An analyst called the GLP-1 market a “fantastic opportunity” for those willing to take risks
Viking Therapeutics shares have great potential, according to an author at The Motley Fool
Shares of Viking Therapeutics, a developer of obesity drugs, soared last week following the release of new clinical data / Photo: Facebook/Nasdaq
Shares of Viking Therapeutics, a mid-cap developer of GLP-1-based anti-obesity drugs, represent a “fantastic buying opportunity,” according to Motley Fool contributing analyst Adriana Ciminno. However, Viking is only suitable for risk-tolerant investors, as the value of its stock depends directly on the results of clinical trials. Following one such announcement, the company’s stock price soared by nearly 20% between September 22 and 25.
Details
Investors willing to take risks should consider buying Viking securities: their growth potential remains intact even after the stock price surged nearly 20% last week, writes Motley Fool contributing analyst Adria Cimini.
The company’s stock jumped 36% on September 22—to $40.85—after it released preliminary data from studies of its experimental drug VK2735, administered as injections, as maintenance therapy for patients with obesity. The drug acts on two hormones at once—GLP-1 and GIP—just like the blockbuster Zepbound from pharmaceutical giant Eli Lilly. The idea behind maintenance therapy is that patients, after losing weight, can reduce their dosage without losing the results they’ve achieved. Specifically, when switching to a dosing schedule of once every two weeks, 97% of the weight loss was maintained, the company reported. Chimin called the result “fantastic.”
The analyst notes that Viking's stock price may fluctuate significantly depending on clinical trial data, which means the stock is suitable only for investors who are not deterred by risk.
What Analysts Are Saying
Following the release of clinical data, analysts at Truist Securities raised their price target for Viking shares from $83 to $87. This implies upside potential of nearly 145% relative to the closing price on Friday, September 25.
The trial results are encouraging, but investors should keep in mind that they apply only to VK2735 in injectable form, not in pill form, wrote Motley Fool freelance analyst Lee Samaha. He believes that data from the tablet study will be decisive for the stock.
In total, Viking’s stock has 18 “buy” ratings from Wall Street analysts and only two “hold” ratings. The average price target is $95.7, which is 170% higher than the stock’s price on September 25.
