Zacks Industry Outlook Highlights Terns Pharmaceuticals, ADMA Biologics, ANI Pharmaceuticals and Liquidia

For Immediate Release

Chicago, IL – March 16, 2026 – Today, Zacks Equity Research discusses Terns Pharmaceuticals TERN, ADMA Biologics ADMA, ANI Pharmaceuticals ANIP and Liquidia Corp. LQDA.

Industry: Biotechnology

Link: https://www.zacks.com/commentary/2883847/4-biotech-stocks-to-watch-for-potential-upside-in-2026

The biotech industry has delivered an upbeat performance so far in 2026 despite an uncertain macroeconomic backdrop. Strong fourth-quarter results, better visibility, new drug approvals and encouraging pipeline progress have helped the sector sustain momentum even amid regulatory challenges and pricing pressures. Given the continuous need for innovative medical treatments (regardless of the state of the economy), the dynamic biotech industry should continue to capture investors' interest going forward.

The recent pickup in mergers and acquisitions (M&A) activity after a period of slowdown, driven by an evolving industry landscape and increasing focus on AI-driven drug discovery, has further supported sector momentum. Large pharmaceutical and biotechnology companies are continually expanding their product portfolios and pipelines through strategic collaborations and acquisitions to adapt their business models amid growing generic competition for key drugs. Consequently, smaller biotech firms leveraging breakthrough technologies are increasingly drawing attention, helping fuel momentum across the broader sector.

Biotech companies like Terns Pharmaceuticals, ADMA Biologics, ANI Pharmaceuticals and Liquidia Corp. are poised to outperform the sector.

Industry Description

This industry includes biopharmaceutical and biotech stocks like Amgen, Inc. (AMGN).

4 Trends Shaping the Future of the Biotech Industry

Innovation and Execution Hold the Key: The primary focus in the biotech industry is on the performance of high-profile drugs and innovative pipeline development, as only a handful of companies in this industry have approved drugs in their portfolios. Most companies spend millions and billions of dollars to create a drug with path-breaking technology, resulting in significant research and development expenditures. The growing focus on using AI technology in drug discovery is driving additional investment into the industry. Precision medicine, also known as personalized medicine, is another rapidly evolving field in the industry.

On the other hand, successful commercialization is crucial for higher drug uptake, as smaller biotechs often lack the necessary funds and expertise to reach the target population. This prompts collaboration deals with either pharma or biotech bigwigs, wherein sales are shared or royalties are received.

Sometimes, approved treatments come with side effects that emerge over time, and the uptake may fail to meet expectations. Hence, it takes several years before a biotech company turns profitable. Moreover, it may take quite a few years for any newly approved drug to contribute to its company's top line.

M&A in the Spotlight: Consolidation has long been a key theme in the pharma and biotech industry, as leading companies continually seek to diversify their revenue streams amid declining sales from their flagship drugs. The recent spree of acquisitions signifies a focus on portfolio expansion and constant pipeline innovation, given the changing landscape and spotlight on AI-driven drug discovery.

Simultaneously, bigwigs in the space also enter into licensing deals and collaborations for a promising drug/candidate to strengthen and expand their portfolios/pipelines in their respective core areas or emerging fields. While oncology and immuno-oncology companies have always been at the top of acquisition targets, the lucrative obesity sector and gene-editing space are now being eyed.

Johnson & Johnson has acquired a clinical-stage biotechnology company, Halda Therapeutics OpCo. The acquisition provides Johnson & Johnson with a highly differentiated clinical-stage treatment for prostate cancer. Swiss pharma bigwig Novartis, too, has been on an acquisition spree. Novartis acquired Avidity Biosciences, Inc. for $12 billion to strengthen its late-stage neuroscience pipeline. Avidity is developing RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs) for serious, genetic neuromuscular diseases.

Gilead Sciences is set to acquire a clinical-stage biotechnology company, Arcellx, for $115 per share in cash plus a $5 contingent value right, implying an equity value of $7.8 billion. The transaction builds on the companies' existing partnership through Kite Pharma and strengthens Gilead's position in cell therapy.

The recent spotlight on the usage of AI technology for drug discovery should lure further investment in this industry.

New Drug Approvals Boost Prospects: New drug approvals staged a strong rebound last year, and the momentum is expected to continue in 2026 as pharmaceutical and biotech companies strive to diversify their product portfolios.

Pipeline Setbacks & Potential Tariffs Weigh on Outlook: Pipeline setbacks are key deterrents for biotech companies, given the exorbitant cost of developing drugs using expensive technology. Most drugs/therapies take years to gain a regulatory nod. An unfavorable outcome from a crucial trial on a promising candidate is a huge setback, particularly for smaller biotechs, which are mostly one-trick ponies. The leading biotechs face other headwinds, including declining sales of high-profile drugs due to intensifying competition.

Many big pharma/biotech companies have sizable production units outside the country and imposition of tariffs will increase their costs, thereby shrinking margins. Moreover, ongoing geopolitical tensions remain a headwind.

Zacks Industry Rank Indicates Challenging Prospects

The group's Zacks Industry Rank is basically the average of the Zacks Rank of all the member stocks.

The Zacks Biomedical and Genetics industry currently carries a Zacks Industry Rank #142, which places it among the bottom 41% of more than 243 Zacks industries. The rank reflects a challenging outlook for the space due to the uncertain macroenvironment. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Before we present a few biotech stocks that are well-positioned to beat the industry based on a strong portfolio/pipeline, let's take a look at the industry's stock market performance and current valuation.

Industry Versus S&P 500 & Sector

The Zacks Biomedical and Genetics industry is a 661-stock group within the broader Zacks Medical sector. It has outperformed both the Zacks Medical sector and the S&P 500 composite sector in the last six months.

The stocks in this industry have gained 18.8% in the last six months compared with the Zacks Medical sector's growth of 5.6% and the S&P 500 composite's rise of 3.3% in the same period.

Industry's Current Valuation

Since most companies in the biotech sector do not have approved drugs, valuing these becomes a complex process. On the basis of the trailing 12-month price-to-sales ratio (P/S TTM), which is commonly used for valuing biotech companies with approved portfolios of drugs, the industry is currently trading at 2.40X compared with the S&P 500's 5.63X and the Zacks Medical sector's 2.5X.

Over the past five years, the industry has traded as high as 3.63X, as low as 1.78X and at a median of 2.41X.

4 Biotech Stocks Worth Buying

Liquidia Corporation is primarily focused on developing drugs for serious respiratory and vascular diseases through precise and innovative therapies built on its proprietary PRINT Technology. This technology enabled the development of Yutrepia (treprostinil) inhalation powder for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Yutrepia continues to gain traction and sales totaled $148.3 million in 2025. As of Feb. 28, 2026, more than 3,600 patient prescriptions had been received since the product's launch.

The company is also advancing L606, an investigational extended-release formulation of treprostinil designed for twice-daily administration using a next-generation nebulizer. Liquidia currently markets generic treprostinil Injection for the treatment of PAH.

LQDA currently carries a Zacks Rank #1 (Strong Buy). Shares of LQDA have soared 40.3% in the past six months. The Zacks Consensus Estimate for 2026 earnings per share (EPS) has more than doubled to $2.14 in the past seven days.

ANI Pharmaceuticals is a diversified biopharmaceutical company with two focal areas – rare diseases and generics. The company's rare disease franchise has emerged as a major growth catalyst on the back of strong performance of ACTH-based injection Cortrophin Gel, whose sales surged 75.6% in 2025 to $347.8 million driven by record new patient starts, continued momentum across target indications, the expanded sales force for neurology, rheumatology and nephrology, and synergies from the combined ophthalmology sales force.

The acquisition of Alimera Sciences added a growing and durable franchise, Iluvien (for diabetic macular edema) and Yutiq (for the treatment of non-infectious uveitis affecting the posterior segment of the eye) to ANIP's portfolio.

The company has a presence in the generics market as well.

ANIP's shares have gained 16% in a year. EPS estimates for 2026 have surged 72 cents to $9 in the past 30 days. ANIP currently carries a Zacks Rank #2 (Buy).

ADMA Biologics delivered a strong performance in 2025 on the back of strong Asceniv growth. Record demand for Asceniv, expected expansion in payer coverage and growing confidence in long-term plasma supply are providing clear visibility into accelerating revenues in 2026. The targeted market has significant growth potential. Incremental additional penetration of Asceniv should accelerate ADMA's revenue growth. The recent FDA approval of the yield enhancement production process is also expected to pave the way for solid revenue growth and margin expansion.

ADMA's efforts to return capital to shareholders are also encouraging.

Shares of this Rank #2 company have lost 2.1% in the past six months. EPS estimates for 2026 have increased 11 cents to 96 cents in the past 30 days.

Terns Pharmaceuticals is a clinical-stage oncology company focused on re-engineering well-understood biological pathways to develop high-impact medicines. Its lead candidate, TERN-701, is a highly selective allosteric BCR-ABL inhibitor with the potential for a best-in-class profile, aiming to significantly improve the efficacy, safety and convenience of existing treatments for chronic myeloid leukemia.

Encouraging data presented for TERN-701 at the American Society of Hematology ("ASH") meeting in December, along with a subsequent capital raise, has strengthened the company's financial and strategic position to advance the candidate toward pivotal trial initiation.

Shares have gained 9.5% year to date. TERN currently carries a Zacks Rank of 2. Loss per share estimate for 2026 has narrowed to $1.19 from $1.25 in the past 60 days.

You can see the complete list of today's Zacks #1 Rank stocks here.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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ANI Pharmaceuticals, Inc. (ANIP): Free Stock Analysis Report

ADMA Biologics Inc (ADMA): Free Stock Analysis Report

Liquidia Corporation (LQDA): Free Stock Analysis Report

Terns Pharmaceuticals, Inc. (TERN): Free Stock Analysis Report

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