Biotech’s Milkshake Moment
Posted October 20, 2026
Chris Campbell
Look at yesterday afternoon’s top gainers.
One of them mines iron ore. Oddly enough, its ticker isn’t IRON. Its ticker is CLF.
IRON is a biotech. So is the rest of the list. Biotech. Biotech. More biotech. Again.
Today was the same thing.
Myriad Genetics up about 37%. SELLAS Life Sciences up 13.5%. Clene up about 21% intraday. There might be more by the time you read this.
But, as you’ll see… this is just scratching the surface of gains some investors have seen in this sector.
And after a strong year, analysts are declaring the industry peaked. We’re taking the other side of the trade.
Today, let’s talk about what the bearish memos miss… and why we think the story’s just getting started.
89 Stocks… In One Day
Roll back the clock to August 19.
Moderna soared 177% in a single session, the biggest one-day gain for an S&P 500 stock in at least 25 years. That same day, about 89 biotech stocks hit new 52-week highs.
Two days later, Werewolf Therapeutics, a stock trading under a dollar, more than doubled on a merger deal.
September 28: Kodiak Sciences gapped up as much as 178% after its eye drugs went toe-to-toe with Regeneron’s Eylea.
Then there’s Definium Therapeutics. Since June, its lead drug has won three Phase 3 trials.
Something’s shifted.
Biotech’s Milkshake Moment
For years, money fled biotech.
The XBI, the main small-biotech index, fell from $168 in early 2021 to $64 three years ago.
Now it’s back.
2026 is on pace to be the second-busiest year for biopharma M&A in recorded history. About $241 billion annualized. 2027 could be even bigger.
Why? One reason: Big Pharma faces a $400 billion patent cliff over the next five years.
Its own pipelines can’t fill the hole fast enough. So it’s buying. In July, Vertex paid $10 billion for Crinetics at a premium of more than 100%. Vertex was the only bidder.
No auction. No bidding war. Still double.
In There Will Be Blood, Daniel Day-Lewis outdrinks his rivals with a very long straw. Big Pharma companies have long straws too. Lately, they’re paying a premium to use them.
And that’s before we even consider what AI is doing to the industry.
The Biggest Straw (AI)
Drug discovery has always been slow, expensive and mostly a failure. AI attacks all three.
Design the molecule. Test it in the (self-driving) lab. Feed the results back to the model. Repeat a thousand times. Faster than a floor full of chemists could do it once.
The market has noticed the potential.
AbCellera, an AI-driven antibody shop, is up about 300% this year. Absci, which designs drugs with generative AI, is up about 217%. Eli Lilly put $40 million into Absci’s last raise.
Estimates for the AI drug discovery market today run from a couple billion dollars to about $20 billion. The most aggressive forecast puts it at $160 billion by 2035.
Nobody agrees on the size. Everyone agrees on the direction. That’s the setup for a supercycle.
A sector starved of capital for years. Buyers who have to buy. A technology that makes the product cheaper to build.
It all adds up to one thing.
There Will Be Blood (Tests)
You’ve already seen one of these up close.
Remember Definium? Subscribers to one of James’ research services had the opportunity to lock in a 530% gain on half their position in under 18 months. The other half of the position is still open. Still up more than 400%.
In fact…
Since 2024, our team has counted more than 230 biotech stocks that doubled or better in a single trading session. And these are stocks, by the way, not options.
James calls them 1-Day Windfalls. And he thinks the next one is close.
Just this week, in fact, our biotech research arm spotted a tiny company approaching a major announcement. James wants our boldest, most aggressive readers positioned before Friday.