Uncertainty looms, which U.S. biotech stocks are expected to break through? Goldman Sachs provides the answer
Goldman Sachs released a report on the outlook for the U.S. biotechnology industry, pointing out that due to macroeconomic and policy uncertainties, the U.S. biotechnology sector has performed poorly, with a decline of about 20%. It is recommended to focus on companies less affected by tariff and policy risks, such as Vertex Pharma and Alnylam Pharma. Goldman Sachs expects the impact of tariffs to be manageable, primarily depending on profit margins and tariff levels, while changes in Medicare and Medicaid will also affect the sector
According to the Zhitong Finance APP, Goldman Sachs recently released a report on the outlook for the U.S. biotechnology industry. Due to increasing uncertainty surrounding the macro economy/tariffs and U.S. healthcare policies, the U.S. biotech sector has performed poorly, declining about 20% year-to-date in 2025, significantly underperforming the S&P 500 index. In this context, Goldman Sachs recommends focusing on companies less affected by tariff and policy risks, such as Vertex Pharma (VRTX.US), Alnylam Pharma (ALNY.US), Gilead Sciences (GILD.US), Amgen (AMGN.US), and Biogen (BIIB.US).
Although President Trump recently announced a 90-day suspension of "reciprocal tariffs" on most countries, previous tariffs and a 10% minimum baseline tariff remain in effect. Goldman Sachs' macro team expects the U.S. to impose additional specific industry tariffs, including on pharmaceuticals. Due to limited disclosure of manufacturing layout information by companies, the impact of tariffs on the biopharmaceutical industry remains difficult to assess.
However, Goldman Sachs anticipates that the impact of tariffs is generally manageable, with specific effects depending on overall profit margin conditions and final tariff levels. Assuming that about 50% of U.S. sales are provided by non-U.S. manufacturing and the tariff rate is 50%, the impact on profit margins would be between 2-3%.
In terms of addressing tariff risks, Goldman Sachs believes that Vertex Pharma and Alnylam Pharma appear to be in the best position, followed by Gilead Sciences, Amgen, and Biogen, while Regeneron Pharmaceuticals (REGN.US) faces challenges.
Additionally, potential changes to U.S. Medicare and Medicaid will also impact the U.S. biotech sector. Although the Trump administration has reiterated that Medicare/Medicaid will not be affected, a report from the U.S. Congressional Budget Office indicates that spending cuts (especially to Medicaid) may be necessary to offset the effects of tax reduction policies.
Goldman Sachs believes that Amgen, Biogen, Regeneron Pharmaceuticals, and Alnylam Pharma seem to be the least affected by changes in Medicaid.
Goldman Sachs also advises investors to choose small and medium-sized enterprises with good cash flow and limited healthcare policy and tariff risks, including Blueprint Medicines (BPMC.US). Goldman Sachs is also focused on potential merger and acquisition opportunities among small and medium-sized enterprises.
Overall, Goldman Sachs has assigned "Buy" ratings to Amgen, Biogen, Regeneron Pharmaceuticals, Vertex Pharma, Blueprint Medicines, and Alnylam Pharma; "Neutral" ratings to Gilead Sciences, Incyte (INCY.US), and Moderna (MRNA.US); and "Sell" ratings to Acadia (ACAD.US), Ionis Pharmaceuticals (IONS.US), and Intellia Therapeutics (NTLA.US)