Viking Therapeutics said Tuesday that recipients of its experimental obesity treatment lost up to 18 pounds, and VKTX stock catapulted to a five-year high.
On today's stock market, Viking shares rocketed 69.3% to close at 15.44. That pushed the biotech stock to its highest point since November 2018.
The company tested several dosing regimens of its weight-loss injection. At the highest dose, patients lost up to 6% more body weight than the placebo recipients. The results "significantly exceed" results from similar drugs over the same time frame, SVB Securities analyst Thomas Smith said in a report. Viking also said Tuesday it plans to test an oral version of the same drug.
"We are positively surprised by the exploration of an oral tablet formulation, which we view as an alternative to a weekly subcutaneous (shot)," William Blair analyst Andy Hsieh said in a note to clients.
Novo Nordisk makes the only approved weight-loss treatments, Wegovy and Saxenda. Both are injections. Diabetes drugs that lead to weight loss — including Novo's Ozempic and Eli Lilly's Mounjaro — are also weekly shots. Amgen's experimental obesity treatment is also an injection.
VKTX Stock: Activating Two Hormones
Viking's drug belongs to a class of medicines that activate a hormone called glucagon-like peptide, or GLP-1. Recent research suggests that also activating a hormone called glucose-dependent insulinotropic peptide, or GIP, could enhance the weight-loss benefit. Viking's drug activates GLP-1 and GIP.
In the Phase 1 study, Viking tested a single dose for 28 days and another regimen that increased the dosage patients received over the same time period. After four weeks, patients who received Viking's obesity treatment lost an average of 0.7%-6% more weight than the placebo group.
"Furthermore, the effect appears durable at three weeks following cessation of therapy," Hsieh said. "Weight loss from baseline remains statistically significant (with the exception of the lowest dose)."
This puts Viking on similar footing with Amgen. Amgen's experimental obesity treatment, known as AMG 133, blocks GIP while activating GLP-1. Over three months, patients who received the highest dose of Amgen's drug lost 14.5% of their body weight.
"The magnitude of the weight loss (from Viking's drug) is reminiscent of Amgen's," Hsieh said. Amgen's drug led to 6%-7.5% placebo-adjusted weight loss after four weeks "and led to several billion in market cap appreciation around the data release."
Hsieh kept his outperform rating on VKTX stock.
Burgeoning Obesity Treatment Market
Viking is going up against diabetes giants Novo and Lilly in obesity treatment.
Novo's semaglutide sells as an oral diabetes treatment called Rybelsus, an injectable diabetes drug known as Ozempic and as a weight-loss shot dubbed Wegovy. Ozempic, notably, has gained a cult following for its weight loss properties. Lilly sells Mounjaro, an injected diabetes drug that can also lead to weight loss. The company is studying it as an obesity treatment.
Semaglutide activates GLP-1, while tirzepatide — the chemical behind Mounjaro — activates both GLP-1 and GIP.
Novo stock soared to a record high on Friday after the company said higher doses of oral semaglutide led to better weight loss in diabetes patients than the approved 7- and 14-milligram doses of Rybelsus. The market is heating up now with Viking's results.
De-Risking For VKTX Stock
Those results, says SVB's Smith, "represent early de-risking (of Viking's obesity treatment), with promising early (effectiveness) signals and a reasonable safety/tolerability profile that appears competitive with other GLP-1/GIP (activating drugs)."
Smith kept his outperform rating on VKTX stock, noting this could expand on Viking's efforts in other metabolic disorders like nonalcoholic steatohepatitis and diabetes. Importantly, the majority of side effects to Viking's obesity treatment were mild or moderate. Nearly all of them were gastrointestinal related. A patient with a history of gallstones experienced a gallstone obstruction.
Bullishly, VKTX stock has a top Relative Strength Rating of 99. This puts shares in the top 1% of all stocks in terms of 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
