Why Viking Therapeutics Could Be ‘Onto Something Pretty Amazing’

Eli Lilly ( LLY ) and Novo Nordisk ( NVO ) have become hot stocks over the past year thanks to their blockbuster GLP-1 drugs to treat obesity.

Over the past year, shares of Lilly and Novo are up 72% and 44%, respectively. By market capitalization, Novo is the largest company in Europe, while Lilly ranks eighth among US companies with a market capitalization of $900 billion.

Both companies’ shares have been buoyed by promising research that shows broad indications beyond weight loss and treating diabetes, sending investors scrambling for the next big breakthrough in the space.

In a recent segment of Good Buy or Goodbye (video above), RSE Ventures CEO Matt Higgins made the case for Viking Therapeutics ( VKTX ).

“We all know what Eli Lilly and (Novo Nordisk) have done,” Higgins, who is invested in $VKTX, told Yahoo Finance. “But it’s a massive TAM (total addressable market). It’s a $150 billion market. And (Viking) is a biotech firm… and they’re on to something pretty amazing. They’re working on two products: one is a shot that you can take once a month, and the other is a pill, which is the holy grail, and early studies show it’s very well tolerated.”

Higgins is not the only one who has been spotted. Viking shares are up nearly 250% this year. At a market cap of $7 billion, its size is dwarfed by Novo Nordisk and Eli Lilly.

Another big contrast to the pharmaceutical giants is that Viking has no revenue yet because its treatments are still in development. And as of June, the company didn’t even have 30 full-time employees; together, Novo and Lilly employ more than 100,000 people.

Even with Viking’s stock rally this year, Higgins believes the stock is still attractive, with two potential catalysts going forward.

One is the possibility of being acquired: he is valued at $15 billion, or about double what he is worth today.

The other is a November conference where Viking is speculated to update its findings on its GLP-1s.

“I don’t think it has a price tag at all,” Higgins said.

Julie Hyman is the co-host of Market Domination on Yahoo Finance. You can find her on social media @juleshyman.

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