Next major rally in biotech likely not until end of 2024, says Capital One

Capital One analyst Zegbeh Jallah says following what seems to be a ramping up of biotech equity offerings, “it seems like we may have” hit the bottom for the sector, though the analyst adds “we believe that the next major rally will likely not occur until the end of 2024, driven by early wins in AI in Healthcare.” In terms of M&A in the sector, the analyst remains “optimistic on the second half,” pointing to commentary from companies like Pfizer (PFE) about continued activity in the M&A marketplace and Novartis (NVS) having also noted continued interest in bolt-on M&A deals under $5B. Investing in biotech “remains attractive,” adds the analyst, who points to Krystal Biotech (KRYS), Argenx (ARGX), and Iveric bio (ISEE) as examples of stocks in the group that have outperformed, “even in this bear market.”