It’s been an excellent 12 months for the inventory market as an entire and an incredible 12 months for a few drugmaker start-ups. Shares of Viking Therapeutics(NASDAQ: VKTX) and Summit Therapeutics(NASDAQ: SMMT) greater than doubled in 2024.
Quick positive aspects are sometimes misplaced on Wall Street, however the funding financial institution analysts who comply with these shares assume they’re going to climb a lot increased in 2025. BTIG analyst Justin Zelin thinks Viking Therapeutics inventory can attain $125 per share for a acquire of about 166% over the subsequent 12 months. Over at Wells Fargo, Mohit Bansal not too long ago issued a $30 worth goal for Summit Therapeutics, suggesting the most cancers drug developer can climb by one other 68% within the 12 months forward.
From the tip of 2023 via Dec. 12, 2024, shares of Viking Therapeutics shot 157% increased. If an experimental weight reduction remedy it is growing continues to reach medical trials, the inventory might greater than double once more.
Viking Therapeutics has no accredited medication to promote, however a candidate it is growing, VK2735, might turn into a number one weight administration drug. It’s a twin GLP-1 and GIP receptor agonist much like tirzepatide from Eli Lilly.
The Food and Drug Administration (FDA) accredited tirzepatide to deal with diabetes in 2022 and expanded its approval to incorporate weight administration in late 2023. Sales of Lilly’s drug rocketed to $11 billion in the course of the first 9 months of 2024.
Viking Therapeutics inventory has been hovering as a result of mid-stage medical trial outcomes counsel VK2735 can earn a big share of the marketplace for twin GLP-1 and GIP receptor agonists. In November, we noticed outcomes from an ascending dose examine. Patients given the very best dosage examined diminished their weight by 8.2% after 4 weeks, 6.8% in comparison with the placebo group.
In March, Viking Therapeutics’ inventory rocketed increased when the corporate offered early-stage medical trial outcomes from an oral model of VK2735. Patients receiving the very best dosage diminished their weight by 5.3%, or 3.3% in comparison with the placebo group, after 28 days.
Summit Therapeutics might have a brand new most cancers remedy that helps the immune system battle tumors. One of probably the most profitable immunotherapies of all time, Keytruda, addresses the programmed loss of life ligand-1 (PD-1) pathway that tumors exploit to close down the immune system when it assaults.
Merck recorded gross sales of Keytruda that grew to $25 billion final 12 months. Summit Therapeutics inventory is up by about 583% in 2024 as a result of it licensed a drug that seems to outperform Keytruda.
Ivonescimab is a bispecific antibody that shuts down PD-1 and vascular endothelial progress issue (VEGF) on the identical time. In the Harmoni-2 examine with lung most cancers sufferers who had been newly recognized with advanced-stage illness, sufferers handled with ivonescimab had been 49% much less prone to worsen in comparison with sufferers given Keytruda.
Summit does not personal ivonescimab. It licensed rights from Akeso to develop and promote it outdoors of China. In May, Akeso earned approval to market the drug all through China as a remedy for second-line lung most cancers sufferers who progressed after their first line of remedy.
The FDA will not approve a brand new most cancers drug for advertising within the U.S. with out a big part 3 trial that enrolls a number of North American sufferers. Investors will not have to attend too lengthy to see whether or not it has a shot within the U.S. market. This October, Summit accomplished enrolling second-line lung most cancers sufferers into the part 3 Harmoni trial. Given the numbers we have already seen in China-based trials, the U.S. Harmoni examine is extensively anticipated to succeed.
Before you leap at both of those shares, it is vital to keep in mind that Wall Street analysts can quietly alter their worth targets downward if issues do not work out as hoped. Repairing the harm that following a foul name can inflict in your portfolio is not as easy.
Viking Therapeutics’ experimental weight reduction drug nonetheless must run a years-long part 3 trial earlier than we all know whether or not VK2735 can rake in tirzepatide-sized gross sales. Unfortunately, many gross sales for the experimental remedy are baked into the inventory’s $5.2 billion market cap. The inventory might shoot increased, but it surely’s solely applicable for buyers who can tolerate quite a lot of danger.
Expectations for Summit Therapeutics are even increased than expectations for Viking Therapeutics. Its $13.2 billion market cap at latest costs might come crashing down if long-term total survival knowledge is not as convincing because the progression-free survival outcomes ivonescimab has already produced. Wall Street analysts aren’t unsuitable to counsel this inventory can shoot increased, but it surely presents extra danger than most buyers can deal with.
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Wells Fargo is an promoting associate of Motley Fool Money. Cory Renauer has no place in any of the shares talked about. The Motley Fool has positions in and recommends Merck and Summit Therapeutics. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure coverage.
2 Soaring Stocks That Could Climb 68% to 166% Higher in 2025, According to Wall Street was initially printed by The Motley Fool
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