Investing in Oncology: 3 Cancer Stocks With Promising Pipelines

The global oncology market is experiencing significant growth, driven by increasing cancer prevalence—projected at over 2 million new U.S. cases in 2025—an aging population, and rapid advancements in immunotherapies, targeted medicines, and personalized vaccines. This dynamic landscape is attracting substantial investment from major pharmaceutical companies and smaller biotechs, fostering a surge in partnerships and acquisitions. Featured companies poised to capitalize on this trend include Relay Therapeutics, advancing its Phase III breast cancer candidate RLY-2608; Pyxis Oncology, with its Fast Track designated micvotabart pelidotin for head and neck cancer and a Merck collaboration; and Allogene Therapeutics, progressing allogeneic CAR T therapies like cema-cel for lymphoma and ALLO-316 for solid tumors, highlighting compelling investment opportunities within the evolving cancer treatment sector.

Analysis

The global oncology market is positioned for significant expansion, driven by secular tailwinds including rising cancer incidence—projected to exceed 2 million new cases in the U.S. in 2025—and an aging population. This environment is fostering aggressive investment and M&A activity from large-cap pharmaceutical firms like Merck and Pfizer, who are targeting innovative biotechs to enhance their pipelines. The analysis highlights three clinical-stage companies with distinct catalysts. Relay Therapeutics (RLAY) has advanced its lead candidate, RLY-2608, into a pivotal Phase III study for a specific advanced breast cancer population, where it has shown potential for an improved tolerability and efficacy profile over standard-of-care. Pyxis Oncology (PYXS) is developing micvotabart pelidotin for difficult-to-treat head and neck cancer, which has received FDA Fast Track Designation and is bolstered by a clinical collaboration with Merck to study it in combination with Keytruda; key data is anticipated in H2 2025 and 2026. Allogene Therapeutics (ALLO) is pioneering allogeneic CAR T therapies, with its lead candidate cema-cel in a pivotal Phase II study for large B-cell lymphoma and its solid tumor candidate, ALLO-316, showing promising early activity, for which the company is now seeking a strategic partner.

Key Decisions for Investors

• Investors with a higher risk tolerance should consider positions in RLAY, PYXS, and ALLO, as each possesses clinical assets with specific, near-to-mid-term data readouts and regulatory milestones that represent significant potential valuation catalysts.
• Monitor the progress of Pyxis Oncology’s collaboration with Merck and Allogene Therapeutics’ search for a partner for its ALLO-316 program, as these events serve as critical third-party validation and could precede strategic M&A interest from larger pharmaceutical players.
• The preliminary data for Pyxis's micvotabart pelidotin, expected in the second half of 2025, is a key event to watch, as positive results in head and neck cancer could substantially de-risk the asset and trigger a significant re-rating of the company.
• Given the high-risk nature of clinical-stage biotech, consider these as speculative positions within a diversified portfolio, as pipeline success is not guaranteed and is subject to clinical trial outcomes and regulatory approval.