Motley Fool calls Viking the GLP‑1 drugmaker growth-hunting investors 'can't ignore'
A Motley Fool analyst says Viking is "the under-the-radar GLP-1 contender that growth hunters can't ignore" / Photo: Facebook / Nasdaq
Risk-tolerant investors should not ignore shares of biotech Viking Therapeutics, Motley Fool analyst Adria Cimino argues. This is because the company is developing an obesity drug that could compete with Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound in the near term.
Details
Cimino calls Viking "the under-the-radar GLP-1 contender that growth hunters can't ignore." The company is developing its obesity drug VK2735 in two formats – oral and injectable. It is currently in phase III clinical trials.
If it gets through trials, VK2735 could secure a meaningful position in the obesity-drug market in the near term, the article argues. Today, the segment is dominated by semaglutide, the active ingredient in Wegovy from Novo Nordisk, and tirzepatide, the active ingredient in Zepbound from Eli Lilly.
Cimino also highlighted that Viking’s share price tends to react sharply to positive news. A few years ago, when the company first reported encouraging phase II results for VK2735, the stock jumped 121% in a single session.
Regulatory approval of VK2735 could drive substantial revenue and earnings growth – as well as long-term share price appreciation, the Motley Fool analyst believes. She also pointed to investor and analyst speculation that Viking could become a takeover target, which could provide an additional catalyst for the stock.
At the same time, Cimino noted the risks typical for biotech companies, including the possibility of clinical setbacks, and said the stock is suitable primarily for "growth investors who don't mind that risk."
Stock performance
Year to date, Viking shares are down 18.3%. Wall Street sentiment remains upbeat: 17 analysts rate the stock a “buy” versus a single “hold.”
In October, Canaccord initiated coverage of the company with a “buy” rating, calling Viking “one of the leading biotech companies in the obesity drug development space.”
The consensus target price is $93.40 per share, implying upside of more than threefold versus the Tuesday closing price.
