<h2>Welcome to Biopharma Insights & Opportunities: Why Biopharma now?</h2><h3>The long winter is over</h3><p>From its February 2021 peak, the biotech sector fell more than 60% through April 2025, a stretch industry veterans dubbed the "biotech winter." That winter has ended. The sector's key index has climbed roughly 75% off its April 2025 lows to levels not seen since 2021, and biotech finished 2025 with a gain of nearly 34%, per PitchBook. Pharma and biotech have notably outperformed the broader market since mid-2025, and for investors it provides a new edge with increasing liquidity (M&A) that has lower correlation to the AI boom, and can provide an interesting diversification factor.</p><h3>Biopharma stock ideas and options strategies</h3><p>Welcome to the first issue of Biopharma Insights, a new research series from Serra Wealth dedicated to one of the most compelling corners of today's market: biotechnology and pharmaceuticals. In the issues ahead we will share the stock ideas and options strategies our team is watching, explain the science and the catalysts behind them, and help you understand both the opportunity and the risks in this fast-moving sector.</p><p>Why launch this series now? In the era of AI valuations and top tech companies holding most of the capital and growth, a new edge in a growing, liquid and external sector can be a key diversification factor for smart investors.</p><h3>Big Pharma is buying, aggressively (and more than in any other sector)</h3><p>The clearest signal of value in the sector comes from the industry's most informed buyers. Biopharma M&A has reached $106 billion across 201 transactions so far in 2026, per PitchBook, putting the industry on pace for more than $250 billion in deal value, its strongest year since 2019. Just this week, GSK agreed to pay $10.6 billion for precision-oncology firm Nuvalent at a 40% premium to its share price, while Eli Lilly has spent over $25 billion across ten acquisitions this year alone, per PitchBook.</p><p>The driver is durable: large pharmaceutical companies face looming patent cliffs on best-selling drugs and urgently need to refill their pipelines. When acquirers are paying 40%+ premiums for clinical-stage assets, well-positioned smaller biotechs can re-rate overnight, and that is precisely the kind of event-driven situation our research aims to identify.</p><h3>AI is changing the odds, but still remains on the sidelines</h3><p>Artificial intelligence is a big boost to an existing alpha. It is consistently rewriting the risk calculus of drug development. Early PitchBook analysis shows AI-native biotechs achieving Phase I success rates of 80 to 90%, versus an industry average of 40 to 65%, with similar outperformance in Phase II. Analysts now project that AI could nearly double the success rate of investigational new drug applications while cutting development timelines and costs. Capital markets have noticed: after a historic IPO drought in 2025, biotech listings have rebounded sharply in 2026, capped by Parabilis Medicines' industry-record $670 million IPO this month, per PitchBook.</p><h3>A catalyst-rich calendar</h3><p>Biopharma is uniquely suited to options strategies because its returns cluster around identifiable, datable events: FDA approval decisions, clinical trial readouts, and drug launches. 2026 offers an unusually dense slate of them. Each issue of this newsletter will map the upcoming catalyst calendar and outline how we would position around it so that we can mathematically map our risk rewards.</p><h3>Our strategy, and three real trades</h3><p>For the past six months we have run this systematic biopharma strategy with real capital, real wins and real losses. The three examples below are actual positions from Serra client accounts, shown net of commissions. We name the securities; we do not identify the clients or accounts. Each is a single position shown to illustrate the strategy's logic, not a portfolio return or a track record.</p><p>The winner, Hinge Health (HNGE): spot with a protective collar. We bought HNGE in February and ran a collar over it, a protective put funded by a covered call. In mid-June the short call was assigned and the shares were called away for a realized gain of about +110%. The collar did two things: it capped our downside the whole way up, and it capped the exit, HNGE kept climbing after we were called away. The lesson: a collar is insurance you pay for in upside, and that trade-off is the strategy working as designed, not a regret.</p><p></p><div data-serra-embed="trade-idea" data-ref="7c1b696d-70eb-432f-afa9-ad1fa2fd722d" data-access="members" data-label="HNGE"></div><p></p><div data-serra-embed="chart" data-ref="7c1b696d-70eb-432f-afa9-ad1fa2fd722d" data-access="members" data-variant="payoff" data-label="HNGE"></div><p>The income engine, BioMarin (BMRN): the options flywheel. No directional bet here. We sold cash-secured puts into weakness and covered calls near our target across several cycles, and those legs have since expired in our favour, adding roughly +12% in realized option premium while the shares themselves drifted modestly higher. The lesson: in a range, the premium is the return.</p><p>The failure, Wave Life Sciences (WVE): spot, and we are taking the hit. We bought WVE in February on a thesis that has not played out. The position is down about 53%, unrealised, and we have not exited. The lesson: size the position and pre-set the exit; being wrong is survivable, being wrong and oversized is not.</p><h3>What we are watching next</h3><p>We keep a live watchlist of names that fit the strategy. Here is one we are following into its next catalyst.</p><p></p><div data-serra-embed="trade-idea" data-ref="2eca0774-55ac-4755-a6fe-ce8d96268c4d" data-access="members" data-label="IONS"></div><h3>Disclaimer</h3><p>This material is produced by Serra Wealth (Serra GCVC OU) for informational and educational purposes only. Serra is an independent consulting firm and is not a licensed investment manager, broker-dealer, or financial institution. Nothing here is legal, tax, or investment advice, nor a personal recommendation, solicitation, or offer to buy or sell any security or option. Trade examples are actual positions from Serra client accounts, shown net of commissions with clients and accounts not identified, for illustration only; they are individual positions, not a composite or a track record. Realized and unrealised results are labelled as such and unrealised marks change with the market. Options and concentrated biotech positions are high-risk and can lose their full value. Past performance and illustrative examples are not indicative of future results.</p>