In the midst of the buzz around Nvidia and Bitcoin ETFs, the remarkable performance of small-cap biotech company Viking Therapeutics, Inc. (VKTX) has taken center stage, surpassing the gains of Mag 7 favorites and popular cryptocurrencies. On February 27, 2024, VKTX surged by an impressive 121%, marking a substantial 700% increase over the past year. Viking's positive Phase 2 trial results for VK2735, revealing a notable 15% body weight reduction in obesity patients. Despite the announcement of a $350 million public stock offering, VKTX's impact suggests a potential renaissance for the biotech industry, which has trailed the broader market in recent years.
Investors seeking growth beyond the Mag 7-dominated S&P 500 are encouraged to explore the biotechnology sector. The sector's comparatively lower average price-to-earnings ratio, exemplified by XBI's 19.9, positions biotechs as enticing options for reasonably priced growth stocks. Additionally, biotech ETFs like XBI present a mid-cap alternative to the mega-cap S&P 500, indicating a transformative phase marked by consolidation, resource sharing, and increased innovation through mergers and acquisitions. With an evolving landscape, advancements in gene therapy, and sustained investor interest, the biotech industry in 2024 holds a cautiously optimistic outlook, according to industry analysts.
