Viking's stock pops as obesity-drug contender drags down Eli Lilly, Novo Nordisk

Dow Jones07-25

MW Viking's stock pops as obesity-drug contender drags down Eli Lilly, Novo Nordisk

By Eleanor Laise

Experimental drug will move to late-stage trials, accelerating development timeline

Viking Therapeutics Inc's shares $(VKTX)$ gained about 14% premarket on Thursday after the company signaled progress on an experimental obesity drug that could accelerate its development timeline.

The San Diego-based company said late Wednesday that it would advance an injectable version of its investigational treatment, VK2735, directly to phase 3 trials. Like Eli Lilly & Co.'s weight-loss drug Zepbound, VK2735 acts on two different gut hormones, GLP-1 and GIP.

In a phase 2 study, patients taking VK2735 lost an average of about 15% of body weight after 13 weeks. Viking is also working on a tablet version of the drug, which is set to enter phase 2 trials later this year, the company said.

The news weighed on shares of obesity-drug leaders Eli Lilly $(LLY)$ and Novo Nordisk $(NVO)$ early Thursday, with each dropping roughly 2% in premarket trading.

Viking also plans to explore monthly dosing of VK2735, CEO Brian Lian said on a call with analysts Wednesday. That approach "could offer additional real-world treatment flexibility which builds on the company's competitive advantage in developing both subcutaneous and oral formulations of the same compound," Leerink Partners analysts said in a research note Wednesday. Both Novo Nordisk's Wegovy and Lilly's Zepbound are once-weekly injections.

Viking on Wednesday reported a second-quarter net loss of $22.25 million, or 20 cents per share, versus a loss of $19.23 million, or 19 cents per share, a year earlier.

Viking's stock has climbed more than 170% in the year to date, while the S&P 500 SPX has gained 13.8%.

-Eleanor Laise

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July 25, 2024 08:38 ET (12:38 GMT)

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Viking's stock pops as obesity-drug contender drags down Eli Lilly, Novo Nordisk

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