Zacks Investment Ideas feature highlights: IBB, Novartis, Pfizer and Eli Lilly's

For Immediate ReleaseChicago, IL – June 24, 2026 – Today, Zacks Investment Ideas feature highlights iShares Biotechnology ETF IBB, Novartis NVS, Pfizer PFE and Eli Lilly’s LLY.Biotech's Silent Resurgence (5-Year Base Breakout)Starting in early 2021, the notoriously difficult-to-invest-in biotech sector suffered one of its most brutal bear markets in history. The iShares Biotechnology ETF, a proxy for the Nasdaq Biotechnology Index and pure-play biotech companies, slumped 33%, failing to notch fresh highs for more than four years. While a 33% drawdown may not seem like much in a vacuum, such a drawdown has far more meaning when compared to the S&P 500 Index, which rose more than 60% over the same period.While U.S. markets have enjoyed a multi-year rally mainly driven by big tech, while biotech has suffered a volatile, choppy, and prolonged sell-off. Although large-cap, cash-rich, mega-cap biotech stocks saw less pain, numerous clinical-stage, speculative biotech stocks loss 50% of their value or more. What caused the carnage?· Higher Interest Rates: Early-stage biotech companies often must rely on borrowed money for a decade or more. Interest rate hikes made borrowing more expensive for these companies.· Post-COVID Hype Died: While biotech companies were the poster-child of the COVID-19 era on Wall Street, “tourist” investors rushed for the exits afterward, causing selling pressure.· Regulatory Red Tape: The Biden Administration’s Federal Trade Commission (FTC) took a very “hawkish” approach to mergers and acquisitions (M&A). M&A is the lifeblood of the biotech sector. Additionally, the Inflation Reduction Act (IRA) introduced government negotiations for Medicare, chilling investment in certain therapeutic areas.Has Biotech Turned the Corner?The biotech sector is showing promising signs that it has turned the corner. Often, the first sign of a turnaround shows its hand in price, which is why legendary investor Stanley Druckenmiller prefers to “invest, then investigate.” That’s exactly what’s occurring in biotech. The IBB is exhibiting extraordinary relative strength. For instance, the Nasdaq dropped nearly 1,000 points on Tuesday. However, IBB bucked the weakness and gained nearly a percent for the session.Meanwhile, the longer timeframe also shows promising relative strength. While many tech stocks have plunged off recent highs, IBB is making new highs and is on the cusp of breaking out of a massive 5-year base. As the old Wall Street adage goes, “The longer the base, the higher in space!”5 Reasons to Own BiotechBiotech’s bull case goes far beyond its price action. Below are 5 reasons to own the sector:AI Will Drive Discovery, Reduce CostsDiscovering a drug and passing a clinical trial can result in years of research and development (R&D) expenses. However, that is likely to change with the advent of high-powered AI models. Predictive AI models and advanced computing infrastructure will dramatically reduce R&D expenses and shave off years of R&D time.M&A & Reduced Red TapeBetween now and the end of the decade, the biotech industry faces a tsunami of patent expirations on blockbuster drugs. For instance, the Novartis heart failure blockbuster drug recently lost key patents, and the Pfizer breast cancer drug will soon. These massive revenue hits will cause big tech companies to acquire clinical-stage biotech companies to fill the void. Additionally, a less hawkish FTC means that more acquisitions are likely to be given the green light.The Coming GLP-1 SupercycleBreakthrough GLP-1 drugs likeEli Lilly’s “Mounjaro” are likely to lead to a biotech super cycle. In fact, GLP-1s are the closest thing the biotech industry has produced to a wonder drug. For instance, GLP-1s have proven to dramatically reduce obesity, inflammation, and the risk of cardiovascular-related death.Rock-Bottom ValuationsBiotech’s multi-year bear market has resulted in poor sentiment and rock-bottom valuations – a recipe for a bull market. For example, Pfizer’s P/E is currently hovering near an all-time low.Diversification & DefenseWall Street’s AI frenzy has likely led to overconcentration in the tech sector. As a result, money managers may look to diversify into biotech and defensive healthcare names.Bottom LineWith the regulatory friction of a hawkish FTC easing, massive big-pharma cash piles searching for pipeline replacements, and game-changing AI efficiencies coming online, the biotech sector’s fundamentals have fundamentally transformed.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks