Shares of Viking Therapeutics (NASDAQ: VKTX) and Summit Therapeutics (NASDAQ: SMMT) have been on a meteoric rise this year, significantly outperforming the market. With both stocks witnessing prices that have more than tripled in 2024, the surge can be attributed to promising developments for Viking’s innovative oral weight loss treatment and surprising advancements related to Summit’s cancer therapy.
While dramatic rises can often foreshadow declines, analysts believe that these two stocks still have considerable room for growth. Oppenheimer’s Jay Olson Ulz projects that Viking Therapeutics’ shares could soar to $138, marking a potential upswing of about 112% from current valuations. Similarly, Citi’s Yigal Nochomovitz anticipates that Summit Therapeutics could see its stock price surge by around 120%, reaching $42 per share in the year ahead.
However, while these projections are compelling, investors are reminded that optimistic price targets from Wall Street are not certainties. A deeper look into what could propel these stocks to meet these bullish expectations is essential.
Viking Therapeutics is venturing into the booming market of weight management drugs, which has recently surpassed $45 billion in annual sales. This sector is expected to balloon to over $150 billion in the coming years. Viking’s promising investigational drug, VK2735, is anticipated to capture a significant portion of this lucrative market. The drug, a dual GLP-1 and GIP receptor agonist, is advancing into phase three trials after demonstrating an impressive 15% average weight reduction in patients over 13 weeks, all while maintaining a strong safety profile. There’s also excitement brewing for VK2735’s oral version, which recently showed promising results in phase one trials by helping patients shed 5.3% of their weight within just 28 days of treatment.
On the other hand, Summit Therapeutics is eyeing a substantial piece of the cancer therapy market, particularly targeting the PD-1 pathway, which is currently thriving. By 2031, the combined sales of PD-1 drugs are projected to reach an astonishing $110 billion annually. Summit’s innovative treatment, ivonescimab, distinguishes itself as a bispecific antibody that engages both the PD-1 pathway and vascular endothelial growth factor (VEGF) concurrently. It has recently outshined Keytruda, the leading PD-1 drug, in trials, showing a notable reduction in relapse rates for lung cancer patients. Despite receiving approval for marketing in China, Summit is gearing up for a pivotal trial in the U.S. that will assess its efficacy in American lung cancer patients.
Investors should exercise caution as Summit’s market cap has surged to a staggering $14 billion amidst its rapid stock price increase, reflecting high expectations. A potential decline could occur if results from upcoming trials fall short of what investors are anticipating. Many analysts suggest being patient and watching for a potential price correction before committing to buying shares.
Conversely, Viking Therapeutics seems to be flying under the radar with its relatively modest market cap of around $7.2 billion. If VK2735 carries on its positive trend in clinical trials, the stock could see a remarkable appreciation. For those willing to embrace higher risk for potential high rewards, this stock might be an appealing addition to a diversified investment portfolio.
Consider this: the Motley Fool Stock Advisor recently highlighted ten stocks with the potential for explosive growth, yet Viking Therapeutics did not make the cut. This could be a compelling cue for investors looking to explore broader market opportunities.
In a landscape defined by rapid advancements and shifting market dynamics, both Viking Therapeutics and Summit Therapeutics stand as exemplars of innovation. Their trajectories could serve as valuable opportunities for savvy investors focused on the future of healthcare and treatment solutions. As they continue to develop groundbreaking therapies, interested investors should remain vigilant, weigh the risks, and explore these unique opportunities within the ever-evolving biotech sector.