Two Potential Growth Stocks that May Soar in the Initial Quarter of 2025
Investors seeking stocks with the potential to make significant moves within a short time frame should consider two innovative biopharmaceutical companies: Recursion Pharmaceuticals (RXRX 5.36%) and Arvinas (ARVN 2.88%). These stocks could experience substantial gains by the end of March, pending the results of recent clinical trials.
However, it's crucial to remember that positive outcomes from these catalysts are not guaranteed. Below, we delve into the details of each company and why they might be worth further consideration.
1. Recursion Pharmaceuticals
Established in 2013, Recursion Pharmaceuticals employs artificial intelligence (AI) software to accelerate drug development. Investor excitement peaked in 2023 following Nvidia's disclosure of a small equity stake. Despite soaring, Recursion's shares have since plummeted around 59% due to concerns over clinical validation of its AI-powered drug discovery platform.
Recursion's journey has been marked by several trials that didn't produce the expected results. After a 2018 clinical trial failure with REC-994 for cerebral cavernous malformation, the company then faced disappointment in December 2022 when their Elucidate study, which enrolled 19 ovarian cancer patients and treated them with REC-617, a CDK7 inhibitor, showed less-than-desired results.
However, there's still hope for Recursion Pharmaceuticals. A successful readout for their phase 2 trial with REC-2282, an ongoing trial for neurofibromatosis patients, could boost the company's stock. Should the trial yield positive results, it could significantly increase investor confidence in Recursion's platform.
2. Arvinas
Arvinas is a clinical-stage drug developer focusing on disrupting cellular processes by prompting cells to break down troublesome proteins. Their lead candidate, vepdegestrant, is an orally available estrogen receptor degrader in a partnership with Pfizer.
Arvinas announced topline data from the VERITAC-2 Phase 3 monotherapy clinical trial for vepdegestrant in second-line-plus ER+/HER2- metastatic breast cancer (mBC) in the first quarter of 2025. Additionally, two new Phase 3 combination trials are planned to initiate in 2025, further expanding vepdegestrant's potential market reach and providing additional data on its efficacy in combination with other therapies.
Arvinas stock has struggled after setting a high in 2024. Despite falling from its peak, the company boasts a modest $119 million enterprise value, signaling that investors might be overlooking its potential. With Pfizer taking on much of the heavy lifting, Arvinas has maintained a limited cash burn rate, leaving it with an impressive $1.1 billion cash position.
In summary, while both Recursion Pharmaceuticals and Arvinas carry inherent risks due to the unpredictability of clinical trials, their innovative approaches and strategic partnerships make them worth further investigation for investors with a high risk tolerance.
Given the uncertain outcomes of upcoming clinical trials, it would be prudent for investors with a high risk tolerance to monitor the financial performances of these companies. A successful trial result for Recursion's REC-2282 could significantly boost the company's stock, potentially making it an attractive investment opportunity in the finance sector. On the other hand, Arvinas's topline data from the VERITAC-2 Phase 3 trial in 2025 and the promising partnership with Pfizer could potentially increase the company's stock value, allowing for significant gains for investors who are keen on investing in innovative biopharmaceutical companies.
