Biopharma Appears a Safe Bet Now, So I'm Adding Two Names
Amid the AI chaos and Iran war uncertainty, I see this industry as safe place to invest.
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AI disruption fears dominated headlines in February, and this continued to push the software sector down through the month. Late in February, concerns around the private credit markets rose significantly, mainly due to events at Blue Owl Capital (OWL) . March has seen a new worry emerge for global investors with the decapitation of leadership in Iran and the start of a shooting war in the Middle East.
These events have essentially closed transit through the Strait of Hormuz. Approximately a fifth of global crude oil shipments go through the strait. The lead up to the conflict and its aftermath has caused oil prices to spike. This has been great for my holdings in the energy sector like ConocoPhillips (COP) and Devon Energy (DVN) , but has been a headwind for the overall market.
Healthcare and biotech/biopharma stocks continue to have the biggest allocation within my portfolio. These industries should see little impact from events overseas. It is hard to map out how this new conflict will unfold or how long it will last. Therefore, I am building a biopharma buying list consisting of holdings I will add to through covered-call orders if this pullback continues in the weeks ahead. In today’s article, I will highlight two names I added to during Tuesday’s market decline. In my weekend column, I will profile another biopharma I just added again to my portfolio as my covered-call trade of the week.
I will start with Harrow Health (HROW) which sold off 28% in trading on Tuesday after fourth-quarter results missed the bottom-line consensus and management offered up less robust sales guidance for fiscal 2026 than expected. That said, sales are expected to grow by just over 30% in this fiscal year and the company is becoming increasingly profitable resulting in a surge of operational cash flow. Given the liquidity and size of the option premiums against HROW, this decline was an easy one to execute some covered call orders against on Tuesday.
I also added to my position in Xeris Biopharma Holdings (XERS) . This is a favorite of James "Rev Shark" DePorre. The stock has dropped some 20% over the past month. Monday the company posted fourth-quarter results that easily exceeded expectations and fiscal 2026 sales guidance was nicely higher than expectations. Xeris grew revenues 43% year-over-year in the quarter, powered by sales in its core product Recorlev doubling from the same period last year.
This is another name that is becoming profitable and should deliver just over 30% revenue growth in fiscal 2026. It has a late-stage pipeline candidate with significant potential that will initiate a pivotal Phase 3 study in the second half of this year. In addition, a potential competitor to Recorlev was hit with an adverse Food and Drug Administration action late last year, that should keep it from hitting the market for at least a year or two. Xeris also has sizable and liquid options against its stock.
At the time of publication, Jensen was long COP, DVN, HROW and XERS.
