After Falling 68%, Where Will This Weight-Loss Drug Stock Be in 2 Years? History Shows Massive Gains Ahead.

Market analysis reveals What's particularly noteworthy is Yet another biopharma name has been run through a familiar trading cycle that often ends on a bullish note (noteworthy indeed)

Additionally, Any investor who owned Viking Therapeutics (VKTX -0 (noteworthy indeed)

If you were on this wild ride, don't panic yet

Moreover, And for interested newcomers, the sell-off may arguably be a buying opportunity

Additionally, Here's why: History says this kind of sharp rise and fall in biopharma stock prices often precedes a slower but more even and more-rewarding rally

Additionally, But first things first

What's Viking Therapeutics

Never heard of it, given current economic conditions

It's a pre-revenue company too, which of course means it's also pre-fit (an important development), given the current landscape

That doesn't mean it's not worth owning even if it is inherently risky -- and volatile (remarkable data)

Market analysis shows just means you'll want to handle it differently if you choose to handle it at all

Moreover, And you just might want to, given Viking's developmental pipeline

This demonstrates that company's currently testing four different drugs in five different clinical trials, each of which is aimed at relatively rare metabolic and endocrine disorders

Its highest-file drug is also the one that's furthest along the developmental trail

In contrast, Its molecular structure is similar to that of the apved GLP-1 weight-loss drugs Ozempic from Novo Nordisk (NYSE: NVO) and Eli Lilly's (NYSE: LLY) Zepbound

In fact, the differences are significant enough to avoid patent infringement challenges

Food and Drug Administration (FDA) makes its ultimate apval decision

Moreover, As the drug in question has worked its way through the lengthy testing cess, investors have pre-emptively purchased s in anticipation of good news, amid market uncertainty

Image source: Getty Images (something worth watching)

However, as is so often the case with biopharma stocks of companies working on game-changing drugs, the market has overshot its target more than once and then suffered a sizable setback

That's what happened beginning in November of last year, anyway

The company announced solid testing results for VK2735

But the market panicked over concerns that manufacturing the phase 2 drug therapy's injectable version and an orally administered version simultaneously could ve quite costly

On the other hand, The stock's been pressured lower ever since, even though the underlying story hasn't actually changed much in the meantime

The fickle crowd trading this stock has simply decided to see the glass as half-empty rather than half-full, given current economic conditions

The evidence shows happens

Furthermore, Additionally, The thing is, it's not this same story hasn't played out many times within the biopharma realm, in today's financial world

Moreover, When the drug in question is the real deal though, a recovery typically takes shape, eventually carrying the ticker in question to much higher highs (an important development), in light of current trends

Moreover, Furthermore, One doesn't need to look that far back in time to see that transpire

Although it's got a handful of drugs in its portfolio, eczema and asthma treatment Dupixent is its breadwinner, making up the single-biggest source of Regeneron's revenue

Eylea is a respectable close second; there is no close third, in today's market environment

Then there's Exelixis (EXEL -0, given the current landscape

The market just chose to sit on the fence for a couple more years, considering recent developments

However, EXEL data by YCharts

If you need more examples of biopharma stocks that climbed and fell out of sync despite the gress being made by the company, there are many more -- Iovance Therapeutics, ACADIA Pharmaceuticals, and CRISPR Therapeutics are just to name a few

Additionally, It happens all the time (an important development), in this volatile climate

At the same time, The bigger point is, there's a frequent disconnect between a biopharma company's stock and that biopharma company's developmental and fiscal gress

Often times, investors plow in too much and too soon

However, At other times, they're surprisingly late, perhaps wary of another market pullback

Furthermore, When the drug in question shows true potential, sooner or later the market figures it out and perly prices in its success, as it did for Regeneron and Exelixis, given current economic conditions

If you're diving in, at least worry the right things But aren't Novo Nordisk and Eli Lilly already established players with very similar obesity drugs

Just know that consumers are often quite willing to try "something else," particularly if it's easier, cheaper, faster, or more convenient than established alternatives

However, But bably not immediately, given current economic conditions

Moreover, And that's where patience comes to the forefront, in today's financial world

As we often say at The Motley Fool, if you are convinced the company's fundamentals, hold its stock for at least three years

Viking's stock should eventually rally, most ly within a two-year time frame, given current economic conditions

After all, it shouldn't take nearly that long to at least start getting meaningful on the weight-loss drug's phase 3 testing, in today's market environment

Even then, in light of Morgan Stanley's forecasted demand, the potential cost of simultaneously manufacturing two competing drugs seems a modest hill to climb

Nevertheless, Most investors are arguably too worried that possibility

Perhaps they were just looking for the right justification to take fits on last year's red-hot run-up

A justification that has since run its course

Nevertheless, However, On that note, just remember this is still a volatile small-cap biopharma name with a speculative crowd of ers, in this volatile climate

Moreover, You'll only want to dive in if you're sure you've got the patience and can handle the tricky this name will almost certainly require

Nevertheless, James Brumley has no position in any of the stocks mentioned

Conversely, The Motley Fool has positions in and recommends CRISPR Therapeutics, Exelixis, Iovance Biotherapeutics, and Regeneron Pharmaceuticals (noteworthy indeed)

In contrast, The Motley Fool recommends Novo Nordisk and Viking Therapeutics

The Motley Fool has a disclosure policy.