On Tuesday, Viking Therapeutics (VKTX.US) recorded its largest single-day stock decline in history, delivering massive profits to traders who had bet against the company and reversing their year-to-date losses in one fell swoop.

According to data from Matthew Unterman, Managing Director at S3 Partners LLC, the biotechnology company's stock crashed 42% on Tuesday, generating $521 million in paper profits for short sellers in a single day. This brought their year-to-date gains to over $380 million, compared to losses of approximately $140 million as of Monday's close.

The dramatic stock decline was triggered by interim results from an experimental oral weight loss drug trial, which showed that side effects caused approximately 28% of patients to withdraw from the study within three months. This shattered market expectations that the oral medication could potentially compete with popular weight loss injection products from Eli Lilly (LLY.US) and Novo Nordisk (NVO.US).

"Tolerability issues overshadowed the efficacy data," noted a research report led by Piper Sandler analyst Biren Amin, adding that all treatment groups in the study experienced high rates of nausea and vomiting.

This marks the second disappointing oral weight loss drug study in recent times. Earlier this month, Eli Lilly's stock plummeted 14% in a single day—its largest decline since 2000—after the company released late-stage results for an experimental weight loss drug that fell short of Wall Street expectations.

Despite the setback, analysts remain optimistic about Viking Therapeutics' stock, with nearly 90% of analysts maintaining ratings equivalent to "buy." The average target price of approximately $90 suggests the stock has more than triple upside potential from current trading levels.

"We view today's weakness in Viking Therapeutics as a buying opportunity, as market concerns about tolerability issues appear overdone," wrote Oppenheimer & Co. analyst Jay Olson in a report, while reiterating an "outperform" rating and $100 price target.