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Eli Lilly and novo nordisk It has been one of the hottest healthcare stocks to own over the past few years. Since 2021, both companies’ stock prices have risen more than 260%, making Eli Lilly now the world’s most valuable publicly traded healthcare company.
Eli Lilly and Novo Nordisk’s diabetes and weight-loss drugs are gaining popularity for helping patients significantly lose weight, and investors are bullish on the long-term prospects of these stocks.
However, according to US estimates, the anti-obesity market could be worth more than $100 billion by 2030. goldman sachs. There’s room for more than a few effective weight loss treatments, and Eli Lilly and Novo Nordisk could be early winners, but that doesn’t mean it’s too late to invest in the industry.
One stock with great potential in the industry is Viking Therapeutics (NASDAQ:VKTX)the company’s portfolio also includes potentially promising weight loss drugs.
The Vikings performed well in recent tests.
Viking has an obesity treatment drug, VK2735, which is currently undergoing phase 2 trials. This means it could still take years to enter the market and generate significant revenue for your business. But investors are already becoming more bullish on the drug given the results shown in clinical trials so far.
On February 27, the company reported positive top-line results in its Phase 2 study of VK2735, meeting all primary and secondary endpoints. In addition to being safe and well-tolerated among trial participants, the average weight loss rate over 13 weeks was 14.7%. This compares to an average 15% weight loss for people who take Novo Nordisk’s Wegoby, and this occurs over his 68 weeks.
If VK2735’s results hold up over time, the drug could certainly prove to be a powerful option as an obesity treatment. One of the big problems in the industry is that there isn’t enough supply to meet demand. That is why people have been using the diabetes drug Ozempic for weight loss purposes. Another potential drug in the mix could help ensure supply meets demand.
Has Viking stock already risen too fast?
Viking Therapeutics’ stock is soaring after promising trial results. Year-to-date, the stock is up more than 370%, far outpacing the gains made by Eli Lilly (36%) and Novo Nordisk (24%) so far in 2024.
But even with the stock’s rise, Viking’s market capitalization remains at about $9 billion, far behind the value of other stocks (both companies have market caps of more than $500 billion). One drug won’t make Viking competitive on valuation, but it could certainly drive up prices.
Viking could even become an acquisition target, as many major healthcare companies are eyeing the weight loss industry. For companies, simply acquiring Viking Therapeutics could be a more cost-effective option than developing their own weight-loss treatments.
Should you invest in Viking Therapeutics stock?
Viking Therapeutics does not have an approved product, and until that changes, it will remain a high-risk stock to own. Despite the high hopes for VK2735, there is still a chance that the drug will underperform and fail to gain regulatory approval. That seems unlikely at the moment given its strong performance, but investors shouldn’t overlook the possibility.
Meanwhile, the company needs to raise funds to continue drug development and clinical trials. Viking recently announced a $550 million common stock offering, and additional offerings may be made.
Viking Therapeutics stock has a lot of upside potential, but it also has some risks. It’s not too late to invest in stocks, as long as you’re willing to take the risk and are aware that it may be difficult until VK2735 gets regulatory approval (assuming it gets approved). maybe.
Should you invest $1,000 in Viking Therapeutics right now?
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David Jagielski has no position in any stocks mentioned. The Motley Fool has a position in and recommends Goldman Sachs Group. The Motley Fool recommends Nordisk. The Motley Fool has a disclosure policy.
Miss Eli Lilly and Novo Nordisk? This could be the next big weight loss stock.Originally published by The Motley Fool
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