We recently compiled a list of the 12 Most Promising Biotech Stocks According to Wall Street Analysts. In this article, we are going to look at where Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) stands against other biotech stocks.
Biotech Sector Set for Growth Amid Innovation and Investor Interest
The biotechnology sector is gaining new momentum with better market conditions, cutting-edge innovations, and growing investor attention. The industry has recovered from a challenging 2024 and is poised for significant expansion led by advances in personalized medicine, AI-driven drug discovery, and growing demand for biologics. MarketsandMarkets predicted that the global biotech market would expand by a strong 13%, from $483.0 billion in 2024 to $546.0 billion in 2025. This expansion demonstrates the sector’s tenacity and promise for growth.
The anticipated shift in the Federal Reserve’s interest rate policies is a key driver of this upturn. Biotech is sensitive to changing rate patterns since it requires a large amount of money for costly R&D and clinical testing. Lower rates make more funding available, which helps biotech companies expand, draw in venture capital, and expedite drug development, according to Genetic Engineering and Biotechnology News. A rate drop, according to analysts, may release billions of dollars in investment funds that have been put aside for fledgling biotech firms looking for steady funding.
Investor interest in biotech equities is growing. Biotech is still a high-growth industry with many chances for risk-takers, despite brief ups and downs. The comeback of biotech has been noted by leading investment banks. Citing solid fundamentals, improved clinical outcomes, and a supportive regulatory environment, Goldman Sachs referred to it as an “undervalued opportunity.” According to the firm, biotech equities have tremendous upside potential and an “option-like structure,” particularly when interest rates decline. Analysts at JPMorgan anticipate a recovery in biotech funding at the same time, pointing to indications of stability in manufacturing and research sectors that were negatively impacted by earlier funding shortages. Industry analysts predict that declining interest rates and advantageous investment circumstances may reopen the IPO window for businesses looking for institutional support, even though biotech IPOs have been quiet since 2021.
As gene editing, AI-powered drug discovery, and precision medicine transform how we treat uncommon genetic illnesses, autoimmune diseases, and cancer, scientific advances are also propelling the expansion of biotech. Biotech firms are meeting medical demands in ways that were unthinkable a decade ago because of developments in CRISPR gene editing and cell treatments. Given this, we will take a look at some of the best promising stocks from the biotech sector.
Our Methodology
For this article, we shortlisted stocks that met the following criteria: a market capitalization of over $2 billion, coverage by at least 15 analysts, and a price target upside of more than 20%. We then ranked the selected stocks based on their price target upside, as determined by Wall Street analysts, as of March 21, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A pharmacist in a lab coat carefully analyzing a vial of medicine for its quality.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Analyst Upside: 45.22%
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) stands eighth among the most promising stocks according to Wall Street analysts. The company is focused on developing life-changing medicines for serious diseases, including eye conditions, cancer, inflammation, and rare genetic disorders. The company’s cutting-edge VelociSuite technology, which speeds up drug research and genetic medicine development and aids in converting scientific discoveries into practical therapies, is what sets it apart.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) reported $3.8 billion in revenue in Q4 2024, a 10% increase over the same period the year before. With $14.2 billion in revenue for the entire year, it earned $1.4 billion in net income. The company’s strong financial position was demonstrated by its $3.7 billion in free cash flow and its remarkable 86% gross margin.
The corporation’s expansion was driven by important products like EYLEA, Libtayo, and Dupixent. With over a million patients treated globally, dupixent is still a huge success and may find new applications. In the meantime, the business is developing novel therapies for lymphoma and multiple myeloma that may increase its market share in oncology.
Notwithstanding its achievements, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) still faces difficulties in the anti-VEGF market, as EYLEA sales are being impacted by growing biosimilar competition. The business must manage these demands while keeping its attention on growth and innovation.
Overall, REGN ranks 8th among the 12 most promising biotech stocks according to wall street analysts. While we acknowledge the potential of biotech companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than REGN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure. None: This article is originally published on Insider Monkey.