Few big pharma stocks have been bigger winners over the last three years than Eli Lilly and Novo Nordisk. Lilly now ranks as the largest drugmaker in the world, with a market cap of $844 billion, after its shares skyrocketed more than 270%. Novo Nordisk stock is up around 75% despite a pullback in recent months.
There's no secret to their success: Both companies have blockbuster weight-loss drugs. But the obesity market could soon have a new contender. Wall Street thinks this weight-loss drug stock could more than 3x over the next 12 months -- and it's not Eli Lilly or Novo Nordisk.
Analysts are bullish about this biotech stock
Viking Therapeutics' (VKTX +0.17%) share price currently hovers around $32. The average analysts' 12-month price target for the biotech stock is $99.29 -- more than 200% higher.
The great expectations for Viking Therapeutics aren't limited to only a few outlier analysts, though. Of the 17 analysts surveyed by LSEG in February who cover the stock, seven rated it as a "strong buy." Another nine analysts viewed Viking as a "buy." The remaining analyst recommended holding the stock.
This optimism on Wall Street remains pretty solid despite Viking's less-than-stellar performance over the past few months. The small drugmaker's share price has plunged nearly 60% since late October 2024.
NASDAQ: VKTX
Key Data Points
Why the steep decline? Some investors were concerned about the outlook for weight-loss drugs after Donald Trump won a second term as president. Trump appointed Robert F. Kennedy Jr. as Secretary of Health and Human Services, and Kennedy has expressed skepticism in the past about relying on medications to lose weight.
Also, Viking was seen by some as a potential acquisition target for Merck. However, Merck announced in December 2024 it was licensing Hansoh Pharma's obesity drug HS-10535. This move added a new (and potentially formidable) competitor for Viking and greatly reduced the likelihood that Merck would acquire the company.
Viking's promising pipeline
Why do many Wall Street analysts like Viking Therapeutics so much? It has an especially promising pipeline.
The company's lead pipeline candidate is subcutaneous VK-2735. Viking plans to advance the drug into phase 3 clinical studies in treating obesity in the second quarter of this year. VK-2735 is a dual agonist of the glucagon-like peptide-1 (GLP-1) receptor and the glucose-dependent insulinotropic polypeptide (GIP) receptor. This is the same mechanism of action as Lilly's tirzepatide, which is marketed as Mounjaro in the U.S. for treating type 2 diabetes and as Zepbound for treating obesity.
Viking is also evaluating an oral tablet formulation of VK-2735 in phase 2 testing. The company thinks this tablet could be more attractive for patients who are reluctant to receive injections, or for those trying to maintain weight loss achieved with an injection.
Unlike many clinical-stage biotech companies, though, Viking isn't a one-trick pony. Its pipeline includes another candidate that could soon advance into late-stage studies -- VK-2809. This experimental therapy targets the severe liver disease metabolic dysfunction-associated steatohepatitis (MASH), which is also known as nonalcoholic steatohepatitis (NASH).
As they say on the infomercials, "But wait! There's more!" Viking is also evaluating VK-0214 in a phase 1 clinical trial as a potential treatment for X-linked adrenoleukodystrophy (X-ALD), a rare neurodegenerative disease. There are currently no approved drugs for treating X-ALD.
Should you buy Viking Therapeutics stock?
You shouldn't buy Viking stock solely because Wall Street likes it. Clinical-stage biotech stocks aren't well-suited for risk-averse investors, and Viking is no exception. There's no guarantee that the company's pipeline programs will be successful.
However, I think Viking Therapeutics could be a great pick for aggressive investors. The prospects for VK-2735 and VK-2809 appear to be good based on their phase 2 results. Viking's market cap is below $3.6 billion right now. If either or both of these drugs fulfill their potential, the company should be worth a lot more in a few years.
