Three Beaten-Down Biotech Stocks With Strong Recovery Potential Heading Into 2026

The biotech sector experienced a significant inflection point in 2025. While early-year jitters around pharmaceutical tariff concerns initially weighed on sentiment, the industry found its footing through M&A momentum, strategic drug pricing agreements, and accelerating FDA approvals. The regulatory environment proved particularly constructive, with 44 novel therapies greenlighted this year—half of them concentrated in the final six months alone. This approval velocity underscores robust pipeline momentum across the industry.

Against this backdrop, three clinical and commercial-stage biotech companies have emerged as compelling turnaround candidates despite substantial share price deterioration in 2025. Each trades with a Zacks Rank #2 (Buy) designation and features improved earnings projections for the coming year. Their stories reveal how temporary setbacks often mask compelling long-term catalysts.

Seres Therapeutics: Pivoting From Trial Results to Late-Stage Study

MCRB has constructed its platform around live bacterial consortia designed to address serious medical complications. Its flagship asset, SER-155, targets bloodstream infections in patients undergoing stem cell transplantation—a significant unmet medical need with limited prevention options.

Clinical momentum has been building. A recent phase Ib dataset demonstrated that SER-155 achieved a 77% relative reduction in bacterial bloodstream infections compared to standard care in transplant recipients. Beyond infection prevention, emerging data hints at broader therapeutic potential in immune-mediated conditions. The FDA’s recent constructive guidance validated the clinical approach, paving the way for midstage trial initiation.

Funding represents the near-term variable. Once capital is secured, management projects interim study readouts within 12 months. The year-to-date share price decline of 12% has created a valuation reset. Wall Street consensus has shifted favorably, with 2026 loss-per-share estimates narrowing from $10.66 to $7.67 over the past two months—a meaningful repricing of near-term burn expectations.

ImmunityBio: Commercial Traction Amid Regulatory Complexity

IBRX operates in an earlier commercial phase, having secured FDA approval for Anktiva—a cancer immunotherapy administered alongside BCG for bladder cancer patients resistant to standard treatment. Despite this regulatory win, shares have retreated 16% year-to-date, primarily reflecting a refusal-to-file notice for a label expansion attempt.

Yet the commercial narrative tells a different story. Drug sales have skyrocketed to nearly $75 million year-to-date versus just $7 million in the comparable prior year—a more than tenfold increase driven by robust market demand. International expansion is underway, with a conditional approval recommendation recently issued by European regulators. A final EU decision appears imminent.

The pipeline extends beyond bladder cancer. Anktiva is simultaneously being investigated as monotherapy and combination therapy across multiple oncology indications including non-small cell lung cancer, glioblastoma, and non-Hodgkin lymphoma. In lung cancer studies, the drug has demonstrated lymphopenia reversal and extended survival signals. Glioblastoma data highlighted strong disease control rates. Multiple catalysts are expected throughout 2026. Analyst estimates have tightened, with 2026 loss-per-share projections improving from 37 cents to 33 cents.

Altimmune: Clearing the Regulatory Path for MASH Therapy

ALT has endured a challenging 2025, with shares surrendering 46% of their value. The source: mixed interim results from a midstage MASH study evaluating pemvidutide, a GLP-1/glucagon dual-receptor agonist intended to treat liver disease and metabolic dysfunction.

While the June-reported 24-week dataset achieved one primary endpoint (disease resolution without fibrosis progression), it fell short on the secondary fibrosis improvement measure. This stumble triggered selling pressure. However, subsequent 48-week data released this month presented a more compelling picture. Extended treatment demonstrated cumulative improvements in liver health biomarkers and inflammation indicators relative to earlier timepoints. Notably, patients receiving higher drug doses showed additional weight loss without evidence of efficacy plateau—a critical signal for dose-response potential.

Regulatory collaboration has accelerated. ALT recently concluded an FDA meeting establishing alignment on late-stage trial parameters. A phase III study is slated to commence in 2026, potentially positioning pemvidutide for commercial consideration. Beyond MASH, parallel studies in alcohol use disorder and alcohol-associated liver disease are progressing, with AUD data anticipated during 2026—another potential catalyst.

The market appears to have overcorrected on the interim stumble. Loss-per-share estimates for 2026 have improved from $1.33 to $1.13 in recent months, reflecting analyst recalibration around clinical trajectory.

Positioning for 2026

These three biotech stocks share a common pattern: meaningful pullbacks masking genuine pipeline progress and regulatory tailwinds. As the sector continues attracting capital given persistent medical needs, near-term capital raises and clinical readouts across all three names appear likely to reset investor perception heading into 2026.