Viking stock gapped up Tuesday after the biotech company's oral weight-loss drug — a potential rival to Eli Lilly and Novo Nordisk — beat expectations in a 28-day study.
At the highest dose, seven people who took the daily pill lost up to 5.3% of their body weight, Viking Therapeutics said in a news release. That outperformed the placebo group by 3.3%. Further, 57% of patients lost at least 5% of their body weight.
The results topped the company's expectations for 1% to 2% placebo-adjusted weight loss, Leerink Partners analyst Thomas Smith said in a report. Investors expected people who took Viking's pill to lose 3% more weight than the placebo group.
"Importantly, (the drug called) VK2735 also demonstrated an impressive safety/tolerability profile with only mild nausea and no vomiting reported, which should allow for exploration of even higher doses and potentially greater weight loss," he said.
On today's stock market, Viking stock surged 16.8%, closing at 80.83. Eli Lilly and Novo Nordisk stocks inched a fraction ahead apiece.
Viking Stock: Taking On Novo, Lilly
The market for weight-loss drugs is currently dominated by Novo's Wegovy and Lilly's Zepbound. But these are weekly under-the-skin injections. Wall Street is looking for the next big boom for the weight-loss market which experts say could be pills.
Viking's drug, dubbed VK2735, mimics two hormones — GLP-1 and GIP — tied to feelings of satiety and blood sugar. The drug also slows how fast the stomach empties itself. This is similar to Lilly's Zepbound. Lilly's next-generation injection, retatrutide, adds in a third hormone target, the glucagon receptor. But Lilly's weight-loss pill, dubbed orforglipron, only targets GLP-1.
Novo is also testing an oral weight-loss drug called amycretin. It loops in GLP-1 and another hormone target, amylin. Over about a month, amycretin recipients lost about 4% of their body weight, David Song says. Song is an investment partner at Tema ETFs, which manages the Tema Obesity and Cardiometabolic exchange-traded fund. Viking stock is a holding.
Still, "I think this readout meets market expectations for a competitive profile," he said in an email to Investor's Business Daily. "The company plans to explore longer treatment windows and higher doses in an upcoming Phase 2 trial."
Side Effects Promising For Weight-Loss Drug
The side effect profile is particularly promising for Viking's weight-loss drug. Viking has also tested the same drug as an injection for weight loss. In that study, 29% of participants experienced mild nausea and 19% had moderate nausea. Across doses, 18% of people had vomiting, 20% had diarrhea and 26% had constipation.
But the pill appeared to have lighter side effects. Just 14% of participants reported mild nausea, there was no vomiting nor constipation. Just one patient reported diarrhea.
"Oral VK2735 appears to be exceptionally well tolerated, with no significant difference from placebo in gastrointestinal adverse events," Leerink's Smith said.
He maintained his outperform rating on Viking stock.
Viking stock has a perfect IBD Digital Relative Strength Rating of 99, meaning shares rank in the top 1% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
