Eli Lilly (LLY) and Novo Nordisk (NVO) have become hot stocks over the past year thanks to their blockbuster obesity treatment GLP-1.
Over the past year, Lilly and Novo shares have risen 72% and 44%, respectively. Novo is the largest company in Europe by market capitalization, while Lilly ranks eighth among U.S. companies with a market capitalization of $900 billion.
Shares in both companies have been boosted by promising studies showing the drugs’ uses expanding beyond weight loss and diabetes treatment, as investors chase the next big breakthrough in the field.
During a recent Good Buy or Goodbye segment (video above), Matt Higgins, CEO of RSE Ventures, recommended Viking Therapeutics (VKTX).
“Eli Lilly and [Novo Nordisk have] “But it’s a huge TAM,” Higgins, who is an investor in $VKTX, told Yahoo Finance. [total addressable market]It’s a $150 billion market. And [Viking] “It’s a biotechnology company. They’re trying to do something very amazing. They’re working on two products. One is an injectable that you take once a month, and the other is a tablet. The tablet is the ultimate goal, and early studies have shown it to be very well tolerated.”
Higgins isn’t the only one to have noticed this: Viking shares are up nearly 250% this year. With a market capitalization of $7 billion, Viking is dwarfed by Novo Nordisk and Eli Lilly.
Another big difference between the big pharma companies is that Viking doesn’t have any revenue yet because the treatment is still in development, and as of June, it had fewer than 30 full-time employees, compared with more than 100,000 employees at Novo and Lilly combined.
Despite Viking shares’ surge this year, Higgins believes the stock remains attractive because of two potential upcoming catalysts.
One is the possibility of it being acquired, which he estimates would cost $15 billion, roughly double its current value.
The other is a conference in November, where Viking is expected to update its findings on GLP-1.
“I don’t think it’s priced in at all,” Higgins said.
Julie Hyman is the co-host of Market Domination on Yahoo Finance. You can find her on social media. Jules Ciment.
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