While impressive results from crucial clinical trials can significantly boost a drug company’s stock prices, prudent investors should maintain a cautious perspective when interpreting such trial outcomes. It’s important to note that accurately predicting the outcome of clinical trials is challenging, but even when results meet expectations on Wall Street, investing in the company based solely on these results may not be wise without other compelling reasons suggesting long-term success.
I find myself drawn to scrutinize three pharmaceutical companies that I believe are worth keeping an eye on: Eli Lilly (LLY), Summit Therapeutics (SMMT), and Vertex Pharmaceuticals (VRTX). Over the next 18 months, these drugmakers are expected to unveil significant findings from crucial clinical trials. Moreover, their outlook for the upcoming five years appears promising.
1. Eli Lilly
In April, Eli Lilly announced favorable phase 3 findings for their oral GLP-1 drug candidate, orforglipron. This news was met with optimism by the market. The study centered on diabetes patients and measured A1c reduction as its key metric. Much anticipation surrounds Eli Lilly’s ongoing late-stage studies of orforglipron for obesity treatments; they are expected to publish data from at least one of these clinical trials within the next year.
In recent times, Eli Lilly has been prominent in the field of weight management. They might be on the verge of another groundbreaking achievement by being among the first to introduce an efficient oral GLP-1 drug for obesity treatment. Given that existing solutions are injected under the skin, orforglipron could find a good market fit if it performs well in phase 3 obesity trials. However, its success is contingent upon how it fares in these studies; otherwise, Lilly’s stocks might experience a significant drop.
Despite any potential shortcomings in later-stage clinical trials for forglipron, Eli Lilly’s portfolio remains solid due to its other promising candidates such as retatrutide, currently undergoing phase 3 trials. Nevertheless, the stock is still a good investment choice.
Simultaneously, Lilly consistently delivers strong financial performances. Their revenue and profits are increasing steadily, suggesting this positive trend will persist in the near term.
In conclusion, Eli Lilly stands out as a promising dividend-growth investment. While it’s worth keeping an eye on the results from phase 3 trials for orforglipron in obesity, the stock is expected to perform favorably over time, regardless of the specific outcome of these studies.
2. Summit Therapeutics
Summit Therapeutics has acquired the rights to develop ivonescimab, a cancer treatment originally developed by Akeso, a Chinese biopharmaceutical company. Ivonescimab has already been approved for use in China, but Summit must carry out clinical trials outside of China to gather data necessary for approval in countries like the U.S., Europe, and regions where it holds marketing authorization.
One of these studies is likely to capture the attention of investors, as Summit is conducting an advanced trial for its flagship product, comparing it with Merck’s Keytruda in patients suffering from non-small cell lung cancer (NSCLC), under a study called Harmoni-3. Enrollment for this study remains ongoing, and there’s optimism that we may receive preliminary results by the end of the coming year.
The shares of Summit skyrocketed following news that ivonescimab performed better than Keytruda in lowering the risk of recurrence or death in NSCLC patients, according to a study in China. If the same outcomes are replicated elsewhere, this could again significantly impact the stock price. Conversely, if Wall Street’s expectations for Summit aren’t met, their share price may decrease.
Is it advisable to invest in Summit Therapeutics’ stocks? To my thinking, the company’s potential over the next five years appears enticing. The drug Ivonescimab is being trialed across multiple types of cancer, and it appears highly promising for NSCLC, which could be its primary market.
Although it might not work as effectively in trials conducted outside of China, obtaining approval from regulatory bodies in one region significantly lowers the chances of encountering major clinical and regulatory obstacles for Ivonescimab, a promising drug pipeline prospect. If you decide to invest in Summit Therapeutics today, you stand to gain rewards from the potential success of their leading candidate.
3. Vertex Pharmaceuticals
Vertex Pharmaceuticals is recognized as a pioneering company, focusing on creating groundbreaking medications where there is a significant lack of existing solutions. One of the latest areas Vertex is concentrating on is type 1 diabetes (T1D). Unfortunately, there are currently no cures for this long-term illness; however, their potential drug zimislecel could serve as a functional cure by restoring patients’ capacity to produce insulin, which is something that individuals with T1D are unable to do.
During the initial stages (phase 1/2) of an ongoing phase 1/2/3 clinical study, ten out of twelve patients who received zimislecel no longer needed insulin after a period of one year. Remarkably, all twelve patients had not experienced any severe hypoglycemic events within the first 90 days.
In simple terms, we expect to collect data from the final stages of this ongoing clinical trial within the next year. If the results are positive, they will undoubtedly be welcomed. Additionally, the company plans to submit regulatory applications for this product in 2026. Zimislecel could prove to be an excellent addition to Vertex’s current product lineup.
In the market of drugs targeting the genetic roots of cystic fibrosis, Vertex Pharma continues to reign supreme, fueling impressive revenue and profit expansion. Over the past half decade, they’ve expanded their offerings significantly, introducing drugs like Journavx for managing acute pain and Casgevy for treating two uncommon blood disorders.
Beyond the news about the clinical trial outcomes for the promising Type 1 Diabetes treatment, Zimislecel, Vertex Pharmaceuticals’ pipeline boasts additional promising programs as well. With these upcoming developments, the company’s stock is poised for impressive performance in the future.
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2025-07-22 12:12