Investing in clinical-stage pharmaceutical companies comes with a lot of risk, but also a lot of potential upside. When such a company delivers a successful product that passes regulatory muster -- or better yet, one that becomes a blockbuster drug -- that can be a game changer, and lead to a soaring share price.

But on the flip side, these types of companies generate little to no income until (and unless) they get a drug approved, and they burn lots of cash in the attempt.

Investors have been bullish about Viking Therapeutics (NASDAQ: VKTX) of late, but it's still a clinical-stage company, and it comes with no shortage of risks. But because it has a promising glucagon-like peptide 1 (GLP-1) agonist in development that may end up winning a share of the lucrative weight-loss drug market, its market capitalization has climbed to $8 billion.

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Source Fool.com