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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 turning into essentially the most precious publicly traded healthcare firm on this planet.
Eli Lilly’s and Novo Nordisk’s diabetes and weight reduction therapies have grown in reputation as they’ve helped sufferers obtain vital weight reduction, and that has made buyers bullish on the long-term prospects for these shares.
However the anti-obesity market might be value 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 therapies, and whereas Eli Lilly and Novo Nordisk would be the early winners, that does not imply it is too late to put money into the business.
One inventory with large potential within the business is Viking Therapeutics (NASDAQ: VKTX), which additionally has a doubtlessly promising weight reduction drug in its portfolio.
Viking achieved sturdy leads to a latest trial
Viking has an weight problems treatment, VK2735, that’s at present in part 2 trials. Meaning it might nonetheless be years away from coming into the market and producing vital income for the enterprise. However buyers are already rising bullish on the drug, given the outcomes it has been demonstrating in trials up to now.
On Feb. 27, the healthcare firm reported constructive top-line outcomes for VK2735’s part 2 trial because it achieved all major and secondary endpoints. Along with being secure and well-tolerated amongst trial individuals, the common weight reduction over a 13-week interval was 14.7%. That is similar to the 15% weight reduction that individuals 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 might actually make the case for the drug being a formidable choice as an weight problems remedy. One of many massive issues within the business is that there’s merely not sufficient provide to satisfy demand. That is why individuals have been utilizing Ozempic, a diabetes drug, for weight reduction functions. One other potential drug within the combine might assist guarantee provide meets demand.
Has Viking’s inventory already surged too shortly?
In mild 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 up to now 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, nevertheless it might actually assist drive up its worth.
It could even result in Viking doubtlessly being a takeover goal, as many bigger healthcare corporations are eyeing the burden loss business. Merely buying Viking Therapeutics might be a cheaper choice for a corporation than creating its personal weight reduction remedy.
Must you put money into Viking Therapeutics inventory?
Viking Therapeutics would not have an accredited product, and till that modifications, it will 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 present, given its sturdy outcomes, it is a risk that buyers should not overlook.
In the meantime, the corporate goes to want to boost cash to maintain on creating the drug and dealing on trials. Viking just lately introduced a $550 million frequent inventory providing, and additional choices are doubtless.
There’s numerous potential upside that comes with Viking Therapeutics’ inventory, however there’s additionally threat. So long as you are comfy with the danger and are conscious that it might be a bumpy trip till VK2735 obtains regulatory approval (assuming that it could possibly), it could nonetheless not be too late to put money into the inventory.
Must you make investments $1,000 in Viking Therapeutics proper now?
Before you purchase inventory in Viking Therapeutics, contemplate this:
The Motley Idiot Inventory Advisor analyst crew simply recognized what they consider are the 10 finest shares for buyers to purchase now… and Viking Therapeutics wasn’t certainly one of them. The ten shares that made the reduce might produce monster returns within the coming years.
Inventory Advisor supplies buyers with an easy-to-follow blueprint for fulfillment, together with steering on constructing a portfolio, common updates from analysts, and two new inventory picks every month. The Inventory Advisor service has greater than tripled the return of S&P 500 since 2002*.
*Inventory Advisor returns as of March 8, 2024
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 Massive Weight Loss Inventory. was initially printed by The Motley Idiot
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