June 24, 2026

Do Biotechs Ever Conduct Stock Buybacks?

In the third quarter of 2023, over 200 Nasdaq-listed biopharma companies were trading with market capitalizations below their cash balances. The reasons for this included the avalanche of IPOs that had recently taken place (over 100 in 2021 alone), rising interest rates, generalists exiting the sector, etc.

Following a slow sector and market recovery, by 2025 that number had fallen to ~50.

Nevertheless, whenever a development-stage biotech trades below cash, the question typically arises (from either management or a disgruntled investor): should the company use its cash pile to buy back shares?

And the simple answer is an emphatic “no.”

Development-stage biotechs nearly always need the cash on their balance sheets to further their development pipeline, and any spending on buying back shares would simply deplete their short-term funds – which would need to be replaced (and indeed added to) further down the line.

That being said, biotechs do conduct buybacks when they are more mature – think: commercial stage companies that are cash generative with less emphasis on R&D.

Buybacks at big caps

Historically, giants like Amgen and Gilead Sciences have used buybacks as part of broader capital-return strategies. For example, Gilead authorized up to $5 billion in stock repurchases in 2014 – one of the largest buybacks in biopharma history.

Amgen’s history is similarly illustrative: over the years, the company has repeatedly authorized buyback programs – from a $2 billion authorization in the early 2000s to multi-billion-dollar expansions more recently – with a $500 million program announced in 2025. Yet it’s worth noting that in many recent quarters, including throughout 2025, Amgen did not actually repurchase shares despite having authorization, underscoring how buybacks are often contingent on market conditions and strategic priorities.

Over the years, Big Pharma has returned billions of dollars to shareholders in the form of buybacks. However, recently, they have been significantly less frequent due to higher debt burdens (from acquisitions) and impending patent cliffs.

Buybacks at mid-caps

In 2025 and 2026, some notable mid-cap biotechs dipped their toes into the buyback pool:

• In 2024, United Therapeutics ($24B mkt cap) authorized a $1B accelerated share repurchase.
• In 2025, Catalyst Pharmaceuticals ($3.0B mkt cap) announced a $200M share buyback program – funded from a strong balance sheet and positioned as part of a balanced capital allocation strategy.
• In 2025, AnaptysBio ($1.9B mkt cap) implemented a $100M stock repurchase plan, actively repurchasing millions of shares.

Note that two of these mid-caps were profitable at the time of writing, with UTHR and CPRX trading on PE ratios of 19.3x and14.5x respectively.

While AnaptysBio was not profitable for the whole of 2025, its 4Q net income was $49.6M. In this case, board authorization for its buyback plan was taken as a signal of confidence that the stock was undervalued relative to its intrinsic pipeline worth and near-term cashflows.

Shareholder expectations

The bifurcation of the biotech market into profitable, cash-generative companies who conduct buybacks – and development-stage biotechs who preserve cash to spend on drug development – also mirrors the expectations of their respective shareholder bases.

Profitable biotechs/biopharma are held more by generalists and growth-oriented funds – whose favored metrics (EPS, etc.) benefit from buybacks.

Development-stage biotechs are held by long-term investors deploying capital to take advantage of milestone-related value creation. They are not expecting you to return cash to them, quite the opposite in fact.