Where Will Viking Therapeutics Be in 3 Years?

By Justin Pope | May 02, 2025, 4:20 AM

The pharmaceutical and biotechnology business tends to be about hitting home runs more than just getting on base. A highly successful drug, sometimes referred to as a blockbuster, can build up a small developer into a mainstream competitor. That's what investors are hoping for from Viking Therapeutics (NASDAQ: VKTX), a young company seeking to establish itself in this highly competitive industry.

Viking stock has been extraordinarily volatile since it went public a decade ago. The stock has traded as low as under $1 per share and as high as $94 at its peak.

While the company's future remains uncertain, significant business developments are forthcoming that could affect the stock's performance over the next three years. Here's what you need to know about investing in Viking Therapeutics today.

Why the volatility? Such is life as a pre-revenue company

As you peel back the layers on Viking, you may quickly notice that there are no sales or profits to speak of.

Developing drug treatments is a lengthy and costly process with a low success rate. There are several phases of clinical tests and studies to evaluate a drug's efficacy and potential side effects, and even some of the most promising drugs can fail their trials. Just ask AbbVie and Pfizer -- both industry giants have suffered high-profile failures over the past year.

Unlike AbbVie and Pfizer, which have extensive drug portfolios and can afford a miss, Viking is a clinical-stage biopharmaceutical company hoping to build its future on a narrow pipeline, with just two compounds in phase 2 or phase 3 trials. That makes the stock far riskier, because the company could go bankrupt if these drugs fail to reach the market.

Higher risk means more volatility, which is part of the game when you invest in pre-revenue stocks like Viking Therapeutics.

Hoping to crack a $150 billion market opportunity

Weight loss drugs are arguably the fastest-growing niche within the healthcare space, and researchers estimate the market for them could reach $150 billion by the early 2030s. Currently, Novo Nordisk and Eli Lilly dominate this market with their incumbent products: Novo Nordisk's semaglutide is the active compound in Ozempic and Wegovy, while Lilly's tirzepatide is the active drug in Mounjaro and Zepbound.

Viking Therapeutics and its investors hope that its lead developmental drug, VK2735, can break into this market. VK2735 is a dual GLP-1 and GIP receptor agonist for the treatment of obesity. Viking is also developing VK2809 for the treatment of metabolic dysfunction-associated steatohepatitis (MASH); however, most investors will likely focus on VK2735 as the potential blockbuster that could propel the company.

The company is simultaneously trialing both an injectable and an oral version of VK2735. The injectable version performed well in its Venture phase 2 study, with patients losing up to 14.7% of their body weight in 13 weeks while tolerating the drug well. Viking is preparing to begin its phase 3 trials this quarter, while the oral version will conclude its phase 2 Venture study over the second half of this year.

Where could Viking Therapeutics be in three years?

Viking could look much different in three years.

If all goes well and the U.S. Food and Drug Administration (FDA) approves VK2735, healthcare data analytics company Ozmosi estimates that the drug could hit the market in mid- to late-2028. The stock currently has a market capitalization of $2.9 billion, so there's clear investment upside if Viking can capture its share of what could be a $150 billion market opportunity.

Additionally, Viking has over $851 million in cash and zero debt. Cash burn was approximately $88 million over the past year, so it should have sufficient funding for the next several years.

However, be cautious about assuming best-case outcomes. According to the FDA, only 25% to 30% of drugs pass their phase 3 studies. As promising as VK2735 appears thus far, it's way too early to declare victory. Even if it makes it through all its trials, shareholders are likely to wait at least several more years for meaningful revenue. That's a tall ask, considering that failing its clinical trials could wipe out the stock's value.

A wide range of investment outcomes means that Viking Therapeutics may not be suitable for everyone. The stock's hero-or-zero nature suggests that you should tread carefully and avoid devoting too much of your portfolio to it.

Should you invest $1,000 in Viking Therapeutics right now?

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie and Pfizer. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.

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