Motley Fool Money

Episode: Biotech Beat NVIDIA in 2025. Can It Do It Again?
Date: February 2, 2026
Host: Tim Byers
Guests: Carl Thiel, Tom King

Episode Overview

This episode dives into the recent surge in biotech stocks, how the sector unexpectedly outperformed tech darling NVIDIA in 2025, and whether this momentum can hold through 2026. The panel discusses industry headwinds—most notably, regulatory uncertainty at the FDA—before moving into detailed earnings predictions for Eli Lilly, Novo Nordisk, and Twist Bioscience. The conversation is candid, rich with market context, and sprinkled with expert insights for long-term investors with an eye on biotech.

Key Discussion Points and Insights

1. The Biotech Boom: Outperforming NVIDIA (00:30–01:46)

• 2025 was a banner year for biotech:
  • Carl Thiel notes the XBI (S&P Biotech ETF) outperformed NVIDIA after "a very, very long, bleak period."
  • Despite the optimism, Thiel issues a caution: “There’s a few alarm bells or a few flags out there that I think are interesting and that people need to be aware of.” (01:26, Carl Thiel)

2. FDA Uncertainty and Its Market Impact (01:46–09:22)

Regulatory Turbulence at the FDA

• Leadership Turnover and Regulatory Chaos:
  • The FDA saw an unusual amount of change—“one of five people who headed up the main drug approval division just in 2025.”
  • Richard Pazdor, ex-head of the oncology division, warns at a recent J.P. Morgan conference that “the firewall between political appointees and drug reviewers has been breached... the pharma industry is continuing to underestimate the damage that’s already been done.” (02:10, paraphrased from Carl Thiel)
  • Confusing regulatory signals risk both longer approval times and inconsistent outcomes for biotech firms.

Balancing Quick Approvals with Safety

• Attempts to Modernize the FDA:
  • “...Martin Curry, the current commissioner... has been very, very forward looking about how he wants to speed approvals... including a plausible mechanism pathway... where the agency could approve drugs based on limited clinical data, basically if the biology makes sense.” (04:00, Carl Thiel)
  • Despite this, investors face mixed signals; in some instances, the bar for approvals in rare disease is increasing, not lessening.

Real-World Examples of Regulatory Contradiction

• Case of Regenex Bio and Hunter Syndrome:
  • Regenerative medicine and gene therapies have faced sudden setbacks—e.g., FDA halted approval of a Regenex Bio drug after a benign tumor appeared in a related trial, even though the drugs used slightly different vectors.
  • “...it seems to contradict what FDA had been saying previously, which is that they were going to be more tolerant of these fatal rare diseases. And that's not what we’re seeing.” (07:23, Carl Thiel)

Implications for Investors

• Adjusting the Investment Lens:
  • Extra risk is required around gene/cell therapy investments: “You have to maybe build in extra timelines for more questions for things being delayed and stuff like that.” (08:44, Carl Thiel)
  • Tom King adds, “We've seen the current skepticism around vaccines and MRNA based therapies... you just got to factor that into your risks.” (09:30, Tom King)

3. Biotech Earnings Predictions (11:03–20:57)

Eli Lilly (LLY): The Weight Loss Juggernaut (11:03–13:46)

• Consensus: Both Tom and Carl predict a “beat” for LLY’s earnings.
• Key driver: Blockbuster GLP-1 weight loss drugs—“These GLP1 drugs, they are biotech drugs and they are in the driver’s seat right now.” (12:39, Carl Thiel)
• Risks: The removal of Tirzepatide from the CVS formulary, which could shift patients to competitors, is noted as a potential—but likely manageable—headwind.

Novo Nordisk (NVO): In Transition (13:46–17:03)

• Earnings Outlook: Tom sees a “miss” as slightly more likely, given company struggles; Carl is looking for a “meet” or modest “beat.”
• Dividend prospects: Both agree the odds of a dividend this quarter are low, given a new CEO’s focus on acquisitions and a desire to conserve cash.
• Key theme: Focus is on the oral WeGovy launch, with Carl noting, “Oral wegovy numbers have been strong.” (16:06, Carl Thiel)

Twist Bioscience (TWST): Solid Execution in a Tough Market (17:03–20:18)

• Quarterly Results: $104M in revenue—exactly as previewed, and part of a strong, consistent upward trend.
• Business model: Twist “makes DNA for other people”—mostly supporting researchers and other biotechs, making it less directly exposed to FDA volatility.
• Resilience: Despite the “biotech winter,” revenue has grown by ~$60M per year, cash burn is decreasing, and profitability is getting closer.
• Valuation perspective: Shares swung from a 111x revenue multiple during the 2020–21 craze down to 3x in 2023; now sits at a reasonable 7x revenue.
• Carl’s take: “Tremendous technology. It's a great, great beat and raise quarter.” (20:39, Carl Thiel)

4. Notable Quotes & Memorable Moments

• On FDA turbulence: “The firewall between political appointees and drug reviewers has been breached... the pharma industry is continuing to underestimate the damage that’s already been done.” (02:10–02:40, Carl Thiel relaying Richard Pazdor)
• Practical investing advice: “You have to maybe build in extra timelines for more questions for things being delayed and stuff like that.” (08:44, Carl Thiel)
• About biotech’s new status: “I love that you’re referring to Lilly as a biotech company. That’s such a victory for biotech. This is like a century-old big pharma company.” (12:39, Carl Thiel)
• Valuation lesson from Twist Bioscience: “It traded at an eye watering 111 times revenue multiple. It subsequently reached a low of 3 times revenue in May of 2023... Now it’s at a more reasonable seven times.” (19:12, Tom King)

Timestamps for Important Segments

• Biotech Outperforms NVIDIA, 2025 market recap: 00:59–01:46
• FDA upheaval and Richard Pazdor’s warning: 01:46–04:00
• Contradictory FDA signals & gene therapy case studies: 06:03–08:44
• Guidance for biotech investors (risk narrative): 08:44–09:51
• Earnings Predictions — Eli Lilly: 11:03–13:46
• Earnings Predictions — Novo Nordisk: 13:46–17:03
• Earnings Recap — Twist Bioscience: 17:03–20:18
• Exposure to FDA risk for DNA tools companies: 20:18–20:57

Panel Tone

Engaged, expert, and pragmatic—offering actionable insights, industry anecdotes, and a healthy dose of caution amidst enthusiasm for biotech’s renewed momentum.

Final Takeaways

• Biotech’s historic outperformance vs. NVIDIA in 2025 has emboldened the sector but major regulatory headwinds remain, especially in gene and cell therapy fields.
• Investors should add a risk and timeline premium for early-stage biotech, particularly those in complex, fast-moving regulatory categories.
• Mature, diversified players like Eli Lilly may continue to thrive via blockbusters; others like Novo Nordisk face more challenges but have strategic levers, like new drug launches or M&A.
• Enablers like Twist Bioscience, serving the broader research ecosystem, show signs of resilience regardless of FDA swings.

Want more insights? Tune in tomorrow for a dive into AI and gaming innovations on the next Motley Fool Money.