Best biotech stocks to watch in 2026

What are biotech stocks?

Biotech stocks are shares in companies that use biological processes to develop medical treatments, diagnostics and other products. The sector overlaps significantly with traditional pharmaceuticals, but biotech companies typically rely more heavily on novel biological technologies including gene therapy, cell therapy, monoclonal antibodies and RNA-based medicines. 

The category spans everything from global pharmaceutical leaders with hundreds of marketed drugs to pre-revenue companies developing a single experimental treatment. Our stocks and shares ISA gives tax-efficient access to UK-listed biotech stocks; US-listed names are accessible through our share dealing account.

The primary driver of individual biotech stock performance is clinical trial data. A positive Phase III result can double or triple a small-cap biotech's share price in a day. A failure at the same stage can wipe out 70-90% of its value. This binary risk profile makes position sizing and diversification particularly important in biotech portfolios.

Biotech stocks: key figures

UK biotech and pharma stocks to watch in 2026

AstraZeneca (LSE: AZN)

AstraZeneca is the UK's largest company by market capitalisation and one of the world's leading biopharmaceutical companies. Its pipeline spans oncology, cardiovascular, rare disease and respiratory, with several late-stage readouts expected through 2026. Q2 2026 results are due in late July/August 2026, with analyst consensus expecting continued double-digit revenue growth. Management has committed to an $80 billion revenue target. The company committed $15 billion to China through 2030, announced during UK Prime Minister Starmer's visit in January 2026. An important near-term risk is the Wainua Phase 3 setback in July 2026, which analysts are watching closely for guidance on pipeline resilience.

GSK (LSE: GSK)

GSK is a global leader in vaccines and pharmaceutical treatments targeting cancer, HIV, respiratory and immunoinflammatory diseases. Q2 2026 results are due in late July/August 2026. Recent coverage points to a £3.6 billion sales shortfall versus prior targets, and investors will be focused on how the newly-acquired Nuvalent assets and specialty medicines portfolio can offset the abandoned camlipixant programme. GSK shares trade at approximately 1,916p as of early August 2026 (Kalkine Media, 5 August 2026).

Oxford BioMedica (AIM: OXB)

Oxford Biomedica is a gene and cell therapy company that transitioned to a pure-play contract development and manufacturing organisation (CDMO) in 2024. It provides viral vector manufacturing capacity to major drug developers needing to scale cell and gene therapy production. As the sector's pipeline matures from clinical trials into commercial launches, demand for CDMO capacity is growing, providing OXB with a more predictable revenue model than pre-clinical biotechs. It has ongoing partnerships with major pharma companies and academic institutions.

Autolus Therapeutics (NASDAQ: AUTL)

Autolus develops programmed CAR-T cell therapies for cancer, using proprietary technology to engineer more targeted and persistent immune cells. Its lead asset obe-cel has received FDA approval for adult acute lymphoblastic leukaemia. The company received $35 million from BioNTech following positive interim Phase 2 data, plus a further $35 million manufacturing milestone payment. Autolus is listed on NASDAQ and accessible to UK investors through an international share dealing account.

How to invest in biotech stocks

Risks of biotech investing

1. Clinical trial failure

The most significant risk in biotech. A single Phase III failure can destroy 70-90% of a small-cap biotech's value in a single day.

2. Regulatory risk

FDA and MHRA approval decisions are binary events with significant uncertainty. Requests for additional data or complete response letters can delay or derail commercial launches.

3. Patent cliffs

Large-cap pharma companies face periods where multiple blockbuster drugs lose patent protection simultaneously, exposing revenues to generic competition.

4. Pricing and reimbursement risk

Particularly in the US and UK, healthcare payers increasingly scrutinise the value of new therapies. A drug that receives regulatory approval but fails to secure adequate reimbursement cannot achieve forecast revenues.

5. Funding risk

Small-cap biotechs frequently need to raise additional capital to fund clinical trials. Dilutive capital raises can significantly reduce returns for existing shareholders.

Biotech stocks FAQs