2 Stocks That Could Soar This Year

Exelixis remains dependent on Cabometyx as its primary growth driver ahead of a expected U.S. generic entry by early 2030, while pursuing diversification via an FDA submission for next‑gen oncology candidate zanzalintinib and planned multiple phase‑3 starts and two late‑stage readouts this year. Summit Therapeutics is advancing ivonescimab through several phase‑3 programs after a China study showed superiority to Keytruda in PD‑L1‑high NSCLC, has an FDA filing in EGFR‑mutated NSCLC, is running 42 studies globally, and faces upside potential (some analysts projecting up to $53 billion peak sales) balanced by typical clinical and regulatory risks.

Analysis

Market structure: Positive phase‑3 readouts or an FDA OK for Exelixis' zanzalintinib or Summit's ivonescimab would reallocate oncology share from incumbents (PD‑(L)1 monotherapies) toward these combination/new‑mechanism entrants; Roche (Tecentriq) and Akeso are direct beneficiaries via combo/partner revenues, while generic entrants to Cabometyx (post‑2030) and some legacy single‑agent PD‑1 sellers face pricing pressure. Winners gain pricing power in specific histologies; losers see margin erosion where label expansion and reimbursement lag.

Risk assessment: Key tail risks are regulatory CRLs, safety signals in larger Western populations (China data non‑replicability), and partner commercialization failure; assign a binary event profile with material P&L move (>30% stock swing) on pivotal readouts within 3–12 months. Hidden dependencies include Roche/Akeso operational execution, payer willingness to fund new combos, and Cabometyx IP litigation timelines through 2030; catalysts are upcoming phase‑3 readouts and FDA filing decisions in the next 6–18 months.

Trade implications: Tactical sizing should be asymmetric: allocate small, defined‑risk positions to Summit (high binary upside) and larger, hedged exposure to Exelixis (existing cash flow from Cabometyx until 2030). Options are preferred for event risk — buy limited‑loss call spreads or straddles into scheduled readouts, and monetize IV by selling covered calls after positive prints; cross‑asset impact likely to raise biotech IV, compress credit spreads for risky pharma names, and produce ephemeral FX flows into USD safe assets on negative surprises.

Contrarian angles: Consensus overweights headline clinical superiority without pricing/execution math — $53B peak sales assumptions for ivonescimab ignore market access and combination trial complexity; implied probabilities in options markets often overshoot real-world regulatory odds. Historical parallels (China‑origin immunotherapies) show replication failure rates materially >50% when moving to global populations, so expect pronounced dislocations and trading opportunities after initial readouts.

Key Decisions for Investors

• Establish a 2–3% portfolio long position in EXEL via stock or buy 12–18 month LEAPS call spreads (buy 1x 12–18M ATM call, sell 1x 25–35% OTM call) ahead of expected phase‑3 initiations/readouts over next 12 months; if zanzalintinib receives positive pivotal data or FDA approval, add to reach 5% within 3 months, if HR ≥0.75 for primary endpoint or CRL occurs, cut to 0–0.5%.
• Allocate a 1–1.5% speculative position to SMMT using defined‑risk option structures: buy 6–12 month 30–50% OTM call spreads (limit premium to <1% portfolio); increase to 3% only if interim NSCLC squamous data shows HR ≤0.75 or ORR improvement ≥10 percentage points vs Keytruda; if readouts are negative or non‑replicable, close within 7 trading days to limit downside.
• Implement an IV‑aware event trade: 30–60 days before each major Summit/Exelixis readout, buy defined‑risk long straddles/strangles only if implied vol <80% (to control cost); if IV >120%, favor buying narrower call spreads or selling premium post‑runup (covered calls on EXEL after +25% move) to capture IV crush. Monitor IV and allocate no more than 0.5% of portfolio per event for pure volatility plays.
• Rebalance 1–2% from undifferentiated small‑cap biotech exposure into large‑cap, cash‑flowing oncology names or short‑dated IG bonds to limit portfolio beta to biotech; hedge binary risk by buying 6–12 month puts on a broad oncology ETF or selling short 0.5–1% position in a PD‑(L)1 incumbent (e.g., MRK) if SMMT option implied probability rises >30% without supporting Western data.