Finding stocks that can triple in two years is hard enough. Finding those that can do so in a mere two months is that much more impressive. That's precisely what Viking Therapeutics (VKTX 7.92%) and Janux Therapeutics (JANX 0.62%) have accomplished since the year started -- and then some. Both companies' shares have soared by well over 200% since early January, thanks to impressive clinical progress.

No doubt existing shareholders are happy, but is it worth investing in these mid-cap biotechs after their recent runs? Let's find out.

1. Viking Therapeutics

Viking Therapeutics focuses on developing medicines for metabolic diseases. The company's portfolio includes VK2735, a potential anti-obesity therapy, and VK2809, which targets non-alcoholic steatohepatitis (NASH). Both niches are projected to grow rapidly through the end of the decade, so there are plenty of opportunities here for a mid-cap biotech. Viking Therapeutics recently completed a phase 2 study for VK2735 with flying colors, jolting its stock price.

In the trial, VK2735 led to statistically significant reductions in body weight at all dose levels compared to a placebo. Next up for VK2735 will likely be phase 3 studies, but with results like those in the bag, things look highly promising. Viking Therapeutics is also planning to report data from its ongoing phase 2 trial for VK2809 sometime in the first half of the year. More positive results should lead to more gains for the biotech.

Here's the other side of the coin. Viking stock could drop like a rock if it fails to deliver in exactly the way the market expects. Or, for that matter, if some of its competitors make progress. Pharmaceutical giant Novo Nordisk just reported encouraging phase 1 results for an oral obesity drug. The news moved Viking Therapeutics' shares in the wrong direction. The biotech has a long way to go before it can even hope to earn approval for VK2735.

There will be plenty of similar pitfalls along the way that could sink its stock price. Funding is another problem. Viking Therapeutics took advantage of its soaring stock price to run a secondary stock offering during which it raised gross proceeds of $632.5 million. The biotech will likely continue resorting to dilutive forms of financing for a while since it generates no revenue and is consistently unprofitable.

The company ended 2023 with $362 million in cash and equivalents and spent $100.8 million in operating expenses last year, a number that should increase as it moves its programs into late-stage testing. Still, given its recent data results, it shouldn't be too hard for Viking Therapeutics to raise funds.

Here's the bottom line: Viking is still far too risky a biotech stock for long-term investors to invest in even though it looks promising. It's worth monitoring how the company evolves in the coming years, but only those with a real appetite for risk should consider taking the plunge.

2. Janux Therapeutics

Janux Therapeutics is a cancer-focused biotech with a somewhat novel approach. The company develops T-cell engagers (TCEs), a kind of therapy that activates T cells (part of the immune system) to respond to, attack, and destroy cancer cells. The issue is that TCEs often come with significant safety issues. Janux Therapeutics seeks to design TCEs that bypass these problems while retaining their efficacy.

The biotech recently reported interim phase 1 results for two candidates, JANX007, a potential treatment for metastatic castration-resistant prostate cancer (mCRPC), and JANX008, being developed to target several solid tumors, including non-small cell lung cancer (NSCLC). The data was encouraging. For instance, among 18 mCRPC  patients who received at least a 0.1mg dose of JANX007, 14 experienced a prostate-specific antigen (PSA) decline of at least 30%, with 10 of them showing PSA declines of at least 50%.

PSA is a protein that's made in the prostate and, at high levels, is sometimes an indication of prostate cancer. JANX008 also showed some promise, with Janux Therapeutics pointing to "encouraging signs of clinical activity." Importantly, the candidates' safety profiles also seemed reasonable. However, it's a bit early to get too excited. These were, after all, just interim phase 1 results. There is a long road and several years ahead.

Janux Therapeutics didn't miss the opportunity its recent good fortunes brought about to raise some funds. It announced a secondary offering during which it racked up $320 million in net proceeds. Management thought the $344 million in cash, equivalents, and marketable securities it had in the bank before the stock offering was sufficient to "execute the company's clinical plan." It incurred $81.1 million in operating expenses last year.

So, Janux Therapeutics should be fine for now, but it runs the same risks as other early-stage, clinical-stage biotechs. The risks are far too high with no product in a phase 2 study. Keep it on your watch list, but don't invest now.