In a significant development for the weight-loss drug market, Viking Therapeutics (VKTX) announced Thursday that it is pursuing a monthly dose of its weight-loss drug VK2735. This news sent Viking’s stock soaring and dealt a blow to market leaders Novo Nordisk (NVO) and Eli Lilly (LLY).
Viking also revealed plans to expedite VK2735 directly into final-phase testing following a meeting with the Food and Drug Administration (FDA). Previously, a Phase 2b study was planned, but this move indicates an accelerated pathway, according to Leerink Partners analyst Thomas Smith.
The announcement impacted shares of Eli Lilly and Novo Nordisk, who dominate the weight-loss drug market with their weekly shots, Zepbound and Wegovy, respectively. Both companies have been experiencing shortages, creating an opportunity for competitors like Viking to enter the market. Viking is the first company to propose a potential monthly injection.
“VK2735 could become a best-in-class injectable compound, and a once-monthly formulation may provide a significant competitive advantage,” stated Naz Rahman, an analyst at Maxim Group. “Patients often struggle with compliance on weekly therapies, so reducing the administration frequency to once a month could be highly attractive.”
Following the announcement, Viking Therapeutics’ stock surged by 28.3%, closing at 64.68. In contrast, Eli Lilly’s stock fell by 4.5%, ending at 821.51, and Novo Nordisk’s stock dropped by 2.9% to 127.83.
Viking Therapeutics’ Stock Soars
The news is particularly challenging for Eli Lilly, whose drug Zepbound mimics the hormones GLP-1 and GIP to enhance satiety and regulate blood sugar levels. Viking’s VK2735 operates on a similar mechanism and is being tested as both an injection and a pill.
Viking also announced plans to commence a 13-week study of VK2735 in the fourth quarter, building on the drug’s “competitive weight loss and clean safety profile at week four,” according to Smith. He holds an outperform rating on Viking Therapeutics stock.
“We anticipate strength in Viking Therapeutics shares following this update, given the potential expedited path for VK2735 and ongoing dose escalation for its oral formulation, which continues to show differentiated safety and best-in-class potential,” Smith added.
The market for oral weight-loss drugs is intensifying as well. Pfizer (PFE) recently disclosed plans to advance its daily pill, danuglipron, into further testing. Earlier this month, Roche (RHHBY) reported that patients taking its weight-loss pill, CT-996, lost 6.1% more body weight over a month compared to placebo recipients.
Viking Therapeutics’ stock rebounded off its 50-day moving average, according to MarketSurge. With a perfect IBD Digital Relative Strength Rating of 99, Viking stock is in the top 1% of all stocks for 12-month performance.
