BONUS: The Biotech Setup Looks Different This Time  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

February 22, 2026   |   Read Online 1 Must-Buy for Monday, February 23rd BONUS: The Biotech Setup Looks Different This Time First a message from our friends at The Oxford Club (sponsor) Dear Reader, I just bought 10,000 shares of a little $5 company... And I suggest you do the same. I think it could be a fantastic opportunity (as I explain here.) Similar to when I put $50k into a little-known mining company back in 1995... Then cashed out 3 years later for about $1.3 million. Get the details here... then decide for yourself. Yours for peace, prosperity, and liberty, AEIOU, Dr. Mark Skousen Macroeconomic Strategist, The Oxford Club BONUS ARTICLE The Biotech Setup Looks Different This Time Biotech has a special talent: It can make a revolution sound like a religion. "AI will fix drug discovery." "Precision medicine will change everything." "Platform, platform, platform." And then… the market sobers up and asks the only question that matters: Show me the clinical endpoint. That's why this moment feels different. Because the "Biotech Precision Rebound" isn't being driven by vibes. It's being driven by a shift in where capital is flowing: away from early science with infinite timelines toward clinical-stage assets with mature pipelines and upcoming readouts with neuropsychiatry and immunology showing real momentum and yes — the small-cap IPO window is finally starting to re-open in early 2026 Let's break it down. Scoreboard / What Happened 1) The IPO window is cracking open (and investors are rewarding readiness) Reuters reported U.S. biotech IPO proceeds in 2025 were ~$1.6B (Dealogic) — tiny versus ~$16B in 2021 — but multiple experts expect interest to revive in 2026, with a preference for mid-to-late-stage pipelines. And early 2026 has receipts: Aktis Oncology brought in $318M via an upsized IPO (with a large strategic participation noted in coverage). Agomab Therapeutics + SpyGlass Pharma raised a combined ~$350M, and BioPharma Dive noted a week where > $1B flowed into newly public biotechs. Eikon Therapeutics raised $381.2M in its IPO (priced at $18). Cheap Investor translation: When IPOs return, it's usually a sign the market is willing to underwrite risk again — but with a stricter demand for proof-of-concept. 2) Neuropsychiatry is back (because the data is back) Two big tells: Compass Pathways (CMPS) announced its second Phase 3 trial hit the primary endpoint for its psilocybin-based therapy in treatment-resistant depression. Vanda (VNDA) just got FDA approval for a new antipsychotic pill for schizophrenia and bipolar I disorder, per Reuters (with analysts debating commercial upside — which is exactly the kind of "good science, market-size debate" that creates pricing inefficiencies). Also, the "big money" has already validated the space: Bristol Myers Squibb completed its Karuna acquisition (a reminder that when CNS assets work, strategics pay real dollars). 3) Immunology is attracting capital because late-stage risk is clearer Kyverna's January update outlined initiation/enrollment progress on a Phase 3 registrational program in generalized myasthenia gravis (gMG), a classic "late-stage pipeline credibility" magnet. 4) The AI "utility" narrative is becoming tangible One concrete signal: Illumina launched the Billion Cell Atlas dataset to accelerate AI-enabled discovery (with major pharma collaborators), with Reuters framing it as part of a broader industry shift toward AI for discovery and safety testing. This matters because AI in drug discovery doesn't need to "invent medicine" overnight. It needs to improve the odds: better targets better molecules better trial design fewer dead-end programs The Real Reason: Why This Rebound Looks Different Than the Last Biotech "Hope Rally" Mechanism #1: Capital is rotating to mature risk, not early risk The market is rewarding programs with: human efficacy signals Phase 2/3 timelines clearer regulatory paths Reuters' point was blunt: investors are looking for drugs in mid-to-late-stage development. Mechanism #2: Neuropsychiatry is producing high-signal events again CNS used to be "high risk, low conviction." Now we're seeing: late-stage wins (CMPS) new approvals (VNDA) and big pharma paying up for credible assets (Karuna/BMS) That's a recipe for capital rotation. Mechanism #3: AI is shifting from branding to infrastructure Illumina's dataset effort is a perfect example: it's not hype, it's inputs that enable models to get better. Cheap Investor translation: when the tooling gets real, the returns show up in hit-rate and speed — not in slogans. Company/Theme Deep Dive: Where "Precision" Meets "Catalyst" Below are specific, tradeable examples tied to the theme. Not because they're "sure things" (nothing in biotech is), but because they map to what the market is paying for right now: clinical-stage maturity + visible catalyst paths. 1) Neuropsychiatry: Compass Pathways (CMPS) What it is / how it makes money (plain English) A clinical-stage CNS company trying to convert a differentiated therapy into a regulated, scalable treatment pathway. What changed CMPS reported its second Phase 3 hit the primary endpoint for treatment-resistant depression. Why the market cares CNS is notoriously difficult. Multiple Phase 3 wins change the probability-weighted value of the pipeline. Cheap Investor angle In biotech, "cheap" often means: the market still prices your asset like a single-trial story even after repeatable late-stage evidence emerges Current tape (for context): CMPS ~$8.05. 2) Immunology: Kyverna (KYTX) What it is An immunology-focused clinical-stage company with programs moving toward registrational-stage development. What changed Kyverna outlined progress and timeline around a Phase 3 registrational gMG program (a late-stage milestone investors tend to reward). Cheap Investor angle Immunology money tends to chase: clearer endpoints clearer regulators clearer trial paths Current tape: KYTX ~$7.68. 3) AI-to-clinic infrastructure: Illumina (ILMN) + "techbio" signals This is the "precision rebound" plumbing layer. Illumina's Billion Cell Atlas is designed to help train models to understand disease mechanisms and identify targets, with major pharma collaboration. Cheap Investor angle You don't need AI to "discover miracles" to make money in the stack. You need AI to: reduce attrition de-risk targets improve trial selection That supports the "transformative era" narrative if it results in more assets reaching late-stage. Current tape: ILMN ~$117.67. 4) The "techbio" pure-play risk/reward: Recursion (RXRX) + Schrödinger (SDGR) These are not "one drug" stories. They're attempts to industrialize discovery. Recursion positions itself as a clinical-stage techbio company and publishes pipeline details and trial disclosure commitments. Schrödinger is widely cited as a leading AI-driven discovery platform in the scientific literature (and connected to collaborations). Current tape: RXRX ~$3.42 SDGR ~$11.53 Cheap Investor angle: These names can look "cheap" because: the market discounts platform narratives after the 2021–2022 hangover …but if clinical utility shows up in the form of better candidates and faster readouts, platforms can re-rate hard. "Is It Cheap?" — How to Value a Precision Rebound Without Falling for a Lab-Coat Story The Cheap Investor test for this theme 1) Are there clinical endpoints, not just mechanisms? CMPS has Phase 3 endpoint success; VNDA has an approval event; KYTX is progressing a registrational program. 2) Is the pipeline mature enough that time-to-answer is reasonable? That's what late-stage assets and IPO investors are selecting for in 2026. 3) Is the financing environment improving? The early 2026 IPO prints (Aktis/Agomab/SpyGlass/Eikon) suggest the door is opening for the right stories. If you can't answer "yes" to at least two of those, it's not "precision rebound." It's just biotech roulette. Bull / Base / Bear Scenarios Bull case: "precision" earns its premium More late-stage readouts hit IPO window stays open AI/data tools translate into higher hit rates and better trial design Capital flows toward clinical-stage pipelines What wins: late-stage CNS + immunology, and selective techbio platforms Base case: choppy, selective market Some late-stage wins, some disappointments IPO market remains open but picky "quality clinical stage" outperforms broad biotech What wins: mature pipelines with near-term catalysts; avoid preclinical-heavy stories Bear case: risk-off + data disappointments A few high-profile failures shut the window Financing tightens Small-cap biotechs get diluted What wins: larger, cash-flow biotech; defensive positioning; strict sizing discipline Actionable Plan (No Hype, Just Process) 1) Choose your lane Lane A: Clinical catalyst names (higher signal) CMPS (late-stage CNS data) KYTX (registrational immunology progress) Lane B: Tools / platforms (higher duration, more narrative risk) ILMN (data infrastructure push) RXRX / SDGR (platform exposure, execution-sensitive) 2) Use a 1/3 – 1/3 – 1/3 scale-in framework Starter position on a pullback (don't chase biotech spikes) Add if the stock holds gains after catalyst news (the market "believes it") Add only if follow-through happens: trial enrollment, endpoint clarity, financing risk reduced 3) Don't ignore the "IPO tape" IPO windows reopening matter because they: reduce financing risk for the sector improve comps and sentiment Keep a running list of early 2026 IPOs and how they trade post-debut. Cheap Investor Checklist / Scorecard IPO cadence in 2026: number of deals and post-IPO performance Late-stage readouts (CNS/immunology): are endpoints being hit? Regulatory signals: approvals/label dynamics (VNDA example) Cash runway: financing risk is still the silent killer in small-cap biotech Trial execution: enrollment pace, discontinuations, protocol changes AI utility signals: datasets/tools adoption by pharma (Illumina collaboration footprint) Sector breadth: XBI vs IBB behavior — is the rebound broad or narrow? One red flag: "platform" names rallying without any clinical or partnership validation Bottom Line If biotech is entering a precision rebound, the winners won't be the loudest stories. They'll be the companies with: late-stage proof (or near-term proof) mature pipelines clear catalysts and a financing window that's reopening for the right risk profile Disclaimer: This article is for informational purposes only and does not constitute investment advice. 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