This year has offered no shortage of market-moving headlines shaping investor sentiment. Mixed job reports, new tariffs fueling turbulence in U.S. trade policy, and ongoing uncertainty around Federal Reserve decisions have all contributed to a difficult backdrop for identifying compelling investment opportunities.

Fortunately, quarterly disclosures from Wall Street’s most seasoned investors provide a window into where the “smart money” is moving. Every quarter, investment firms managing over $100 million are required to file a Form 13F with the Securities and Exchange Commission (SEC). This documentation itemizes which stocks firms bought and sold during the most recent quarter — offering valuable insight into institutional positioning.

One of the more interesting moves that came this quarter was from the Duquesne Family Office, led by billionaire investor Stanley Druckenmiller. According to the firm’s second-quarter 13F, Druckenmiller initiated a new position in Viking Therapeutics (VKTX 4.53%) — a pharmaceutical stock that has plummeted by 35% so far in 2025.

Let’s unpack what may have compelled Druckenmiller to buy the dip in Viking and assess if now is a good time for investors to follow his lead.

Viking could be an asymmetric bet

An asymmetric investment opportunity occurs when the potential upside far outweighs the potential downside. Venture capital offers a textbook example: Most early-stage companies fail, but a single unicorn can generate enough returns to offset losses across the entire fund.

Viking can be viewed through this same lens. The company is advancing a pipeline of obesity and weight-management medications. At the moment, this pocket of the healthcare realm is dominated by a duopoly — Eli Lilly and Novo Nordisk, the makers of blockbuster GLP-1 treatments Mounjaro, Zepbound, Ozempic, and Wegovy.

While Viking remains in the clinical-trial stage, the U.S. Food and Drug Administration (FDA) approval of even one of its candidates could unlock explosive upside, positioning the company as a disruptive entrant in a lucrative healthcare market.

He may be hedging his existing exposure in this space

Another reason Druckenmiller may have his eyes on Viking is due to some existing exposure to the weight-loss market. According to filings, the Duquesne Family Office already owns Lilly stock, having bought shares for three consecutive quarters.

According to research from Goldman Sachs, the global total addressable market (TAM) for obesity-care medications could reach $120 billion by next decade. Given the size of the market and the dynamics of its fragmented competition, it’s possible that Druckenmiller is merely hedging the existing position in Lilly with one that could become a multibagger should Viking successfully advance its weight-loss drug candidates.

Viking is a speculative takeover candidate

Although Viking has yet to formally break into the weight-management space, its clinical trial data over the past year has shown some encouraging signs.

Still, a key concern for investors is whether the company has the financial resources to manufacture at scale should the company secure FDA approval. On one hand, Viking’s science has demonstrated some promise, but on the other hand, its size raises legitimate questions about its capacity to handle commercialization.

With Lilly and Novo already competing fiercely, and other big pharma heavyweights actively seeking entry into the weight-loss industry, Viking’s pipeline positions it as a compelling acquisition candidate should its therapies progress beyond proof-of-concept.

Is Viking Therapeutics stock a buy?

Whether viewed as a hedge, an acquisition play, or a high-risk/high-reward bet on clinical success, Druckenmiller’s decision to buy Viking stock signals two things: a willingness to embrace uncertainty, as well as a conviction that the obesity-care market is expansive enough to support more than just two incumbents.

For prospective investors, the decision to buy Viking Therapeutics stock ultimately comes down to your personal risk tolerance. For now, Viking’s entire valuation rests on speculation and the hope that its pipeline breaks into a rapidly growing, billion-dollar industry with limited competition.

The trade-offs here should not be overlooked: Viking could emerge as the next breakthrough in weight management, or, just as easily, it could suffer setbacks that consign it to a long list of biotech companies with unrealized potential.

Adam Spatacco has positions in Eli Lilly and Novo Nordisk. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.

Although mighty American pharmaceutical company Eli Lilly (LLY 2.95%) has a dizzying number of commercialized products, it’s a recently approved medication that’s attracted outsized attention lately. This is its GLP-1 weight-loss drug, Zepbound. On Friday, thanks to news of a large Federal subsidy program apparently in the works, shares of the drug’s maker leaped more than 3% higher in value.

A half-decade experiment

That morning The Washington Post, citing official documents it had obtained from the Centers for Medicare and Medicaid Services (CMS), provided details of that program.

The agency aims to launch a five-year pilot initiative under which Medicare Part D insurance providers and state Medicaid programs would be permitted to cover the costs of obesity drugs. This would help remove a major hurdle for some otherwise qualifying patients, as expenses for the regularly administered Zepbound can add up significantly.

The report comes a day after President Trump sent a series of letters to top U.S. healthcare company CEOs insisting that they lower the prices of important treatments. If implemented, this apparent experimental program would fit with the White House’s recent cost-saving push for the many Americans using medications.

Details wanted

It wasn’t much of a surprise that investors cautiously bid up Eli Lilly stock — and that of its GLP-1 drug making rival, Wegovy developer Novo Nordisk — following the article’s publication. Any such program would certainly be a boon for both products and their manufacturers, although much remains to be parsed when and if more details about the CMS’s program become available.

It’s Thursday morning, 11:50 a.m. ET — and Eli Lilly (LLY 14.56%) stock is off to the races!

This morning, the Indianapolis-based pharmaceutical giant announced that its new GLP-1 weight loss pill, orforglipron, has “demonstrated statistically significant efficacy results and a safety profile consistent with injectable GLP-1 medicines in successful [ACHIEVE-1] Phase 3 trial.”

Lilly shares are up 14.2% in response to the news, while shares of its rivals in the GLP-1 weight loss market, Novo Nordisk (NVO -7.78%) and Viking Therapeutics (VKTX 1.00%), are falling 7.1% and 1.7%, respectively.

Eli Lilly’s new GLP-1 wonder drug

Earlier this week, as you may recall, Pfizer (PFE 0.43%) admitted defeat in its own effort to develop a GLP-1 weight loss pill, halting research on its danuglipron once-a-day oral drug after a patient in its study experienced a “potential drug-induced liver injury.” Lilly’s new drug, on the other hand, seems to have no such side effects and plenty of good effects.

As Lilly described in its press release, orforglipron is “the first oral small molecule glucagon-like peptide-1 (GLP-1) receptor agonist, taken without food and water restrictions, to successfully complete a Phase 3 trial.” Clinical data from this 40-week trial show that orforglipron helped reduce A1C blood sugar levels in patients “by an average of 1.3% to 1.6%.” At the same time, the once-daily oral pill helped reduce patients’ weights by an average of 7.9% over the course of the trial.

What’s more, Lilly points out: “Given that participants had not yet reached a weight plateau at the time the study ended, it appears that full weight reduction was not yet attained.” So, orforglipron has the potential to deliver even greater weight loss when given more time to work.

This all suggests that orforglipron is useful for both treating diabetes and weight loss — and with no needles required.

What this means for Lilly

Lilly notes that the ACHIEVE-1 study was only the first of seven planned Phase 3 clinical studies it will conduct to prove the GLP-1 drug’s safety and effectiveness for treating both diabetes and obesity, with no need for injections. The company is therefore still a ways away from commercializing the drug.

That said, completing the six remaining trials should give Lilly plenty of time to ramp up production capacity, such that it will be able “to launch orforglipron worldwide without supply constraints” — and be first in line to do so with an oral, once-a-day GLP-1 pill.

What this means for Novo Nordisk and Viking Therapeutics

Suffice it to say this would be a huge accomplishment for Lilly, expanding the addressable market for GLP-1 drugs (through ease of delivery, with no needles required) while promising that Lilly would have this market entirely to itself — at least at first.

Unfortunately, what’s good news for Eli Lilly is probably bad news for investors in Novo Nordisk and Viking Therapeutics, both of which lag Lilly in the race to develop their own easy-to-take GLP-1 diet pills. (Both Novo and Viking are developing such pills; they’re just not as far progressed in their work as Lilly. Currently, Novo has only injectable GLP-1 drugs on the market — Ozempic and Wegovy — and Viking has neither.)

Lilly’s insistence on its intention to permit no supply deficit with the new wonder drug also indicates the company doesn’t intend to give an opening to Hims & Hers Health (HIMS 1.09%) to horn in on the business with a copycat oral GLP-1 pill, as the smaller pharmaceutical company successfully did when filling a gap in supply of Lilly’s Mounjaro and Zepbound injectable GLP-1 drugs.

Is Eli Lilly stock a buy?

Long story short, investors in Eli Lilly stock are right to be excited today. I can’t say I’m enthusiastic about the stock’s sky-high 60-plus price-to-earnings valuation. Then again, for the time being at least, Eli Lilly is running away with the GLP-1 market and leaving Novo Nordisk, Viking Therapeutics, and even Hims & Hers in the dust.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.