What happened

Shares of clinical-stage biotech Viking Therapeutics (VKTX 31.14%) fell by as much as 4.8% on exceptionally low volume during the first hour of trading Tuesday morning. Since this mid-single-digit dip, the biotech's shares have battled back over the course of today's trading session.

As of 2:33 p.m. ET Tuesday afternoon, Viking's stock was only down by 0.86% on a fraction of its normal daily volume. The biotech's shares appeared to drop in response to a broad-based sell-off across the growth equity landscape during the opening hours of Tuesday's session. 

So what

Viking's stock has been among the biggest winners within the growth equity space this year, thanks to an upcoming mid-stage data readout in nonalcoholic steatohepatitis (NASH), along with a surprisingly strong early-stage readout for its weight-loss candidate, VK2735.

With both drugs targeting multibillion-dollar markets, most shareholders appear to be in wait-and-see mode at this point, based on the stock's modest trading volume today.  

Now what

Is Viking stock still a buy? Although the company has received a fair amount of criticism for possibly becoming a "story stock" following its meteoric rise this year, the fact remains that its shares are still cheap relative to its commercial prospects in the NASH and weight loss arenas.

On the weight loss front, Wall Street thinks this market will top $100 billion in annual sales by the end of the decade. The two big winners are expected to be Eli Lilly's Mounjaro and Novo Nordisk's Wegovy. Taken together, the more optimistic analyst estimates call for these two drugs to rake in nearly $70 billion in annual sales by 2030.

This leaves approximately $30 billion in market share up for grabs for latecomers like VK2735. That's an enormous opportunity for a company like Viking, with its $2.25 billion market cap. 

And then there's NASH. While estimates vary, Viking is quite possibly looking at another $10 billion to perhaps $30 billion in white space by the time its lead candidate, VK2809, would be ready to enter the market.

So while it is definitely fair game to doubt Viking's ability to compete against the front-runners in the NASH and weight loss drug spaces, there is enough meat on the bone, so to speak, to justify the biotech's eye-popping trajectory over the past few months.  

Keeping with this theme, there is a real chance that Viking ultimately gets bought out at some point within the next 12 months. AbbVie (ABBV 3.45%), for instance, has openly admitted that it is on the hunt for high-growth opportunities due to emerging competition in its core area of expertise, immunology. And Viking definitely qualifies as a budget-friendly play for a debt-laden company like AbbVie.

AbbVie also doesn't have much in the way of a dyed-in-the-wool metabolic pipeline, Viking, in turn, would open up a new area of potential growth for the drugmaker.