Billionaires Flock to VKTX: Is the Stock Set to Double?
Wall Street is buzzing with excitement about $Viking Therapeutics(VKTX)$ and its weight loss drug. Analysts predict the stock could surge by 98%.
Meanwhile, billionaires are also piling into this pharmaceutical stock. For example, in Q2, billionaire Jeff Yass's Susquehanna International Group bought around 1.1 million shares of Viking, and Israel Englander's Millennium Management acquired about 326,000 shares.
So, is now the time to follow these billionaires into Viking?
Why Wall Street is Bullish？
In February, Viking announced a successful clinical trial for VK2735, a dual GLP-1 and GIP receptor agonist. After 13 weeks of treatment, patients lost an average of 14.7% of their body weight, and weight loss continued even after the 13-week trial period.
In addition to the injectable version, VK2735’s oral tablet version is approaching Phase 3 trials. In March, Viking reported that a Phase 1 study of the oral drug showed significant weight loss in just 28 days of treatment.
With soaring demand for weight loss drugs— $Novo-Nordisk A/S(NVO)$ ’s GLP-1 drug semaglutide reached $27.6 billion in annual sales in Q2 2024—Viking is stepping into a hot market. However, it’s worth noting that its market share is being eroded by $Eli Lilly(LLY)$ ’s tirzepatide.
Future Catalysts for Viking
Viking isn’t just focused on weight management. The company’s pipeline also targets various metabolic diseases. Recently, its most advanced candidate, VK2809, showed success in a Phase 2b study for metabolic dysfunction-associated steatotic liver disease (MASH). After 52 weeks, up to 75% of patients achieved MASH resolution without worsening fibrosis. The U.S. has millions of MASH patients.
The Phase 3 trial for the weight loss drug VK2735 is on the horizon, but Viking still needs to finalize details with the FDA. If the FDA doesn’t impose stringent requirements on study duration or scale, the stock could see a significant boost.
Additionally, a Phase 2 trial for the VK2735 oral drug, lasting 13 weeks, is set to start in Q4 this year. Currently, no approved oral GLP-1/GIP dual-action drugs are available. While still early in development, the oral VK2735 shows promising results.
Best Time to Buy?
For investors with a high risk tolerance, Viking might be an appealing stock. However, it’s not ideal for those who haven't achieved financial independence yet.
The company has a market cap of $6.3 billion, but it will likely be over a year before any products are approved for market. Any negative news about VK2735’s clinical trials or FDA review could cause the stock to plummet.
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