Prediction: These two stocks could rise sharply in 2025

Sometimes small biotech companies see their stocks surge due to clinical or regulatory advances. That’s what happened this year Viking Therapeutics And Summit Therapeuticswhich gained significant momentum due to positive data. Of course, it’s hard to predict who will be next in line in 2025, but there are clues we can follow to make educated guesses.

With that in mind, let’s consider two biotech companies that could potentially deliver incredible returns next year: Recursive pharmaceuticals (RXRX -1.09%) And BioAge Labs (BIOA -2.88%). Are these drug manufacturers worth investing in?

1. Recursive pharmaceuticals

Recursion Pharmaceuticals is entering a pivotal phase in its history. The company is known for its artificial intelligence (AI)-based operating system, which tests clinical compounds against a library of human genes to identify the best candidates for clinical trials. Although Recursion Pharmaceuticals claims its approach could help significantly reduce the time and cost associated with developing novel drugs, the company currently has no products on the market and no candidate in Phase 3 trials. However, multiple data readings are expected in the next 14 months.

Recursion Pharmaceuticals could report results from the first part of a phase 2/3 study for REC-2282, a potential therapy for neurofibromatosis type 2, in the fourth quarter. Neurofibromatosis is a rare disease that causes tumors to grow in several places, including the nervous system. Recursion also plans to read key data for REC-4881, a Phase 2 drug for the treatment of familial adenomatous polyposis (a genetic disorder that can lead to colorectal cancer), in the first half of 2025.

Next year will see further readouts and the start of clinical trials. Positive results could boost the stock price and provide evidence that Recursion Pharmaceuticals’ potentially paradigm-shifting approach to drug development is working. However, some or all of Recursion Pharmaceuticals’ clinical trials could fail. Even if they are successful, it will still be a while before Recursion Pharmaceuticals is a commercial biotech company. Recursion Pharmaceuticals’ AI-centric project looks promising and the company has collaborated with several well-known companies.

In collaboration with, EXS4318 is being developed to target multiple inflammatory diseases Bristol Myers Squibb. There is also a partnership with Roche And Bavarianas well as with AI giant Nvidiawith which it built the largest supercomputer in the pharmaceutical industry. In short, Recursion Pharmaceuticals’ efforts could pay off, but it’s still too early to be sure that they will — and if not, the company’s shares might not be worth much in five years. Therefore, only those who have an increased appetite for risk should consider this investment.

2. BioAge Labs

BioAge Labs is a newcomer to the market. The company completed its initial public offering (IPO) on October 1. The biotechnology company’s leading candidate is called Azelaprag. It is developed as a weight loss agent, but with a catch. Azelaprag is currently being tested in Phase 2 trials in combination with tirzepatide, the active ingredient in the obesity drug Zepbound. A problem with many weight loss therapies is that they cause both muscle and fat loss.

Losing too much muscle mass can be a problem, but azelaprag tricks the body by simulating exercise-like signals in the body that will hopefully lead to muscle retention or even muscle growth even as patients lose body fat. In a phase 1b study in healthy volunteers, azelaprag increased muscle metabolism and reduced muscle atrophy, among other things. Notably, the company is also planning a Phase 2 trial in combination with semaglutide, the active ingredient in Wegovy.

The anti-obesity market is currently one of the hottest areas in the industry. According to some estimates, it could be worth $150 billion by the early 2030s, up from just $24 billion last year. If azelaprag continues to win approval as an important addition to drugs like Wegovy and Zepbound to help patients maintain muscle mass while losing weight, BioAge Labs stock will rise. The company plans to release some Phase 2 data next year, and depending on the results, its stock could rise significantly.

However, much like Recursion Pharmaceuticals, BioAge Labs remains an unproven company that could go either way, no matter how promising its lead program currently looks. I therefore advise caution with this stock, even more so than with Recursion. For now, it’s probably best to watch BioAge Labs from the sidelines. If it makes progress next year, its shares could then be worth investing in.