Shares of Viking Therapeutics surged by over 90% on Tuesday following the positive outcomes of the company’s experimental weight loss medication in a mid-stage trial.
Viking Therapeutics stands among the cadre of smaller pharmaceutical companies focusing on obesity treatments, aiming to tap into the burgeoning weight loss drug sector, projected by analysts to reach a market valuation of $100 billion by the decade’s end.
However, Viking may not navigate this domain solo. Analysts speculate that larger pharmaceutical players like Pfizer, which abandoned two of its weight loss drug projects last year, might contemplate acquiring firms like Viking Therapeutics. Tuesday’s market response has propelled Viking Therapeutics’ market capitalization to approximately $7 billion.
The trial encompassed over 170 participants grappling with obesity or being overweight, with some receiving varied doses of the injectable drug or a placebo. Individuals administered weekly doses of the medication witnessed weight reductions of up to 14.7% from baseline, or 13.1% after adjusting for the placebo, over the 13 weeks.
Remarkably, as high as 88% of patients receiving the drug, named VK2735, achieved at least a 10% weight loss, a stark contrast to the mere 4% among untreated individuals.
Significantly, there was no discernible plateau in weight loss by week 13 across any dosage of the drug, indicating the potential for continued weight reduction with prolonged treatment, as highlighted by Viking CEO Brian Lian during an investor call.
The drug exhibited a “promising” safety profile throughout the 13-week trial, with patients generally tolerating it well. Approximately 4% of patients receiving any dosage of the medication discontinued the study prematurely, compared to around 6% in the placebo cohort.
The majority of adverse events encountered by patients upon initiating the drug—referred to as treatment-emergent adverse events—were predominantly mild or moderate in intensity. Many of these events pertained to gastrointestinal issues, a common occurrence across various weight loss and diabetes treatments, encompassing symptoms such as nausea, vomiting, diarrhea, and constipation.
Viking intends to unveil the comprehensive Phase 2 dataset at medical symposiums. Additionally, the company expressed its intention to engage with the Food and Drug Administration (FDA) to deliberate on the subsequent phases for the advancement of VK2735.
Furthermore, the company disclosed its anticipation of releasing preliminary trial data concerning an oral formulation of its weight loss medication. Viking Therapeutics’ drug targets GLP-1 and another hormone known as GIP. These hormones mirror the targets of Eli Lilly’s weight loss and diabetes drugs, Zepbound and Mounjaro.
In a note issued on Tuesday, analysts from Deutsche Bank remarked that Viking Therapeutics’ latest data suggests that the weight loss drug market could potentially evolve beyond the “duopoly” dominated by Novo Nordisk and Eli Lilly, prominent manufacturers of sought-after treatments.
However, the analysts cautioned that manufacturing these treatments “at scale to meet outsized demand has proven to be no easy feat,” underscoring Novo Nordisk and Eli Lilly’s established “defensive moat.”
