Those in search of equities with the potential for rapid and substantial returns may wish to consider the biopharmaceutical sector. A little over four times as much has happened so far this year for Viking Therapeutics (NASDAQ: VKTX) shareholders.
Despite Viking's meteoric rise, Oppenheimer analyst Jay Olson predicts even greater heights for the stock in the coming year. Olson maintained his outperform rating and increased Viking Therapeutics' price objective to $138 from $116.
Perhaps a more effective medication for controlling one's weight? Oppenheimer has increased its price objective for Viking Therapeutics' experimental weight-management treatment, VK2735, in reaction to favorable outcomes from clinical trials.
An analog of Eli Lilly's tirzepatide, VK2735 is an agonist for both GLP-1 and GIP. Mounjaro, a medication for diabetes, and Zepbound, a medication for obesity, both include tirzepatide as their active ingredient.
While estimates differ, Wall Street analysts believe that tirzepatide sales have the potential to surpass $50 billion per year during their peak.
Using 15 mg of VK2735 weekly, 35 participants in a mid-stage clinical trial lost 14.7% of their body weight. Although this number seems to be competitive with Zepbound, it will be quite some time before this still-experimental treatment can challenge Lilly's megahit.
Is it time to invest in Viking Therapeutics? While analysts are correct in predicting significant growth for Viking Therapeutics, the stock's high level of risk makes it unsuitable for the majority of investors.
Viking Therapeutics has no licensed drugs to offer yet, yet at recent prices, it has a market cap of $8.2 billion. Till we get encouraging results from the late stages of the clinical study, this stock is not a good choice for those who do not have an incredibly high risk tolerance.
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