Motley Fool analyst sees Viking as 'dark-horse threat' to Eli Lilly and Novo Nordisk
Shares of the mid-cap obesity-drug maker are up 7% on Tuesday
Viking Therapeutics has a weight-loss program that looks to be competitive with medicines already on the market like Wegovy and Zepbound / Photo: fotografiko eugen / Shutterstock
Viking Therapeutics, a smaller obesity-drug developer, could emerge as a "dark-horse threat" to Eli Lilly and Novo Nordisk, argues Motley Fool contributor Alex Carchidi. While Viking's therapy is still in clinical testing, the company's valuation could rise substantially if it captures even 1% of the market, he argues.
Details
Viking Therapeutics has a real chance to win market share in the GLP-1 obesity-drug market from giants Eli Lilly and Novo Nordisk, according to Carchidi.
The mid cap's drugs are still in clinical trials, but its lead candidate, VK2735, which targets the same receptors as Eli Lilly's Zepbound, has produced "strong early data," he notes.
Carchidi points to data from two studies. In one, patients receiving injectable VK2735 lost 14.7% of their body weight over 13 weeks. In another, participants taking the oral version of the drug lost 12.2% over the same period. For comparison, he cites data showing that patients treated with Zepbound lost 20.2% of their body weight over 72 weeks, while those taking Wegovy lost 13.7%.
That leads Carchidi to conclude that, based on 13-week results, Viking's drug candidate appears competitive. Still, because the drugs were studied in separate trials involving different patients, doses, and follow-up periods, any comparison is suggestive rather than direct, the analyst cautions.
He also notes that the pharmaceutical giants are already developing the next generation of obesity treatments, making it unclear how VK2735 will ultimately stack up against those candidates.
Viking is preparing to begin late-stage trials for both the injectable and oral versions of VK2735, and the company's prospects will depend heavily on their results, Carchidi writes. Still, if the mid-cap developer captures even a 1% share of the obesity-drug market, which analysts project could reach $100 billion before the end of the decade, its valuation could increase substantially.
What other analysts say
Viking shares have climbed nearly 40% over the last 12 months, and the stock was up 7% in trading on Tuesday as of this writing. Year to date, however, Viking is off 1.5%.
Wall Street is broadly bullish on the name. The stock has 17 "buy" calls versus two "hold" ratings and no "sell" recommendations from analysts. The average target price is $94.30 per share, implying upside of more than 200% from the last closing price.
