What happened

Shares of the clinical-stage biotech Viking Therapeutics (NASDAQ:VKTX) gained a whopping 27% last month, according to data from S&P Global Market Intelligence. What sparked this breakout?

Oddly enough, Viking's shares raced higher in August without a clear-cut catalyst. The biotech's stock appears to be simply heating up ahead of the company's forthcoming presentation at the American Society for Bone and Mineral Research meeting later this month -- where Viking is expected to update investors on the status of its mid-stage hip fracture drug candidate VK5211.

A series of stacked coins with an upward trending green arrow above leading a jar filled with U.S. currency.

Image source: Getty Images.

So what

This double-digit move higher last month does have a solid fundamental underpinning, however. Viking shares could turn out to be deeply undervalued at current levels. After all, the company is developing a nonalcoholic steatohepatitis drug, VK2809, that has the potential to generate billions of dollars in sales. And Viking's VK5211 is no slouch either, with this experimental drug also staring down a billion dollar-plus market opportunity in the lucrative hip fracture setting.

Now what

Whether Viking's stock can maintain its monstrous momentum without a newsworthy event remains to be seen. But the company does have two major near-term catalysts that could trigger another breakout before year's end. 

First, Viking is reportedly in negotiations with various partners to advance VK5211 into a late-stage trial. Any licensing deal for this high-value compound should come with a healthy upfront cash payment.

Second, Viking is on track to release VK2809's mid-stage results by November. If positive, the biotech's shares should bolt higher. This key experimental drug, after all, would be one step closer to reaching a market that's forecast to grow to a staggering $35 billion within the coming decade. 

The headline here is that Viking's stock might be gearing up for a prolonged period of growth -- that is, if everything falls into place for its top clinical candidates. Therefore, risk-tolerant investors might want to consider adding this promising name to their portfolios soon.

George Budwell owns shares of Viking Therapeutics. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.