Sahak Manuelian, managing director, global equity healthcare sales & trading at Wedbush, joins BNN Bloomberg to discuss the markets with a focus on the biotech

After a prolonged slump, biotech stocks are staging a strong recovery as investors rotate back into value and healthcare. Lower interest rates, renewed M&A activity and fading policy risks are helping revive confidence in the once-beaten-down sector.

BNN Bloomberg spoke with Sahak Manuelian, managing director of global equity healthcare sales and trading at Wedbush, about what’s driving the biotech rebound, why small-cap names are leading the charge and which areas could see further upside heading into 2026.

Key Takeaways

  • Biotech stocks are rebounding after a four-year bear market as investors return to undervalued names and M&A activity accelerates.
  • Rotational shifts are pushing money from growth and momentum stocks into value and defensive sectors, including healthcare.
  • Lower interest rates and easing recession fears are supporting biotech’s renewed strength heading into 2026.
  • Investor sentiment improved after Pfizer’s pricing agreement with the U.S. government eased concerns about strict drug policies.
  • Analysts highlight Scholar Rock and Denali as promising biotech plays with strong long-term potential despite near-term volatility.

Sahak Manuelian, managing director of global equity healthcare sales and trading at Wedbush Sahak Manuelian, managing director of global equity healthcare sales and trading at Wedbush

Read the full transcript below:

ROGER: Our next guest has been tracking the biotech sector and is liking what he’s seeing — a seasonal outperformance within the biotech complex since early summer. Let’s get more on this with Sahak Manuelian, managing director of global equity healthcare sales and trading at Wedbush. Thank you very much for joining us, Sahak.

SAHAK: Thank you for having me.

ROGER: What are you liking about this, and what do you think is fuelling it?

SAHAK: We’ve seen a really nice move higher within the biotech complex. The group has been in a bear market for the better part of the last four years, and what we’ve seen through the summer and more recently is valuations getting very cheap. We’ve also seen a pickup in mergers and acquisitions in the space and a cleansing, if you will, of some early-stage IPOs from 2020 and 2021. A lot of paper came to market at relatively expensive prices, and these were really early-stage biotech companies.

So we’ve seen a clearing out of that. There have been several reverse-merger-type deals, and some “zombie” companies have returned cash to shareholders after losing their lead assets. While most CEOs don’t like to shut down operations, this has been healthy for the group. Positioning has also been quite low, which has helped.

Interest rates are another key factor. As rates have started moving lower — and are expected to keep falling — that’s provided further support. Markets are pricing in another 25 to 50 basis points of cuts by the end of the year, and recession fears have eased thanks to a stronger macro backdrop.

ROGER: That all sounds like good news. Is there any spillover effect from AI, or are investors just realizing there are strong opportunities in biotech?

SAHAK: I think there are a lot of factors helping the group move higher. We’re seeing rotational forces beneath the surface pushing more value and defensive names higher, while some of the shine is coming off areas like AI, technology and communication services — sectors that have shown tremendous outperformance over the past few years.

As rates continue to fall and the macro backdrop remains stable, investors are looking for new sources of alpha heading into year-end and into 2026. We’re seeing money rotate out of some of the recent winners and into value and defensive areas. Within value, healthcare offers both defence and growth, and biotech — which has been beaten up for several years — is drawing investors back now that valuations look compelling again.

ROGER: You mentioned this has been a four-year bear market. Are you concerned it could return?

SAHAK: Sure, it could. We’ve been in this bear market since the highs of early 2021. But the move higher since June and July has been strong enough that biotech has turned positive for the year. Any near-term pullback from current levels would likely present another buying opportunity for investors who may have missed the recent rally.

ROGER: Are there certain areas within biotech you’re watching more closely?

SAHAK: Definitely. We’re watching several areas, particularly neuromuscular and neurodegenerative diseases. We highlighted a couple of names — Scholar Rock and Denali — that we think still look attractive for investors.

ROGER: Denali is down about 38 per cent over the past year. Do you think it’s on its way back up?

SAHAK: I do. Denali sets up well here. The risk-reward looks reasonable. The FDA recently pushed out its PDUFA date for Hunter syndrome by three months to April 5, 2026. But there’s been no change to the composition of the review team, and the company continues to have regular dialogue with regulators. There’s been no request for additional data, so we think the review is progressing normally and that the stock still has upside potential.

ROGER: And what about Scholar Rock?

SAHAK: Scholar Rock — ticker SRRK — has an outperform rating from us. The company recently received a complete response letter from the FDA for its spinal muscular atrophy program, and interestingly, the stock rallied after that. More recently, the FDA issued what’s called an official action indicated, or OAI, and the stock fell back below $30.

We think this weakness creates opportunity. The franchise should ultimately have a powerful drug launch, though it may be delayed by about four quarters. We still expect eventual approval and believe this pullback offers investors a good entry point.

ROGER: Sahak, thank you very much for joining us today.

SAHAK: Thank you.

ROGER: That was Sahak Manuelian, managing director of global equity healthcare sales and trading at Wedbush.

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This BNN Bloomberg summary and transcript of the Oct. 20, 2025 interview with Sahak Manuelian are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.