Yesterday, February 28, development-stage biotech Viking Therapeutics (VKTX) announced results from a Phase 2 trial of its GLP-1 weight-loss drug candidate that that showed the potential for the VK2735 compound to be best in class in the $36.5 billion (revenue) market for GLP diabetes-control and weight-loss drugs. (This class of drug, the GLP-1 agonist, mimics the natural GLP hormone that stimulates insulin production and helps regulate blood sugar levels. Research has also shown that the drugs move food more quickly through the digestive system and lead the body to think it’s fuller sooner–hence the weight-loss effect.) The results showed a weight loss of 14.7% of body weight over 13 weeks–that’s better than the 7% to 8% for Eli Lilly’s (LLY) Zepbound, one of the current market leaders. And the trial showed the potential for more convenient administration of the drug–once a month injections instead of the weekly or every other week injections required by Eli Lilly and Novo Nordisk’s (NVO) drugs. The next step for Viking Therapeutics is to meet with the Food & Drug Administration somewhere around the midpoint of 2024 on the design for the next Phase 2b trial that will study dosing, the period of efficacy, and more safety issues. Before that happens, Viking Therapeutics is scheduled to release the results of trials of an oral form of VK2735 during the first quarter of 2024. With most GLP drugs now administered by injection, an oral version would be a huge event in this market. Shares of Viking Therapeutic have soared on the news to close at $94.45 on February 28 from $38.48 on February 26. I’m still a buyer now, however. Even with the higher price the market cap is still just $9.49 billion, making the company an attractive acquisition for a bigger drug maker (Eli Lilly’s market cap is $719 billion, just as a benchmark), and giving the stock plenty of room to run to the upside. The Medical Technology Stock Letter, in my opinion one of the best sources on biotech, recommends a buy up to $100 and has a $145 target on the stock. I will add Viking Therapeutic to my Volatility Portfolio on my JubakAM.com subscription site and to my Jubak’s Picks Portfolio today, February 29, with a target price of $150.
Need more GLP? Buying Viking Therapeutics on trial results
