Moderna's stock fell 18% following a leak of positive clinical data for its cancer vaccine, yet it has surged 587% year-to-date, reflecting the strong performance of the biotech sector. The iShares Biotechnology ETF (IBB) is up 24% through October 23, 2026, with many of its holdings more than doubling in value.
Analysts attribute this growth to a new cycle of innovation driven by advancements in clinical trials, mergers and acquisitions, and technologies such as mRNA and artificial intelligence. The FDA has approved about a dozen novel biologic drugs in 2025, with 66 more in the pipeline, including potential blockbusters from Moderna and Eli Lilly.
The sector is recovering from a downturn, and while risks remain, the outlook is improving with new drug approvals and innovative treatments. Companies like Illumina and 10x Genomics are leading advancements in gene sequencing and AI applications in drug discovery.
M&A activity is also on the rise, with $134 billion in deals in the first half of 2026, indicating strong clinical promise for many drugs. Investors are encouraged to consider biotech ETFs for exposure, with specific recommendations for Illumina and Twist Bioscience, which are positioned to benefit from the ongoing innovation in precision medicine