MW What's next for Viking Therapeutics? Here's how the company can scale up.

By Ciara Linnane

Viking's obesity-drug program is progressing well. Now management is thinking about manufacturing tie-ups.

Viking Therapeutics Inc.'s stock jumped 3% Tuesday, after a bullish note from Oppenheimer highlighted the company's promising obesity-drug program and its potential appeal to a deep-pocketed partner.

Analysts came away from a meeting with Viking's management with an update on the program that included their thinking on how they would scale up, assuming clinical trials currently underway prove successful.

Viking $(VKTX)$ is in the midst of a phase 2a dosing trial of its oral obesity drug VK2735, with a data readout expected in the second half of the year. The company is expected to launch a phase 3 trial of VK2735 in injectable form in the first half of the year.

The pill version is expected to be a game changer in the space, as most patients would prefer to take a pill than have an injection. For now, the drugs made popular by Eli Lilly & Co. $(LLY)$ and Novo Nordisk $(NVO)$ (DK:NOVO.B) that treat obesity and diabetes are only available in injectable form.

"Despite independently pursuing clinical trials for VK2735, management expressed interest in potential partnerships for its obesity suite, ideally through global licensing and royalty with a cardiometabolic leader," Oppenheimer analysts led by Jay Olson wrote in a note to clients published Monday.

Viking has long been viewed as a takeover target, given the positive data from early VK2735 trials. The company's most recent update was in early November at Obesity Week, an event organized by the Obesity Society. The company said obese adults taking the highest dose in a phase 1 trial of 100 milligrams had an average weight loss of 8.2% from baseline over a four-week period. The 100-mg dose also produced weight loss of up to 6.8% compared with a placebo.

The stock has buy ratings from all 14 analysts who offer coverage on FactSet - a perfect score that reflects its clinical differentiation and large total addressable market.

Oppenheimer is looking forward to the phase 2a trial data which will show the effects of different dosing arms and lower two-week titration intervals, among other things.

Viking is planning an exploratory arm that will investigate 30 milligrams as a maintenance dose after up-titration to 90 mg. It will have five active arms testing 15-mg to 120-mg doses, with titration beginning at 30 mg for the 60-mg, 90-mg and 120-mg cohorts.

Oppenheimer is also upbeat on Viking's other pipeline products, which include a treatment for NASH, or non-alcohol-related steatohepatitis, also known as fatty liver disease.

The disease affects about 22 million Americans, per the American Managed Care Pharmacy Association, and can lead to end-stage liver disease, liver cancer and death. It has become the most common reason for liver transplants in the U.S.

For more, see: Viking Therapeutics is more than just a weight-loss stock, and that's drawing cheers

The analysts are also upbeat on the amylin program that's expected to enter a phase 1 trial later this year. Amylin is a hormone that helps regulate blood sugar in the body.

"Recently showcased at ADA (American Diabetes Association), the program demonstrated promising preclinical weight-loss signals, and we are interested to see how the program performs clinically, as it could offer a significant addition to VKTX's obesity pipeline and strengthen its position in the metabolic space," the Oppenheimer analysts wrote.

Viking's stock has gained 51% in the last 12 months, while the SPDR S&P Biotech ETF XBI has gained 4% and the S&P 500 SPX has gained 25%.

-Ciara Linnane

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January 21, 2025 15:04 ET (20:04 GMT)

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