3 PROMISING BIOTECHS FOR THE YEAR 2025

An astute analyst might call 2024 a year of both promise and peril for the biotech business. XBI, the exchange traded index fund that best represents the overall fortunes of the industry’s most cutting edge companies, finally shrugged off the depressed prices of 2023, rising as much as 23% during some points of the year. However, a new threat emerged in the form of Robert F. Kennedy Jr, the controversial anti-vaccine crusader who President Elect Trump has chosen to lead the Department of Health and Human Services. No doubt Kennedy is expected to shake up healthcare in America. But what, exactly, that means for each individual biotech company, remains to be seen. 

In the larger picture, we will now have a president that will be turning 80 while in office…which will make America’s second consecutive octogenarian president. In short, the more grey America gets, the larger the demand for biotech’s health preserving products. Come rain, or come shine, an aging American society simply needs biotech.  

But not all companies are created equal. Some are tougher than others, more able to withstand the inevitable ups and downs of a risky business. Some offer better science than others, breakthroughs that better address unmet needs. And for some, 2025 promises to be a breakout year, while for others, 2025 will just be one more stop on a marathon journey towards innovation. 

Below, find three biotech firms that are particularly well suited to deliver powerful results in the year 2025. 

By: The Sick Economist 

1) Mesoblast limited 

2024 is ending on an exciting note for Mesoblast, and 2025 could be even more fruitful. The company describes itself as a business that creates “allogeneic cellular medicines for inflammatory diseases.”  This means that they utilize standardized industrial processes to manufacture cell based therapies that DO NOT come from the patient’s own body. (As opposed to more widely used Car-T therapies, which are not standardized, but rather custom made each time from the patient’s own body). 

After years of struggle and rejection, Mesoblast finally earned FDA approval for Ryoncil, a treatment for very ill children experiencing graft v host disease. This is a specialty medicine that would treat less than 10,000 children a year, but there is currently no other approved therapy for these desperately sick kids, so Mesoblast has a high probability of earning substantial payments for this ground breaking product. Additionally, the company hopes to earn adult approval in the near future, which would further broaden the total addressable market. 

The company is well funded to launch this novel treatment into the market. As of September 30th, 2024, the company had $50 million in cash on hand, with the potential to unlock another $110 million in funding upon approval of the drug. Now that Ryoncil has been approved, that means that the company will have a war chest of $160 million. (The firm burned $10.5 million in cash for the quarter ending Sept 30th). 

It’s always exciting when a company successfully pioneers a totally new method of action to treat any disease, no matter how obscure. But the real promise for Mesoblast investors is the other indications that may be just around the corner. In 2025, the company is launching a phase III confirmatory trial testing its anti-inflammatory cells against lower back pain, a condition that affects more than 7 million Americans. Separately, the company is angling to file for accelerated approval in the realm of heart failure, a disease state that affects 6 million Americans.  

Mesoblast’s late breaking FDA approval was a sweet way to end 2024, but it may just be the first of many. The firm has battled for years to advance its novel pipeline of anti-inflammatory stem cells, and 2025 may really be the year that all of that hard work and risk finally pays off for shareholders. 

2) Summit Therapeutics

If you are looking for a way to double your money in 2025, Summit Therapeutics could be the answer.  

This small, formerly obscure firm rocked the oncology community in September, 2024, when it disclosed data suggesting that it’s new cancer agent could beat Keytruda, currently the largest selling drug in the world. This trial, dubbed Harmoni II, was conducted in China; Ivonescimab almost doubled patient survival times vrs. Keytruda and reduced the overall risk of death by 49% compared with Keytruda. These results set the oncology community abuzz; its not every day that an upstart emerges from obscurity and handily bests the established gold standard in cancer therapy. 

2025 is critical because the company is currently running phase III trials (dubbed, “Harmoni III”) in the USA. If these American trials can reproduce similar data to the Chinese trials, then Summit could have a new blockbuster on it’s hands. In 2023, Keytruda did $23,000,000,000 in sales world wide. If Ivonescimab could capture just 20% of that market share over a period of years, that would equate to about $5 billion in annual revenue. According to the NYU Stern School of Business, biotech firms often trade at a multiple of six times revenue. This would mean that Summit could be worth $30 billion, as opposed to the current stock market valuation of approximately $13 billion. 

The results of the Harmoni III trial are slated to be released in the middle of 2025. If the results are positive, Summit could be sold to a larger Big Pharma conglomerate soon after.  The controlling shareholder of Summit, Bob Duggan, has built and sold an oncology company before. At 80 years of age, its unlikely that he plans to grow the company indefinitely. Duggan most likely aims to exit the business for two or three times the current shareprice. If you don’t mind taking the risk of investing in a company with only one product, you may just want to buy shares and take a ride right along with him. 

3) Voyager Therapeutics 

The Years 2023 and 2024 were revolutionary in the world of neurology, and 2025 could represent the next step in a tantalizing direction. In those two past years, the FDA approved the first drugs proven to slow down the deadly progression of Alzheimer’s disease (Leqembi approved in ‘23, and Kisunla in ‘24). Although these drugs only slow progression of the disease be 30-40%, they still represent a milestone in the world of neurology: for decades prior to 2024, pharmaceutical companies big and small invested billions of dollars in Alzheimer’s research only to be met with unrelenting failure. These two approvals were like the firing of a starting gun at an Olympic sprint event: now that the corporate world sees that big profits are possible in the Alzheimer’s field, the race for innovation has begun. 

One noteworthy competitor in that space is Voyager Therapeutics. They bring a fresh approach that could result in novel treatments. Instead of focusing on the dreaded amyloid plaques, Voyager possesses a suite of intellectual property focused on the brain protein TAU, which is another protein that, when dysfunctional, is thought to worsen the cognition of Alzheimer’s patients. 

2025 is the first year that Voyager really has an opportunity to bring these new agents into human trials. They anticipate beginning a number of TAU related clinical trials with a few different approaches. Additionally, they are beginning human research programs to treat ALS and Parkinson’s, two additional excruciating neurological diseases with few effective treatments available.

Voyager is an example of an early stage company that the patient biotech investor may find appealing. Although 2025 is likely to yield critical clinical milestones, the company won’t be offering a viable commercial product for years to come. But the firm is currently priced that way on the stock market. Voyager is currently valued at about $350 million on the stock market. This figure is even less than the quantity of money in the company’s bank account. So currently, the market is valuing the start up’s intellectual property at $0.  If you think that several potential novel approaches to Alzheimer’s or ALS disease must be worth more than $0, then Voyager Therapeutics might be a good bet for you.