The biotech industry is a powerhouse, driving life-altering breakthroughs that have redefined healthcare. The obesity drug market – a niche of the broader industry – has exploded in recent years, fueled by a growing understanding of obesity's impact on overall health. Biotech companies are stepping up to the plate with transformative therapies that are shaping healthcare and minting millionaires.
Projections call for the obesity drug market to be worth an astonishing $200 billion by 2031, underscoring the immense growth potential in this space. While giants like Novo Nordisk (NVO) and Eli Lilly (LLY) have already set the stage, emerging players are quickly catching up. Some of these relative newcomers are Viking Therapeutics, Inc. (VKTX) and Corbus Pharmaceuticals Holdings, Inc. (CRBP).
In fact, Piper Sandler recently issued a bullish note spotlighting these two rising stars in the biotech world. The firm emphasized the game-changing potential of their therapeutic treatments. Backed by consensus “Strong Buy” ratings on Wall Street and massive triple-digit upside potential, here’s a closer look at VKTX and CRBP.
Biotech Stock #1: Viking Therapeutics
Founded in 2012, San Diego-based Viking Therapeutics, Inc. is an innovative, clinical-stage biopharma company focused on advancing treatments for metabolic and endocrine disorders. At the forefront of its pipeline is VK2735, a dual GLP-1/GIP agonist for obesity, which has shown promising safety and clinical benefits in early trials, with both injectable and oral formulations in development.
Viking has also made significant strides with VK2809, an oral drug for non-alcoholic steatohepatitis (NASH) and fibrosis, having recently completed successful Phase 2 trials, reinforcing its potential to drive major advancements in these therapeutic areas. Valued at $5.7 billion by market cap, shares of this biotech firm have delivered stunning returns of 193% over the past year and 171% on a YTD basis, which easily dwarfs the broader S&P 500 Index’s ($SPX) 33% annual returns and 27.4% YTD gains.
Viking Therapeutics has had a highly productive 2024, with notable progress across multiple clinical trials. In the first quarter, Viking revealed strong outcomes from the Phase 2 VENTURE trial of subcutaneous VK2735 for obesity, showing significant body weight reductions after 13 weeks of treatment. Additionally, early findings from a Phase 1 trial of an oral formulation of VK2735 in healthy volunteers demonstrated encouraging weight loss and excellent tolerability.
The company also achieved positive 52-week histology results from the Phase 2b VOYAGE trial for VK2809, targeting NASH/MASH and fibrosis, with successful reductions in liver fat and significant improvements in liver conditions. Moreover, the biotech company’s third quarter earnings results, revealed on Oct. 23, triggered a remarkable 21.3% surge in its shares in the subsequent trading session.
The pre-revenue company reported a smaller-than-expected loss of $0.22 per share, which marks a slight improvement from the year-ago quarter’s $0.23 loss per share. During the quarter, the company reported research and development expenses of $22.8 million, up from $18.4 million during the same period in 2023. The increase was mainly driven by higher costs associated with the manufacturing of the company’s promising drug candidates, reflecting its ongoing investment in advancing its pipeline.
As of Sept. 30, Viking Therapeutics boasted a strong cash position of $930 million in cash, cash equivalents, and short-term investments, marking a substantial rise from $362 million at the end of fiscal 2023. This solid financial foundation sets the stage for Viking to reach critical milestones in its clinical programs, driving its growth and strengthening its position in the competitive biotech landscape.
Looking forward to Q4, Viking Therapeutics is gearing up for an End-of-Phase 2 meeting for subcutaneous VK2735 in obesity. Additionally, the company is also set to kick off a Phase 2 study of its oral formulation of VK2735.
On Dec. 2, Piper Sandler praised Viking Therapeutics for its robust metabolism pipeline, which spans obesity and NASH, noting the potential of both subcutaneous and oral VK2735 to compete in the lucrative incretin class. The firm highlighted oral VK2735 as potentially the “best” oral incretin in development, citing its lower rates of gastrointestinal side effects and strong efficacy.
Additionally, Piper emphasized Viking’s VK2809 as a promising drug candidate for NASH. Considering these exciting prospects, the investment firm set an “Overweight” rating and a bold price target of $74 for VKTX stock.
Overall, Wall Street appears highly bullish on VKTX stock, with a unanimous “Strong Buy” rating from all the 14 covering analysts. Plus, the average analyst price target of $111.08 indicates 122.7% potential upside from the current price levels.
Biotech Stock #2: Corbus Pharmaceuticals
Massachusetts-based Corbus Pharmaceuticals Holdings, Inc. is an emerging leader in oncology and obesity, committed to developing innovative therapies for serious health conditions. The company’s pipeline includes CRB-701, a next-generation antibody-drug conjugate that targets Nectin-4 on cancer cells, delivering a potent cytotoxic payload to fight tumors.
Corbus is also advancing CRB-913, a highly peripherally restricted CB1 inverse agonist aimed at treating obesity. With a market cap of approximately $185 million, shares of Corbus, like Viking, have also soared beyond the broader market, posting outstanding returns of 156% over the past 52 weeks and 152% on a YTD basis.
The pre-revenue company dropped its Q3 earnings results on Nov. 7, which sparked a 1.4% surge in its shares in the next trading session. During the quarter, the company reported a loss of $1.15 per share, reflecting a dramatic improvement from the previous year’s loss of $2.27 per share. Operating expenses surged to approximately $15.5 million for the quarter, compared to $9.5 million in the same period last year.
This rise was largely driven by a $3.2 million increase in CRB-701 clinical trial costs and $1 million for IND-enabling studies for CRB-913. On a positive note, as of Sept. 30, the company maintained a strong financial position with $159.4 million in cash, cash equivalents, and investments, which is expected to fund operations through Q3 of fiscal 2027.
The company also raised $35.6 million in net proceeds through its ATM program and successfully made its final $11.8 million loan payment, fully clearing its debt. While reflecting on the company’s Q3 results, CEO Yuval Cohen highlighted the company's steady progress. He noted that CRB-701 is on track to deliver the first data from its U.S. bridging study in Q1 of fiscal 2025.
The CEO also added, “We are also pleased with the continued development of CRB-913, our highly peripherally restricted CB1 inverse agonist for the treatment of obesity. We presented updated pre-clinical data at Obesity Week 2024 and expect to dose the first study participant in Q1 2025.”
As for Piper Sandler, the investment firm sees Corbus Pharmaceuticals' candidate CRB-701 as a standout in the treatment of cervical cancer and other solid tumors. The firm believes CRB-701’s differentiated profile could offer an improved safety profile while maintaining strong efficacy, with peak risk-adjusted sales projected at $555 million.
Additionally, Piper highlighted CRB-913, which it sees as a potential player in the obesity market, especially targeting patients who discontinue GLP-1 treatments due to tolerability issues. The firm also sees potential for CRB-913 in combination with incretin therapies. With Phase 1 trials expected to start in Q1 2025 and data anticipated in the second half of the year, Piper set a price target of $35 for Corbus and assigned an “Overweight” rating on the stock.
Wall Street is highly optimistic about CRBP stock, with a consensus “Strong Buy” rating overall. Of the nine analysts offering recommendations, eight advise a “Strong Buy,” and the remaining one suggests a “Moderate Buy.” The average analyst price target of $58.67 indicates 283.5% potential upside to CRBP’s current price levels.
