Eli Lilly and Novo Nordisk have been among the many hottest healthcare shares to personal over the previous few years. Since 2021, shares of the 2 corporations are up greater than 260%, with Eli Lilly now changing into probably the most helpful publicly traded healthcare firm on this planet.
Eli Lilly’s and Novo Nordisk’s diabetes and weight reduction remedies have grown in reputation as they’ve helped sufferers obtain important weight reduction, and that has made traders bullish on the long-term prospects for these shares.
However the anti-obesity market may very well be price greater than $100 billion by 2030, in accordance with estimates from Goldman Sachs. There’s room for extra than simply a few efficient weight reduction remedies, and whereas Eli Lilly and Novo Nordisk will be the early winners, that does not imply it is too late to spend money on the trade.
One inventory with enormous potential within the trade is Viking Therapeutics (NASDAQ: VKTX), which additionally has a doubtlessly promising weight reduction drug in its portfolio.
Viking achieved robust leads to a current trial
Viking has an weight problems medicine, VK2735, that’s at present in part 2 trials. Which means it may nonetheless be years away from getting into the market and producing important income for the enterprise. However traders are already rising bullish on the drug, given the outcomes it has been demonstrating in trials to this point.
On Feb. 27, the healthcare firm reported optimistic top-line outcomes for VK2735’s part 2 trial because it achieved all major and secondary endpoints. Along with being protected and well-tolerated amongst trial members, the typical weight reduction over a 13-week interval was 14.7%. That is akin to the 15% weight reduction that folks taking Novo Nordisk’s Wegovy common — and that is over a interval of 68 weeks.
If VK2735’s outcomes maintain up over an extended interval, it may definitely make the case for the drug being a formidable choice as an weight problems therapy. One of many massive issues within the trade is that there’s merely not sufficient provide to fulfill demand. That is why folks have been utilizing Ozempic, a diabetes drug, for weight reduction functions. One other potential drug within the combine may assist guarantee provide meets demand.
Has Viking’s inventory already surged too shortly?
In gentle of the promising trial outcomes, shares of Viking Therapeutics have been skyrocketing. Yr so far, the inventory is up greater than 370% — far greater than the returns Eli Lilly (36%) and Novo Nordisk (24%) have achieved to this point in 2024.
However even with the rise in share worth, Viking’s market capitalization stays at round $9 billion, which is nowhere close to the worth of these different shares (each have market caps in extra of $500 billion). One drug is not going to make Viking rival them in valuation, however it may definitely assist drive up its worth.
It might even result in Viking doubtlessly being a takeover goal, as many bigger healthcare corporations are eyeing the burden loss trade. Merely buying Viking Therapeutics may very well be a less expensive choice for an organization than creating its personal weight reduction therapy.
Must you spend money on Viking Therapeutics inventory?
Viking Therapeutics does not have an authorised product, and till that modifications, this can stay a high-risk inventory to personal. For all of the promise that VK2735 possesses, there’s nonetheless the potential that the drug will falter and be unable to acquire approval from regulators. Whereas that appears unlikely at the moment, given its robust outcomes, it is a chance that traders should not overlook.
In the meantime, the corporate goes to want to lift cash to maintain on creating the drug and dealing on trials. Viking just lately introduced a $550 million widespread inventory providing, and additional choices are possible.
There may be quite a lot of potential upside that comes with Viking Therapeutics’ inventory, however there’s additionally threat. So long as you are comfy with the chance and are conscious that it may very well be a bumpy trip till VK2735 obtains regulatory approval (assuming that it will possibly), it might nonetheless not be too late to spend money on the inventory.
Must you make investments $1,000 in Viking Therapeutics proper now?
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David Jagielski has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Goldman Sachs Group. The Motley Idiot recommends Novo Nordisk. The Motley Idiot has a disclosure coverage.
Missed Out on Eli Lilly and Novo Nordisk? This May Be the Subsequent Huge Weight Loss Inventory. was initially printed by The Motley Idiot
