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Altimmune (NASDAQ: ALT) and Viking Therapeutics (NASDAQ: VKTX) have a lot of features in common, but, at least for the moment, the performance of their stocks is not one of them. Whereas Viking's shares are up by 610% over the last three years, Altimmune's are down by 54%.

However, there's more than one argument for why Altimmune's next act could look a lot more like Viking's trajectory. So let's examine three reasons it might be the next weight loss biotech to soar.

1. It's eyeing the same astronomically large market

If you've been keeping up with the biopharmaceutical sector lately, you know that weight loss drugs like Eli Lilly's Zepbound and Novo Nordisk's Wegovy are all the rage. Per the World Health Organization (WHO), by 2025, nearly 1 billion people globally will fit the criteria for obesity.

The allure of the profits awaiting in that market is driving investors to bid up Viking's shares -- and the same could now be the case with Altimmune, which also has an obesity medicine in development. Estimates of the dollar value of the market vary widely, but the consensus is that to merely call it "big" is an understatement. Per some calculations by Morgan Stanley, it could be worth as much as $77 billion by 2030.

Biotech players like Altimmune and Viking will probably not capture the lion's share of the pie the way Novo Nordisk and Eli Lilly are currently doing. Aside from arriving quite late to the show in comparison to the big pharmas, they lack the manufacturing and distribution capabilities to reach most of the unserved demand.

Nonetheless, as the ascent of Viking's stock shows, investors are more than willing to bet on the chances of capturing enough of the market to deliver tremendous growth. After all, it's easier to register massive gains when starting from zero revenue, so the bar for success is fairly low.

In other words, a total conquering of the market is not at all necessary from an investor's standpoint; a relatively small market share will probably do. Once again, Altimmune's situation is very much the same as Viking's before its run-up.

2. It has a quite promising and differentiated contender in the works

Viking's stock soared thanks to very favorable data from the mid-stage clinical trials for its lead candidate, suggesting that it might be more effective than the offerings by Novo Nordisk and Eli Lilly by causing weight loss at a faster rate. Altimmune just reported similarly favorable data, and in one important dimension its candidate might be even better. Here's why.

The biotech's lead program is called pemvidutide, and currently the company is planning to have talks with regulators at the Food and Drug Administration (FDA) in the third quarter of this year about how to proceed to phase 3 clinical trials. According to data from the phase 2 trial, patients treated with the drug for 48 weeks at the highest dose level tested shed an average of 32.2 pounds, which worked out to be 15.6% of their body weight on average. More weight loss could be possible with treatment that continues beyond that time horizon, which is a plus.

Furthermore, per data that the company presented on June 23, only 21.9% of that weight loss was attributable to breakdown of muscle tissue, with the rest attributable to breakdown of fat. That's a critical point, as one of the drawbacks of the market's current leaders, Wegovy and Zepbound, is that they lead to significant loss of muscle mass. In short, Altimmune's candidate has a credible shot at one-upping the big shots, which is quite bullish even if the results need to be confirmed in additional clinical trials.

3. Its balance sheet looks great

Much like Viking Therapeutics, Altimmune's balance sheet is more than strong enough to provision it with most of the financial resources it needs to bring its candidate to the market, even if that process will take a couple of years.

It has no long-term debt, and $182 million in cash, equivalents, and short-term investments. Its trailing-12-month (TTM) total operating expenses were $89 million, so in theory it won't need to raise any cash within the next 12 months, and perhaps even a bit longer than that.

When it does eventually raise cash, it will have plenty of leeway to do so via either new stock issuance or taking out debt. The decision will likely be based on how much the hype from the company's clinical trial results has driven higher share prices -- so pay attention, and you won't be surprised if your shares get diluted.

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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