Is Viking Therapeutics Stock Going to $50? Here's What the Bulls and Bears Are Saying

Viking Therapeutics (NASDAQ: VKTX) is one of the hopefuls in a very exciting pharmaceutical and biotech space right now: the weight loss drug market. Today, pharma giants Eli Lilly and Novo Nordisk dominate this area with their drugs, but demand is so high that there is room for a newcomer or newcomers to carve out a share -- and generate growth. This market is expected to reach almost $100 billion in just a few years, and demand for the products remains high.

Viking develops potential drugs for endocrine and metabolic disorders, and its lead candidate VK2735 is involved in late-stage trials for the weight loss indication. This biotech has reached a key moment in its growth story, suggesting stock price performance in the months and quarters ahead. Is Viking stock going to $50? Let's check out what the bulls and the bears are saying.

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The bull case

Viking is studying VK2735 as an injectable in phase 3 at the moment, and a phase 3 study of an oral version of the candidate is set to begin in the fourth quarter of this year. A maintenance dosing study is also underway, with data expected in the third quarter.

Any positive reports could potentially boost the stock, as we've seen investors have been reactive to such news in the past. When Viking reported strong phase 2 data in February of 2024, the stock soared more than 100% in one trading session.

Viking is very close to the finish line, so if all goes well, the company could soon have a significant revenue source. Meanwhile, the bulls have also speculated that a big pharma or even a large biotech company interested in getting in on the valuable weight loss drug market might consider acquiring Viking or establishing a partnership. Either a product launch or such a business development opportunity could be fantastic news for Viking shareholders.

Another important point: Viking isn't relying uniquely on VK2735 and instead is expanding its weight loss pipeline. It recently launched a phase 1 trial of VK3019, a dual amylin and calcitonin receptor agonist, representing another technique to target obesity.

The bear case

Viking is a $4.3 billion company facing off against the $1.1 trillion Eli Lilly and the $210 billion Novo Nordisk. These pharma giants have enormous resources to market their products to doctors and make them known to patients. And these companies have the resources to develop massive obesity drug pipelines. So, even if Viking reaches the finish line and demand for these drugs is high, it still may be difficult for Viking to stand out.

And while it's fantastic that the biotech specializes in metabolic drug development, any candidate failure or setback could call into question its expertise -- and weigh heavily on stock performance. Pharma giants, with broad pipelines and portfolios of commercialized products, may worry less about such setbacks.

Finally, even though Viking has significantly declined from its peak, the stock still has climbed 40% over the past year -- some investors may worry that it could stagnate after such a gain, particularly since the company hasn't yet commercialized a product.

All of this means Viking does represent a certain amount of risk right now, and investors seeking a weight loss drug winner might turn to the "safer" Eli Lilly.

The verdict: Is Viking heading to $50?

Now, let's get back to our question: Considering the bull and bear cases, is Viking, today trading around $37, going to $50? I think the bull case outweighs the bear one, and this biotech stock has room to run -- if upcoming data and other news are positive. In that case, or even ahead of data reports, Viking could easily reach $50 thanks to its progress so far in this high-potential market.

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