Viking Therapeutics: 34% Down But Don’t Write It Off Yet” Stock Down 1/3 This Year? We Think You’re Crazy To Sell
Uncertainty and Volatility Weigh on Stocks
Investors are increasingly withdrawing their money from stocks due to the current uncertainty in the market, including shares of Viking Therapeutics. However, despite this trend, the biotech company still holds significant upside potential.
The Mid-Cap Biotech’s Attractions
Viking Therapeutics is indeed a clinical-stage biotech with no product on the market and consistently unprofitable. Its recent performance has been affected to some extent by broader macroeconomic issues; however, this should not necessarily deter investors. Viking Therapeutics operates in sectors with high unmet medical needs, including weight management – an area where significant growth is predicted.
A Promising Duo of Mid-Stage Candidates
One promising candidate from Viking Therapeutics is VK2735, a dual GLP-1/GIP agonist designed for treating obesity. This kind of mechanism of action has already led to the breakthrough and efficacy seen in Eli Lilly’s Zepbound, making it an impressive platform for potential success even with less resources compared to competitors. Furthermore, VK2735’s results have surpassed numerous other successful mid-stage treatments, outside of those developed by larger pharmaceutical companies.
VK2809 and Its Potential Market
Another notable mid-stage candidate from Viking Therapeutics is VK2809, which performed well in metabolic dysfunction-associated steatohepatitis (MASH) patients – a condition often linked to obesity. While its path has yet to be as clear-cut in comparison to other emerging treatments, the opportunity for it to become a leading drug in this young market presents an attractive prospect.
CordenPharma Manufacturing Agreement
Recently, Viking Therapeutics secured a multi-year manufacturing deal with privately held CordenPharma that highlights the company’s preparedness for commercial activities following VK2735 approval. The planned production totals over 1 billion oral formulations, along with numerous autoinjectors and syringes per year.
Risk Considerations
Investing in a clinical-stage biotech inherently carries above-average risk since even successful products often fail to yield substantial revenue when introduced into the market. If both VK2735 and VK2809 fail in late-phase studies, the stock’s price could significantly drop. This is particularly pertinent for investors uncomfortable with volatility or unsure about their risk-taking capacity.
Consideration for Investment
However, this also brings a note of encouragement for less conservative risk-takers. Investing a small portion, so long as Viking Therapeutics only makes up a sliver of one’s overall portfolio, minimizes potential losses if the investment fails. For those comfortable with market unpredictability and willing to diversify wisely, initiating a position in the company could offer significant upside over time.
The Motley Fool’s investment analysts, despite recognizing the biotech sector’s volatility, have listed 10 stocks that are projected for substantial gains; Viking Therapeutics, however, was not on this distinguished list.
