As renewed conflict in the Middle East pressures global risk assets, some investors may be looking for sectors that can absorb volatility better than the broader market. According to a recent Truist Securities note, biopharma could serve that role, with commercial-stage healthcare names standing out as a relatively steadier place to deploy capital during periods of geopolitical uncertainty.
Truist examined several major disruptions from the past few years, including the escalation of war in Ukraine, broader Middle East tensions, and the 2024 Iranian missile attack. Across those episodes, the firm found that healthcare-focused equities generally held up better than the S&P 500, with lower swings in share prices and a more defensive profile. In particular, the State Street Health Care Select Sector ETF appears to have behaved more like a shelter than a source of stress.
Biotech, however, is not a single trade. Truist noted that the S&P Biotech ETF has been more sensitive to risk rotation, especially for pre-commercial companies whose valuations depend heavily on future clinical and regulatory milestones. That can make the group more volatile in the short term, but it can also create opportunities when prices weaken. For investors willing to tolerate a longer time horizon, that pullback can be attractive entry territory.
The firm also pointed out that investors in uncertain periods often favor companies with established revenue streams, durable demand, and less economic cyclicality. That dynamic can benefit commercial biopharma names that offer strong franchises and relative value rather than pure growth speculation.
For large-cap pharma, direct exposure to the Middle East appears limited. Truist said the region represents only a small slice of sales for most companies, with GSK and Takeda standing out as the most exposed at roughly 6%. Even so, the analysts believe U.S. and European demand should remain the main support for the group if regional disruption continues.
There may also be niche winners if conflict persists. Truist highlighted Amgen as a company that could benefit from government preparedness spending, given its role in products such as Nplate and Neulasta, which are included in stockpiles for radiological or nuclear emergencies. Gilead and Regeneron were also cited for procurement eligibility and manufacturing ties with the government.
The broader message from the note is that healthcare is once again being viewed through a defensive lens. In a market shaped by headlines and uncertainty, biopharma may not be immune to swings, but it could still offer a comparatively calmer path for capital seeking shelter.
