2 Stocks That Could Realistically Double by 2030

The famously volatile biotech industry can help investors earn substantial returns in relatively short periods, so long as they pick the right companies. Take Abivax (NASDAQ: ABVX) and Viking Therapeutics (NASDAQ: VKTX), two biotechs that have grown in prominence in recent years. These two drugmakers could see their shares double over the next four years -- for a compound annual growth rate of about 19% -- provided they can make significant headway with their leading pipeline candidates. Here's the rundown.

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1. Abivax

Abivax is a clinical-stage biotech developing a promising product called obefazimod. This drug could enter the market for ulcerative colitis (UC) medicines if it earns approval. Although it is a highly competitive area, obefazimod has shown tremendous potential so far. Unlike some traditional immunosuppressants used to treat UC, which leave patients vulnerable to various infections, obefazimod does not broadly weaken the immune system. Obefazimod aced a phase 3 clinical trial in patients with moderate-to-severe UC, about 47.3% of whom had had inadequate responses to prior therapies. These results highlight the fact that obefazimod could be just as effective as its competitors (or even more so) while limiting side effects. That's why it looks so promising.

But could Abivax's shares really soar by 2030, especially considering they have already gained significant value over the past two years? Potentially, yes, and that will depend on upcoming clinical and regulatory milestones. Abivax should release data from a phase 3 maintenance study of obefazimod in UC patients before the second quarter ends. If it posts solid results once again, that could jolt the stock. The company could then seek regulatory approval and may obtain it by the end of 2027.

From then on, if obefazimod's commercial performance is strong, the stock could double in value by the end of the decade, and perhaps maintain solid momentum beyond that, especially if Abivax makes progress in earning more indications for its crown jewel. That's the optimistic bull case. Investors should also consider the risks involved here. For instance, Abivax is worth 8.44 billion euros ($9.8 billion).

A valuation of this magnitude is rare for a clinical-stage biotech. It stems entirely from obefazimod's massive commercial potential and reflects the market's sky-high expectations. If Abivax's leading candidate fails to match them, the stock will fall off a cliff. Clinical and regulatory setbacks are always a risk for drugmakers, especially those without a single product on the market and generating no revenue. So, this stock is highly risky. Invest accordingly.

2. Viking Therapeutics

Viking Therapeutics is developing weight loss medicines. The company's leading candidate, VK2735, is being tested in phase 3 clinical trials. We should have data from those studies within the next 12 to 18 months. Viking Therapeutics is also working on an oral formulation of VK2735 for which it expects to start phase 3 studies by year-end. The biotech is looking to position itself as a leader in the fast-growing weight loss market. True, it will become increasingly competitive over the next five years as more pharmaceutical giants dip their toes in these waters.

Even so, provided Viking Therapeutics' clinical trial readouts are strong, its shares could soar. Viking's decision to develop both subcutaneous and oral formulations of its lead candidate provides excellent strategic optionality. Recently approved oral weight-loss pills are seeing tremendous success and attracting new patients who had never taken GLP-1 medicines, highlighting the need for more differentiated anti-obesity options.

Viking Therapeutics got the message. In addition to its mid- and late-stage programs, it is working on a newer weight-loss medication that mimics the actions of the amylin and calcitonin hormones. Viking Therapeutics hopes this approach will improve tolerability and attract patients who shy away from GLP-1 drugs due to their side effects. The biotech could see its shares soar over the next four years if it can make solid progress with this early stage candidate while moving forward with its more advanced programs.

Viking Therapeutics could then carve out a niche in this fast-growing space and generate rapidly rising revenue well into the 2030s. However, the stock also remains risky due to the potential of clinical and regulatory roadblocks. For interested investors with a high tolerance for volatility, it's best to start with a small position.

Prosper Junior Bakiny has positions in Viking Therapeutics. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.