Better Long-Term Buy: Eli Lilly or Viking Therapeutics?

Eli Lilly reported 2025 sales growth of 45% to more than $65 billion, with net income just under $21 billion and a roughly 32% margin, reinforcing its position as a dominant GLP-1 and broader healthcare growth stock. The article also highlights Viking Therapeutics’ VK2735, which has shown about 15% weight loss in 13 weeks for the injectable and up to 12% in oral trials, with phase 3 progress raising takeover optionality. Overall, the piece is bullish on both names but frames Eli Lilly as the lower-risk choice and Viking as the higher-upside speculative play.

Analysis

The market is treating GLP-1 as a single trade, but the dispersion is widening between de-risked cash generators and binary clinical assets. That favors Lilly as the core “quality compounder” while keeping a small optionality sleeve in VKTX, because the near-term winner is not necessarily the best drug but the asset with the cleanest path to reimbursement, manufacturing scale, and prescriber adoption.

The second-order winner is actually the M&A optionality basket: if VKTX continues to de-risk, large-cap pharma will likely prefer to buy capacity rather than build it, and that pulls forward valuation re-ratings across small-cap obesity names. The flip side is that every additional positive data point in the class raises the bar for differentiation; a crowded GLP-1 landscape can compress future economics through price pressure, formulary rebates, and payer pushback long before peak sales arrive.

The real risk is timing mismatch. VKTX’s upside is front-loaded into phase 3 execution and regulatory milestones over the next 6–18 months, while Lilly’s multiple is already discounting a lot of success and may be vulnerable if growth decelerates even modestly or if the market starts to price in peak-share concerns. A smoother-than-expected approval path for the oral asset would matter more than headline efficacy because it expands adherence and gross-to-net economics, which is what acquirers ultimately pay for.

Contrarian view: the consensus is overestimating how much of Lilly’s moat is protected by first-mover advantage and underestimating how valuable convenience will be if oral dosing meaningfully improves persistence. At the same time, the market may be underpricing the probability that a smaller platform like VKTX gets taken out before full commercialization, turning clinical optionality into cash at a premium long before operating leverage is visible.

Key Decisions for Investors

• Long VKTX as a high-conviction event-driven optionality position into the next phase 3 readout; size small, but expected upside is asymmetric if efficacy and tolerability remain intact. Use a defined-risk structure rather than common equity if available.
• Hold/accumulate LLY only on weakness, not strength; treat it as a defensive growth core with lower torque, but avoid chasing at elevated multiples where any slowing in prescription growth could de-rate the stock by 10-15% quickly.
• Pair trade: long VKTX / short LLY on a 6-12 month horizon if you want to express the view that marginal upside is more mispriced in the smaller asset than in the incumbent. Hedge with tight stops because binary trial risk can dominate.
• Consider a basket long of small-cap obesity names versus short large-cap healthcare incumbents that lack pipeline exposure, as M&A optionality can reprice the whole subgroup if one asset gets acquired. The trade works best into catalyst windows, not after broad biotech rallies.
• If trading options, buy VKTX call spreads into catalyst dates and finance with short-dated premium sales only if implied volatility is extreme; the risk/reward is best when the market underprices timing but overprices the probability of failure.