Viking Therapeutics (VKTX) has announced that its subcutaneous obesity drug candidate VK2735 is moving into Phase III development. Viking is currently preparing for an end-of-Phase II meeting with the Food & Drug Administration later this year.
Just as significant–maybe more?–pharmacokinetics data for VK2735 continues to show the potential for once-a-month dosing. The market-leading GLP diabetes/weight-loss drugs from Eli Lilly (LLY) and Novo Nordisk (NVO) require weekly injections. That dosing advantage gives VK2735 the potential to be the best-in-class obesity drug. (Viking is also at work on an oral version of the drug.)
The stock popped so strongly on the news because there was a belief on Wall Street that at least one more Phase II study might be needed before the FDA would give the go-ahead for a Phase III trial. The Medical Technology Stock Letter reports that Viking expects to hold an end-of-Phase II meeting with the FDA later this year. Details on Phase III trial design and timing will be disclosed following the end-of-Phase II meeting
After discussions with the agency, VKTX now estimates that a Phase III development program with two phase III trials with 4,500 patients in each will cost roughly $300 million. That won’t require additional fund raising since Viking has $942 million in cash on hand.
(Separately, the company earlier this year reported that the Phase I trial of the oral formulation of VK2735 has demonstrated encouraging dose dependent safety and tolerability, and positive signs of clinical activity, with subjects reporting mean weight loss of up to 5.3% from baseline following 28 days of daily oral dosing at 20mg and 40mg. A Phase II trial is now scheduled for this program also later this year.)
In case you’ve forgotten the size of the potential prize here, the weight loss drug market is estimated these days at about $130 to $150 billion annually by the end of the decade.
The Medical Technology Stock Letter says buy Viking below $100 a share–the stock closed at $64.68 on July 25–with a target price of $140.
The stock is a member of my Jubak Picks Portfolio. That position is down 32% from when I initiated it on February 28, 2024. Full disclosure: I own Viking Therapeutics in my personal portfolio.
