Getting a Full View: 5 Breakthrough Biotech Stocks to Watch in 2025

Five biotech breakthrough stocks offer opportunities for investors looking to diversify beyond traditional pharmaceuticals. These stocks include Mind Medicine (MindMed) MNMD, Beam Therapeutics (BEAM), Arcellx (ACLX), Ocugen (OCGN), and Insmed (INSM). Each company has innovative pipeline candidates with unique mechanisms of action that could transform medicine. While R&D costs are high and most of these companies are currently reporting losses, successful drug development and commercialization could lead to significant revenue growth. Investors should monitor these stocks closely, as they hold potential for strong returns in the next few years. However, these investments carry risks, as success depends on FDA approvals.

Biotech Faced Challenges in 2024, But 2025 Promises Greener Grass

Initially, the biotech and drug sector faced a rough second half in 2024, following a strong start. Disappointing third-quarter sales and profits caused a sharp downturn. Companies cut their guidance, signaling weaker prospects. Pipeline setbacks added uncertainty, while Robert F. Kennedy Jr.’s appointment as head of Health and Human Services raised concerns with his anti-vaccine views, affecting market sentiment.

Nevertheless, the sector remains at the forefront of innovation. Investors focus on areas like diabetes/obesity, gene therapy, inflammation, and neuroscience, attracted by their growth potential. The FDA also approved 50 new drugs as of December 20, maintaining the usual annual average.

Looking forward to 2025, R&D innovation will likely drive the industry’s progress. As new drugs and treatments emerge, the focus on advancing medical science will continue to fuel interest in biotech.

A Closer Look at Gene Editing, Breakthrough Therapies, and Innovative Treatments in Biotech

Mind Medicine (MindMed)
MindMed is advancing its lead candidate, MM120, an orally disintegrating tablet (ODT) with lysergide D-tartrate (LSD) for generalized anxiety disorder (GAD). The phase III Voyage study is ongoing with results from a 12-week trial expected in the first half of 2026. This study is the first of two phase III trials for MM120 in GAD. The second phase III trial, Panorama, will begin in the first half of 2025.

The FDA granted MM120 breakthrough therapy designation for GAD, highlighting the urgent need for new treatments. The last new drug for GAD was approved in 2007. Phase II data showed MM120’s efficacy far exceeds current treatments with a favorable safety profile. MindMed is also preparing to launch another phase III study for MM120 ODT in major depressive disorder in early 2025.

Beam Therapeutics
Beam Therapeutics is pioneering base-editing technology, a next-generation gene-editing method. This technology allows for precise, single-base changes in genes without causing DNA damage or double-strand breaks. Beam’s lead candidate, BEAM-101, is undergoing phase I/II testing in the BEACON study for sickle cell disease (SCD). Early data shows BEAM-101’s potential for significant clinical differentiation compared to current SCD treatments, with promising increases in fetal hemoglobin and reductions in sickle hemoglobin.

In addition to BEAM-101, Beam is expanding its pipeline into liver genetic diseases, with BEAM-301 targeting alpha-1 antitrypsin deficiency (AATD). Initial data from the phase I/II study of BEAM-302 in AATD patients is expected in 2025. Beam is positioned for a catalyst-rich 2025, with solid cash reserves to continue developing its hematology and liver disease programs.

Arcellx
Arcellx is co-developing anito-cel with Gilead, a promising CAR-T therapy for relapsed or refractory multiple myeloma (RRMM). The phase II iMMagine-1 study is pivotal for anito-cel in RRMM. Early data from a phase I trial showed a median progression-free survival of 30.2 months in a challenging patient group. The iMMagine-1 study has also shown strong, durable responses and no delayed neurotoxicities in over 140 treated patients. This positions anito-cel as a potential disruptor in the multiple myeloma market.

Ocugen
Ocugen is advancing gene therapy for retinal diseases, focusing on two leading candidates with unique mechanisms of action. The phase III liMeliGhT study is evaluating OCU400 for treating retinitis pigmentosa (RP), a rare genetic disorder that causes vision loss. Enrollment is expected to complete in the first half of 2025. The FDA has granted orphan drug designation to OCU400 for RP. Since RP is linked to mutations in over 100 genes, OCU400’s gene-agnostic approach could provide broader treatment options for patients.

Ocugen is also developing OCU410, a one-time gene therapy for geographic atrophy (GA), an advanced form of dry age-related macular degeneration (dAMD). Early data from the phase I/II ArMaDa study shows OCU410’s ability to slow lesion growth, preserve retinal tissue, and stabilize visual function. Currently, patients with GA in the U.S. have limited treatment options. OCU410 aims to address multiple disease aspects beyond the complement pathway, potentially transforming GA treatment.

Insmed
Insmed’s lead candidate, brensocatib, is showing promise as a treatment for neutrophil-driven inflammatory conditions. In May 2024, positive results from the ASPEN study showed brensocatib reduced pulmonary exacerbations in bronchiectasis patients. Based on these findings, Insmed plans to submit a regulatory filing for brensocatib in bronchiectasis soon. If approved, brensocatib will be the first treatment for bronchiectasis, with a potential commercial launch in mid-2025 in the U.S., followed by Europe and Japan in 2026.

In addition to bronchiectasis, brensocatib is being tested in clinical studies for chronic rhinosinusitis without nasal polyps (CRSsNP) and hidradenitis suppurativa. Top-line data from the phase IIb BiRCh study in CRSsNP is expected in late 2025. Insmed’s marketed drug, Arikayce, continues to see steady sales for treating refractory mycobacterium avium complex lung disease. The company is also expanding Arikayce’s label and testing new therapies, such as treprostinil palmitil inhalation powder for pulmonary hypertension.

Biotech’s Promising Future in 2025

It is evident that the biotech sector remains dynamic and full of potential. Innovative therapies and cutting-edge technologies are driving progress. Companies like MindMed, Beam Therapeutics, Arcellx, Ocugen, and Insmed lead the charge with breakthrough treatments. As these companies advance through clinical trials, investors should monitor their progress. The potential for significant returns is high, but risks remain, particularly regarding regulatory approvals. With continued R&D innovation and a focus on unmet medical needs, 2025 promises exciting opportunities in biotech.

Author

Bernice Lottering