Why Are These Biotech Stocks Outperforming Their Peers?

Arrowhead Pharmaceuticals [ARWR], Cytokinetics [CYTK], Ionis Pharmaceuticals [IONS] and United Therapeutics [UTHR] surged between 30% to 45% in the first week of September following positive drug development updates.

The S&P Biotechnology Select Industry Index [SPSIBI] rose about 5.7% during the same period. 

This disparity highlights how stock-specific catalysts can deliver outsized returns for investors who know where to focus.

This article examines the regulatory developments shaping the US biotech and pharma sector, before unpacking what’s driving each stock’s recent surge.

Sector Talk: Streamlined Trials, AI Use and New Appointments 

On September 3, the US Food and Drug Administration (FDA) introduced the Rare Disease Evidence Principles. These are intended to speed up the process of rare disease drug development by identifying “alternative methods” to traditional clinical trials.

The FDA argued that, when it comes to drugs for rare diseases, it is “difficult or even impossible to generate substantial evidence of safety and efficacy” due to the smaller population being studied.

The regulator said eligible candidates must target genetic defects that affect a tiny population — fewer than 1,000 patients in the US — facing rapid deterioration.

Drug reviews are expected to speed up further following the integration of a generative artificial intelligence tool by the FDA, which is being used to “accelerate clinical protocol reviews, shorten the time needed for scientific evaluations and identify high-priority inspection targets”.

Meanwhile, the appointment of anti-vaccine activist Robert F. Kennedy Jr. as the head of the US Department of Health and Human Services under the Trump Administration has capped biotech and pharma stock gains in 2025.

Another key appointment that has affected biotech stock performance during the year was that of Vinay Prasad as the head of the FDA’s Center for Biologics Evaluation and Research (CBER).

In particular, gene and cell therapy-focused biotech firms endured a stock selloff following the appointment of Prasad on expectations of tougher drug approval standards. 

CBER oversees the reviews of vaccines, biological products, rare disease drugs, gene therapy and xenotransplantation.

On the tariff front, US President Donald Trump said in early August that he will slap a “small tariff” on pharmaceutical imports to the US, before raising it to 250% after a year, “because we want pharmaceuticals made in our country.”

Nearly 90% of US biotech companies relied on imported components for at least half of their approved products, the Biotechnology Innovation Organization reported in March.

Comparing ARWR, CYTK, IONS and UTHR 

Cytokinetics is a late-stage biopharmaceutical company focused on developing and commercializing treatments for diseases in which muscle performance is compromised.

Ionis Pharmaceuticals and Arrowhead Pharmaceuticals develop RNA-targeting medicines and therapies.

United Therapeutics is a pharmaceutical company that is focused on developing drugs for pulmonary arterial hypertension and other life-threatening diseases.

Source: Yahoo Finance

ARWR Stock in Focus

Shares of Arrowhead Pharmaceuticals experienced their best weekly performance of the year in early September, after the company signed a global licensing and collaboration agreement with Swiss pharma giant Novartis [NVS] for an experimental therapy that targets neurodegenerative diseases, including Parkinson’s Disease.

ARWR stock closed the first week of September 32% higher, at an over one-year closing high of $29.08.

Under the terms of the deal, Novartis will receive an exclusive worldwide license to develop, manufacture and commercialize ARO-SNCA, a preclinical stage program that utilizes Arrowhead’s Targeted RNAi Molecule platform to shut down specific genes that cause disease.

Arrowhead will pocket an upfront payment of $200m from Novartis and will be eligible to receive up to $2bn in potential milestone payments plus royalties on commercial ARO-SNCA sales.

H.C. Wainwright analysts said the deal will extend Arrowhead’s cash runway without diluting its ownership, Reuters reported.

CYTK Stock in Focus

On September 2, shares of Cytokinetics jumped over 40% following a positive update on its experimental heart drug called aficamten.

The company said aficamten produced superior echocardiographic results compared to the current standard-of-care metoprolol in patients with hypertrophic cardiomyopathy (HCM), a genetic heart condition that causes the heart muscle to thicken and can obstruct blood flow.

The US FDA is currently reviewing a new drug application for aficamten, with a deadline for completing its review set for December 26, 2025.

A lot is riding on aficamten, the success of which Cytokinetics hopes will lay the foundation for its specialty cardiology franchise.

Analysts at Jefferies expected obstructive HCM drug sales to peak at $2.3bn in the US, Barrons reported.

IONS Stock in Focus

Similarly, shares of Ionis closed 35% higher on September 2, before rising further to hit an over four-and-a-half-year high of $62.08 a day later.

IONS stock surged after the company announced positive updates for its upcoming drug, olezarsen, which is being developed to treat patients with severe hypertriglyceridemia.

The company reported that olezarsen demonstrated up to 72% placebo-adjusted mean reduction in fasting triglycerides and a significant reduction in acute pancreatitis during its phase 3 clinical trials.

Ionis plans to submit a supplemental new drug application to the FDA by the end of the year.

Citing a report from a William Blair analyst, Barrons reported that approval of olezarsen would open a $1.7bn market if the company reaches just 15% of 1.2 million patients at the highest risk.

UTHR Stock in Focus

Shares of United Therapeutics hit an all-time high of $436.95 on September 2 on news that the company’s nebulized Tyvaso inhalation solution produced “significant improvements” in patients with idiopathic pulmonary fibrosis (IPF).

IPF is a progressive and incurable lung disease where lung tissue becomes thick and stiff for unknown reasons, according to the National Heart, Lung and Blood Institute.

“Existing IPF treatments offer only modest benefits, often with challenging side effects. These results represent a major step forward, giving us hope for improving outcomes in patients who desperately need better options. These unequivocally positive results included endpoints that were not attained in prior phase 3 IPF clinical trials — including, importantly, a difference in quality of life,” said Steven D. Nathan, Chair of the Steering Committee.

United Therapeutics said it will use the data to support a supplemental new drug application for nebulized Tyvaso to the FDA. 

The company added that it plans to meet the FDA before the end of the year to “discuss ways to potentially expedite the regulatory review process.”

Citing a report by UBS analyst Ashwani Verma, Reuters reported that the launch of nebulized Tyvaso for IPF treatment is expected to generate $3bn in nominal peak sales.

Conclusion

The recent rallies in Arrowhead, Cytokinetics, Ionis and United Therapeutics highlight how breakthrough clinical results and strategic partnerships can rapidly reprice biotech valuations, regardless of broader sector headwinds such as tariffs, leadership shifts and pricing pressures.