Two Biotech Plays Worth Watching into 2026: Growth Through Innovation

The healthcare sector faced headwinds in 2025, yet certain biotech companies demonstrated remarkable resilience. Axsome Therapeutics (NASDAQ: AXSM) and Exelixis (NASDAQ: EXEL) stand out as compelling opportunities for patient long-term investors seeking exposure to companies with tangible growth drivers.

Axsome Therapeutics: Leveraging a Diversified Pipeline for Expansion

Axsome Therapeutics has methodically built momentum through consistent clinical wins and regulatory approvals. Its current product arsenal—featuring Auvelity for depression management, Symbravo for migraine relief, and Sunosi for narcolepsy-induced daytime sleepiness (acquired from Jazz Pharmaceuticals)—provides a solid revenue foundation that generated $442.5 million through the first nine months of 2025, reflecting impressive 65.8% year-over-year growth.

The real excitement, however, lies ahead. The company is navigating toward a potentially transformative approval for Auvelity as a treatment for Alzheimer’s disease agitation. This represents substantial market opportunity—approximately 5 million U.S. AD patients experience agitation, yet only one approved therapeutic exists. Industry observers suggest Auvelity could achieve blockbuster status in this indication alone.

Beyond AD agitation, Axsome’s late-stage development pipeline showcases promising breadth. The company is preparing regulatory filings for AXS-12 in narcolepsy management, while simultaneously advancing AXS-14 for fibromyalgia and exploring Sunosi applications in ADHD—marking a symbol of the company’s commitment to addressing underserved patient populations across neurology and psychiatry. These multiple catalysts position Axsome to substantially increase revenue and approach profitability within the next five years.

Exelixis: Defending Market Position While Preparing for Next-Generation Growth

Exelixis has established itself as an oncology specialist, with Cabometyx serving as its flagship engine. The therapy holds the distinction of being the most-prescribed tyrosine kinase inhibitor for renal cell carcinoma (kidney cancer’s most prevalent form) and maintains approved indications across multiple cancer types. Through September 2025, the company reported $1.7 billion in revenue, representing approximately 7.5% growth year-over-year.

What makes Exelixis particularly attractive is its patent portfolio strength. The company has successfully defended its intellectual property position, with Cabometyx facing no meaningful generic competition risk until the next decade—providing substantial runway for continued revenue generation from its core asset.

However, Exelixis isn’t resting on current success. The biotech disclosed robust phase 3 data for Zanzalintinib, a next-generation oncology candidate, in metastatic colorectal cancer. A regulatory submission appears imminent, addressing a critical clinical need: colorectal cancer remains the second-leading cause of cancer deaths globally, and current treatment options for metastatic disease remain inadequate. Zanzalintinib carries significant revenue potential as a next-decade driver, while simultaneously reducing Exelixis’ dependence on Cabometyx ahead of eventual patent expiration.

The company’s oncology expertise and diverse pipeline across all development stages suggest continued innovation momentum is forthcoming throughout 2026 and beyond.

The Investment Case Forward

Both companies offer different yet complementary narratives: Axsome presents a rapidly scaling revenue story with multiple near-term catalysts, while Exelixis provides stable cash generation paired with transformational pipeline assets. For investors seeking biotech exposure with concrete near-term events and defensible market positions, either warrant serious consideration entering 2026.