B. Riley’s Top Biotech Picks Ahead of 3Q26 Earnings Season

Investing.com -- B. Riley analyst Mayank Mamtani has identified top biotech picks heading into third-quarter 2026 earnings season, following the Federal Reserve’s 25 basis point rate hike to 4.00%, its first increase since July 2023. The unanimous 12-0 vote left room for one to two additional hikes before year-end. With the 10-year Treasury at its highest level since 2007, small and mid-cap biotech stocks face a macro-driven drawdown that historically has presented buying opportunities.

1. Axsome Therapeutics (AXSM) - Rated Buy with a $300 price target and up 6% year-to-date. Shares are down 20% from year-to-date highs. The third-quarter 2026 report reflects the first full quarter capturing AUVELITY’s expansion into adjunctive treatment for major depressive disorder. Third-quarter-to-date IQVIA data shows AUVELITY total prescriptions up 10% quarter-over-quarter and 35% year-over-year, with wholesale spending dollars up 25% quarter-over-quarter. The analyst models AUVELITY revenue at approximately $205 million to $210 million, with consensus at $215.8 million. Total revenue is projected at approximately $259 million, with fiscal year 2026 tracking just short of $1 billion at approximately $976 million.

2. Cytokinetics (CYTK) - Rated Buy with a $146 price target and up 4% year-to-date. Proprietary weekly IQVIA tracking through September 11 shows approximately $15 million of MYQORZO wholesale in third-quarter-to-date versus $8.9 million for all of second quarter, tracking to approximately $18 million for the full quarter. This volume supports approximately $42 million to $47 million of U.S. net product revenue and approximately $46 million to $50 million of total product revenue including Europe, roughly double the second-quarter level versus consensus of approximately $36 million to $37 million. Weekly wholesale set successive highs on August 21 at $1.70 million and September 4 at $1.87 million.

3. Eton Pharmaceuticals (ETON) - Rated Buy with a $70 price target and up 229% year-to-date. The analyst believes the Street is gaining appreciation for ETON’s margin profile alongside accelerating revenue potential. Consensus third-quarter 2026 and fiscal year 2026 revenue stands at $42 million and $149.7 million versus management’s guidance of over $145 million for fiscal year 2026. Adjusted gross margin is expected to print at approximately 74% versus 73% in second quarter and 67% in first quarter, with fiscal year 2026 landing just above management’s over 70% target.

4. Harrow (HROW) - Rated Buy with a $60 price target and down 31% year-to-date. The diversified ophthalmic platform has fiscal year 2026 guidance of $350 million to $365 million, implying second-half 2026 revenue of $235 million to $250 million on first-half revenue of approximately $115 million and approximately 31% fiscal year growth at the midpoint. The analyst models third-quarter 2026 at $99.8 million against consensus of $99.1 million and fourth-quarter 2026 at $135.4 million against consensus of $136.8 million.

5. TG Therapeutics (TGTX) - Rated Buy with an $86 price target and up 95% year-to-date. The commercial-stage anti-CD20 multiple sclerosis franchise is positioned to compound off an approximately $1 billion U.S. Briumvi exit run-rate at year-end 2026. Full Phase 3 ENHANCE results are expected at MSToronto2026 on October 21-23, consolidating Day 1 and Day 15 loading into a single 600-mg Day 1 infusion. Subcutaneous ublituximab Phase 3 top-line data follows at year-end 2026 or first quarter 2027.

6. Zymeworks (ZYME) - Rated Buy with a $44 price target and up 4% year-to-date. Partner Jazz Pharmaceuticals’ third-quarter 2026 report in early November provides the first commercial read on the first-line HER2-positive gastroesophageal adenocarcinoma launch following the August 25 approval and $250 million milestone. Launch mechanics favor a clean start with over 90% prescriber overlap from Ziihera’s second-line biliary footprint. Fourth-quarter 2026 and fiscal year 2027 Ziihera consensus stands at $44 million and $364 million.

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