Viking Therapeutics soars after obesity drug trial hits targets

The GLP-1 market may soon stop being a duopoly as Viking Therapeutics’ (VKTX) weight loss drug shows promising initial results in a mid-stage trial. The stock has soared following the results from the company’s Phase 2 clinical trial of VK2735, with Wall Street firms calling the data a “best-case scenario” and “a clear win” for Viking Therapeutics.

GLP-1 STUDY: Viking Therapeutics has announced top-line results from the company’s Phase 2 clinical trial of VK2735, a dual agonist of the glucagon-like peptide 1 and glucose-dependent insulinotropic polypeptide receptors in development for the potential treatment of various metabolic disorders such as obesity. The Phase 2 VENTURE trial successfully achieved its primary endpoint and all secondary endpoints, with patients receiving VK2735 demonstrating statistically significant reductions in body weight compared with placebo, the company said in a statement.

Additionally, the study showed VK2735 treatment to be safe and well tolerated with the majority of treatment emergent adverse events being categorized as mild or moderate, it added. Based on these findings, Viking intends to meet with the FDA and discuss next steps in the development of VK2735.

Patients receiving weekly doses of VK2735 demonstrated statistically significant reductions in mean body weight after 13 weeks, ranging up to 14.7% from baseline. Patients receiving VK2735 also demonstrated statistically significant reductions in mean body weight relative to placebo, ranging up to 13.1%. All doses of VK2735 also demonstrated statistically significant differences relative to placebo on the key secondary endpoint assessing the proportion of patients demonstrating at least 10% weight loss. Up to 88% of patients in VK2735 treatment groups achieved greater than or equal to 10% weight loss, compared with 4% for placebo.

BEST-CASE-SCENARIO: Commenting on the results, Truist says it views the topline data from Viking Therapeutics’ Phase 2 VENTURE study evaluating once weekly subcutaneous VK2735 in weight loss as “very impressive” with placebo-adjusted weight loss of 13.1% in just 13 weeks of dosing. Furthermore, tolerability is in-line with discontinuation from treatment comparable to the placebo group, the firm highlights. Truist sees the data as a “best-case scenario” and expects the shares to be very strong on Tuesday in trading.

DUOPOLY MAY END SOON: Also commenting on the trial data, Deutsche Bank said Viking Therapeutics’ Phase 2 VENTURE data shows the GLP-1 market could eventually be more than an Eli Lilly (LLY) and Novo Nordisk (NVO) duopoly and the “development playbook is no secret.” That said, manufacturing parenteral GLP-1s at scale to meet the outsized demand has proven to be no easy feat, which gives Lilly and Novo a “defensive moat,” the firm tells investors in a research note. Deutsche believes the pace of VK2735’s weight loss for the 15mg dose looks superior to Lilly’s and Novo’s max weight loss, which ranged between 15%-20% between weeks 32-48. The 17% nausea rate for VK2735 also compares favorably to that of Lilly and Novo, though VKTX2735’s 63% vomiting rate and 20% discontinuation is higher than that of Lilly and Novo, adds the firm. Deutsche has a Hold rating on Lilly with a $695 price target.

Leerink also noted that Viking Therapeutics’ positive topline data from the highly anticipated Phase 2 VENTURE trial of subcutaneous VK2735 for the treatment of obesity showed “very impressive” placebo-adjusted weight loss of up to 13.1% in just 13 weeks of dosing. The efficacy meaningfully exceeds Viking and investor expectations, and appears to compare favorably with competing GLP-1/GIP agonists, including Eli Lilly’s tirzepatide, which drove less than 10% absolute weight reduction at all doses at the 13-week mark in the Phase 3 SURMOUNT-1 trial, the firm pointed out. Overall, Leerink views the data as “a clear win” for Viking and expects significant strength in Viking’s shares. The firm reiterated an Outperform rating on Viking’s shares.

PRICE ACTION: In Tuesday morning trading, shares of Viking have jumped almost 74% to $77.90. Meanwhile, shares of weight loss drug competitors Eli Lilly and Novo Nordisk have moved lower.