Expected to surpass Eli Lilly, Novo Nordisk, and Novartis, the "new darling of weight-loss drugs" Viking's trial results are promising, causing a sharp increase in stock price

On the overnight of March 27th, shares of Viking Therapeutics, a biotechnology company in the weight loss drug concept, surged nearly 28.8% at one point, marking the largest intraday gain since February 27th. Since the beginning of this year, Viking's stock price has risen by 342%, bringing the company's market value to around $8.8 billion.

The significant increase in Viking's stock price is mainly attributed to the company's release of early research results on its new oral weight loss drug VK2735. The results demonstrated that in the first-phase clinical trial, the drug can lead to a weight loss of 5% within 28 days at the maximum dose, showing a significant weight loss effect comparable to Novo Nordisk and potentially superior to Eli Lilly.

The study showed that patients participating in the trial lost an average of 3.3% of their weight in 28 days, significantly outperforming the placebo, with no reported serious side effects of the VK2735 drug. The highest dose of VK2735 helped patients lose 5% of their weight in 28 days in the first phase, a performance comparable to Novo Nordisk's oral drug amycretin and potentially superior to Eli Lilly's drug orforglipron tested in the second-phase study.

Furthermore, as Viking is expected to start the second-phase clinical trial in the second half of this year, considering the subsequent need to complete more critical third-phase clinical trials, submit regulatory approvals, and prepare for market listing, media analysts predict that the drug is unlikely to be on the market before 2028.

Oral weight loss drug VK2735 has significant commercial prospects

It is reported that Viking is one of the few companies developing oral weight loss drugs instead of injectables, with competitors including Eli Lilly and Novo Nordisk. Analysts point out that the oral weight loss drug VK2735 has significant commercial prospects.

Firstly, mainstream weight loss drugs on the market such as Wegovy and Zepbound are injectables, so oral drugs will bring important market opportunities to Viking because many patients may prefer taking pills over injections.

According to a report by William Blair analysts, the weight loss drug VK2735 will help the company enter the "maintenance" weight market. The so-called "maintenance" market refers to consumers who have already achieved their target weight through weight loss drugs or other means and now need to maintain their weight long-term. For patients who have reached their target weight and only need to maintain it, oral drugs may be more popular.

Secondly, it is worth noting that the rate of gastrointestinal issues (such as diarrhea and vomiting) in patients treated with Viking drugs is lower compared to those treated with a placebo. In contrast, drugs like Wegovy from Novo Nordisk and Zepbound from Eli Lilly often come with gastrointestinal side effects Therefore, this feature of Viking's drug may set it apart in the weight loss drug market.

Viking CEO Brian Lian stated:

"We are particularly pleased with the preliminary safety and tolerability data of the drug, which indicate a unique feature of our drug, namely the mildest gastrointestinal side effects."

In addition to oral weight loss drugs, Viking is also developing a weight loss injection. Some analysts estimate that the annual sales in the obesity market could reach as high as $80 billion. Therefore, if Viking can successfully develop an effective weight loss injection, it will open up a huge market opportunity for the company and may attract cooperation or acquisition interest from other companies