Why Biotech Can Deliver Outsized Gains
The biotechnology sector is one of the most volatile yet rewarding areas of the stock market. Unlike traditional industries, where growth is often steady and predictable, biotech companies can see their shares skyrocket in response to successful clinical trials, FDA approvals, or breakthrough therapies. For long-term investors, this volatility translates into massive opportunity — especially when betting on companies with multiple catalysts in play.
Looking ahead to 2030, two smaller biotech firms — Viking Therapeutics (NASDAQ: VKTX) and Axsome Therapeutics (NASDAQ: AXSM) — stand out as potential multi-baggers. If either can achieve a compound annual growth rate (CAGR) of around 14.9% over the next five years, their stocks could easily double in value. Here’s a closer look at why both companies have what it takes to make that happen.
1. Viking Therapeutics (VKTX): Riding the GLP-1 Wave
Viking Therapeutics recently came under pressure after releasing phase 2 trial results for its oral GLP-1 weight loss candidate, VK2735. On the surface, some investors saw the dropout rate due to gastrointestinal side effects as a red flag. However, the data tells a different story.
- At the highest tested dose, VK2735 achieved 12.2% weight loss in just 13 weeks.
- By comparison, Eli Lilly’s oral GLP-1 candidate orforglipron reported a nearly identical 12.4% weight loss — but only after 72 weeks.
This suggests Viking’s candidate could be more potent over shorter treatment periods. Importantly, lower doses of VK2735 showed fewer side effects while still producing meaningful weight loss, giving the company multiple paths forward in clinical development.