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 NAD treatment for addiction. 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.