Viking is developing two future star new drugs at the same time

Table of Contents

Introduction to Viking

Viking Therapeutics (ticker: VKTX) is a clinical-stage biotherapy company focused on developing innovative treatments for metabolic and endocrine disorders. The company’s main oral drug candidate “VK0612” is used to treat type 2 diabetes; An oral drug “VK5211” is a non-steroidal selective androgen receptor modulator (SARM) used to treat cancer cachexia. In addition, the company is developing three novel preclinical programs targeting metabolic diseases and anemia.

Two star drugs under development

VK2735 for weight control

VK2735 is a GLP-1 receptor agonist that Viking is developing as an injectable and oral weight-loss drug to treat obesity and diabetes. The trial met all primary and secondary endpoints, showing statistically significant reductions in body weight compared to placebo at all doses. Patients who received weekly doses of the drug lost 14.7% of their body weight from baseline after 13 weeks.

The second phase clinical trial of Viking’s weight loss drug VK2735 has positive results, helping obese patients lose an average of nearly 15% of their weight, which is better than that of pharmaceutical companies Eli Lilly (ticker: LLY) and Novo Nordisk (ticker: NOVO) Existing weight loss drugs are more effective.

Up to 88% of patients in the VK2735 trial group lost more than 10% of their weight, compared with 4% in the control group given placebo. The therapy is safe and well-tolerated. 95% of adverse reactions are mostly gastrointestinal adverse reactions, which are considered mild or moderate. Most of them occurred in the early stages of the trial, and patients recovered quickly. As a result, Viking’s stock price soared 121% on February 27, 2024, which was the largest single-day increase in Viking’s history.

VK2735 uses the same mechanism as Eli Lilly’s Zepbound, and Eli Lilly’s placebo-adjusted 12-week weight loss is approximately 8%.

VK2809 for MASH

Don’t forget that Viking is also developing another non-alcoholic steatohepatitis (MASH) treatment drug, VK2809. The proportion of patients in the VK2809 group that can reduce liver fat content by at least 30% can reach up to 84.9%, and the market has high hopes.

While it has showed promising liver fat reduction during a Phase 1/2 study. Fifty-two week Phase 2 biopsy data is expected in 1H 2024.

For details on this part, please see my previous post “MASH drug is about to have a major breakthrough”.

Stock price performance

The stock has soared 674% over the past 12 months, while the S&P 500 has gained only about 28%.

Shares of Viking Therapeutics has jumped 169.99% over the past five days.

Enormous potentials

All parties want to acquire Viking

Eli Lilly had offered to acquire Viking for $40 to $50 per share and planned to announce the deal in mid-Feb, 2024 . At the end of January 2024, it was reported that Viking had also received an acquisition offer from Pfizer (ticker: PFE). Viking believed that the price gap between the two was too big, so it decided to publish the data of its VK273 weight loss drug.

Amazing potential for the future

All parties want to acquire Viking

Eli Lilly had offered to acquire Viking for $40 to $50 per share and planned to announce the deal in February 2024. At the end of January 2024, it was reported that Viking had also received an acquisition offer from Pfizer (ticker: PFE). Viking decided to publish the data of its VK273 weight loss drug because it believed that the price gap between the two was too big.

Share dilution

Viking’s stock price surged after announcing the data of VK273, and then announced a public issuance of common shares. This move caused its stock price to fall 5% the next day. For small biotech companies with no products on the market, finding sources of funding is critical, and dilutive financing is common. Investors should keep this in mind.

Can Viking threaten Eli Lilly?

The Viking drug candidate looks promising, but Eli Lilly’s Zepbound’s phase 3 study showed that patients lost an average of 26% of their weight over 88 weeks, and the results were promising. Whether Viking can challenge Eli Lilly in the weight loss market depends on whether Viking’s commercialization goes smoothly, but Viking has not yet started the third phase of research so far. Meanwhile, another drug being studied by Eli Lilly, Retatrutide, is currently in a Phase 3 trial. In a Phase 2 trial, it showed an average weight loss of 17.5% over 24 weeks. Even it may beat Existing medications.

Huge risks

If the factor of retarglutide is removed and we only consider that Viking has to face Eli Lilly’s Zepbound, it is possible for Viking to gain some market share, but unless the product is much better than Eli Lilly’s product, otherwise, like It is unlikely that a small biotech company like Viking will succeed in taking down Eli Lilly. Eli Lilly has an overwhelming advantage in commercializing drugs due to its scale and commercial experience. Of course, Viking may also be acquired in the future, which will certainly bring a one-time huge return to its stock price.

If Viking’s subsequent clinical results fail to meet investor expectations or encounter regulatory hurdles, the company’s stock price could plummet. Viking’s potential is huge, but so are its shortcomings. Investors should think twice unless they have a high tolerance for risk and volatility.

Relative articles

Disclaimer

The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.