Is Biotech's Turnaround Finally Here? Insights from a Busy Conference Season

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Is Biotech's Turnaround Finally Here? Insights from a Busy Conference Season

September 11, 2025

The first half of September is always a whirlwind of activity with investor conference season in full swing and the life science investment community back to business. FINN health investor relations leaders have been in the room at several major health-focused investor conferences, including Wells Fargo, Cantor Fitzgerald, H.C. Wainwright, Morgan Stanley, and Baird. Being onsite with clients and connecting with colleagues across the industry reaffirmed the incredible energy and innovation driving the sector forward.

From these conversations and sessions, a consistent thread of insights emerged. Here are five key takeaways shaping our counsel to health innovation leaders and investors:

1. A Deeply Undervalued Sector

Healthcare is profoundly undervalued relative to other industry "tech" sectors. Many speakers and investors noted this may be one of the most pronounced disconnects in the past two decades. Despite strong pipelines and tangible clinical advancements, patient outcomes that sustain and save lives remain depressed. This disconnect presents a compelling entry point for long-term investors into innovation-driven companies trading below their intrinsic value.

2. The Mismatch of Policy and Reality

Policy headwinds surrounding Most Favored Nation drug pricing proposals and pharma tariffs continue to cast a shadow over the sector. Yet, the consensus among experts is that the ultimate impact of these policies will likely be far less severe than what current valuations imply. Markets dislike uncertainty, but the selloff appears to reflect worst-case scenarios. This creates an opportunity for discerning investors to look past the noise and focus on fundamentals.

3. A Year of Unpredictable Victories

Unexpected clinical wins have been a hallmark of 2025. Companies such as Abivax, Celcuity, Tourmaline Bio, and Verona achieved significant gains from strong trial data, surprising even seasoned analysts. At the same time, highly rated consensus stocks like NVO and VKTX experienced steep pullbacks. The message is clear: reputational momentum no longer guarantees resilience-data does. Investors are recalibrating toward evidence-driven performance. Whether in clinical outcomes or sales, it's about results, not potential.

4. A Turnaround Fueled by Fundamentals

The narrative of 'too many IPOs' and 'too many public companies' is losing credibility. Sector fundamentals are proving too strong to ignore, largely supported by the influx of 'diabesity dollars' from the GLP-1 drug class. In parallel, a robust innovation pipeline and significant amounts of capital on the sidelines suggest the groundwork for a biotech rebound is already in motion. The media have been touting the return of biotech and the energy in these meetings matched that enthusiasm.

5. The Real 'AI Moment' Is Yet to Come

While the first wave of AI-driven biotech companies has sparked interest, the real transformation will occur when AI becomes a ubiquitous, integrated tool across the sector. AI's true potential lies in drug discovery, clinical trial design, and precision care delivery. Investors should be watching closely for companies that operationalize AI not as a gimmick but as a force multiplier-faster clinical trial design, faster patient target and faster analysis.

Taken together, these insights point toward a sector poised for recovery and renewed investor attention. The undervaluation won't last forever, and companies that demonstrate execution, transparency, and value creation will benefit most.

Biotech has matured. No longer fueled by early-stage promises alone, it thrives on robust data, validated clinical pathways, and multi-modal therapies. Against this backdrop, leaders who communicate clearly and consistently, strengthen ties to key opinion leaders and patient advocacy communities, and build validation are positioned to define the next chapter of health innovation.

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• Health Thought Leadership

POSTED BY: David Carey