Healthcare Stocks Facing Headwinds Could Stage Strong Recoveries in 2026

The Setup: Two Laggards With Hidden Catalysts

The broader market may be climbing higher, but not all stocks are riding the wave. Some of the most interesting opportunities often hide in the companies that have stumbled — especially when the fundamental story remains intact. Two healthcare plays worth monitoring heading into 2026 are Viking Therapeutics and Zoetis, both of which took hits in 2025 but have catalysts that could flip the narrative dramatically.

The Weight Loss Play: Viking Therapeutics’ Bet on VK2735

Viking Therapeutics (NASDAQ: VKTX) is no ordinary biotech startup. Yes, it’s still in the development phase — which carries inherent risks — but this isn’t a company chasing yesterday’s trends.

The real story centers on VK2735, a GLP-1 based weight management drug candidate that showed impressive mid-stage results. The drug has already advanced to phase 3 trials, and the company is also working on an oral version. If successful, this positions Viking squarely in one of the fastest-growing pharmaceutical markets right now.

Why did the stock get hammered in 2025? Two reasons. First, profit-taking after a strong 2024 run. Second, the oral formulation hit some speed bumps with patient dropouts tied to adverse reactions at higher doses. But here’s the thing — lower dose levels looked commercially promising, and the efficacy data remained strong.

The potential inflection point: Phase 3 data announcements could arrive in 2026. A successful readout would likely send shares sharply higher. For investors comfortable with biotech volatility, Viking represents the kind of risk-reward imbalance that could deliver outsized returns.

The Animal Health Comeback: Zoetis Navigates Turbulence

Zoetis (NYSE: ZTS) dominates the animal health space, but 2025 threw some curveballs. Two of its key pain-relief products — Librela (for dogs) and Solensia (for cats) — faced regulatory scrutiny following reports of severe adverse reactions, dragging both the stock and company earnings lower.

Yet a recovery narrative is already building.

The company proved it could handle competitive pressure in its dermatology unit, where Apoquel competes against newer alternatives for treating allergic itch in dogs. Despite market fragmentation with apoquel alternative for dogs and other options emerging, Zoetis held its ground and continues expanding across millions of undertreated pets globally.

More importantly, new product approvals are coming online. Lenivia, an osteoarthritis treatment for dogs, was approved in Canada and Europe. Its edge: longer-acting formulation means fewer vet visits. Portela, the cat-focused version, also cleared European regulators. These launches could gain momentum through 2026, helping Zoetis move past its 2025 headaches.

Beyond the immediate recovery story, Zoetis has the fundamentals of a fortress. It’s a genuine industry leader with proven innovation capabilities, a thick pipeline, consistent earnings, and a dividend track record that speaks for itself — payouts have grown 458% over the past decade.

The Real Question: Will 2026 Be Different?

Both stocks stumbled because of temporary setbacks, not broken business models. Viking’s weight loss drug could become a blockbuster if phase 3 data hits. Zoetis has new products entering the market while its core business remains competitive and profitable.

The risk-reward clearly favors these battered names heading into next year. That’s worth considering now, before the market reprices them.