Viking Therapeutics stock remains under pressure, but analysts said Wednesday the company's strategy for its Phase 3 obesity studies could pay off big time against bigger rival Eli Lilly.
The small company just started two final-phase studies of its weekly shot, VK2735. One will enroll about 4,500 patients who have obesity or are overweight with at least one related condition. The other will test the drug in patients with type 2 diabetes and obesity.
Lilly's Zepbound and Viking's VK2735 use the same mechanism. Both mimic hormones called GLP-1 and GIPR to curb hunger and improve blood sugar markers.
But here's where Viking could have the edge, says William Blair analyst Andy Hsieh. Viking is testing three doses: 7.5 milligrams, 12.5 milligrams and 17.5 milligrams. These are "right-sifted" from the approved Zepbound doses at 5 milligrams, 10 milligrams and 15 milligrams.
Insurers usually won't cover incremental doses of Zepbound, though those might be the right doses for patients who've lost weight and want to maintain that loss.
"While large academic centers with dedicated reimbursement staff could successfully navigate the headwind, smaller-scale or community-based clinics could benefit from the availability of these intermediary doses," he said in a report.
Viking Therapeutics Stock's Massive Drop
Viking Therapeutics stock, though, has dropped off 67% from a recent high at 81.73, achieved intraday on Oct. 28.
But analysts said the company's test results have been strong. In midstage testing, patients who received weekly under-the-skin injections of VK2735 lost 13% more body weight than placebo recipients after 13 weeks. That "appeared competitive vs. alternative incretins," Leerink Partners analyst Thomas Smith said in a report, referencing the drug class.
In November, Viking said patients who received its drug maintained 94% of their weight loss after 16 weeks and 83% out to 19 weeks.
For the Phase 3 test, Viking Therapeutics is running the study for 78 weeks. That compares to 72 weeks for Eli Lilly's Zepbound studies.
William Blair's Hsieh says it's unlikely the 17.5-milligram dose of VK2735 will markedly improve on the 15-milligram dose of Zepbound. He expects the GLP-1 and GIPR mimickers will probably hit a weight-loss ceiling, eventually.
Market Share Dynamics Are In Flux
But Viking Therapeutics stock could benefit from the increasing power of the direct-to-consumer market for weight-loss drugs. Companies are also offering patients a variety of dosing options, including pens with specific doses and syringes and vials. The latter offers some flexibility.
These all "could have significant ramifications on market share dynamics," Hsieh said.
He has an outperform rating on Viking Therapeutics stock, calling it his "top pick for 2025."
"We continue to believe that Viking's obesity franchise offers a unique set of attractive qualities that will be viewed favorably in the lens of both pharma from an M&A perspective," he said. "This is underscored by the best-in-class potential of VK2735 with both oral and (under-the-skin) formulations."
Smith, the Leerink analysts, says investors are closely watching for midstage results from Viking's study of its weight-loss pill, expected in the third quarter. He rates Viking Therapeutics stock an outperform.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
