Let’s start with Viking Therapeutics, a clinical-stage biopharmaceutical company focused on the treatment of endocrine disorders and other metabolic diseases. The company’s arsenal includes novel drugs that are first-in-class or best-in-class and are developed as orally administered small molecule compounds.

Viking’s research portfolio currently includes three drug candidates in four separate research areas. The company’s lead drug, VK2809, holds promise as a potential treatment for several metabolic diseases, including non-alcoholic steatohepatitis (NASH), type 2 diabetes and obesity, which are interrelated. The company’s second lead drug, VK2735, specifically targets the treatment of metabolically related obesity.

Viking has garnered attention for VK2809, its NASH drug currently in Phase 2b clinical trials and known as VOYAGE. Earlier this month, the company published data showing a positive effect of reducing liver fat in various patient subgroups, including patients with F1 fibrosis and a concomitant risk factor such as obesity.

Of more relevance to investors looking for a biopharmaceutical company focused on obesity treatment is the fact that Viking this year initiated a Phase 2 VENTURE study of VK2735 for the treatment of obesity. VK2735 is a wholly owned drug that acts as a GLP-1 and GIP receptor agonist. Previous data from the Phase 1 study showed that the drug is well tolerated across a variety of dosing regimens and has an acceptable safety profile. Viking has completed the patient recruitment process for the VENTURE study and results are expected to be published in 1H24.

Jay Olson of Oppenheimer sees these two drugs as key for Viking, especially VK2809 and its use for the treatment of NASH. However, he is not dismissive of the obesity-focused candidate VK2735 and writes, “We believe that VKTX’s lead candidate, the THR-β agonist VK2809 for the treatment of NASH, is similar to Madrigal Pharmaceutical’s MGL-3196, and that Ph2a’s relative liver fat reduction efficacy results are at least as strong. We believe that if the biopsy-confirmed results of the VK2809 Ph2b study are sufficient to continue drug development under Ph3, we believe the current market value of VKTX is undervalued relative to its peers. We believe VK2735 has asymmetric upside potential based on the current valuation.”

Olson sees plenty of upside opportunity in this stock – more than enough to justify his Outperform (i.e., “buy”) rating. He sets his price target for these stocks at $40, which translates to an impressive upside potential of 207% over a one-year horizon. (To see Olson’s track record, click here)

Clearly, Wall Street agrees with this bullish view. The stock has received 6 recent ratings, and all of them are unanimously positive – a consensus rating of “Strong Buy.” The stock is trading at $13.01, and its average target price of $34 implies a one-year upside of 161%. (See VKTX stock outlook.)