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Where Does VKTX Stock Stand After the Obesity Pill Setback?
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Key Takeaways
Viking's oral obesity pill VK2735 cut weight but showed high dropout rates due to side effects.
Investors worry oral safety issues could affect VKTX's SC version now in late-stage development.
VKTX trades at a premium valuation, with widening 2025 and 2026 loss per share estimates.
Viking Therapeutics (VKTX - Free Report) is one of the few biotech stocks that has shown immense potential in this space. It is developing VK2735, an investigational novel dual GLP-1 and GIP receptor agonist, in multiple clinical studies as oral and subcutaneous (SC) formulations for treating obesity.
Last month, Viking’s stock suffered a major setback after it reported mixed top-line results from a mid-stage study evaluating the safety and efficacy of the oral formulation of VK2735. Patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing, compared with 1.3% in the placebo group. However, a significant number of patients dropped out of the study due to adverse events. Per VKTX, the discontinuation rate among VK2735-treated participants was about 28% compared with 18% for placebo.
These higher-than-expected dropout rates in the study were a disappointment. Viking Therapeutics assured investors that it might mitigate the side effects of oral VK2735 by gradually moving patients from lower to higher doses. However, the results have raised concerns about the drug’s tolerability and safety profile. The mixed oral pill results have some investors worried that the safety concerns seen in the oral formulation could also affect the SC version, which was recently advanced into late-stage development. An update on VK2735 SC is not expected until the end of 2026 or early 2027.
Despite the setback, we believe that there is still room for smaller biotechs like VKTX to grab a share of the booming obesity market — provided they address tolerability and safety concerns. Even though Viking’s mid-stage study results on the oral version were underwhelming, the company still successfully achieved its primary and secondary endpoints.
According to research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by 2030. The space is currently dominated by two companies, namely Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) , whose respective injectable obesity drugs, Zepbound and Wegovy, are major contributors to their top-line growth. Both companies are also investing heavily in expanding their obesity portfolios by advancing multiple novel candidates, intensifying competition for emerging players like Viking.
Competition Heating Up in the Obesity Space
To capitalize on the rapidly expanding obesity market, Eli Lilly and Novo Nordisk are racing to introduce oral weight-loss pills. While there are currently no approved pills for weight-loss management, Novo’s regulatory filing seeking approval for an oral version of Wegovy is currently under review by the FDA. A final decision is expected before the end of 2025.
In July, Lilly reported results from two late-stage studies evaluating orforglipron, its GLP-1 once-daily oral pill for obesity. Both studies met their primary and all key secondary endpoints. With the full clinical dataset now available, Lilly plans to submit a regulatory filing for the drug with the FDA before this year’s end.
Another company that is making significant progress in the obesity space is Amgen (AMGN - Free Report) . The company is developing the investigational GIPR/GLP-1 receptor drug, MariTide, as a single dose in a convenient autoinjector device, with the potential for monthly and possibly less frequent dosing. In March, AMGN initiated two phase III studies on MariTide in obesity as part of its comprehensive MARITIME phase III program. Since June, Amgen has initiated two additional late-stage studies in other obesity-related conditions.
VKTX’s Price Performance, Valuation and Estimates
Shares of Viking Therapeutics have underperformed the industry year to date, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, VKTX is trading at a premium to the industry. Going by the price-to-book value (P/B) ratio, the company’s shares currently trade at 3.66 times trailing book value, higher than 3.19 for the industry. The stock is also trading above its five-year mean of 3.25.
Image Source: Zacks Investment Research
Estimates for Viking’s 2025 loss per share have widened from $1.87 to $2.48 in the past 60 days. During the same timeframe, loss per share estimates for 2026 have increased from $2.54 to $3.15.
Image Source: Zacks Investment Research
Viking Therapeutics currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Where Does VKTX Stock Stand After the Obesity Pill Setback?
Key Takeaways
Viking Therapeutics (VKTX - Free Report) is one of the few biotech stocks that has shown immense potential in this space. It is developing VK2735, an investigational novel dual GLP-1 and GIP receptor agonist, in multiple clinical studies as oral and subcutaneous (SC) formulations for treating obesity.
Last month, Viking’s stock suffered a major setback after it reported mixed top-line results from a mid-stage study evaluating the safety and efficacy of the oral formulation of VK2735. Patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing, compared with 1.3% in the placebo group. However, a significant number of patients dropped out of the study due to adverse events. Per VKTX, the discontinuation rate among VK2735-treated participants was about 28% compared with 18% for placebo.
These higher-than-expected dropout rates in the study were a disappointment. Viking Therapeutics assured investors that it might mitigate the side effects of oral VK2735 by gradually moving patients from lower to higher doses. However, the results have raised concerns about the drug’s tolerability and safety profile. The mixed oral pill results have some investors worried that the safety concerns seen in the oral formulation could also affect the SC version, which was recently advanced into late-stage development. An update on VK2735 SC is not expected until the end of 2026 or early 2027.
Despite the setback, we believe that there is still room for smaller biotechs like VKTX to grab a share of the booming obesity market — provided they address tolerability and safety concerns. Even though Viking’s mid-stage study results on the oral version were underwhelming, the company still successfully achieved its primary and secondary endpoints.
According to research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by 2030. The space is currently dominated by two companies, namely Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) , whose respective injectable obesity drugs, Zepbound and Wegovy, are major contributors to their top-line growth. Both companies are also investing heavily in expanding their obesity portfolios by advancing multiple novel candidates, intensifying competition for emerging players like Viking.
Competition Heating Up in the Obesity Space
To capitalize on the rapidly expanding obesity market, Eli Lilly and Novo Nordisk are racing to introduce oral weight-loss pills. While there are currently no approved pills for weight-loss management, Novo’s regulatory filing seeking approval for an oral version of Wegovy is currently under review by the FDA. A final decision is expected before the end of 2025.
In July, Lilly reported results from two late-stage studies evaluating orforglipron, its GLP-1 once-daily oral pill for obesity. Both studies met their primary and all key secondary endpoints. With the full clinical dataset now available, Lilly plans to submit a regulatory filing for the drug with the FDA before this year’s end.
Another company that is making significant progress in the obesity space is Amgen (AMGN - Free Report) . The company is developing the investigational GIPR/GLP-1 receptor drug, MariTide, as a single dose in a convenient autoinjector device, with the potential for monthly and possibly less frequent dosing. In March, AMGN initiated two phase III studies on MariTide in obesity as part of its comprehensive MARITIME phase III program. Since June, Amgen has initiated two additional late-stage studies in other obesity-related conditions.
VKTX’s Price Performance, Valuation and Estimates
Shares of Viking Therapeutics have underperformed the industry year to date, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, VKTX is trading at a premium to the industry. Going by the price-to-book value (P/B) ratio, the company’s shares currently trade at 3.66 times trailing book value, higher than 3.19 for the industry. The stock is also trading above its five-year mean of 3.25.
Image Source: Zacks Investment Research
Estimates for Viking’s 2025 loss per share have widened from $1.87 to $2.48 in the past 60 days. During the same timeframe, loss per share estimates for 2026 have increased from $2.54 to $3.15.
Image Source: Zacks Investment Research
Viking Therapeutics currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.