2 ‘Strong Buy’ Biotech Stocks With 120% or More Upside Potential

The biotech industry continues to serve as a driving force in healthcare, producing life-altering breakthroughs that are transforming patient care and the overall landscape of medicine. One of the hottest niches within this sector is the obesity drug market, which has experienced explosive growth in recent years. This surge has been fueled by a deeper understanding of how obesity affects overall health, leading to astonishing projections that anticipate the obesity drug market could reach a valuation of $200 billion by 2031.

Prominent players like Novo Nordisk and Eli Lilly have established footholds in this lucrative market, but emerging biotech firms are quickly making strides, particularly Viking Therapeutics, Inc. (VKTX) and Corbus Pharmaceuticals Holdings, Inc. (CRBP). Piper Sandler, a leading investment firm, has issued bullish commentary on these companies, highlighting their significant upside potential in the market. Backed by consensus “Strong Buy” ratings from Wall Street, let’s delve into a detailed analysis of VKTX and CRBP.

Biotech Stock #1: Viking Therapeutics

Founded in 2012 and based in San Diego, Viking Therapeutics, Inc. is an innovative, clinical-stage biopharma company dedicated to advancing treatments for metabolic and endocrine disorders. The cornerstone of its pipeline is VK2735, a dual GLP-1/GIP agonist aimed at obesity, which has yielded promising safety and efficacy signals in early trials. Notably, both injectable and oral formulations are under development.

Another key asset is VK2809, an oral treatment targeting non-alcoholic steatohepatitis (NASH) and fibrosis, which has recently completed successful Phase 2 trials. With a market capitalization of approximately $5.7 billion, VKTX shares have appreciated dramatically, recording a remarkable 193% return over the past year and an impressive 171% year-to-date, significantly outperforming the broader S&P 500 Index, which posted 33% annual returns and 27.4% YTD gains.

Viking Therapeutics has had a productive 2024 so far, garnering strong outcomes from multiple clinical trials. Noteworthy developments include:

• Phase 2 VENTURE trial: VK2735 for obesity demonstrated significant weight reductions over 13 weeks.
• Phase 1 trial of VK2735 (oral formulation): Encouraging results in healthy volunteers showed excellent tolerability and weight loss.
• Positive Phase 2b VOYAGE trial results for VK2809: Majors reductions in liver fat and significant improvements in liver conditions.

Furthermore, a positive earnings report on Oct. 23 resulted in a notable 21.3% increase in share price. Viking has reported a smaller-than-expected loss of $0.22 per share, and a robust cash position of $930 million indicates strong financial health. The company is also preparing for an End-of-Phase 2 meeting for VK2735 and will soon commence a Phase 2 study of its oral formulation.

Piper Sandler is intentionally optimistic, assigning an “Overweight” rating to Viking with a price target of $74. Additionally, Wall Street analysts show unanimous “Strong Buy” sentiments for VKTX, with an average price target of $111.08, indicating a potential upside of 122.7% from current levels.

Biotech Stock #2: Corbus Pharmaceuticals

Massachusetts-based Corbus Pharmaceuticals Holdings, Inc. is emerging as a significant player in the fields of oncology and obesity, focusing on developing innovative therapies for severe health challenges. The company is advancing several programs, including CRB-701, a next-generation antibody-drug conjugate specifically targeting Nectin-4 on cancer cells, and CRB-913, a peripherally restricted CB1 inverse agonist for obesity treatment.

With a market cap of about $185 million, Corbus shares have also skyrocketed, achieving outstanding returns of 156% over the past year and 152% year-to-date. Following the release of its Q3 earnings report on Nov. 7, shares experienced a modest rise. Corbus reported a loss of $1.15 per share, an improvement from the prior year’s $2.27 loss, and maintained a solid cash position of $159.4 million, projected to sustain operations through Q3 2027.

The CEO, Yuval Cohen, highlighted momentum in the company’s pipeline, reporting that CRB-701 is headed towards initial U.S. bridging study results expected in Q1 2025. Moreover, CRB-913 is anticipated to begin clinical trials early next year. Piper Sandler views CRB-701 as having significant potential in treating cervical cancer and other solid tumors, estimating peak sales could reach $555 million. They also see CRB-913 as a potential solution for patients who experience tolerability issues with GLP-1 treatments.

With Phase 1 trials for CRB-913 expected to initiate in Q1 2025, Piper set a price target of $35 and assigned an “Overweight” rating to the stock. Overall, Wall Street analysts are optimistic about CRBP, with eight of the nine providing coverage recommending a “Strong Buy,” while one suggests a “Moderate Buy.” The consensus average price target of $58.67 presents an impressive 283.5% potential upside from current price levels.

Conclusion

In summary, both Viking Therapeutics and Corbus Pharmaceuticals have shown impressive growth trajectories and promising clinical pipelines that present remarkable investment opportunities in the booming obesity drug market. With strong financial positions, supportive analyst ratings, and the potential for astronomical upside, these biotech stocks are set to capture significant interest in the coming years. As the market for obesity treatments expands, savvy investors may find these stocks present meaningful opportunities for substantial returns.