Three Potential Stocks Poised for Significant Gains in 2025
Three Potential Stocks Poised for Significant Gains in 2025
Many youngsters often enjoy the most about the arrival of a new year? It's the fireworks. Similarly, investors aren't averse to observing some fireworks in their portfolios as the new year commences.
Three contributors from our website have pinpointed stocks that could potentially bring a significant impact for growth investors. Here's why they believe that Novo Nordisk (NVO -0.32%), Summit Therapeutics (SMMT -5.55%), and Viking Therapeutics (VKTX -3.56%) have the potential to be major successes for 2025.
Novo Nordisk might be due for a strong comeback in 2025
*David Jagielski*(Novo Nordisk): The year 2024 has been challenging for pharmaceutical company Novo Nordisk. Entering this week, its shares had declined by 14% as the firm behind the well-liked diabetes drug Ozempic has witnessed good growth, but this has failed to convince investors.
Matters were further exacerbated when the company unveiled results from a trial involving weight loss treatment CagriSema. In a late-stage trial, the drug aided participants in losing an average of 22.7% of their weight, which fell short of the anticipated 25%.
The stock suffered a substantial fall of around 20% in response, indicating a severe overreaction to what may eventually become the top weight loss drug in the future. Novo Nordisk already has an approved weight loss treatment called Wegovy, which shares the same active ingredient (semaglutide) with Ozempic.
While the trial results for CagriSema were certainly not impressive, the market reacted in a significant (negative) manner. The sell-off in the stock has pushed it close to its 52-week low, and it's now trading at 22 times next year's estimated future earnings (based on analyst estimates).
Considering its low valuation and the market's apparent overreaction to the recent trial results, this is a stock that has the potential to generate substantial gains in the coming year as a rebound may be imminent.
Novo Nordisk has been investing in additional manufacturing capacity to cater to the increasing demand for its weight loss and diabetes treatments, and its results have been impressive in recent quarters. The business has been augmenting its operating profit by 21% through the first nine months of this year. With considerable more growth still in store for the company, investors should be cautious not to overlook Novo Nordisk -- the healthcare stock could have substantial upside in the coming year.
A potential blockbuster in the making
*Keith Speights* (Summit Therapeutics): 2024 has been a successful year for Summit Therapeutics, with its stock delivering a formidable 7x increase. I believe the new year will bring further positivity for this up-and-coming pharmaceutical company.
Summit expects to announce top-line results in mid-2025 from a phase 3 study evaluating ivonescimab in combination with chemotherapy as a second-line treatment for advanced non-small cell lung cancer (NSCLC).
The U.S. Food and Drug Administration (FDA) has already granted Fast Track Designation to the therapy for this indication. This means that the approval process could be expedited, and the FDA will work closely with Summit to advance ivonescimab.
While there's a degree of risk associated with any clinical trial, Summit's chances of success with this late-stage study appear to be significant.
Why? Summit's partner, Chinese pharmaceutical company Akeso, reported stunning results from its phase 3 study of ivonescimab earlier this year as a first-line treatment for NSCLC. Patients receiving the drug experienced significantly improved progression-free survival rates than patients receiving Merck's Keytruda immunotherapy.
It's crucial to note that Keytruda ranked as the world's top-selling drug last year with sales of $25 billion. With ivonescimab surpassing Keytruda in Akeso's late-stage study, I anticipate that Summit will have a blockbuster drug in its arsenal in the not-too-distant future.
And Summit doesn't plan to stop with the second-line NSCLC indication. The company is evaluating ivonescimab in combination with chemotherapy in a late-stage study as a first-line NSCLC therapy. It also intends to initiate another phase 3 study of the drug as a monotherapy in the first-line NSCLC setting.
Lightning can strike the same place twice
*Prosper Junior Bakiny (Viking Therapeutics):* Can a stock deliver substantial returns twice consecutively? Under the right circumstances, this is indeed possible.
Ponder Viking Therapeutics, a mid-cap biotech that soared this year following outstanding phase 2 results for its investigational weight loss medication, VK2735. The company should advance on this program in the coming year, when it's likely to initiate a phase 3 study.
It is also working on an investigational medication for metabolic dysfunction-associated steatohepatitis, which should also enter pivotal trials in 2025.
Viking has more promising early-stage candidates, and progress from these could be the catalyst that propels the stock price. Its oral formulation of VK2735 is an example worth considering.
Billion-dollar weight loss medications like Zepbound and Wegovy are administered via injection. An oral formulation would be a welcomed sight for many patients. Although several drugmakers are working on this project, Viking has more upside potential than the leading pharmaceutical companies, while smaller ones haven't shown the type of results it has so far.
The organization is still pushing forward with enticing anti-obesity initiatives. They recently disclosed optimistic pre-clinical findings from a fresh clinical substance. Viking aims to assert its dominance in this therapeutic sector, which is currently spiking in popularity and experiencing substantial growth within the industry. The company has exhibited a greater level of potential in this field compared to many others, even those with significantly more financial backing.
Consequently, Viking Therapeutics' stocks could witness another significant surge next year and maintain a robust trajectory over the subsequent five years.
Investors might be interested in diversifying their portfolios by considering these growth stocks, as financial analysts have identified Novo Nordisk, Summit Therapeutics, and Viking Therapeutics as potential major successes for 2025. Due to the significant negative market reaction to the trial results for Novo Nordisk's weight loss treatment CagriSema, the stock is now trading at a low valuation. Considering its promising growth potential and the increasing demand for its weight loss and diabetes treatments, Novo Nordisk could have substantial upside in the coming year.