Viking Therapeutics: The Under‑the‑Radar GLP‑1 Contender Growth Hunters Can't Ignore

When most people think about GLP-1 drugs, they think of the blockbuster products sold by pharma giants Eli Lilly and Novo Nordisk. Lilly makes Mounjaro and Zepbound, while Novo makes Ozempic and Wegovy. These drugs have helped people around the world shed pounds -- and as a result, they've brought in billions of dollars in sales.

These pharmaceutical companies lead the market today, but they may not remain undisturbed here for very long. Other pharma players and biotech companies are knocking on the door -- and if their candidates make it successfully through clinical development and regulatory review, they could make a grand entrance.

Before that happens, it's a great idea to scoop up shares and hold on to them as the story unfolds. Which stock to buy? Let's check out Viking Therapeutics (NASDAQ: VKTX), the under-the-radar GLP-1 contender that growth hunters can't ignore.

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How GLP-1 drugs work

So, first, a quick bit of information about GLP-1 drugs. People aiming to lose weight have flocked to these products as they're easy to take -- by weekly injection -- and have safely produced fantastic results. The drugs work by interacting with hormones involved in the management of blood sugar levels and appetite.

Demand has been so high for GLP-1 drugs that shortages have even been declared in the past. This suggests that, even though Lilly and Novo lead this market right now, there's room for other players to join.

And one of these players may be Viking. The company is studying VK2735 in an injectable formulation in a phase 3 study and in a pill format in a phase 2 study. Clinical trial results so far have been strong, suggesting VK2735 may become a significant player in this market in the not-too-distant future.

Viking stands out because both the injectable and oral formulations use the same molecule, meaning that it should be easy for a patient to switch from one to the other.

A stock known to react

Investors may score a win as Viking progresses with VK2735 and announces trial data. When the company initially reported positive phase 2 trial data about two years ago, the stock soared 121% in one trading session. So Viking stock is known to react to positive news -- though I wouldn't expect such a massive gain with every bit of positive news.

And a potential regulatory approval could lead to significant revenue growth and profit down the road. That clearly supports the idea of positive stock performance over time. Finally, some investors and analysts have suggested that Viking could be a takeover target -- this could be another route to gains.

Of course, Viking, like any biotech company, faces the risk of setbacks in drug development. But if you're a growth investor who doesn't mind that risk, Viking is a GLP-1 contender that you can't ignore.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.