It’s been a good year for the stock market as a whole and a great year for some pharmaceutical startups. Shares of Viking therapies(NASDAQ: VKTX) And Summit Therapeutics(NASDAQ: SMMT) more than doubled by 2024.
Quick gains are often lost on Wall Street, but investment bank analysts who follow these stocks think they will soar much higher in 2025. BTIG analyst Justin Zelin thinks Viking Therapeutics stock could reach $125 per share, which would deliver a gain of about 166% for the month. next 12 months. About bee Wells FargoMohit Bansal recently issued a $30 price target on Summit Therapeutics, suggesting the cancer drug developer could rise another 68% over the next year.
From the end of 2023 through December 12, 2024, shares of Viking Therapeutics shot up 157%. If an experimental weight loss treatment under development continues to succeed in clinical trials, the stock could more than double again.
Viking Therapeutics has no approved drugs to sell, but a candidate it is developing, VK2735, could become a leading weight management drug. It is a dual GLP-1 and GIP receptor agonist, similar to tirzepatide Eli Lilly.
The Food and Drug Administration (FDA) approved tirzepatide for the treatment of diabetes in 2022 and expanded its approval to include weight management in late 2023. Sales of Lilly’s drug skyrocketed to $11 billion in the first nine months of 2024.
Shares of Viking Therapeutics have soared as mid-stage clinical trial results suggest VK2735 could capture a large share of the dual GLP-1 and GIP receptor agonist market. In November we saw results from a study with increasing doses. Patients who received the highest dose tested reduced their weight by 8.2% after four weeks, 6.8% compared to the placebo group.
In March, shares of Viking Therapeutics skyrocketed when the company reported early-stage clinical trial results of an oral version of VK2735. Patients receiving the highest dose reduced their weight by 5.3%, or 3.3%, after 28 days compared to the placebo group.
Summit Therapeutics could have a new cancer therapy that helps the immune system fight tumors. One of the most successful immunotherapies of all time, Keytruda, targets the programmed death ligand-1 (PD-1) pathway that tumors exploit to disable the immune system when it attacks.
Merck Keytruda recorded sales that grew to $25 billion last year. Summit Therapeutics stock is up about 583% in 2024 as it licenses a drug that appears to outperform Keytruda.
Ivonescimab is a bispecific antibody that simultaneously shuts down PD-1 and vascular endothelial growth factor (VEGF). In the Harmoni-2 study of lung cancer patients newly diagnosed with advanced disease, patients treated with ivonescimab were 49% less likely to worsen compared with patients receiving Keytruda.
Summit does not own ivonescimab. It licensed rights from Akeso to develop and market it outside China. In May, Akeso received approval to market the drug across China as a treatment for second-line lung cancer patients who had progressed after their first treatment.
The FDA will not approve a new cancer drug for marketing in the US without a large Phase 3 trial involving many North American patients. Investors don’t have to wait too long to see if it has a chance in the US market. In October, Summit completed enrollment of second-line lung cancer patients in the Phase 3 Harmoni trial. Given the numbers we’ve already seen in Chinese studies, the American Harmoni study is widely expected to succeed.
Before you buy any of these stocks, it’s important to remember that Wall Street analysts can quietly adjust their price targets downwards if things don’t turn out as hoped. Repairing the damage a bad call can do to your wallet isn’t that easy.
Viking Therapeutics’ experimental weight loss drug still needs to complete a yearlong Phase 3 trial before we know if VK2735 can capture the sales of tirzepatide. Unfortunately, much of the selling for the experimental therapy is baked into the stock’s $5.2 billion market cap. The stock could shoot higher, but this is only suitable for investors who can tolerate a lot of risk.
Expectations for Summit Therapeutics are even higher than expectations for Viking Therapeutics. Its $13.2 billion market cap at recent prices could collapse if the long-term overall survival data isn’t as compelling as the progression-free survival results that ivonescimab has already delivered. Wall Street analysts aren’t wrong to suggest this stock could shoot higher, but it does come with more risk than most investors can handle.
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Wells Fargo is an advertising partner of Motley Fool Money. Cory Renauer has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions at Merck and Summit Therapeutics. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.
2 Rising Stocks That Could Surge 68% to 166% Higher in 2025, According to Wall Street, originally published by The Motley Fool
