By Josh Nathan-Kazis
Viking Therapeutics is speeding the development of its weight loss injection, which could compete with the shots on the market from Eli Lilly and Novo Nordisk.
The shortened timeline for the clinical testing of the shot makes Viking an even more ripe target for one of the big pharma firms looking to snap up an obesity drug of their own.
Viking shares jumped 29% Thursday following the announcement late Wednesday. The company also released quarterly results. The company, which has no approved products, said it had cash and cash equivalents worth $942 million, enough for at least three years of operations, according to analysts.
When Viking said in February that patients on its injectable weight loss drug VK2735 had lost 15% of their body weight after thirteen weeks, the stock jumped more than 120% in a single day. The company's CEO said at the time that he expected to test the drug next in a mid-stage Phase 2b trial, generally used to confirm an optimal dosing level.
However, Viking said on Wednesday it would skip that step and move the shot right into Phase 3, the late-stage trials needed to secure regulatory approval. The company said that Food and Drug Administration guidance will require two Phase 3 trials and that it expects those trials to cost roughly $300 million.
VK3275, like Lilly's Zepbound, works by targeting both GLP-1 and GIP receptors. Analysts have compared the Phase 2 results of the drug to that of retatrutide, Lilly's next-generation obesity medicine.
Today, only Lilly and Novo have succeeded in bringing new highly effective obesity medicines to market. The enormous demand for the drugs has drawn intense investor interest, though both companies are currently struggling to ramp up manufacturing. A long list of other drugmakers is seeking to compete with Lilly and Novo. Now, Viking's abbreviated timeline appears to give it a leg up.
The stock is up more than 240% this year and more than 360% over the past 12 months. Viking has long been considered an attractive takeover target for big pharma companies like Merck that lack their own obesity assets. The quicker timeline only makes the company look sweeter.
Viking didn't spell out the details of its Phase 3 plans, but William Blair analyst Andy Hsieh wrote that the trial could begin early next year.
In addition to the injected form of VK3275, Viking is also testing a pill form of the same medicine. The company said it plans to begin a Phase 2 study of that oral version in the fourth quarter.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
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July 25, 2024 11:03 ET (15:03 GMT)
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