Viking Therapeutics stock skidded Wednesday despite the "encouraging" speed with which the company enrolled roughly 280 patients in a study of its weight-loss pill.
The company finished enrollment in roughly two-and-a-half months, Leerink Partners analyst Thomas Smith said in a report. Viking is testing its daily pill, VK2735, in patients with obesity or who are overweight with at least one co-morbid condition.
The "rapid" enrollment "reflects strong interest in the '2735 program and continued enthusiasm for incretin therapies in obesity and metabolic conditions," he said.
But Viking Therapeutics stock dropped 5.9% to 26.34, underperforming the biotech industry group, which fell 1.9%. Viking shares peaked at 99.41 in February 2024 but began falling steadily last November. That lines up with a broader biotech sell-off. Today, the biotech's shares are below their 50-day moving average, according to MarketSurge.
Viking Therapeutics Stock: What's Next?
Viking is testing both injectable and oral versions of the same drug, VK2735. The drug works by mimicking hormones called GLP-1 and GIPR to decrease hunger and improve blood sugar. In the recently enrolled study, Viking will test out six doses vs. a placebo over 13 weeks.
William Blair analyst Andy Hsieh expects the results from this study in August, while Viking has guided to the second half of the year. Hsieh notes that Viking Therapeutics had results in February 2024 from a study it finished enrolling in October 2023. That study was for the shot.
Hsieh reiterated his outperform rating on Viking Therapeutics stock.
In addition to the midstage study of VK2735 in pill form, Viking is expected to start a final-phase study of the weekly shot sometime next quarter. Later this year, the company will move another weight-loss drug that mimics the hormone amylin into clinical testing.
Hsieh also noted that Viking could benefit from the results of Eli Lilly's study of Mounjaro in reducing the risk of cardiovascular events. Mounjaro is a type 2 diabetes treatment that uses the same mechanism as VK2735.
"Given the stock pullback over the past few months, we believe the risk/reward profile skews meaningfully to the upside," Hsieh said in a client note.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
