Fortunes have been made on biotech stocks over the last few decades. The secret to success has been to invest in an up-and-coming biotech company before it even had a product on the market. Ideally, the company would have a pipeline featuring multiple promising candidates with significant commercial potential.

Viking Therapeutics (VKTX -2.45%) fits the profile of such a stock to a T. Could Viking be a millionaire-maker?

What's in Viking Therapeutics' quiver

Many small biopharmaceutical companies are essentially one-trick ponies. They're betting the farm on a single pipeline candidate. Not Viking Therapeutics.

The company is evaluating lead candidate VK2809 in a phase 2 study for treating non-alcoholic steatohepatitis (NASH), which is also called metabolic-associated steatohepatitis (MASH). Viking reported in the first quarter of 2024 that VK2809 achieved the study's primary endpoint of statistically significant reductions in liver fat after 12 weeks of treatment. In June, it announced further results showing that the experimental drug achieved NASH resolution with no worsening of fibrosis in up to 75% of patients, along with other positive results.

Another pipeline program isn't too far behind VK2809. Viking is evaluating VK2735 in another phase 2 study targeting obesity. In February, it announced outstanding results from this study. Patients receiving weekly injections of VK2735 achieved placebo-adjusted mean weight loss of up to 13.1% after 13 weeks of treatment. This weight loss topped results reported in clinical studies of blockbuster drugs semaglutide (which Novo Nordisk markets under the brand names Ozempic and Wegovy) and tirzepatide (marketed by Eli Lilly under the brand names Mounjaro and Zepbound).

Viking also has two candidates in early stage testing. The company announced positive results for one of them in March. Patients taking a daily dose of a tablet version of VK2735 achieved up to 3.3% placebo-adjusted mean weight loss after 28 days of treatment. Viking's other phase 1 program, VK0214, targets X-linked adrenoleukodystrophy (X-ALD), a rare genetic disorder that affects the adrenal glands and the nervous system.

Huge potential markets

Viking isn't going after small markets with its drugs in development. The company is targeting indications with massive commercial potential.

Until this year, there were no therapies approved by the U.S. Food and Drug Administration (FDA) for treating NASH/MASH. The liver disease affects an estimated 6 million to 8 million people in the U.S. Estimates vary about how big the NASH/MASH market could grow. However, Vantage Market Research projects it could reach a whopping $108 billion by 2030.

There's more of a consensus about the obesity market. Several Wall Street analysts predict it will top $100 billion by 2030. The staggering success so far for Novo Nordisk's Ozempic/Wegovy and Eli Lilly's Mounjaro/Zepbound franchises lends credence to these estimates.

Viking's X-ALD opportunity won't be nearly as large as its potential in NASH/MASH and obesity. However, most patients don't have any approved treatment options. Some children can receive a gene therapy called Skysona, but it isn't suitable for many younger patients.

Could Viking be a millionaire-maker?

Let's return to our original question: Could Viking Therapeutics be a millionaire-maker? I think the answer is a definitive "yes." Of course, nearly any stock could be a millionaire maker -- depending on how much money you start with.

But Viking's market cap currently stands at $5.5 billion. Zacks Investment Research thinks VK2809 could reach peak sales of $4 billion. William Blair projects peak sales for VK2735 of $11.7 billion. If we assume a price-to-sales ratio of 6x (roughly the average for the biopharma industry), Viking could potentially be worth more than $94 billion in the future. And we haven't included prospects for the company's earlier-stage programs.

It's not too farfetched to think Viking could generate a 25x return over the next 15 years. If so, an initial investment of $40,000 in the biotech stock could grow to at least $1 million.

That said, Viking has a long way to go. There's no guarantee that its pipeline programs will be successful. Investors should be aware of the risks associated with buying clinical-stage biotech stocks, even those with promising candidates. Viking might be a millionaire-maker, but it might not.