Analyst advised to stay away from shares of GLP-1 drug developer Viking

Investors would be "wise to stay away" from shares of mid-cap biotech Viking Therapeutics, says Motley Fool analyst Thomas Neal. Viking is no longer a "dark horse" in the obesity drug market: it is still researching its drugs, while its competitors have already made great strides, he explains. Wall Street as a whole does not share his view.

Motley Fool analyst Thomas Neal advised investors to dump Viking Therapeutics securities in favor of shares of the company's larger competitors.

In 2023-2024, Viking was considered the favorite among developers of GLP-1-based obesity drugs to compete with Denmark's Novo Nordisk and US-based Eli Lilly, The Motley Fool writes. At the time, the company's mid-cap development VK2735 was showing more convincing results than Eli Lilly's Zepbound in clinical trials, Neal claims. Investors, he says, were "aggressively driving up" Viking's share price in the expectation that it would become a takeover target by another pharma company. Between November 2023 and the end of February 2024, the mid-cap developer's stock soared about eightfold.

But investor optimism has since waned - the following clinical trial data included information on more serious than expected side effects, Neal notes.

In addition, the competitive landscape has changed. While VK2735 is still in the trial phase, Biotech's larger competitors are developing new, more effective treatments for obesity, the analyst says. Among them, he names Novo Nordisk's experimental drugs CagriSema and Eli Lilly's retatrutide.

All this led to the fall of Viking quotations from their peak values by almost 64% - to $30.9 at the close of trading on Ma 22 (on Ma 25, exchanges in the U.S. were not working).

Neal also points out to investors that Viking had about $603 million in accounts at the end of the first quarter with expenses of about $114 million per quarter. The analyst believes that the company may need additional funds to bring the drugs to market, which would dilute shareholder equity.

Wall Street doesn't share Neil's pessimism. Viking securities have 15 "buy" recommendations from analysts, two "hold" and none "sell".

In October 2025, investment bank Canaccord first rated the issuer's stock and immediately advised buying it, calling Viking "one of the leading biotech companies in the development of obesity drugs."

The average target price of Biotech's securities is $95.4, which is more than three times the last closing price of the securities.