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Zacks Investment Ideas feature highlights: Viking Therapeutics, McDonalds, Starbucks, Novo Nordisk and Eli Lilly

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For Immediate Release

Chicago, IL – August 21, 2024 – Today, Zacks Investment Ideas feature highlights Viking Therapeutics (VKTX - Free Report) , McDonalds (MCD - Free Report) , Starbucks (SBUX - Free Report) , Novo Nordisk (NVO - Free Report) and Eli Lilly (LLY - Free Report) .

Massive Weight Loss Market: Viking (VKTX - Free Report) Is Best in Breed

What Does Viking Therapeutics Do?

Viking Therapeutics is a company that develops treatments for metabolic and endocrine disorders. VKTX’s focus is on creating medication to address conditions such as steatohepatitis (NASH), a liver disease, as well as obesity and diabetes. Through its expertise in receptor signaling pathways, Viking Therapeutics strives to create therapies that cater to the needs of individuals facing these health challenges, ultimately aiming to improve outcomes over time.

America has an Obesity Problem

America’s obesity rate has been rising for years and is reaching a fever pitch in the 2020s. Unfortunately, many of the causes of obesity will not go away any time soon, and most Americans will not take the extra steps necessary to avoid them. Obesity in America is influenced by factors such as eating habits, lack of physical exercise, and environmental conditions. The easy availability of caloric-dense foods from restaurants like McDonalds plays a significant role in the issue.

Meanwhile, even coffee establishments like Starbucks have many drinks packed with orders of magnitude of the daily sugar intake one should consume. Finally, societal norms regarding portion sizes and eating habits also impact the increasing obesity rate.

Heart Disease is the Number One Killer

Heart disease, which is mainly caused by an unhealthy diet and physical inactivity, causes more deaths annually than any other disease. In 2021, heart disease was responsible for 13% of all deaths in the United States and was the top cause of death for both genders (according to the World Health Organization [WHO]).

GLP-1 Drugs Have Blockbuster Potential

For many Americans, the fix for a rampant obesity problem and other obesity-linked issues like diabetes may be GLP-1 drugs. GLP-1s imitate the functions of a hormone known as glucagon peptide. This hormone helps to manage blood sugar levels and appetite.

These medicines are commonly prescribed for treating type 2 diabetes as they enhance insulin production and stomach digestion. Some GLP-1 drugs like Novo Nordisk’s Ozempic and Eli Lilly’s have already hit the market, and resulted in massive earnings for each company.

Viking’s Best-in-Breed Weight Loss Drug

In late February, VKTX shares more than doubled in a single session after the company announced positive top-line results for its VK2735 GLP-1 drug. However, Eli Lilly and Novo Nordisk have enjoyed the first-mover advantage. Nevertheless, VKTX may be the most attractive stock for three reasons:

1. Room to Grow: VKTX’s market cap is tiny compared to LLY and NVO.With the GLP-1 market expected to grow to $500 billion in the next few years, even a small capture of the weight loss market could mean big gains for VKTX shares.

2. Effectiveness: In clinical trials, patients taking Ozempic saw similar results to VK2735 patients, but it took them 68 weeks to see those results, compared to 13 weeks for VK2735 patients. Meanwhile, Phase 2 studies have shown that Viking’s drug is about twice as effective as LLY’s.

3. Acquisition Candidate: A large drug maker like Pfizer may look to enter the weight loss market by acquiring VKTX. VKTX would likely be bought out at a very high premium if this were to happen.

VKTX’s Bullish Pattern

Finally, VKTX is setting up a perfect monthly bull flag pattern. Monday, the stock rose 17% as volume more than doubled (a sign of heavy accumulation).

Bottom Line

Viking Therapeutics has developed a best-in-breed GLP-1 drug. The company is poised to gain a large portion of the massive weight loss drug market.

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