We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Viking (VKTX) Skyrockets 197% YTD: Is the Stock Worth a Buy?
Read MoreHide Full Article
Viking Therapeutics (VKTX - Free Report) has been attracting investor interest for quite a while, all thanks to the rapid progress of its pipeline candidates targeting obesity and non-alcoholic steatohepatitis (NASH) indications.
This year, management reported encouraging results on its obesity and NASH drug programs. These results position the company’s pipeline candidates strongly against currently available therapies targeting these diseases.
So far this year, the stock has surged 197.3% against the industry’s 6.3% decline. The stock has also outperformed the sector as well as the S&P 500.
Image Source: Zacks Investment Research
Robust Commercial Potential in the Obesity Space
Viking is one of the few biotech stocks that has shown immense potential in the obesity space. Its obesity drug, VK2735, is being evaluated as a subcutaneous (SC) injection and as an oral pill in a mid-stage study and an early-stage study, respectively. This drug has shown blockbuster potential, demonstrating superior weight reduction capabilities in both clinical studies.
In February, management reported that the phase II VENTURE study, which evaluated the SC formulation of VK2735, achieved its primary and all secondary endpoints with statistical significance. Patients treated with the SC formulation achieved a mean weight reduction of 14.7% after 13 weeks compared with 1.7% in the placebo group. In March, Viking reported data from the early-stage study on the oral formulation of the drug, which demonstrated promising dose-dependent reductions in mean body weight after 28 days of daily dosing.
Management plans to meet with the FDA to discuss the above results to determine the next steps in VK2735 development. It expects to advance both formulations of the drug into further development before this year’s end.
The obesity market has garnered much interest lately, with two companies — Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) — currently dominating this space. Despite having approved obesity drugs, Lilly and Novo have been unable to cope with existing demand. They are facing delays in fulfilling orders amid continued supply constraints and product shortages.
Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $130 billion by 2030. This is also evident from the fact that Lilly and Novo are not only investing heavily to optimize their production capacities but have also started evaluating multiple other novel obesity candidates.
Encouraging Data from NASH Drug Study
Last month, management reported positive 52-week histologic data from the phase IIb VOYAGE study that evaluated its lead pipeline drug VK2809 in patients with biopsy-confirmed N ASH. This study evaluated four different doses of VK2809 — 1 mg, 2.5 mg, 5 mg, and 10mg.
The study achieved its secondary endpoints of histologic changes assessed by hepatic biopsy after 52 weeks of treatment with VK2809 when compared with placebo. Overall, 40% to 50% of patients who received VK2809 achieved NASH resolution(meaning the disease symptoms disappeared) and at least a one-stage improvement in fibrosis. In contrast, only 20% of patients who received a placebo achieved similar results. The study previously achieved its primary endpoint — patients who received VK2809 achieved a statistically significant reduction in liver fat content following 12 weeks of treatment.
Viking intends to meet with the FDA to discuss the VOYAGE study results, before making further decisions on the program. Management is also looking for a partner to further develop and market the drug.
Based on the above study results, we believe that the drug could rival Madrigal Pharmaceuticals’ (MDGL - Free Report) Rezdiffra, which the FDA approved in March 2024 as the first-ever NASH drug. It was commercially launched by Madrigal in April.
Stock Price & Estimates
The stock is trading at a premium to the industry, as seen in the chart below.
Image Source: Zacks Investment Research
VKTX Stock Valuation
Viking’s stock has gone up by 1,861.7% in the past two years, mainly due to its solid pipeline progress. During this period, the stock has also outperformed the S&P500.
Estimates for Viking’s 2024 loss per share have slightly increased from $1.08 to $1.11 over the past 60 days.
VKTX Estimate Movement
Image Source: Zacks Investment Research
Conclusion
The stock is expected to surge further if Viking secures a potential approval for VK2735 or VK2809. Though the company lacks a stable stream of revenues, management has accumulated a strong cash balance of around $963 million (as of March 2024-end), which is helping it fund its day-to-day operations. Given the success obtained by Viking in pipeline development, it could also be eyed as an attractive acquisition target by big pharma.
Viking is an outstanding stock to have in one’s portfolio based on its strong cash balance and robust pipeline progress. Though VKTX currently trades at a premium to the industry, we recommend investors should accumulate this #2 Ranked stock as it has growth potential.
Image: Bigstock
Viking (VKTX) Skyrockets 197% YTD: Is the Stock Worth a Buy?
Viking Therapeutics (VKTX - Free Report) has been attracting investor interest for quite a while, all thanks to the rapid progress of its pipeline candidates targeting obesity and non-alcoholic steatohepatitis (NASH) indications.
This year, management reported encouraging results on its obesity and NASH drug programs. These results position the company’s pipeline candidates strongly against currently available therapies targeting these diseases.
So far this year, the stock has surged 197.3% against the industry’s 6.3% decline. The stock has also outperformed the sector as well as the S&P 500.
Robust Commercial Potential in the Obesity Space
Viking is one of the few biotech stocks that has shown immense potential in the obesity space. Its obesity drug, VK2735, is being evaluated as a subcutaneous (SC) injection and as an oral pill in a mid-stage study and an early-stage study, respectively. This drug has shown blockbuster potential, demonstrating superior weight reduction capabilities in both clinical studies.
In February, management reported that the phase II VENTURE study, which evaluated the SC formulation of VK2735, achieved its primary and all secondary endpoints with statistical significance. Patients treated with the SC formulation achieved a mean weight reduction of 14.7% after 13 weeks compared with 1.7% in the placebo group. In March, Viking reported data from the early-stage study on the oral formulation of the drug, which demonstrated promising dose-dependent reductions in mean body weight after 28 days of daily dosing.
Management plans to meet with the FDA to discuss the above results to determine the next steps in VK2735 development. It expects to advance both formulations of the drug into further development before this year’s end.
The obesity market has garnered much interest lately, with two companies — Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) — currently dominating this space. Despite having approved obesity drugs, Lilly and Novo have been unable to cope with existing demand. They are facing delays in fulfilling orders amid continued supply constraints and product shortages.
Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $130 billion by 2030. This is also evident from the fact that Lilly and Novo are not only investing heavily to optimize their production capacities but have also started evaluating multiple other novel obesity candidates.
Encouraging Data from NASH Drug Study
Last month, management reported positive 52-week histologic data from the phase IIb VOYAGE study that evaluated its lead pipeline drug VK2809 in patients with biopsy-confirmed N ASH. This study evaluated four different doses of VK2809 — 1 mg, 2.5 mg, 5 mg, and 10mg.
The study achieved its secondary endpoints of histologic changes assessed by hepatic biopsy after 52 weeks of treatment with VK2809 when compared with placebo. Overall, 40% to 50% of patients who received VK2809 achieved NASH resolution(meaning the disease symptoms disappeared) and at least a one-stage improvement in fibrosis. In contrast, only 20% of patients who received a placebo achieved similar results. The study previously achieved its primary endpoint — patients who received VK2809 achieved a statistically significant reduction in liver fat content following 12 weeks of treatment.
Viking intends to meet with the FDA to discuss the VOYAGE study results, before making further decisions on the program. Management is also looking for a partner to further develop and market the drug.
Based on the above study results, we believe that the drug could rival Madrigal Pharmaceuticals’ (MDGL - Free Report) Rezdiffra, which the FDA approved in March 2024 as the first-ever NASH drug. It was commercially launched by Madrigal in April.
Stock Price & Estimates
The stock is trading at a premium to the industry, as seen in the chart below.
VKTX Stock Valuation
Viking’s stock has gone up by 1,861.7% in the past two years, mainly due to its solid pipeline progress. During this period, the stock has also outperformed the S&P500.
Estimates for Viking’s 2024 loss per share have slightly increased from $1.08 to $1.11 over the past 60 days.
VKTX Estimate Movement
Conclusion
The stock is expected to surge further if Viking secures a potential approval for VK2735 or VK2809. Though the company lacks a stable stream of revenues, management has accumulated a strong cash balance of around $963 million (as of March 2024-end), which is helping it fund its day-to-day operations. Given the success obtained by Viking in pipeline development, it could also be eyed as an attractive acquisition target by big pharma.
Viking is an outstanding stock to have in one’s portfolio based on its strong cash balance and robust pipeline progress. Though VKTX currently trades at a premium to the industry, we recommend investors should accumulate this #2 Ranked stock as it has growth potential.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.