Viking Therapeutics has enjoyed a tremendous history of growth thus far in its time on the marketplace, but recently the company’s stock has dipped downwards in a worrying fashion. Some investors are even beginning to muse that this could be the beginning of a long downwards trend, but the truth of the matter is that Viking Therapeutics is only just getting started. Viking has a number of drugs in the works that could fly off the shelves once they get FDA approval, and there are many reasons to believe that the company will soon bounce back.
Here’s why you shouldn’t count Viking Therapeutics out just yet, and how we can expect the company to rally from its recent losses and regain its sterling market position.
Down but not out
Viking Therapeutics (NASDQ: VKTX) may be trading downwards right now, but it would be foolish to insinuate that the company is permanently out. That’s because Viking has managed to create five unique drug candidates that could prove to be immensely profitable over the next few years when and if they get the approval of the FDA. The ongoing trade war between The United States and China has certainly diminished hopes across the marketplace, but to let these temporary jitters get in the way of long-term prosperity would be a sorry mistake that no investors should be forced to make.
In other words, don’t panic just because Viking has had a rough few days. There’s one developing market that’s not yet ripe but will soon be an immensely profitable space that Viking is well positioned to dominate sooner rather than later – non-alcoholic fatty liver disease (NAFLD) and NASH, a more serious form of that same condition, are both creating patients who have been generating an immense demand for drugs which can treat their condition. This is where Viking comes in, as many of its maturing drug candidates could swoop into that space before its competitors get a chance to scoop up those patients first.
According to a press release on the company’s website, Viking recently moved into a new phase for one of its NASH treatment solutions, which will prove to some worried investors that things are still going according to plan when it comes to winning over the FDA. The biotech industry is currently swirling with the mystery of how much the NASH market will be worth in the next few years, but it’s safe to say that researchers have already determined that the conditions impacts a wide variety of Americans. That means that companies like Viking have an immense marketing opportunity before them, as up to 30 million people could be affected by NASH, according to the National Institutes of Health.
Current market leaders aren’t dominating
Viking has one big issue it has to face up to – there are competitors who are currently better situated to exploit this budding NASH market, especially Intercept Pharmaceuticals and Genfit who have been helping addiction treatment centers with their drugs as an alternative to Botox. Yet neither of these companies is well enough situated to enjoy a monopoly over the budding NASH sector, and it’s unlikely either of them will be able to prevent Viking from finalizing its own drugs in the foreseeable future. The fact that current market leaders can’t get a total stranglehold over their sector will appease many biotech investors who want to find a reliable underdog who could yet enjoy a tremendous position in the near-future.
Viking is also flush with cash, which is excellent news to biotech investors who only want to back a company that has the ability to keep developing its expensive treatment solutions for some time yet. According to one third quarter earnings report, for instance, Vikings posted relatively meager losses of just $6.6 million in that quarter, ensuring the company had a healthy cash stockpile of $288.1 million to rely upon as time went on. This led to a soar in the company’s stock price, and investors should be aware that having so much cash on hand will enable Viking to keep developing its solutions regardless of whichever immediate FDA hurdles arise in its way.
Having access to capital is vital for a company in Viking’s situation, which is why its executives likely aren’t too worried about the temporary slump that’s slightly diminished its valuation. For investors who are tolerant of minor risks, Viking thus poses an ideal opportunity, as the company’s future drug developments will likely inflate its share prices to the benefit of whichever investors scoop up as many as they can in this and similar down periods. As the company’s prospectus and recent press releases makes clear, Viking has a first-in-class orally available drug that’s entering Phase 2b clinical trials which could prove to be immensely promising. This, coupled with its exploitable market and plentiful in-hand cash, renders Viking Therapeutics an ideal comeback candidate for risk-tolerant investors.