Weight loss drug developer Viking Therapeutics (VKTX -6.41%) has been in the news recently. The company offers substantial upside potential for investors, and although it is a speculative investment, it’s attractive to risk-tolerant investors seeking a stock that could double in a few years. Here’s why.
Viking Therapeutics and VK2735
The investment case hinges on its lead weight loss drug, VK2735. The GLP-1 and GIP agonist has shown rapid weight loss in clinical trials, and investors hope it will do so again in an ongoing phase 3 trial in subcutaneous (injectable) form. Even more exciting, Viking plans to initiate a phase 3 trial of VK2735 in oral formulation later in 2026.
Image source: Getty Images.
Beyond its potential to deliver rapid weight loss, another major advantage is the possibility of using VK2735 as a dual-formulation therapy, where patients can achieve rapid weight loss with subcutaneous dosing, followed by more convenient oral dosing for maintenance. Recent top-line results from a maintenance study strengthened that prospect: an initial 19-week weekly subcutaneous dose, followed by a transition to a weekly, biweekly, or monthly maintenance dose.
The results were so positive that they drove a surge in the share price, and the company promptly raised $500 million in a stock and convertible senior note offering to fund pipeline development.
However, as recently discussed, the key near-term data will come from the second part of the maintenance study, in which the oral formulation is used as a maintenance dose. Hopefully, the maintenance will provide better tolerability data than the phase 2 VK2735 oral trial did last year. If so, investors will likely feel more confident in the potential of its dual-formulation strategy and the phase 3 VK2735 oral trial.
While there’s no guarantee of success in clinical trials, VK2735 is a promising candidate, and the weight loss market is so lucrative that, in the words of CEO Brian Lian at a recent Morgan Stanley conference, “We can have a much smaller portion of the market and really, really have a successful franchise.” As such, Viking has the potential to meet Wall Street analyst expectations for substantial price appreciation, but anyone buying in needs to appreciate the downside risk of disappointing clinical trial data.
Today’s Change
(-6.41%) $-2.09
Current Price
$30.51
Key Data Points
Market Cap
Day’s Range
$30.43 – $32.48
52wk Range
$25.77 – $43.15
Volume
34.2K
Avg Vol
3.8M
How Viking Therapeutics stock can double
Morgan Stanley estimates that the global market for obesity drugs could reach more than $77 billion in 2030 (the year when VK2735 could become an established treatment), and a mere 1.4% share could result in the $1.2 billion in revenue that Wall Street analysts have penciled in for the company, according to S&P Global Market Intelligence. That’s a big number for a company trading at a market cap of a little more than $4 billion, and it suggests plenty of upside potential if it can establish market share with a dual-formulation strategy or even as a lower-cost option.
