Shares of Viking Therapeutics and Summit Therapeutics have surged in 2024, driven by promising clinical trial results for their respective drug candidates. Analysts predict further gains in 2025, but caution that these stocks carry significant risk.
Viking Therapeutics' Weight Loss Candidate
Viking Therapeutics is developing VK2735, a dual GLP-1 and GIP receptor agonist similar to Eli Lilly's tirzepatide. Tirzepatide, approved for diabetes in 2022 and weight management in late 2023, generated $11 billion in sales in the first nine months of 2024. Mid-stage clinical trial results for VK2735 suggest it could capture a significant share of the weight management market. In an ascending dose study, patients receiving the highest dosage of VK2735 experienced an 8.2% weight reduction after four weeks, a 6.8% reduction compared to the placebo group. Early-stage results from an oral version of VK2735 showed a 5.3% weight reduction, or 3.3% compared to placebo, after 28 days.
BTIG analyst Justin Zelin projects Viking Therapeutics stock could reach $125 per share, a 166% increase, based on the potential of VK2735. However, the drug still needs to undergo a years-long phase 3 trial, and its success is not guaranteed.
Summit Therapeutics' Cancer Immunotherapy
Summit Therapeutics is focused on cancer therapy and has licensed ivonescimab from Akeso. Ivonescimab is a bispecific antibody that simultaneously inhibits PD-1 and VEGF. In the Harmoni-2 study involving lung cancer patients with newly diagnosed advanced-stage disease, ivonescimab reduced the likelihood of disease progression by 49% compared to Keytruda, a highly successful immunotherapy that targets the PD-1 pathway. Merck recorded $25 billion in Keytruda sales last year.
Summit completed enrollment in the phase 3 Harmoni trial for second-line lung cancer patients in October. Wells Fargo analyst Mohit Bansal has issued a $30 price target for Summit Therapeutics, suggesting a 68% increase. The FDA requires a large phase 3 trial with North American patients for approval in the U.S., and the Harmoni study is expected to be pivotal.
Investment Considerations
While analysts are optimistic about Viking Therapeutics and Summit Therapeutics, they caution that these stocks are not without risk. Wall Street analysts can adjust price targets downward if clinical trials fail or market conditions change. Viking Therapeutics' VK2735 needs to succeed in phase 3 trials to justify its current market capitalization. Summit Therapeutics' ivonescimab must demonstrate convincing long-term overall survival data to maintain its high valuation. Investors should carefully consider these risks before investing in these companies.
