Triple-Leveraged Biotech ETF Doubles as Regulatory Winds Shift in 2026

Triple-leveraged ETFs aren’t for everyone, but if you believe biotech is about to break out, Direxion Daily S&P Biotech Bull 3X Shares (NASDAQ:LABU) offers the most aggressive way to capture that move. The fund’s structure is simple but powerful: it delivers three times the daily return of the S&P Biotechnology Select Industry Index through derivatives and swaps.

The fund has doubled over the past year as the underlying biotech sector gained momentum. This outperformance demonstrates how leverage can accelerate returns when sector trends align, turning moderate biotech gains into explosive ETF performance.

That amplification works both ways. LABU has experienced significant volatility over longer timeframes, a reminder that leverage magnifies losses as dramatically as gains. But the sector is turning a corner. According to BioPharma Dive, biotech’s market recovery accelerated in the second half of 2025 as regulatory uncertainty eased and dealmaking returned.

The FDA Approval Calendar Matters More Than You Think

For biotech investors, FDA approval decisions represent the single most important macro catalyst. Each approval validates years of research, unlocks revenue streams, and triggers acquisition interest from larger pharmaceutical companies. The FDA’s calendar for 2026 includes multiple high-profile decisions across oncology, rare diseases, and metabolic conditions.

This matters for LABU because the fund holds over 200 biotech companies, from established players like Regeneron Pharmaceuticals (NASDAQ:REGN | REGN Price Prediction) and Vertex Pharmaceuticals (NASDAQ:VRTX) to clinical-stage developers. When the FDA approves a drug from one of these holdings, the stock often jumps 20% to 50% in a single day. LABU’s leverage multiplies that movement across its portfolio. Monitor the FDA’s drug approval announcements on the agency’s website and BioPharma Dive. Key decision dates are usually known months in advance through PDUFA target action dates.

Watch What’s Actually Driving the Returns

LABU’s performance hinges on which holdings are generating momentum right now. Moderna (NASDAQ:MRNA), the fund’s top position, has surged recently on positive developments. These individual stock moves get amplified through the fund’s leverage mechanism, creating outsized gains that explain LABU’s recent outperformance.

This concentration cuts both ways because LABU rebalances daily to maintain its leverage target. Understanding which biotech names are driving performance becomes critical for timing entries and exits. Track the fund’s daily holdings file on Direxion’s website and cross-reference it with recent FDA announcements or clinical trial readouts to identify which stocks are creating the momentum that gets tripled in your returns.

Consider the Unleveraged Alternative

If the biotech thesis appeals but the daily volatility doesn’t, iShares Biotechnology ETF (NASDAQ:IBB) offers a more stable approach. The fund tracks a similar biotech index without leverage and has delivered strong returns over the past year, though not matching LABU’s amplified gains.

IBB’s longer track record and deeper liquidity make it suitable for extended holding periods, while LABU works best as a tactical trade around specific catalysts like FDA approvals.

The Bottom Line

LABU’s performance over the next 12 months will be determined by the pace of FDA approvals driving individual biotech stock moves and whether Moderna and other top holdings can sustain their recent momentum without giving back gains during the fund’s daily rebalancing.