“There’s no such thing as bad publicity” is a statement often attributed to Phineas T. Barnum, the 19th century American circus owner and self-promoter extraordinaire. The biotech sector has proven this oft-repeated adage to be wrong.

The volatile biotechnology industry relies on the goodwill of regulators, politicians and the public. In 2016, this goodwill was in scant supply and scores of intrinsically sound companies got tarnished with the same brush.

But now the political pressure on biotech is easing, as congressional committee hearings into biopharmaceutical scandals fade into memory and Donald Trump’s populist promises to crack down on drug pricing are supplanted by his moves toward deregulation.

Below, we focus on how to profit from the “disruptors” in the biotech space that are poised to leapfrog not just the broader markets but also their stodgier drug-making rivals.

The poster boy for corporate wrongdoing…

The carnage was gruesome last year in biotech. High-profile price gouging scandals engulfed Valeant Pharmaceuticals (NYSE: VRX) and Turing Pharmaceuticals and unfairly punished innocent companies.

Infamous for his smirk during congressional hearings, Turing’s former CEO Martin Shkreli became the poster boy for corporate malfeasance.

Shkreli came under fire for jacking up the price of a lifesaving malaria medication 5,000%. Under heated questioning in Congress, the cocky biotech executive showed no remorse. The press referred to Shkreli as “the most hated man in America” and at one point, he even auctioned off a chance for people to punch him in the face for charity (the stunt raised thousands of dollars but an actual punch never came to pass).

After Shkreli was pilloried in the stockades of public opinion, lawmakers in both parties vowed to pressure drug companies to reduce prices. Biotech investors ran for the exits.

But now biotech investors are running back, as many of these challenges dissipate. The benchmark NASDAQ Biotechnology Index fell 19.1% in 2016, but year-to-date it’s up 9.4%, compared to gains of 10% and 5.7% respectively for the S&P 500. Biotech is home to several growth opportunities that should beat the market this year.

Keep your eye on the disruptors…

You can turbocharge the already outsized potential of biotech by focusing on the newcomers that are working on breakthrough treatments.

Jim Pearce, chief investment strategist of Personal Finance and Breakthrough Tech Profits, explains the rewards of pinpointing the game changers:

“A common theme in the technology industry is disruption. A better chip supplants an older model or a more effective vaccine makes another obsolete. Then some companies soar while others file Chapter 11.

Part of our mission is to keenly watch and wait for such disruptions to make you money and guard you from losses.

Disruption is one reason the tech sector can keep rising while the rest of the market waffles along. A disruption doesn’t have to be revolutionary to generate massive profits.”

One convenient way to tap the moneymaking power of biotech disruptors is by purchasing shares in the ALPS Medical Breakthroughs ETF (NYSE: SBIO).

With net assets of $97.3 million, this exchange-traded fund seeks results that correspond to the performance of its underlying index, the Poliwogg Medical Breakthroughs Index. The Poliwogg is comprised of small- and mid-cap stocks of biotech and pharmaceutical companies that have one or more drugs in either Phase II or Phase III U.S. Food and Drug Administration clinical trials.

SBIO emphasizes game-changing entrepreneurial companies — i.e., smaller biotech “rocket stocks” that are poised to take off. They have a market cap of not below $200 million and not above $5 billion.

The earlier-stage firms in the SBIO’s underlying Poliwogg index devoted about 2.7% of market cap on research and development, 29% higher than the R&D spent by components of the NASDAQ Biotech Index.

Top SBIO holdings include Exelixis (NSDQ: EXEL), Neurocrine Biosciences (NSDQ: NBIX), Ultragenyx Pharmaceutical (NSDQ: RARE), Taro Pharmaceutical Industries (NYSE: TARO), and GW Pharmaceuticals (NSDQ: GWPH). The fund’s expense ratio is 0.50%, which is reasonable for its class.

SBIO got clobbered in 2016, posting a decline of 27.6%. However, the fund has risen 9.8% year to date, as the biotech sector’s recovery provides lasting tailwinds.

For individual stocks that are plays on technological disruption, continue to follow the advice of our team at Breakthrough Tech Profits.

Got a question? Send me a letter: mailbag@investingdaily.com — John Persinos

A breakthrough for treating depression…

Jim Pearce and his colleagues have pinpointed a disruptive technology that can treat clinical depression with a 90% success rate in just 24 minutes’ time.

Not surprisingly, this technology is poised to upend the $171 billion depression market.

Demand for antidepressants keeps rising, but the patent expiration of most drugs combined with unpleasant side effects is creating an urgent need for innovative ways to treat depression.

That’s where a tiny, under-the-radar company comes in. This tech disruptor has developed a new treatment for the scourge of depression… and investors who get in on the ground floor stand to make a fortune. Click here for full details.