How to invest in the US stock biotechnology sector in 2026? JF Apex Securities: Focus on these 6 top stocks, 7 potential targets, and 5 merger goals.

Jefferies Financial Group Inc. recently released a outlook report on the US biotechnology industry in 2026, focusing on preferred investment targets, undervalued potential companies, and potential merger opportunities. The report indicates that in 2026, the biotechnology sector will see multiple key clinical trial data disclosures, new drug approvals, and policy dynamics, with sub-track companies expected to achieve value revaluation through technological breakthroughs and commercial progress. Six preferred targets Based on the richness of market catalysts and valuation potential, Jefferies Financial Group Inc. has selected six companies as core recommendations for 2026: Dianthus Therapeutics (DNTH.US), target price $66: The focal drug claseprubart (a complement C1s inhibitor) shows potential in various neuromuscular diseases, including chronic inflammatory demyelinating polyradiculoneuritis (CIDP), generalized myasthenia gravis (gMG), and multifocal motor neuropathy (MMN), with estimated peak revenue of $2 billion. In 2026, the company will reach key milestones such as the mid-term analysis of the CIDP Phase III clinical trial and the initiation of the gMG Phase III trial. Taysha Gene Therapies (TSHA.US), target price $11: The gene therapy TSHA-102 for the treatment of Rett syndrome has huge market potential (estimated peak revenue of $2 billion). Its key advantage lies in intrathecal dosing, which is safer than some systemic gene therapies. The Phase III clinical trial data for this core product is expected to be disclosed in mid-2026, with further data at 12 months follow-up to reduce project risks. Tyra Biosciences (TYRA.US), target price $32: The core asset dabogratinib (TYRA-300) is an oral, highly selective FGFR3 inhibitor with disruptive potential in moderate-risk non-muscle-invasive bladder cancer (IR-NMIBC) and achondroplasia (ACH) areas. The company will announce key data for IR-NMIBC and ACH indications next year. Tango Therapeutics (TNGX.US), target price $14: The company is collaborating with Revolution Medicines (RVMD.US) to explore the combination of their PRMT5 inhibitor vopimetostat with RAS inhibitors to treat mesothelioma-associated pancreatic cancer (PDAC), with the potential to achieve "game-changing" efficacy. Data on this combination therapy for pancreatic cancer is expected to be disclosed in the first half of 2026. ORIC Pharmaceuticals (ORIC.US), target price $23: The company has two potential assets: 1) the PRC2 inhibitor ORIC-944 for prostate cancer; and 2) enzertinib for EGFR exon 20 insertions and PACC mutations in lung cancer. The prostate cancer project is directly comparable to Pfizer Inc.'s (PFE.US) similar drug mevrometostat. Key catalysts next year include dose optimization data for ORIC-944 and clinical trial results from Pfizer Inc. and enzertinib in first-line lung cancer treatment. Solid Biosciences (SLDB.US), target price $15: The company focuses on the gene therapy SGT-003 for Duchenne muscular dystrophy (DMD). In the first half of 2026, it will hold three key meetings with the FDA to finalize the design of a Phase III trial, external controls, and data requirements for an accelerated approval pathway. Seven undervalued companies The report highlights seven "undervalued stocks" with significant catalysts and potential for value revaluation, covering areas such as gene editing and rare disease treatment: Ultragenyx Pharmaceuticals (RARE.US), target price $114: The company's current stock price is discounted, mainly reflecting the value of its marketed products. In 2026, it will see a concentration of key catalysts, including the release of Phase III final data for setrusumab for osteogenesis imperfecta from late 2025 to early 2026, which is expected to drive a 100% increase in stock price; in the second half of 2026, key trial data for the Angelman syndrome therapy GTX-102 will also be unveiled. In addition, the company's two gene therapy drugs MPSIIIA and GSD1a are expected to submit marketing applications in 2026, potentially receiving priority review eligibility, further expanding growth opportunities. Beam Therapeutics (BEAM.US), target price $41: The company focuses on the field of gene editing, with an update on Phase I/II data for the AATD therapy BEAM-302 expected in early 2026. This therapy has shown the best potential with a 91% mutation correction rate, and is advancing approximately 2 years ahead of competitors. Additionally, its sickle cell anemia (SCD) therapy BEAM-101 is expected to submit a marketing application by the end of 2026, with an HbF induction rate exceeding 60%, surpassing the approved drug Casgevy. Aurinia Pharmaceuticals (AUPH.US), target price $21: The core product Lupkynis shows steady growth in the treatment of lupus nephritis, with expected revenues of $265-270 million in 2025. In early 2026, the company will announce the clinical development path of its autoimmune disease drug aritinercept, targeting the BAFF/APRIL pathway and potentially expanding to multiple autoimmune disease indications, bringing new growth to the company. Kodiak Sciences (KOD.US), target price $39: A potential dark horse in the field of retinal disease therapy, Kodiak Sciences will release data from three Phase III clinical trials in 2026. Among these, the trial results for KSI-101 in the MESI indication are expected to drive stock price volatility by 40%-60%, with its dual-target inhibition mechanism poised to surpass similar drugs from Roche (RHHBY.US). Intellia Therapeutics (NTLA.US), target price $45: A leading company in the field of gene editing, Intellia Therapeutics will release key data for the hereditary angioedema (HAE) therapy lonvo-z in mid-2026. Previous clinical data showed a 97% rate of patients achieving an attack-free state. Although the ATTR therapy is facing clinical pause, the company's $670 million cash reserve is sufficient to support until mid-2027 and is expected to restart trials through negotiations with the FDA. Compass Therapeutics (CMPX.US), target price $8: Focused on the development of tumor bispecific antibodies, Compass Therapeutics will release durable data from the Phase II/III trial of the biliary tract cancer therapy tovecimab by the end of the first quarter of 2026. The US market size for this indication is about $4 billion, with a wide competitive landscape. If the trial achieves the HR <0.7 primary endpoint, it could become the second-line treatment standard. KalVista Pharmaceuticals (KALV.US), target price $38: With the world's first oral on-demand therapy for hereditary angioedema (HAE), Ekterly has stood out, with the stock price up 80% in 2025. The drug was launched 1.5-2 years earlier than competitors, and is expected to achieve rapid growth in patient penetration rates and revenue in 2026, with peak sales expected to reach $700 million, significantly expanding the market for oral HAE treatments. Five potential merger targets Jefferies Financial Group Inc. believes that the following companies, due to their unique assets or market positions, may become merger targets in 2026: Arrowhead Pharmaceuticals (ARWR.US): With a strong RNAi product line in cardiovascular metabolism and new targets for obesity. Celcuity (CELC.US): Its drug gedatolisib shows unique efficacy in PIK3CA wild-type breast cancer. ORIC Pharmaceuticals: High-value projects in prostate cancer and lung cancer. Travere Therapeutics (TVTX.US): If approved for FSGS, it will open up a huge market in the rare kidney disease field. KalVista Pharmaceuticals: First-mover advantage and strong growth in oral HAE drugs.