Why Viking Therapeutics may have “stumbled upon something quite amazing”

Eli Lilly (LLY) and Novo Nordisk (NVO) have become hot stocks over the past year thanks to their blockbuster obesity drug GLP-1.

Over the past year, Lilly and Novo shares have risen 72% and 44%, respectively. Novo is Europe's largest company by market capitalization, while Lilly ranks eighth among U.S. companies with a market capitalization of $900 billion.

Shares of both companies benefited from promising research showing expanded applications beyond weight loss and diabetes treatment, leaving investors on the hunt for the next big breakthrough in the field.

In a recent segment of “Good Buy or Goodbye” (video above), Matt Higgins, CEO of RSE Ventures, spoke out in favor of Viking Therapeutics (VKTX).

“We all know what Eli Lilly and what [Novo Nordisk have] done,” Higgins, who is invested in $VKTX, told Yahoo Finance. “But it's a massive TAM [total addressable market]. It is a $150 billion market. And [Viking] is a biotechnology company… and they've come up with something quite amazing. They're working on two products: one is a shot that you get once a month, and the other is a pill that is the holy grail and that early studies show is very well tolerated.”

Higgins isn't the only one who's noticed. Viking's shares have risen nearly 250 percent this year. With a market capitalization of $7 billion, the company is dwarfed by Novo Nordisk and Eli Lilly.

Another big difference from the pharmaceutical giants is that Viking has no revenue yet because its treatments are still in development. And in June, the company had fewer than 30 full-time employees; combined, Novo and Lilly employ more than 100,000 people.

Despite Viking's share price rise this year, Higgins believes the stock remains attractive, with two potential catalysts in the future.

One of them is the possibility of a takeover: he estimates the takeover value at 15 billion dollars, roughly double the current value.

The other is a conference in November where Viking will likely update its findings on its GLP-1s.

“I don’t think it’s priced in at all,” Higgins said.

Julie Hyman is co-host of Market Domination on Yahoo Finance. Find her on social media @juleshyman.

Click here for the latest stock market news and detailed analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance