In the volatile biotech industry, companies can see their shares soar over relatively short periods on strong clinical progress for exciting pipeline candidates.
That's precisely what could happen to Exelixis (EXEL 1.44%) and Summit Therapeutics (SMMT 3.23%) this year. And the even better news is that there are reasons to consider holding onto these drugmakers' shares even beyond the next 12 months. Let's find out more.
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1. Exelixis
Exelixis is a relatively small biotech focused on oncology. Over the past decade or so, the company's sole growth driver has been Cabometyx, a medicine approved for several types of cancer, including some forms of kidney cancer. Cabometyx is an impressive drug and has earned many indications. Even so, Exelixis has been looking to diversify its lineup ahead of generic competition for its crown jewel, which is expected to enter the U.S. market by early 2030.
Exelixis is making solid progress toward that goal. Late last year, it submitted an application to the U.S. Food and Drug Administration (FDA) for its next-gen cancer drug, zanzalintinib, in metastatic colorectal cancer in combination with Roche's Tecentriq.
NASDAQ: EXEL
Key Data Points
If Zanzalintinib is to replace Cabometyx, though, it should also be a pipeline in a drug. Exelixis is planning to make more clinical headway this year to prove that it is. It expects several phase 3 study initiations and two late-stage data readouts. Positive results could jolt the stock. Zanzalintinib will take time to ramp up sales; in the meantime, Exelixis' main growth driver should continue to push it in the right direction, at least until 2030.
If the company can secure approval and label expansions for Zanzalintinib in the next few years while advancing early stage candidates, the stock could perform well over the next five years and beyond, despite Cabometyx's patent cliff.
2. Summit Therapeutics
Summit Therapeutics' leading candidate, ivonescimab, is currently undergoing several phase 3 clinical trials. The medicine became famous after performing better than Keytruda -- the world's best-selling cancer drug -- in a head-to-head study in patients with non-small cell lung cancer (NSCLC) and a PD-L1 protein overexpression. That study was in China, though, and run by Summit's partner, Akeso Biopharma.
Now, Summit is looking to replicate these results and seek approval for the therapy in the U.S. The company should have some data readouts this year, including for a study investigating ivonescimab in squamous NSCLC.
NASDAQ: SMMT
Key Data Points
The biotech also submitted an application to the FDA for ivonescimab in patients with EGFR-mutated NSCLC. If ivonescimab earns FDA approval and achieves its ongoing phase 3 study, Summit Therapeutics' stock price could rise significantly in 2026. The great thing about ivonescimab is that Summit Therapeutics should, eventually, seek many other approvals for the medicine. It is being investigated across a range of different indications in China.
Between those and the ones being done outside of China, Summit is undergoing 42 studies for the medicine. Some analysts have estimated that ivonescimab could reach peak sales of $53 billion. It will take a long time and many successes to get there, but it does show Summit's potential with this medicine. There are risks, including potential clinical and regulatory setbacks. It's crucial to keep that in mind and invest accordingly.
