Viking Therapeutics will update investors at the upcoming Obesity Week event, and analysts are as bullish as it gets on the company's oral weight-loss therapy
Viking Therapeutics Inc.'s stock was up up as much as 3.8% early Friday as excitement continued to build about data on the oral weight-loss drug the company will present at the upcoming Obesity Week event.
The stock (VKTX), which enjoys the unusual position of having all buy ratings from the 13 analysts offering coverage on FactSet, has been on a tear this year, gaining almost 300% to date in 2024.
The stock has gained about 30% since the company reported quarterly earnings last week that showed enough cash on its balance sheet to fund key clinical trials.
It was clinging to a gain of just less than 1% in the final half-hour Friday.
Data from the Phase 1 trial now under way has already yielded promising results for the company's VK2735 oral therapy, which achieved a 3.3% placebo-adjusted weight loss in participants after 28 days based on a 40-milligram dose.
The pill also proved safe and well-tolerated, with no reports of the vomiting or diarrhea that other therapies can cause, raising hopes that higher doses will prove even more effective.
The company is expected to offer data on the higher dosing arms of 60, 80 and 100 milligrams at Obesity Week, which is organized by the Obesity Society and takes place Nov. 3-6 in San Antonio, Texas. Viking is also expected to present data on the injectable version of VK2735 that is currently being tested in a Phase 2 trial.
Jefferies analysts are expecting the data to support a move to a Phase 2 trial for the pill version.
"We believe the posters' results will support the development plan further, including monthly subcutaneous into Phase 2 and oral higher dose into Phase 2, while solidifying the company's class leading position (clinical profile and development timeline) among new-gen peptide incretins," analysts led by Roger Song wrote in a note to clients.
Analysts expect that a pill version of the treatment will be a game changer, as it would be far more easily administered than the current injectable versions. Many companies, including market leaders Novo Nordisk (DK:NOVO.B) (NVO) and Eli Lilly & Co. (LLY), are working to develop a weight-loss pill.
Jefferies is confident Viking's stock still has plenty of upside. The research team has a $110 price target on the stock, which is 49% above its current price.
Oppenheimer has the highest price target among FactSet analysts at $138, which is 86% above the current price.
Jefferies is expecting VK2735 to generate peak U.S. revenues of about $12 billion.
Cantor analysts said scalability remains a key question based on conversations they have had with investors. Analysts led by Prakhar Agrawal noted that Novo Nordisk has not launched an oral version of its semaglutide despite a positive Phase 3 trial and is awaiting subcutaneous amycretin data before making a decision.
"This suggests that for peptide drugs, doses meaningfully above 50 mg a day could have scalability hurdles due to the large amount of active pharmaceutical ingredient needed," the analysts wrote in a note to clients.
The issue of scalability has led to speculation that Viking could be a takeover target for a big pharmaceutical company.
Viking's injectable and oral treatments use the same mechanism as Novo Nordisk's Wegovy and Ozempic and Lilly's Mounjaro, mimicking the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.
Jefferies analysts are also expecting Viking to offer data that supports a once-monthly dosing based on the treatment's PK profile, referring to pharmacokinetics, which measures how the body interacts with administered substances for the entire duration of exposure.
The company has said the injectable version might support once-monthly dosing.
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-Ciara Linnane
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