1. Viking Therapeutics, Inc. (NASDAQ:VKTX)
Analysts Upside Potential: 160.36%
Viking Therapeutics, Inc. (NASDAQ:VKTX) is a biopharmaceutical company that is currently in the clinical stage of developing new treatments for metabolic and endocrine disorders. The company is currently developing a promising weight management drug called VK2735, which targets the same receptors as Eli Lilly’s successful drug, Tirzepatide. VK2735 is a dual agonist that activates both GLP-1 and GIP receptors, which are involved in regulating appetite and glucose metabolism, making it a candidate for treating obesity.
Tirzepatide by Eli Lilly was approved by the FDA for diabetes treatment in 2022 and later for weight management in 2023. It generated substantial sales, reaching $11 billion in the first nine months of 2024, indicating a strong market demand for effective weight management solutions. The drug under development by Viking Therapeutics, Inc. (NASDAQ:VKTX) has shown promising results with Phase 1 trial patients taking the highest dose (100 mg) losing an average of 8.2% of their body weight after four weeks, which was significantly better than the placebo group (6.8% reduction).
The positive results from VK2735’s clinical trials have led to a significant increase in the company’s stock value, reflecting investor confidence in its potential to capture a large share of the market for dual receptor agonists. Alger Mid Cap Focus Fund in its second quarter investor letter stated that one-third of the US adults suffer from obesity and they believe that Viking Therapeutics, Inc.’s (NASDAQ:VKTX) upcoming drug has the potential to address a large market. Moreover, researchers at Goldman Sachs predict that the market for these drugs may reach $130 billion by 2030. It is the top stock that can make you rich in 2025.
Alger Mid Cap Focus Fund stated the following regarding Viking Therapeutics, Inc. (NASDAQ:VKTX) in its Q2 2024 investor letter:
“Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company focused on developing novel therapies for patients suffering from metabolic and endocrine disorders. Their lead drug VK2809, a beta-selective thyroid hormone receptor agonist, is in development for nonalcoholic steatohepatitis and nonalcoholic fatty liver disease. Their VK2735 drug is a GLP-1 dual agonist being developed for patients with obesity. During the quarter, the company’s shares were negatively impacted by several factors: 1) a challenging environment for biotechnology stocks, exacerbated by Fed policy decisions to maintain elevated interest rates, 2) increased competition in the obesity treatment landscape, 3) manufacturability and scalability concerns regarding Viking’s obesity drug and 4) the absence of strategic partnerships from large pharmaceutical companies. Despite the challenging quarter, we continue to believe that the company’s GLP-1 drug has the potential to be a best-in-class obesity drug given its favorable efficacy and safety profile. Further, with approximately one-third of U.S. adults suffering from obesity, we believe the company’s GLP[1]1 drug has the potential to address a large market once approved.”
While we acknowledge the potential of Viking Therapeutics, Inc. (NASDAQ:VKTX) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VKTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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