Gamble on Huge Gains with These 3 Best Biotech Stocks to Buy for 2026

The biotechnology sector offers investors a high-risk, high-reward opportunity as companies race to bring breakthrough therapies to market. Here are three standout stocks that should be on your watchlist in 2026, according to Barchart ratings.

Each of these three biotech stocks offers varying risk profiles and development timelines for investors willing to bet on medical innovation.

Ligand Pharmaceuticals (LGND) is a royalty-based biopharmaceutical company. Over the years, it has built a diversified portfolio of drug programs through partnerships with major pharmaceutical firms. The company’s Captisol drug delivery technology platform continues to generate steady revenue streams across multiple approved medications.

Valued at a market cap of $3.9 billion, Ligand shares have almost tripled in the past three years. The San Diego-based company operates a lean infrastructure that generates cash from twelve commercial-stage products while maintaining a pipeline of over eighty development-stage programs.

This approach allows Ligand to benefit from drug sales without bearing the massive costs of manufacturing, marketing, or clinical development. Partners handle those expenses while Ligand collects a percentage of revenue.

Ligand’s royalty revenue has doubled since 2022, while operating expenses declined by more than 50%. It expects core revenue between $225 million and $235 million in 2025, with adjusted earnings of roughly $7.50 per share.

Ligand projects royalty revenue to grow by 40% in 2026, driven by products such as Filspari for kidney disease, Ohtuvayre for respiratory conditions, and Capvaxive for pneumococcal infections. Management estimates royalty revenue to grow at a compounded annual growth rate of 23% through 2030, up from the previous forecast of 22%.

This confidence is tied to a robust commercial portfolio and strategic acquisitions, such as the Apeiron deal and the Pelthos spin-out. The Pelthos transaction proved lucrative, creating a standalone company now worth approximately $300 million.

With more than $1 billion in deployable capital, Ligand has the financial flexibility to invest in growth projects. Management targets $150 million to $250 million in annual investments and focuses on assets to address unmet medical needs with strong clinical differentiation.

For investors seeking biotech exposure without the binary risk of single-drug companies, Ligand offers diversified revenue streams, visible growth catalysts, and improving profitability margins.

Out of the eight analysts covering LGND stock, seven recommend “Strong Buy,” and one recommends “Moderate Buy.” The average LGND stock price target is $235, below the current price of $200.

Kinnate Biopharma (KNSA) is developing precision oncology therapies that target genetically defined cancers. The clinical-stage biotech’s innovative approach to cancer treatment has drawn investor interest as it advances through critical trial phases.

Kiniksa Pharmaceuticals has delivered impressive growth as its flagship drug ARCALYST gains traction in treating recurrent pericarditis, a painful heart condition. The company raised its full-year revenue guidance to between $670 million and $675 million, up significantly from the previous range of $625 million to $640 million.

Third-quarter revenue hit $180.9 million, representing growth of roughly $24 million from the prior quarter and $69 million compared to the same period last year. Kiniksa turned profitable with net income of $18.4 million in the quarter, a sharp reversal from the $12.7 million loss reported a year earlier.

ARCALYST has become the preferred treatment for recurrent pericarditis by targeting specific inflammation-causing proteins called interleukin-1 alpha and beta.

The drug is still only reaching about 15% of eligible patients with multiple recurrences, suggesting substantial room for expansion. More than 3,825 physicians have now prescribed the medication, with over 350 new prescribers added in the third quarter alone.

Patients are staying on treatment longer, with the average duration now reaching 32 months, up from 30 months previously. About 20% of prescriptions are now written after a patient’s first recurrence rather than waiting for multiple episodes.

Kiniksa is also developing KPL-387, a monthly injection that could make treatment more convenient. Phase two trial results are expected in the second half of 2026, potentially opening new growth opportunities.

Out of the eight analysts covering KNSA stock, seven recommend “Strong Buy,” and one recommends “Moderate Buy.” The average KNSA stock price target is $54, below the current price of $42.

Ascendis Pharma (ASND) specializes in rare-disease treatments using its proprietary TransCon technology platform, which enables extended-release formulations of existing therapies. The company’s approved growth hormone therapy for children and expanding pipeline position it for solid growth.

Ascendis Pharma delivered groundbreaking clinical trial results that could reshape treatment for achondroplasia, the most common form of dwarfism. The company’s COACH trial showed children receiving a combination of TransCon CNP and TransCon Growth Hormone grew at unprecedented rates, averaging 8.8 centimeters per year in treatment-naive patients.

This growth rate exceeds anything previously seen in achondroplasia treatment and surpasses the 97th percentile for children of average height. Children who were already on TransCon CNP therapy and then added growth hormone still achieved impressive growth of 8.4 centimeters annually. The improvement in height scores was roughly three times better than existing monotherapy options.

Beyond just height gains, the combination therapy delivered meaningful improvements in body proportionality and arm span, addressing quality-of-life issues that matter deeply to patients. Children can reach farther, making everyday activities as they mature, like cooking or driving, easier without modifications. Remarkably, all 21 patients in the trial stayed on treatment for the full year, suggesting excellent tolerability.

The company plans to move forward with a Phase 3 trial, preparing to establish this combination as a new treatment standard. Ascendis is currently awaiting FDA approval for TransCon CNP monotherapy, with a decision expected by late February. The combination therapy would build upon that approval, offering physicians and families unprecedented treatment options for managing this challenging condition.

Out of the 17 analysts covering ASND stock, 15 recommend “Strong Buy,” one recommends “Moderate Buy,” and one recommends “Hold.” The average ASND stock price target is $259, below the current price of $209.

On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com