BTIG analysts have compiled a list of healthcare companies they regard as their top investment ideas for 2026, spanning several subsectors where near-term catalysts and long-term growth opportunities exist. The roster includes medical device manufacturers, biopharmaceutical developers focused on specialty indications, diagnostic firms expanding screening capabilities, and healthcare services businesses aligned with lower-cost care and value-based models.
Below is a company-by-company review of the BTIG picks, with the factors the research team highlighted as potential performance drivers.
1. Establishment Labs Holdings (NASDAQ:ESTA)
BTIG selected Establishment Labs as its top SMID-cap pick for 2026. The medical device company has two minimally invasive platforms - Preservé and Mia - that the firm says are reshaping aesthetic breast augmentation. BTIG points to continued U.S. share gains and international expansion as primary growth vectors.
The brokerage cited an anticipated full-year 2025 revenue increase of approximately 27% and noted the company has submitted its Motiva implants to the U.S. Food and Drug Administration for a label expansion into breast reconstruction. BTIG also identified the upcoming U.S. launch of Preservé and the potential label expansion as material catalysts for growth.
2. Avalo Therapeutics (NASDAQ:AVTX)
Avalo is a SMID-cap name BTIG listed among its top picks for the first half of 2026 because of its position in hidradenitis suppurativa, or HS. BTIG emphasized that Avalo is the only publicly traded pure-play focused on HS with near-term data expected, with Phase 2b results for AVTX-009 anticipated in the second quarter of 2026.
The research note referenced market-size projections for HS that grow from approximately $2.5 billion in 2025 to over $10 billion by the mid-2030s, indicating a large potential opportunity. BTIG also noted that Avalo has attracted positive analyst interest, with Guggenheim and Mizuho initiating coverage with Buy and Outperform ratings, respectively.
3. Nektar Therapeutics (NASDAQ:NKTR)
Nektar is BTIG’s second SMID-cap pick for the first half of 2026. The firm pointed to the company’s REZPEG program in atopic dermatitis, which BTIG believes shows results comparable to established therapies such as Dupixent, a drug that generates more than $10 billion annually.
Long-term data readouts from Nektar were expected in the first and second quarters of 2026, and BTIG suggested the peak sales potential from atopic dermatitis alone could exceed the company’s current enterprise value. The note also referenced analyst price-target increases from firms including H.C. Wainwright and Oppenheimer after positive Phase 2b data for Nektar’s alopecia areata program.
4. BrightSpring Health Services (NYSE:BTSG)
BrightSpring was named BTIG’s top SMID-cap pick for 1H26 among healthcare services companies. The home- and community-based care provider was described as delivering steady growth across its pharmacy and provider segments. BTIG attributed this performance to higher volumes, rising drug costs, new drug launches, and the broader shift to lower-cost care settings.
The research highlighted the company’s alignment with value-based care models as supportive of continued expansion. BTIG also noted recent external coverage changes, including an upgrade to Overweight at KeyBanc and price-target increases from firms including TD Cowen and BMO Capital.
5. LifeStance Health Group (NASDAQ:LFST)
LifeStance, BTIG’s second SMID-cap pick for 1H26, operates an outpatient mental health platform that offers both in-person and virtual care, a distinction BTIG emphasized relative to virtual-only providers. The company reported strong demand, with organic visit growth of 17% year-over-year in the third quarter of 2025 and improvements in clinician productivity.
BTIG called out LifeStance’s third-quarter 2025 revenue of $364 million, which exceeded analyst expectations, and noted third-quarter earnings per share of $0.00.
6. Guardant Health (NASDAQ:GH)
Guardant was BTIG’s large-cap top pick for the first half of 2026. The company is characterized as a pioneer and market leader in liquid biopsy oncology tests. BTIG observed that Guardant delivered a very strong 2025, with shares up approximately 234% over the year, and continues to execute on strategic initiatives.
Key catalysts called out included the company’s Shield colorectal cancer blood-based screening test and its work expanding screening into additional cancer types. BTIG also noted that Guardant received FDA approval for its Guardant360 CDx as a companion diagnostic for certain colorectal cancer patients and that preliminary fourth-quarter 2025 results exceeded estimates.
7. GeneDx (NASDAQ:WGS)
GeneDx was named a SMID-cap top pick for its leadership in rare-disease testing services. BTIG noted the company holds roughly an 80% market share in whole-exome and whole-genome testing and described the business as rapidly growing.
The research highlighted opportunities for gross margin expansion and profitability improvement while GeneDx expands into larger markets. BTIG recorded preliminary 2025 revenue of about $427 million for the company and relayed management’s guidance that 2026 revenue is expected to be between $540 million and $555 million. The company also plans to launch a new whole-genome sequencing test for fetal anomalies in February 2026.
8. Foghorn Therapeutics (NASDAQ:FHTX)
Foghorn is BTIG’s first SMID-cap pick for 1H26 in the oncology-focused therapeutics space. The company is developing inhibitors and degraders aimed at the chromatin regulatory system across multiple oncology indications. BTIG highlighted the lead asset, FHD-909 - developed in partnership with Eli Lilly - which targets solid tumors bearing SMARCA4 mutations and is positioned with a favorable risk-reward profile ahead of initial Phase 1a data.
Foghorn recently completed a $50 million equity financing and appointed Jeff Sacher as interim chief financial officer and treasurer, items the BTIG note included in its assessment.
9. Palvella Therapeutics (NASDAQ:PVLA)
Palvella was included among BTIG’s SMID-cap picks despite the company’s strong share performance in 2025. BTIG sees additional upside ahead of pivotal Phase 3 data for QTORIN Rapamycin in microcystic lymphatic malformations. The brokerage emphasized the drug’s clean safety profile and strong Phase 2 efficacy, and described the addressable market as a $3-5 billion opportunity with no FDA-approved therapies currently available.
BTIG noted a positive regulatory interaction that led TD Cowen to raise its price target, and cited a published systematic review that the firm said supports the scientific rationale for QTORIN in porokeratosis.
10. Aldeyra Therapeutics (NASDAQ:ALDX)
Aldeyra rounded out BTIG’s top picks for 1H26 as the company approached potential U.S. approval for Reproxalap in dry eye disease, with a PDUFA action date in March 2026. BTIG observed that approval could trigger nearly $200 million in milestone payments from partner AbbVie and allow Aldeyra to shift greater focus toward developing systemic RASP scavengers for larger indications.
The research also noted that Aldeyra expanded its RASP modulator platform after new preclinical results indicated positive effects in models of Parkinson’s disease and ALS.
Sector implications
BTIG’s list highlights a range of subsectors within healthcare where near-term regulatory, clinical and commercialization catalysts could influence company trajectories. Medical devices, specialty therapeutics, diagnostics and home- and community-based services are among the areas BTIG singled out as likely to see meaningful activity in 2026.
Concluding observation
BTIG’s compilation emphasizes companies with identifiable near-term milestones - including FDA filings, PDUFA dates, Phase 2b and Phase 3 readouts, new product launches and commercial expansion - that the firm believes could translate into accelerated growth or re-rating in 2026. Investors reviewing the list will find a mix of names at different stages of commercialization and clinical development across the healthcare landscape.