The Zacks Analyst Blog Mineralys, Lyell, Insmed and Nektar

Zacks highlights four drug/biotech names—Mineralys (MLYS), Lyell (LYEL), Insmed (INSM) and Nektar (NKTR)—that rallied strongly in 2025 on positive clinical, regulatory and commercial developments and have further upside into 2026. Mineralys reported positive pivotal phase III and phase II data for lorundrostat and plans an NDA submission in early 2026 (MLYS YTD +203.4%; 2026 loss estimate narrowed from $3.06 to $2.50); Lyell has RMAT-designated ronde-cel, ~$320M cash and expansion of its pipeline (LYEL YTD +191.6%; 2026 loss est. narrowed $12.68 to $9.70). Insmed’s Arikayce generated $314.5M in sales in the first nine months of 2025 (+21% YoY) and Brinsupri showed a strong US launch ($28.1M Q3 sales) despite a failed BiRCh CRSsNP study, while Nektar posted positive REZOLVE phase IIb readouts and plans phase III advancement (NKTR YTD +218.8%; 2026 loss est. narrowed $12.82 to $10.81).

Analysis

Market structure: Recent positive readouts and FDA activity concentrate winners in small/mid-cap drug developers with late-stage assets — specifically MLYS (lorundrostat) and NKTR (rezpeg) — and acquirers with inorganic firepower. Payor/pricing tailwinds from federal agreements reduce downside from aggressive drug pricing, increasing M&A probability (greater than historical average), which should bid up takeover candidates and compress yields on speculative biotech debt.

Risk assessment: Binary regulatory and commercial risks dominate: MLYS NDA submission in early 2026 and multiple H1 2026 readouts (LYEL LYL273, INSM CEDAR, MLYS Explore‑OSA) are 30–70% binary-value events that could move shares ±50%+ in days. Hidden dependencies include manufacturing scale (CAR‑T capacity), reimbursement pathways, and near‑term dilution risk if cash burn exceeds runway; LYEL’s $320m cash is a positive data point but not a guarantee beyond 18–24 months.

Trade implications: Tactical allocations should be asymmetric — small concentrated long exposure to MLYS and NKTR sized 1.5–3% each with built‑in hedges. Use calendar/vertical call spreads (6–12 month) to capture upside while capping premium; sell short-dated (30–60 day) implied‑volatility spikes post-data using iron condors on heavily implied tickers to monetize elevated IV.

Contrarian angles: Consensus underestimates payor resistance and real-world adherence; commercial penetration assumptions (best‑in‑class) can be 30–60% overstated relative to trial efficacy. Historical parallel: 2019–2021 biotechs that rallied into single‑asset catalysts often retraced 60% after label/reimbursement setbacks — prepare for asymmetric outcomes and potential opportunistic M&A squeezes that can drive short-term overshoots.

Key Decisions for Investors

• Establish a 2–3% portfolio long position in MLYS now (scale in over 2–4 weeks); hedge with 6–9 month 20–25% OTM put protection sized to 30% of the equity notional. Target 12–18 month upside of +80–150% on NDA approval or +30–50% on positive commercial traction; cut exposure if shares fall >30% from entry or FDA issues arise.
• Allocate 1–2% to a synthetic long in NKTR via 9–12 month call spreads (buy 25–35% OTM calls, sell 60–80% OTM calls) to cap premium; take profits on a 50% move higher and reduce if REZOLVE phase‑III advance is delayed beyond H1 2026.
• Implement a relative‑value pair: long 1–1.5% position in LYEL (company‑specific RMAT/candidate catalysts) vs short 1% of XBI to isolate company upside from sector beta; reassess after H1 2026 pivotal starts or LYL273 data.
• Buy portfolio biotech tail insurance: allocate 0.5–1% of portfolio to 3–6 month 15–20% OTM puts on a biotech basket (MLYS, NKTR, LYEL weighted) ahead of clustered H1 2026 readouts to limit downside from binary failures; avoid adding to INSM until CEDAR readout and confirm no near-term dilution (avoid follow-on within 90 days).