This Stock Skyrocketed 800% in 2025 – Time to Buy or Time to Bail?

A moonshot stock just pulled off the impossible – an 800% gain in seven months. But here's the real question: is this rally built on fundamentals or just another case of Wall Street's 'greater fool theory' in action?

The anatomy of a parabolic move

When any asset climbs eightfold while the broader market crawls, it demands scrutiny. Is this disruptive tech? A sector revolution? Or just another pump waiting for bagholders?

Red flags or runway?

800% moves don't happen in efficient markets without either explosive growth or explosive risk. The smart money's already asking: did you get the early memo or just the FOMO?

The verdict

Only two types of investors chase 800% runners – those who understand why it happened, and those about to learn why it shouldn't have. Which camp are you in?

(Remember: past performance guarantees nothing – except maybe your broker's next yacht payment.)

A potential first-in-class drug

Abivax's leading pipeline candidate is called obefazimod, a potential treatment for ulcerative colitis (UC). It could be a first-in-class drug, meaning a medicine that has a novel mechanism of action distinct from those of existing therapies targeting the same condition. First-in-class drugs sometimes prove more effective than standard existing treatments, so there is significant potential for a smaller biotech company working on a medicine like this one, if it can ace clinical trials.

Image source: Getty Images.

Abivax has just achieved exactly that, with strong results from a pair of phase 3 trials for obefazimod. The medicine led to a high rate of remission among participants with moderate to severely active UC, compared to a placebo. Importantly, the studies included patients who had never received any advanced therapy for UC, as well as some who had but had previously failed to achieve remission. According to Abivax, 47.3% of participants in these trials had an inadequate response to prior therapy.

In other words, obefazimod succeeded in helping some patients achieve remission where other medicines had failed. And this isn't an obscure therapeutic area with just a couple of options, either: It's actually a highly competitive market. There are numerous advanced therapies for UC, including some produced by several of the world's largest pharmaceutical companies. That makes obefazimod's success all the more impressive.

Why it may not be too late to buy the stock

Abivax's market capitalization is now 3.7 billion euros (about $4.3 billion). Some analysts estimate that obefazimod could hit peak sales of about $4 billion. Of course, it won't get there anytime soon, even if it earns approval. Though the data looks strong so far, there is more to come.

The recent results Abivax shared were from induction trials (to see whether a medicine can reduce the symptoms of a disease). The biotech has an ongoing maintenance study (to check whether it can keep the disease under control), the results of which it plans to share in the second quarter of 2026. If this data isn't up to Wall Street's liking, Abivax's shares might plunge.

That's to say nothing of potential regulatory setbacks, which aren't that rare with smaller biotech companies and could also sink the company's stock price. So there are some risks involved, but the stock might be worth it for those who can stomach the volatility. Abivax has developed a medicine with a novel mechanism of action that performs well in clinical trials, and that ability speaks volumes about the company's innovative capabilities.

Meanwhile, although funding was an issue at the start of the year, it should no longer be a problem. Abivax ended the first quarter with 103.6 million euros in cash ($120.1 million), which management thought would only last until the end of this year. Thanks to obefazimod's phase 3 results and the company's stock price soaring, Abivax announced a secondary offering, during which it expects to generate gross proceeds of 637.5 million euros ($747.5 million). That should be plenty of money for the company to keep the lights on, even beyond next year.

There's still significant upside left if the ongoing phase 3 clinical trials for obefazimod in UC also yield strong results. Additionally, Abivax is testing its lead candidate as a monotherapy for Crohn's disease, as well as a potential combination treatment for UC.

Consistent positive clinical and regulatory developments could lead to even more gains for patient investors. That's why it might still be time for those with above-average risk tolerance to initiate a small position in the stock.