MW Viking Therapeutics is more than just a weight-loss stock, and that's drawing cheers
By Ciara Linnane
Biotech's liver-disease treatment is also viewed as best-in-class, earning it a full slate of buy ratings from analysts
Viking Therapeutics Inc. won plaudits Wednesday, not for its obesity pill which has generated significant excitement among investors, but for the other key product candidate in its pipeline - a treatment for the liver disease MASH.
MASH, or metabolic dysfunction-associated steatohepatitis, is a serious liver disease that's caused by a buildup of fat that becomes inflamed despite a low intake of alcohol. It was formerly known as NASH, or non-alcohol-related steatohepatitis.
The disease affects about 22 million Americans, per the American Managed Care Pharmacy Association, and can lead to end-stage liver disease, liver cancer, and even death. It has become the most common reason for liver transplants in the U.S.
Viking $(VKTX)$ on Tuesday gave a presentation at the American Association for the Study of Liver Diseases meeting in San Diego, detailing full data from its Phase 11b trial of its VK2809 product candidate in MASH patients.
William Blair analysts were upbeat on the data.
"We are impressed by the demonstration of a statistically significant and clinically meaningful improvement in the FDA approvable endpoint of fibrosis benefit at the highest dose, along with MASH resolution acrossall doses," analysts led by Andy T. Hsieh wrote in a note to clients Wednesday.
Fibrosis is the scarring of liver tissue that occurs in MASH and can lead to issues like cirrhosis if left untreated. The data suggested the benefit was consistent despite fibrosis stage, "which in our view bodes well for the pivotal program that will likely exclusively enroll fibrosis stage 2 and 3 patients," said Hsieh.
The data showed VK2809 remained safe and the frequency of adverse events of interest and discontinuation rate were comparable to placebo, said Hsieh. There were no reports of either hepatoxicity or gallbladder disease, which are common with MASH.
"Overall, we believe our thesis that VK2809 is the best-in-class MASH drug within the oral modality is affirmed," said the note.
William Blair has the equivalent of a buy rating on the stock, as do all 13 analysts offering coverage of the stock on FactSet. The bank is one of many expecting Viking to be a takeover target, given the unique position of its pipeline across the metabolic disease spectrum.
The company's obesity pill VK2735 is ready for Phase 3 trial and the company is planning an amylin program that will commence with a Phase 1 trial next year. Amylin is a hormone that helps regulate blood sugar in the body.
"While we acknowledge it is risky to base our investment thesis on an eventual takeout, the prospect is reasonably high given Viking's clinical differentiation, combined with the large TAM (total addressable market) of chronic metabolic conditions," said Hsieh.
William Blair is not alone in predicting big pharma will acquire Viking. Raymond James analysts wrote as much earlier this year when they said they view VK2735 as better than tirzepatide, which is the medical name for Eli Lilly & Co. Inc.'s $(LLY)$ mounjaro. That was after an earlier data set and did not include the higher doses in the trial.
Maxim analysts also said Viking will need a partner for commercialization and even for late-stage development.
"Considering the competitive nature of the product and the blockbuster growing market, we believe this further increases Viking's attractiveness as a potential acquisition target with Viking's NASH program being upside," they wrote at the time.
Viking's last update on its obesity pill was in early November at Obesity Week, an event organized by the Obesity Society. The company said obese adults taking the highest dose in a Phase 1 trial of 100 milligrams had an average weight loss of 8.2% from baseline over a four-week period. The 100 mg dose also produced weight loss of up to 6.8% compared with placebo.
Viking's stock was up 1.8% Wednesday and has gained 182% in the year to date, while the SPDR S&P Biotech exchange-traded fund XBI has gained 5% and the S&P 500 SPX has gained 24%.
-Ciara Linnane
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November 20, 2024 12:06 ET (17:06 GMT)
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