by Ian Cooper

Biotech has been one of the most explosive sectors of the year.

And it’ll get even better.

Combined with new innovation, demand for better treatment, pharmaceutical companies strengthening pipelines, a resurgence of M&A, and weight loss drug demand, biotech will continue to offer some of the most explosive opportunities.

Look at Eli Lilly (LLY), for example.

It’s seeing so much demand for its obesity treatments, it’s about to spend another $5.3 billion to make even more. And, according to The Wall Street Journal, its Zepbound treatment is generating more than 74,800 prescriptions every week.

Better, that boom is far from over, with Goldman Sachs noting the obesity market will reach $100 billion by 2030. Plus, according to Morgan Stanley, the global market for obesity drugs could increase more than 15-fold by 2030.

While you can always trade Eli Lilly and Novo Nordisk on the obesity treatment news, smaller, down, but not out stocks like Viking Therapeutics could see big upside, too.

For one, the company reported that the injectable form of its treatment helped patients lose up to 13.1% of their weight after 13 weeks in Phase 2 trials. The company also said the oral form of its treatment led to a weight loss of about 3.3% after 28 days in Phase 1 trials.

Now, thanks to the success of Phase 1, the company has plans to initiate its Phase 2 oral drug trials later this year. Helping, Morgan Stanley just initiated coverage of VKTX with an outperform rating, with a price target of $105. That’s based on promising Phase 2 data for VKTX2735 and VK2809 for the treatment of obesity and NASH, respectively.

“The firm’s analyst pointed out that the two drug candidates are poised to tap into blockbuster market opportunities. The anticipation of near-term updates on these drugs is expected to contribute to further upside for Viking Therapeutics,” says Investing.com.