We recently published a list of 7 Most Profitable Biotech Stocks To Buy Right Now. In this article, we are going to take a look at where Royalty Pharma plc (NASDAQ:RPRX) stands against other most profitable biotech stocks to buy right now.

With improved market conditions, innovative breakthroughs, and more investor interest, the biotechnology industry is gaining new traction. The sector has bounced back from a difficult 2024 and is set to grow significantly, thanks to developments in AI-driven drug discovery, personalized medicine, and the rising demand for biologics. The global biotech market was expected to grow by a robust 13%, from $483.0 billion in 2024 to $546.0 billion in 2025, according to MarketsandMarkets. The sector’s resilience and growth potential are demonstrated by this expansion.

One of the main causes of this upturn is the expected change in the Federal Reserve’s interest rate policies. Because biotech involves expensive R&D and clinical testing, it is susceptible to shifting rate patterns. According to Genetic Engineering and Biotechnology News, lower rates increase the amount of cash available, which aids biotech companies in growing, attracting venture capital, and accelerating drug development. Analysts predict that a rate decline might free up billions of dollars in investment money set aside for nascent biotech companies seeking stable funding.

The global biotechnology sector is undergoing transformative growth in 2025, driven by scientific breakthroughs and shifting market dynamics. Key trends, treatments, financial metrics, and the US regulatory landscape significantly impact the industry.

Key Trends Shaping 2025’s Biotech Landscape

Genetic engineering is becoming a dominant force in biotech, with CRISPR-based therapies like Casgevy—approved for sickle cell disease and beta-thalassemia—expanding into polygenic disorders such as diabetes. Synthetic biology is also projected to experience tremendous growth, with expectations to reach $100 billion by 2030, enabling sustainable pharmaceutical and biofuel production. Another important development is AI-driven drug discovery, which has reduced drug discovery costs by 30-50% while accelerating timelines. Startups are increasingly leveraging machine learning for precision oncology and protein design.

The RNA therapeutics sector is also booming, particularly following the success of mRNA vaccines, which paved the way for RNA interference (RNAi) therapies like Fitusiran. Fitusiran has shown an impressive 89.9% reduction in bleeding events in hemophilia A/B patients. Regenerative medicine is also advancing, with innovations such as 3D bioprinting and CAR-T cell therapies entering clinical trials for organ repair and cancer treatment. The regenerative medicine market is expected to reach $37.27 billion by 2031.

Biotech Breakthroughs Fuel Market Growth

Several biotech therapies are showing significant efficacy across various medical conditions, driving both medical advancements and investor enthusiasm. CRISPR-Cas9 treatments, aimed at genetic disorders, have over 1,200 clinical trials ongoing. mRNA vaccines, used for infectious diseases and cancer, have already administered more than 29 million doses globally by 2024. Imdelltra, a treatment for small cell lung cancer, has achieved a 40% objective response rate. It is estimated that 90,000 patients globally use gene and cell therapies annually. The biotech sector continues to thrive with groundbreaking treatments, including Imdelltra, which is projected to generate $2.1 billion in sales by 2030. Meanwhile, analysts at William Blair foresee significant potential for zanzalintinib, estimating it could reach $5 billion in net U.S. sales by 2033. This promising drug is expected to target multiple indications, such as renal cell carcinoma, colorectal cancer, neuroendocrine tumors, and head-and-neck cancer, further solidifying its blockbuster status.

As these groundbreaking innovations reshape the medical landscape, they are also fueling a surge in investor interest in biotech equities, positioning the industry as a high-growth space despite its inherent volatility. Leading investment banks, including Goldman Sachs, see biotech as an “undervalued opportunity” with strong fundamentals, improved clinical outcomes, and favorable regulations. JPMorgan analysts anticipate a rebound in biotech funding, with signs of stability in manufacturing and research. Declining interest rates could also reopen the IPO window for biotech firms. Meanwhile, innovations in gene editing, AI-powered drug discovery, and precision medicine are driving biotech’s expansion, revolutionizing treatments for genetic disorders, autoimmune diseases, and cancer.

Our Methodology

For our methodology, we screened for biotech companies with a market capitalization of over $10 billion and a net income exceeding $100 million. From that group, we identified the stocks with the highest net income and ranked them accordingly.

At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Royalty Pharma plc (NASDAQ:RPRX)

Latest Net Income: $858.98 million  

Royalty Pharma plc (NASDAQ:RPRX) operates uniquely in the biotech industry by acquiring royalty interests in marketed or late-stage biopharmaceutical products rather than developing or marketing drugs. This model allows the company to provide capital to innovators while earning a percentage of future sales, typically ranging from 2% to 20%. By avoiding the risks and costs of drug development, the company benefits from successful pharmaceutical products through strategic investments.

At the upper end of its guidance range, Royalty Pharma plc (NASDAQ:RPRX)’s fiscal year 2024 portfolio receipts came to $2.8 billion. This represents a 13% increase, much beyond its original forecast of 5% to 9%. The business anticipates $2.9 billion to $3.05 billion in portfolio receipts in 2025. Its portfolio now includes four development space treatments and royalties on AD medication.

The FDA has approved Tremfya for ulcerative colitis, Cobenfy for schizophrenia, and Voranigo for brain cancer, among other favorable developments for the company’s portfolio. In addition to $230 million for share repurchases, it invested $2.8 billion to expand its holdings. A fresh $3 billion share repurchase plan was recently approved by its Board, and Royalty Pharma Plc (NASDAQ:RPRX) plans to buy back $2 billion of its shares in 2025.

Patient Capital Opportunity Equity Strategy stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q2 2024 investor letter:

“While Royalty Pharma plc (NASDAQ:RPRX) is in the healthcare space, it is more like an investment firm that buys royalty assets in the healthcare space. The company has an extremely strong track record, running the business for over 20 years as a private fund before bringing it public. The market opportunity for external royalty funding has only grown as early-stage start-ups need funding and legacy players are looking to lower their debt levels. We think Royalty Pharma is perfectly positioned as the partner of choice. The company is disciplined, maintaining deal internal rate of returns (IRRs) in the low-teens despite the higher interest rate environment. We think as the company continues to deliver as a public company, the market will start paying attention.”

Overall, RPRX ranks 4th on our list of most profitable biotech stocks to buy right now. While we acknowledge the potential of biotech companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RPRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.