3 Reasons Viking Therapeutics Stock Could 10X if Its Obesity Pipeline Succeeds

The weight loss drug market has been one key focus for investors in recent years. This is because demand has been incredibly high, driving blockbuster revenue for companies making such products -- here, I'm talking about pharma giants Eli Lilly and Novo Nordisk.

But these companies aren't the only ones that could win in the market in the years to come. One biotech company in particular is approaching the finish line, with its candidate involved in a phase 3 trial. This player, Viking Therapeutics (NASDAQ: VKTX), is studying VK2735 in injectable format in that trial and aims to launch a phase 3 trial of an oral format of the candidate later this year.

Let's check out three reasons Viking stock could increase by 10 if its obesity pipeline succeeds.

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1. A billion-dollar market and high demand

The weight loss drug market is on track to reach nearly $100 billion by the end of the decade, analysts predict. This, along with the sustained high demand for these drugs, means there is room for more than one or two companies to succeed here.

At certain points over the past few years, demand exceeded the supply of the Lilly and Novo weight loss drugs. Though both companies no longer face that problem since they've ramped up manufacturing capabilities, other players could easily carve out market share -- especially a company like Viking that so far has delivered solid clinical trial results.

2. Viking's market value makes growth possible

Viking has a market value of about $3.5 billion, leaving it room to run if it gains product approvals and then goes on to generate revenue growth. A 10x increase would result in a market cap of $35 billion -- a move that would be possible if Viking's pipeline delivers.

Of course, with one or two products on the market, Viking wouldn't reach the market value levels of its big pharma rivals -- Lilly and Novo, with market values of more than $900 billion and $200 billion, respectively, have enormous product portfolios supporting growth. But this biotech could easily see its market value soar from current levels.

3. Viking has a track record of stock performance

Viking stock surged following phase 2 data from VK2735. This was during one trading session back in 2024 -- the stock jumped 121%. Since, Viking shares have lost much of that gain, but this movement shows that investors have their eyes on the stock and are ready to pile in on any good news.

A potential product approval could, of course, be big as it opens the door to significant and lasting revenue growth. So, such news, as well as additional clinical trial news in the meantime, could help Viking along the path to increasing by 10.

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.