2 Biotech Stocks That Could Soar 29% and 165% According to Wall Street's Top Analysts

Regeneron Pharmaceuticals, an established biotech, reported strong 2024 sales for Dupixent ($14.2B, +22%) and Libtayo ($1B+, +40%), despite a Q1 revenue decline and competitive pressures on Eylea, while maintaining a robust pipeline and initiating a dividend, reflecting its profitability and over $2 billion in free cash flow. Concurrently, clinical-stage Viking Therapeutics, though pre-revenue and incurring losses, presents a high-risk, high-reward investment opportunity driven by its lead GLP-1 candidate, VK2735, in late-stage development, with analysts forecasting significant upside potential based on its pipeline and approximately $808 million in cash reserves.

Analysis

The biotech landscape presents two distinct opportunities in Regeneron Pharmaceuticals (REGN) and Viking Therapeutics (VKTX). Regeneron stands as a highly profitable entity, underscored by strong 2024 performance from key drugs Dupixent, with sales up 22% to $14.2 billion, and Libtayo, which surpassed $1 billion in sales with 40% growth. This strength is tempered by headwinds facing its legacy blockbuster Eylea, which saw flat sales of $6 billion amid rising competition and is contributing to recent share price pressure and a 3.7% year-over-year Q1 revenue decline. Despite the revenue miss, Regeneron's financial health remains robust, evidenced by a 12% increase in Q1 net income to $809 million, over $2 billion in trailing twelve-month free cash flow, and the recent initiation of a dividend. Its pipeline, featuring 45 candidates and recent approvals like Lynozyfic, provides a pathway for future growth. In stark contrast, Viking Therapeutics is a clinical-stage, pre-revenue company representing a high-risk, high-reward profile. Its valuation is heavily dependent on its pipeline, led by the GLP-1/GIP agonist VK2735 for obesity, which has advanced to Phase 3 trials. While the company is currently loss-making, it holds approximately $808 million in cash and equivalents to fund operations, and analyst sentiment is exceptionally bullish, with price targets forecasting potential upside of 165% or more, contingent on clinical success.

Key Decisions for Investors

• Investors should assess Regeneron based on its durable cash flow from diversified products like Dupixent and its emerging dividend, while closely monitoring the competitive erosion of Eylea's market share and the adoption rate of Eylea HD.
• For those with a high risk tolerance, Viking Therapeutics offers a speculative, catalyst-driven play on the burgeoning obesity drug market; positions should be sized appropriately given its pre-revenue status and binary risk tied to upcoming Phase 3 trial results for VK2735.
• Consider the divergent profiles for portfolio construction: Regeneron as a potential core holding balancing growth with income, and Viking as a satellite position with significant upside potential but a dependence on clinical and regulatory outcomes.