Freedom Broker says buy weight-loss drugmaker Viking ahead of 2H data releases

Freedom Broker has issued a trade idea on the biotech Viking Therapeutics. The company is expected to present fresh data from clinical trials of its main weight-loss drug, and historically, as Freedom Broker points out, the stock rises ahead of these events.

In a note seen by Oninvest, Freedom Broker recommends buying Viking Therapeutics with a target price of $37 per share. This is 20.5% higher than current quotes: Yesterday, July 15, the stock closed at $30.70 per share.

In the second half of the year, two upcoming events could help lift Viking Therapeutics’ stock, according to Freedom Broker. First, the company plans to initiate the final phase of clinical trials for the injectable version of its lead obesity drug candidate, VK2735. Second, Viking is likely to release interim data from a separate study evaluating the oral formulation of the same molecule.

Historically, in the run-up to such releases, "Viking shares have exhibited increased trading activity and outperformance," Freedom Broker notes. "Given the upcoming events, there is a high likelihood that a similar scenario will play out this time as well," it added.

Viking Therapeutics is focused on developing treatments for metabolic and endocrine disorders. Its pipeline currently includes four drug candidates: two targeting obesity, one for non-alcoholic fatty liver disease (NAFLD), and another for a rare genetic condition affecting the nervous system and adrenal glands.

The company’s lead asset, however, is VK2735. According to Freedom Broker, it has so far demonstrated weight-loss efficacy that exceeds that of market leaders Wegovy (semaglutide) from Denmark's Novo Nordisk and Zepbound (tirzepatide) from Eli Lilly of the U.S. These two therapies currently dominate the GLP‑1 space, accounting for an estimated 95% of the market, Freedom Finance has estimated previously. Morningstar projected last year that up to 16 new obesity treatments could enter the market within five years, from major players such as Roche, Amgen, Pfizer, and AstraZeneca, as well as smaller biotechs. That said, Freedom Broker considers Viking to be the only near-term serious challenger with the potential to break into the GLP‑1 market and disrupt the current duopoly.

Wall Street sentiment remains broadly bullish. According to MarketWatch, Viking has 17 "buy" ratings versus just two "hold" recommendations. The average price target of $90.26 per share implies upside of nearly 200% from current levels.

One in eight people worldwide suffers from obesity, according to the World Health Organization. Yet for years, there was no safe or consistently effective treatment. A wide range of drugs, from amphetamines to cannabinoid receptor antagonists, were used at various times, but all were eventually pulled from the market due to serious side effects.

A breakthrough came in the summer of 2021, when U.S. regulators approved Wegovy for chronic weight management. The rise of obesity drugs, particularly GLP‑1 receptor agonists, represents a “quiet revolution,” says Boris Tolkachev, an analyst at Freedom Finance Global. He likens their impact to that of statins, which transformed cardiology in the late 1980s, and to Viagra in terms of their influence on mass culture.

The AI translation of this story was reviewed by a human editor.