Market uncertainty can make nervous investors leery of investing in industries that are more speculative in nature, such as pharmaceuticals and biotechnology. In a sector as rich in opportunities as this one, though, some will be undervalued for one reason or another.
24/7 Wall St. Key Points:
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Market uncertainty can make nervous investors leery of investing in industries that are speculative in nature.
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Yet, Wall Street still has big expectations for Viking Therapeutics Inc. (NASDAQ: VKTX).
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Here are some of the biotech and pharma stocks for which analysts have big expectations. Apparently, some share prices could double or more in the coming year, and all these stocks have consensus Buy ratings.
| Stock | Mean Target | Upside |
| Amicus Therapeutics Inc. (NASDAQ: FOLD) | $17.09 | 77.8% |
| Apellis Pharmaceuticals Inc. (NASDAQ: APLS) | $46.10 | 62.5% |
| Arrowhead Pharmaceuticals Inc. (NASDAQ: ARWR) | $47.50 | 154.6% |
| Avidity Biosciences Inc. (NASDAQ: RNA) | $67.91 | 113.3% |
| Biogen Inc. (NASDAQ: BIIB) | $228.33 | 61.9% |
| BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) | $96.86 | 56.7% |
| Ionis Pharmaceuticals Inc. (NASDAQ: IONS) | $61.32 | 94.9% |
| Legend Biotech Corp. (NASDAQ: LEGN) | $79.83 | 118.1% |
| Revolution Medicines Inc. (NASDAQ: RVMD) | $73.29 | 90.9% |
| SpringWorks Therapeutics Inc. (NASDAQ: SWTX) | $67.50 | 87.7% |
| Vaxcyte Inc. (NASDAQ: PCVX) | $149.89 | 79.3% |
| Viking Therapeutics Inc. (NASDAQ: VKTX) | $110.00 | 256.0% |
The standout on that list is Viking Therapeutics. Analysts anticipate the stock has lots of room to run. Does that mean that this is an undervalued stock? Or has one overzealous analyst skewed the mean?
Why Invest in Viking Therapeutics?
Viking Therapeutics stock is up more than 283% from its 2015 initial public offering (IPO) share price. It is about 68% lower than its all-time high. The company says it is focused on the development of novel first-in-class or best-in-class therapies designed to improve patients’ lives. It has been recognized for its strong balance sheet and solid collaboration agreements. Positive trial results prompted the stock to soar about a year ago. Fierce competition in the weight-loss space had weighed on the shares since then. They have a 52-week trading range of $23.11 to $99.41. The question is, where does Wall Street anticipate the stock is headed?
Viking Therapeutics, the Company
This clinical-stage biopharmaceutical company focuses on the development of novel therapies for metabolic and endocrine disorders. The company’s lead drug candidate is VK2809, an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta, which is in Phase 2b clinical trials to treat patients with biopsy-confirmed non-alcoholic steatohepatitis, as well as nonalcoholic fatty liver disease.
The company also develops:
- VK5211, an orally available non-steroidal selective androgen receptor modulator that is in Phase 2 clinical trials for the treatment of patients recovering from non-elective hip fracture surgery
- VK0612, an orally available Phase 2b-ready drug candidate for type 2 diabetes
- VK2735, a novel dual agonist of the glucagon-like peptide that is in Phase 2 obesity clinical trial
- VK0214, an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta for X-linked adrenoleukodystrophy
Viking Therapeutics headquarters are in San Diego. The company was founded in 2012, and it went public in the spring of 2015. Among those it competes with or are similar to are:
- Apellis Pharmaceuticals
- Madrigal Pharmaceuticals Inc. (NASDAQ: MDGL)
- Neurocrine Biosciences Inc. (NASDAQ: NBIX)
- Sarepta Therapeutics Inc. (NASDAQ: SRPT)
- Vaxcyte
As mentioned, Viking is among those in the race for a profitable weight-loss medication, and the company began its Phase 2 trial of VK2735 this month. The CEO recently hinted that the company might be willing to license or sell a successful obesity treatment it developed. Also, a Goldman Sachs analyst has suggested that biotech stocks are an under-the-radar opportunity for investors looking to capitalize on the Federal Reserve’s recent rate cuts.
Viking Therapeutics, the Stock
The share price is down almost 22% year to date but still more than 34% higher than a year ago. The Nasdaq is up less than 2% since the beginning of the year. Note that the $110.00 consensus price target is well above both the current share price and the all-time high. All 15 analysts who follow the stock recommend buying shares, six of them with Strong Buy ratings. H.C. Wainwright reiterated its Buy rating. On the other hand, CNBC’s Jim Cramer lately has recommended selling shares.
Viking Therapeutics is popular with hedge funds. Institutional investors hold almost 75% of the shares. FMR, also known as Fidelity Investments, is a beneficial owner, and BlackRock, State Street, and Vanguard also have notable stakes. More than 20 million shares, or over 18% of the float, are held short. Note that CEO Brian Lian and other officers sold more than $12 million worth of shares last month.
Wall Street Expectations
Wall Street expectations for where the stock goes in the next 52 weeks are all very positive. Even if one discounts the high price target as overly enthusiastic, even the mean and low targets suggest there’s plenty of room for shares to run.
| Low target | $74.00 | 139.5% |
| Mean target | $110.00 | 256.0% |
| High target | $164.00 | 430.7% |
What’s with the enthusiasm for the stock? Viking is in the celebrated weight-loss treatment race and has been releasing encouraging trial results. Many investors see Viking as a takeover candidate as well. Whatever the reason, Wall Street has high expectations for the stock in 2025.
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