Is VTRX the Next Big Competitor to LLY & NVO? Surge of 121% Signals Potential Growth Ahead
Biopharmaceutical company $Viking Therapeutics(VKTX)$ saw its stock price surge over 121% on Tuesday, reaching a peak of $77.17. This surge followed the announcement of positive results from Phase 2 trials of its weight loss drug VK2735.
In contrast, shares of giants like $Novo-Nordisk A/S(NVO)$ and $Eli Lilly(LLY)$ dropped by approximately 1.7%.
$Viking Therapeutics(VKTX)$ 's stock continued to rise over 3% in after-hours trading.
$Viking Therapeutics(VKTX)$ 's candidate weight loss drug shows promise $Viking Therapeutics(VKTX)$ 's surge can be attributed to the positive results from Phase 2 trials of its candidate weight loss drug VK2735.
VK2735, a dual agonist targeting glucagon-like peptide and glucose-dependent insulinotropic peptide receptors, demonstrated significant weight loss compared to placebo across all doses, with patients experiencing an average reduction of 14.7% in weight after 13 weeks of treatment. Moreover, up to 88% of patients experienced a weight loss of 10% or more.
CEO Brian Lian suggested that extending the duration of treatment could further enhance weight loss. $Viking Therapeutics(VKTX)$ plans to conduct further clinical development this year and intends to release Phase 1 study results of the oral version of the drug later this quarter.
Why Did LLY & NVO Stock Prices Drop? Is VKTX Undervalued? Or Might It Be Acquired by LLY?
$Viking Therapeutics(VKTX)$ 's positive news poses a challenge to $Eli Lilly(LLY)$ in particular. $Eli Lilly(LLY)$ 's Zepbound, similar to $Viking Therapeutics(VKTX)$ 's weight loss drug, showed inferior weight loss results in Phase 3 trials compared to VK2735's Phase 2 results. Some analysts believe VK2735 may be more competitive than Zepbound.
Additionally, FDA approval of $Eli Lilly(LLY)$ and $Novo-Nordisk A/S(NVO)$ 's GLP-1 class weight loss drugs has led to significant stock price increases since 2023, while $Viking Therapeutics(VKTX)$ 's market value remains relatively lower, leading some to speculate that $Viking Therapeutics(VKTX)$ may be undervalued and could potentially be acquired by LLY.
Analysts See Significant Upside Potential for VKTX, Options or ETFs?
Leerink Partners analyst Thomas Smith sees $Viking Therapeutics(VKTX)$ 's data as a clear success, anticipating a substantial increase in $Viking Therapeutics(VKTX)$ 's stock price. However, analyst David Risinger warns that $Viking Therapeutics(VKTX)$ 's research is in Phase 2, while $Eli Lilly(LLY)$ 's is in Phase 3, and $Eli Lilly(LLY)$ is researching the next-generation weight loss drug tirzepatide.
Some investors may consider buying options on $Viking Therapeutics(VKTX)$ , while others, less confident in individual stock fluctuations, may opt for biotech ETFs like $iShares Biotechnology ETF(IBB)$ or $Spdr S&P Biotech Etf(XBI)$.
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