Josh Brown, CEO of Ritholtz Wealth Management, made a pointed claim on CNBC’s Halftime Report this week about large-cap biotech: “These are growth stocks where you don’t have to worry about disruption. They’re breaking out.” His reasoning is that companies dealing in molecules, proteins, and clinical trials occupy a fundamentally different risk category than software or media. AI can disrupt a platform overnight; it cannot disrupt a decade-long drug approval process.
Large-cap biotech does enjoy a structural insulation from the overnight platform disruption that has hollowed out tech companies. But the sector faces its own slow-motion disruption forces — patent cliffs, biosimilar competition, and government drug pricing reform — that are just as capable of destroying revenue. These are different disruption mechanisms, and conflating them leads to blind positions.
Why Biotech Genuinely Resists AI-Style Disruption
Brown’s core thesis holds up. The five names he and his colleague highlighted — Amgen, AbbVie, Gilead, Biogen, and Eli Lilly — operate in a domain where competitive moats are built in laboratories over many years, not in data centers over months. A new AI model cannot render a biologic drug obsolete the way it can render a content platform or a search engine irrelevant. The FDA approval process, which typically spans a decade from discovery to market, creates a structural time buffer that no software company enjoys.
The year-to-date price performance across these names reflects that relative resilience. Amgen is up 16% year-to-date, and Gilead has gained 21% in 2026 so far. Both are well ahead of the broader iShares Biotechnology ETF (IBB), which is up roughly 3% year-to-date. These are not stocks riding a general biotech wave; they are outperforming the sector itself.
Brown also noted that AI will likely help these companies rather than hurt them, accelerating drug discovery and clinical trial analysis. That is a reasonable expectation and one that institutional investors appear to share. Gilead carries 93% institutional ownership, and Amgen sits at 85%. Large money managers are not treating these as fragile positions.
The Disruption Risk Brown Didn’t Mention
Biotech does not face platform disruption, but it faces something equally damaging: the patent cliff. When a blockbuster drug loses exclusivity, revenue can fall by half in just a few years. This is not a hypothetical risk. It is playing out right now across the very names Brown highlighted.
AbbVie is the most instructive case. Humira, once the world’s best-selling drug, lost exclusivity to biosimilar competition and its revenue fell roughly 50% in just two years — a collapse that would have been fatal without a replacement pipeline. AbbVie had one: Skyrizi grew 33% to $5 billion in Q4 2025, and Rinvoq grew 30% to $2.4 billion. The franchise transition is working, but it required years of pipeline investment and near-flawless execution to pull off. That is not guaranteed to repeat.
Amgen faces a similar dynamic. Its legacy franchises are under pressure from two directions simultaneously: Medicare redesign and biosimilar entry. Enbrel revenue fell 48% in Q4 2025, squeezed by both Medicare Part D redesign and biosimilar pressure, while Prolia declined 10% as biosimilar competition accelerated. These are not cyclical dips — they reflect structural revenue erosion that the company must outrun.
The growth portfolio is picking up the slack — UPLIZNA grew 131% and TEZSPIRE grew 60% in Q4 — but Amgen’s $54.6 billion debt load means the company has limited room for error if newer pipeline bets disappoint. The margin for error is narrow.
Gilead’s clinical trial risk is also worth naming directly. Its ASCENT-07 trial for Trodelvy missed its primary endpoint in first-line breast cancer, and the STAR-221 gastric cancer study was discontinued. Trial failures like these can erase years of pipeline value in a single day. That is a form of disruption, just one that moves at the speed of a press release rather than a software update.
Two Profiles, Two Outcomes
Whether Brown’s thesis works for a specific investor depends heavily on the entry point and time horizon. Consider two realistic scenarios.
An investor who bought Eli Lilly five years ago and held through today has seen the stock appreciate roughly 416% over five years, driven by the GLP-1 revolution. Mounjaro grew 110% to $7.4 billion in Q4 2025, and Zepbound grew 123% to $4.2 billion. The pipeline execution was exceptional.
But Lilly is now down 6% year-to-date in 2026 and trades at a forward P/E of 29 times earnings. The entire bull case rests on GLP-1 dominance continuing. If a competitor closes the efficacy gap or manufacturing constraints persist, the concentration risk is severe.
Contrast that with Biogen. The stock is up 26% over the past year, but the company is guiding for revenue to decline a mid-single-digit percentage in 2026. Its MS franchise fell 14% in Q4 2025, and biosimilars revenue declined 16%. LEQEMBI, its Alzheimer’s therapy, is growing quickly but from a small base. Global LEQEMBI in-market sales reached roughly $134 million in Q4 2025, up 54% year-over-year, but that is not yet enough to offset the structural retreat in the core MS business. Biogen trades at a forward P/E of 12 times earnings, which prices in the uncertainty. Brown’s colleague mentioned owning Biogen alongside Amgen and AbbVie, but the risk profile is materially different.
Three Questions That Separate the Durable Names From the Fragile Ones
Brown’s framing is useful as a starting point for sector allocation. Large-cap biopharma does belong in a different risk bucket than software or consumer tech when it comes to AI-driven obsolescence. The regulatory moat, the capital intensity of drug development, and the long clinical timelines all create structural durability that most sectors lack.
But treating any of these names as immune to disruption is too strong. The practical framework is to evaluate each stock on three specific questions. First, what percentage of current revenue comes from products with patent protection extending beyond five years? Gilead’s Biktarvy, for instance, has patent settlements pushing generic entry to April 2036, which is a genuine moat. Second, does the pipeline contain at least two products with Phase 3 data capable of replacing the largest declining franchise? AbbVie has answered this with Skyrizi and Rinvoq; Biogen’s answer is less clear. Third, is the balance sheet strong enough to fund pipeline investment through a patent cliff without raising equity at a bad time?
Amgen’s CEO Robert Bradway said after Q4 2025: “We enter 2026 with momentum across a broad portfolio of medicines and a clear path towards advancing innovative therapies to deliver sustained long-term growth.” That confidence is backed by 18 products hitting record sales in 2025 and a six-study Phase 3 obesity program in MariTide. The disruption risk is real but manageable for a company with that kind of breadth.
Brown is right that these stocks occupy a structurally protected corner of the market. The investor who understands which type of disruption to worry about — not AI, but patent cliffs and pricing reform — is positioned to hold through the volatility that comes with the territory and capture the long-term compounding these franchises can deliver.
