1) Viking Therapeutics, Inc. (NASDAQ:VKTX)
Number of Hedge Fund Holders: 41
One-year Return: ~117%
Average Upside Potential: ~176%
Market Cap as of 30th December: $4.44 billion
Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company, which focuses on the development of novel therapies for metabolic and endocrine disorders.
Wall Street remains optimistic about Viking Therapeutics, Inc. (NASDAQ:VKTX)’s lead program, VK2735, and its long-term growth potential. VK2735 is a novel dual-agonist designed to target the glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors. This combination enhances metabolic benefits for conditions such as obesity and type 2 diabetes. Viking Therapeutics, Inc. (NASDAQ:VKTX) made headway in its clinical trials for VK2735.
Recent developments have demonstrated VK2735 leading to significant weight loss results, bolstering the confidence of the investors. As per Maximize Market Research, the obesity treatment market size is expected to reach ~US$32.50 billion by 2029. Dual-agonists, like VK2735, reflect promise in delivering greater weight loss and glycemic control compared to GLP-1 monotherapies, placing Viking Therapeutics, Inc. (NASDAQ:VKTX) for long-term growth.
Viking Therapeutics, Inc. (NASDAQ:VKTX)’s clinical trials of VK2735 (both injectable and oral formulations) continue to progress well, with results so far indicating strong efficacy and tolerability. A successful transition to late-stage trials and eventual FDA approval should unlock additional opportunities for partnerships, licensing, or global commercialization.
Fred Alger Management, an investment management company, sees material upside to Viking Therapeutics, Inc. (NASDAQ:VKTX)’s stock on the back of the company’s GLP-1 drug, which it believes has the potential to be a best-in-class obesity drug considering its favorable efficacy and safety profile. Here’s what the firm said in its Q2 2024 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 VKTX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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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