Key Takeaways
- William Blair recommends five stocks for 2026, including three clinical-stage biotechs.
- Xenon Pharmaceuticals’ azetukalner shows promise in treating neurological conditions and may secure FDA approval for focal onset seizures in 2027.
- Evommune’s EVO756 and Terns Pharmaceuticals’ TERN-701 are positioned as strong contenders for significant market impact in autoimmune diseases and chronic myeloid leukemia, respectively.
Top Stock Picks for 2026
William Blair has identified five stock recommendations for 2026, prominently featuring three clinical-stage biotech companies. Among these selections, Krystal Biotech, recognized for its gene therapy gel Vyjuvek, and ARS Pharmaceuticals, known for the nasal allergy spray Neffy, are highlighted along with Xenon Pharmaceuticals, Terns Pharmaceuticals, and Evommune.
Xenon Pharmaceuticals stands out due to its lead asset, azetukalner, an investigational small molecule designed to treat various neurological disorders, including focal onset seizures (FOS) and mood disorders. Analyst Myles Minter, Ph.D., emphasizes that the promising efficacy observed in recent trials reduces risk associated with the company’s upcoming pivotal FOS study, which is set to report results in early 2026. The anticipated FDA submission could potentially lead to a market launch in 2027 for a therapy that has not seen new approvals in the FOS indication for nearly a decade. The demand is notable, with William Blair predicting peak global sales exceeding $2.6 billion, due to high instances of refractory seizures among patients.
Terns Pharmaceuticals is another key recommendation, focusing on TERN-701, a candidate currently in phase 1 trials aimed at chronic myeloid leukemia (CML). Analyst Andy Hsieh, Ph.D., presents a compelling case, citing TERN-701’s validated mechanism as an allosteric BCR-ABL inhibitor, which has promise for disrupting the current market led by Novartis’ Scemblix. He points out that TERN-701 has demonstrated superior efficacy, reporting a major molecular response rate of 75% in a heavily pretreated population. Hsieh suggests that pending further results, the drug holds significant potential for Big Pharma interest, with projected global peak sales reaching $5.6 billion upon approval.
Evommune, which recently went public, rounds out the picks, focusing on the development of EVO756, a MRGPRX2 inhibitor targeting autoimmune diseases. Analyst Matt Phipps, Ph.D., believes EVO756 has “multi-blockbuster sales potential,” particularly in ongoing phase 2b evaluations for chronic spontaneous urticaria (CSU) and atopic dermatitis (AD). Initial proofs-of-concept show promising results, with high clinical response rates in CSU studies. William Blair estimates peak sales could reach $5 billion by 2035 if the treatments prove successful.
In summary, these selections reflect a strategic focus on innovative biotech solutions with the potential for substantial market impact, aligning with William Blair’s ongoing investment strategy.
The content above is a summary. For more details, see the source article.