These 3 biotech stocks are highly innovative, but can they turn a profit?

In a blog post in April, ARK Invest’s Shea Wihlborg noted that M&A in the biotech sector is increasing. 

“A key driver is the looming patent cliff, with ~$300bn in branded prescription drug revenue likely to lose patent exclusivity by the end of 2030.” 

The M&A spike is thus more than a trend – it is “a structural bid” which could endure as patent pressures mount. 

However, within biotech, wrote Wihlborg, “the larger opportunity — one arguably misunderstood by the market — is in modalities that could shift treatment paradigms from chronic management to one-time cures… In our view, as clinical validation increases, acquirers making early bets on paradigm-shifting modalities are likely to capture the largest long-term value.”

One name at the forefront of this opportunity is Tempus AI [TEM], a biotech firm which is a particular favourite of Cathie Wood, as CMC Aureon recently detailed. TEM stock is currently in third place among all of flagship fund ARKK’s holdings, at 5.27%, and fourth across all the ARK funds, at 3.93%. 

This week, we’ll look at three other stocks that could benefit from the dynamic shift identified by ARK’s analysts. 

Twist Bioscience: The DNA sequencing play

Another biotech stock which ARK has got its eye on is Twist Bioscience [TWST]. The stock is 12th (at 2.82%) among all ARK’s holdings and 13th in ARKK (3.23%). Wood is not the only investor excited about TWST stock, which is up 42.89% over the last 12 months, albeit down from the heady heights of the immediate post-IPO period in 2021.

Based in San Francisco, Twist manufactures synthetic DNA and DNA products. As such, it is squarely at the forefront of the ongoing decrease in the cost of reading and sequencing DNA. 

It was buoyed by a better-than-expected Q1 FY2026 update. Revenue rose some 17% year-on-year to $103.7m and the company raised full-year guidance, reinforcing confidence in its synthetic DNA platform as demand builds in AI-enabled drug discovery and genomics workflows.

Analysts have focused on the improving growth trajectory — now marking its 12th consecutive quarter of revenue expansion — but continue to flag persistent losses and the credibility of a still-developing path to EBITDA breakeven as the key valuation tension.

The stock will be highly sensitive to any evidence of slowing demand or margin disappointment heading into its next earnings cycle. Twist will report Q2 earnings before market opens on May 4.

Intellia Therapeutics: The gene-editing play

Intellia Therapeutics [NTLA] surged at the end of April after delivering strong Phase 3 HAELO trial results for its one-time in vivo CRISPR therapy lonvo-z, which reduced hereditary angioedema attacks by some 87% and positioned it as potentially the first gene-editing drug to reach approval in this setting. 

The data has shifted sentiment meaningfully, with analysts highlighting a clearer path toward FDA filing and a potential US launch in 1H 2027, supported by a rolling biologics license application (BLA) submission already underway.

However, market commentary remains cautious: despite the clinical breakthrough, concerns persist around commercial adoption, safety history in related programmes and the durability of patient uptake versus existing chronic therapies.

This has not discouraged ARK, which recently bought a total of 263,848 shares across the ARKK and ARKG ETFs, valued at $3,596,248.

NTLA stock is up 51.7% over the past 12 months.

Intellia Therapeutics recently announced an underwritten public offering of some 16.7m shares at $10.75 each, raising roughly $180m in gross proceeds to fund ongoing CRISPR gene-editing development. The company also granted underwriters a 30-day option to purchase an additional 2.5m shares, with Jefferies, Goldman Sachs and Citigroup acting as joint bookrunners.

The firm’s next earnings call is expected on May 14.

Guardant Health: The molecular diagnostics play

Guardant Health [GH] is accelerating its transition from a pure-play liquid biopsy diagnostics company into a broader oncology platform, supported by FY2026 revenue guidance of $1.25–1.28bn (27–30% growth) and continued 30% oncology volume expansion, driven by strong adoption of its Guardant360 and Shield screening franchises.

Recent catalysts – including FDA approvals for expanded companion diagnostic use in colorectal cancer, new biomarker-driven indications and multiple collaborations such as its strategic partnership with Merck [MRK] — reinforce its positioning at the centre of precision oncology and therapy selection workflows.

However, market commentary remains split: while revenue growth and screening uptake are strengthening the top-line narrative, ongoing cash burn and heavy investment in Shield and multi-cancer detection keep GH firmly in a growth-at-scale-before-profitability phase, making sentiment highly sensitive to reimbursement and adoption inflection points. 

Indeed, ARK is treading cautiously on this stock – it comprises just 0.36% of the total across all the funds, and 3.52% of ARKG, the ARK Genomic Revolution ETF, putting it in 11th place in that fund’s holdings.

GH stock is up a very healthy 68.40% over the last 12 months. The firm reports on May 7. 

This is how the three stocks fundamentals currently line up.

Source: Yahoo Finance

Conclusion: the investment case for TWST, NTLA and GH 

Overall, the biotech sector is increasingly being reshaped by a structural M&A cycle, driven by patent cliffs and the strategic push by big pharma to secure next-generation modalities early. 

In that context, Twist Bioscience, Intellia Therapeutics and Guardant Health each sit at different points on the innovation curve: TWST represents enabling infrastructure for synthetic biology, NTLA offers high-conviction but binary exposure to CRISPR-based curative therapies, and GH is progressing toward scaled commercialisation in liquid biopsy diagnostics. 

The bull case across all three rests on platform scalability, expanding clinical validation and rising strategic value in an environment where acquirers are paying for paradigm-shifting technologies. 

The bear case, however, is similarly consistent: persistent cash burn, execution risk and the long path from scientific validation to durable profitability. With sentiment increasingly sensitive to clinical data, reimbursement dynamics and financing needs, these names remain highly event-driven but strategically positioned for consolidation-driven upside.

CMC Aureon’s proprietary theme relevance system maps the world’s biggest investing megatrends. For in-depth analyses of stocks with high growth potential, subscribe to CMC Aureon Foresight.