Canaccord initiates on obesity drugmaker Viking with 'buy,' sees 200% upside
Shares of biotech company Viking Therapeutics could triple, according to Canaccord Genuity, which in a coverage initiation called the firm "one of the leading biotech companies in the obesity drug development space," now dominated by Novo Nordisk and Eli Lilly.
Details
Yesterday, October 29, Canaccord initiated coverage of the small-cap drug developer with a “buy” rating and a 12-month target of $106 per share, CNBC reported. That’s roughly triple Viking’s current market value; the stock closed yesterday at $35.20 per share.
Canaccord described Viking as “one of the leading biotech companies in the obesity drug development space.”
The market reaction was muted: shares rose only 0.8 % yesterday, leaving the company’s market capitalization near $4 billion.
Product development
Two injectable drugs – semaglutide (marketed as Wegovy by Novo Nordisk of Denmark) and tirzepatide (Zepbound by Eli Lilly of the U.S.) – currently control about 95% of the global obesity-drug market.
Viking, however, is developing its VK2735 candidate in both injectable and oral forms. The molecule is in the third and final phase of clinical trials.
The switch from injections to tablets will significantly improve convenience for patients and strengthen adherence to therapy, said Boris Tolkachev, analyst at Freedom Finance Global. He cautions the semaglutide-tirzepatide duopoly will not last forever.
Morningstar estimated nearly a year ago that 16 new obesity drugs could enter the market within five years, together capturing about a third of sales by 2031. Analysts value the total market at $200 billion. JPMorgan projected that Viking’s oral formulation alone could command 10% of that market once released, likely around 2030.
According to MarketWatch, Viking shares have 17 “buy” ratings and only one “hold.” The average target price is $94 per share, implying 167 % upside from current levels.
The AI translation of this story was reviewed by a human editor.
