Shares of Viking Therapeutics (NASDAQ: VKTX), a clinical-stage drugmaker working on metabolic treatments, have tripled in value this year. Despite the huge run-up, analysts who follow the company think it has heaps more upside.
The average analyst who follows Viking Therapeutics thinks it can rise to $113.55 per share. Reaching the consensus expectation would result in a gain of about 76% from the stock’s recent closing price.
Before opening your brokerage application to take advantage of the mismatch between Wall Street’s expectations and the stock’s present price, we should learn a thing or two about the experimental drugs in the company’s late-stage pipeline.
Why Wall Street is bullish for Viking Therapeutics
Viking Therapeutics doesn’t have any approved drugs it can sell now, but an experimental treatment it recently advanced to phase 3 trials could become an enormous blockbuster. VK2735 is a weekly injection that acts on GLP-1 and GIP receptors in the pancreas to reduce patients’ appetites.
There are plenty of GLP-1 drugs out there, but at the moment, tirzepatide from Eli Lilly (NYSE: LLY) is the only treatment for diabetes or weight management that acts on GLP-1 and GIP receptors. Lilly’s GLP-1 plus GIP agonist was first approved to treat diabetes under the brand name Mounjaro in 2022 and again for weight management last November under the brand name Zepbound.
Tirzepatide is gaining market share from semaglutide, a GLP-1 agonist that Novo Nordisk markets as Ozempic, Wegovy, and Rybelsus. Eli Lilly’s treatment produced second-quarter sales that rocketed up by 86% compared to the first quarter to reach an annualized $17.2 billion.
Viking intends to begin a phase 3 obesity trial with VK2735 after a meeting with the Food and Drug Administration (FDA) scheduled for later this year. This isn’t the only dual GLP-1 and GIP agonist in development, but it’s arguably closer to earning approval from the FDA than its peers.
Viking Therapeutics sports a $7.2 billion market cap at recent prices, but commercial-stage biotech stocks tend to trade at mid-single-digit multiples of…
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