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The recent weakness appears to be driven largely by investor concerns over dilution following the company’s $575 million financing, which was announced shortly after the maintenance-study results. This likely amplified selling pressure as investors focused on the impact of the new shares and convertible notes. Meanwhile, intensifying competition in the obesity space has also weighed on sentiment.
While the recent decline reflects near-term concerns around dilution and competitive pressure, the broader investment thesis will depend on the strength of Viking’s pipeline, its growth opportunities and its ability to compete in the rapidly evolving obesity market.
Let’s explore the company’s fundamentals to better understand how to play the stock amid the recent decline.
VKTX’s Obesity Pipeline Shows Potential
Viking is one of the handful of companies that have shown immense potential in the obesity space. It is developing VK2735, an investigational novel dual GLP-1 and GIP receptor agonist, in multiple clinical studies using oral and subcutaneous (SC) formulations. This drug has demonstrated robust weight reduction capabilities across both versions.
The company is conducting two late-stage studies — VANQUISH-1 and VANQUISH-2 — evaluating VK2735 SC for 78 weeks. VANQUISH-1 is evaluating the drug in adults without type II diabetes (T2D) who have obesity or are overweight with at least one weight-related co-morbid condition. VANQUISH-2 is assessing its efficacy in obese or overweight adults with T2D. Data from these studies are not expected before 2027. Viking is on track to start late-stage studies of oral VK2735 before this year’s end. These studies will broadly follow the framework of the VANQUISH program but will be smaller in scale and shorter in duration.
In September, Viking reported top-line results from the SC portion of its VK2735 maintenance study. The data showed that patients were able to preserve most of the weight loss achieved with weekly VK2735 after transitioning to every-other-week or monthly dosing, while the drug remained generally well tolerated. These findings support the potential for less-frequent maintenance dosing, offering greater flexibility for long-term weight management. The second part of the study, evaluating a transition from SC to oral VK2735 for maintenance, was initiated on Tuesday.
However, Viking is not putting all its eggs in one basket. In June, the company started a phase I study on VK3019, a novel obesity candidate designed to activate amylin and calcitonin receptors. Management believes therapies targeting these receptors could potentially be used either as standalone treatments or in combination with VK2735 to improve weight-loss induction and support longer-term weight management. While still an early-stage candidate, VK3019 marks an expansion of Viking’s obesity pipeline beyond VK2735 and adds another mechanism that could broaden its future treatment options.
Competition in Targeted Markets Remains a Concern
Viking is developing the candidate as a potential alternative to established GLP-1 products marketed by pharma giants Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) . Both companies are already marketing oral and injectable obesity treatments. Lilly markets injectable Zepbound and oral Foundayo, while Novo Nordisk markets injectable Wegovy and its oral Wegovy pill.
The competitive landscape is also evolving rapidly. Lilly recently reported results for EloraTZP, an investigational combination of eloralintide, a selective amylin receptor agonist, and Zepbound. Data from a phase IIb study showed that all EloraTZP combinations met the primary and secondary endpoints, delivering substantial weight loss and A1C reductions at 48 weeks. LLY plans to advance the candidate into phase III development in the fourth quarter of 2026.
Meanwhile, Novo Nordisk has submitted CagriSema to the FDA for weight management. The once-weekly treatment combines semaglutide with cagrilintide, a long-acting amylin receptor agonist. A final decision is expected before this year’s end.
VKTX Stock Performance, Valuation & Estimates
Shares of Viking Therapeutics have lost about 17% year-to-date, significantly underperforming the industry’s 2% growth. The stock has also underperformed the sector and the S&P 500 during the same period, as shown in the chart below.
The company is trading at a significant premium to the industry. Going by the price/book ratio, the stock currently trades at 9.03 times trailing 12-month book value, higher than 3.82 times for the industry.
Image Source: Zacks Investment Research
Estimates for Viking Therapeutics’ 2026 and 2027 loss per share have improved in the past 60 days.
Image Source: Zacks Investment Research
How to Play VKTX Stock?
Viking has several developments that could support the stock. In the near term, the company expects to initiate the late-stage development program for oral VK2735. Over the medium to long term, investors can look to additional updates on the drug. Viking expects to report results from the oral maintenance portion of the VK2735 study in 2027, which could provide further evidence of its potential for flexible, less-frequent dosing. The VANQUISH studies are also expected to generate results in 2027 and could serve as significant catalysts for the stock.
Viking could also attract acquisition interest from larger pharmaceutical companies seeking to strengthen their presence in the obesity market. As one of the few independent biotechs with a late-stage obesity asset, the company could be a strategically attractive target as Big Pharma continues to seek promising external assets.
Given these opportunities, we believe the recent decline could provide an opportunity for investors to buy or retain VKTX shares, which carry a Zacks Rank #2 (Buy). Although clinical and competitive risks remain, favorable developments from VK2735 could help the stock regain momentum.
View the Zacks #1 Rank List
Image: Bigstock
VKTX Down 16% in a Month: Time to Invest or Exit the Stock?
Key Takeaways
Shares of Viking Therapeutics (VKTX - Free Report) have lost about 16% over the past month, despite the positive results from a maintenance dosing study evaluating its lead obesity candidate, VK2735.
The recent weakness appears to be driven largely by investor concerns over dilution following the company’s $575 million financing, which was announced shortly after the maintenance-study results. This likely amplified selling pressure as investors focused on the impact of the new shares and convertible notes. Meanwhile, intensifying competition in the obesity space has also weighed on sentiment.
While the recent decline reflects near-term concerns around dilution and competitive pressure, the broader investment thesis will depend on the strength of Viking’s pipeline, its growth opportunities and its ability to compete in the rapidly evolving obesity market.
Let’s explore the company’s fundamentals to better understand how to play the stock amid the recent decline.
VKTX’s Obesity Pipeline Shows Potential
Viking is one of the handful of companies that have shown immense potential in the obesity space. It is developing VK2735, an investigational novel dual GLP-1 and GIP receptor agonist, in multiple clinical studies using oral and subcutaneous (SC) formulations. This drug has demonstrated robust weight reduction capabilities across both versions.
The company is conducting two late-stage studies — VANQUISH-1 and VANQUISH-2 — evaluating VK2735 SC for 78 weeks. VANQUISH-1 is evaluating the drug in adults without type II diabetes (T2D) who have obesity or are overweight with at least one weight-related co-morbid condition. VANQUISH-2 is assessing its efficacy in obese or overweight adults with T2D. Data from these studies are not expected before 2027. Viking is on track to start late-stage studies of oral VK2735 before this year’s end. These studies will broadly follow the framework of the VANQUISH program but will be smaller in scale and shorter in duration.
In September, Viking reported top-line results from the SC portion of its VK2735 maintenance study. The data showed that patients were able to preserve most of the weight loss achieved with weekly VK2735 after transitioning to every-other-week or monthly dosing, while the drug remained generally well tolerated. These findings support the potential for less-frequent maintenance dosing, offering greater flexibility for long-term weight management. The second part of the study, evaluating a transition from SC to oral VK2735 for maintenance, was initiated on Tuesday.
However, Viking is not putting all its eggs in one basket. In June, the company started a phase I study on VK3019, a novel obesity candidate designed to activate amylin and calcitonin receptors. Management believes therapies targeting these receptors could potentially be used either as standalone treatments or in combination with VK2735 to improve weight-loss induction and support longer-term weight management. While still an early-stage candidate, VK3019 marks an expansion of Viking’s obesity pipeline beyond VK2735 and adds another mechanism that could broaden its future treatment options.
Competition in Targeted Markets Remains a Concern
Viking is developing the candidate as a potential alternative to established GLP-1 products marketed by pharma giants Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) . Both companies are already marketing oral and injectable obesity treatments. Lilly markets injectable Zepbound and oral Foundayo, while Novo Nordisk markets injectable Wegovy and its oral Wegovy pill.
The competitive landscape is also evolving rapidly. Lilly recently reported results for EloraTZP, an investigational combination of eloralintide, a selective amylin receptor agonist, and Zepbound. Data from a phase IIb study showed that all EloraTZP combinations met the primary and secondary endpoints, delivering substantial weight loss and A1C reductions at 48 weeks. LLY plans to advance the candidate into phase III development in the fourth quarter of 2026.
Meanwhile, Novo Nordisk has submitted CagriSema to the FDA for weight management. The once-weekly treatment combines semaglutide with cagrilintide, a long-acting amylin receptor agonist. A final decision is expected before this year’s end.
VKTX Stock Performance, Valuation & Estimates
Shares of Viking Therapeutics have lost about 17% year-to-date, significantly underperforming the industry’s 2% growth. The stock has also underperformed the sector and the S&P 500 during the same period, as shown in the chart below.
VKTX Stock Underperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
The company is trading at a significant premium to the industry. Going by the price/book ratio, the stock currently trades at 9.03 times trailing 12-month book value, higher than 3.82 times for the industry.
Image Source: Zacks Investment Research
Estimates for Viking Therapeutics’ 2026 and 2027 loss per share have improved in the past 60 days.
Image Source: Zacks Investment Research
How to Play VKTX Stock?
Viking has several developments that could support the stock. In the near term, the company expects to initiate the late-stage development program for oral VK2735. Over the medium to long term, investors can look to additional updates on the drug. Viking expects to report results from the oral maintenance portion of the VK2735 study in 2027, which could provide further evidence of its potential for flexible, less-frequent dosing. The VANQUISH studies are also expected to generate results in 2027 and could serve as significant catalysts for the stock.
Viking could also attract acquisition interest from larger pharmaceutical companies seeking to strengthen their presence in the obesity market. As one of the few independent biotechs with a late-stage obesity asset, the company could be a strategically attractive target as Big Pharma continues to seek promising external assets.
Given these opportunities, we believe the recent decline could provide an opportunity for investors to buy or retain VKTX shares, which carry a Zacks Rank #2 (Buy). Although clinical and competitive risks remain, favorable developments from VK2735 could help the stock regain momentum.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.