Viking Therapeutics' highly anticipated weight-loss pill topped Wall Street's expectations — and a rival pill from Novo Nordisk — after just four weeks of treatment. But, after rallying in premarket trades and opening higher, Viking stock tumbled.
Patients who took the highest dose of Viking's pill lost 8.2% of their body weight. That compares to a 1.4% loss for placebo recipients. The 6.8% difference is far better than investors' expectations the obesity pill to outperform the placebo by 5% to 6%, William Blair analyst Andy Hsieh said.
But Viking is far from the only drugmaker trying to make an obesity treating pill a reality.
In a presentation at the ObesityWeek meeting, AstraZeneca said patients with type 2 diabetes lost 5.8% of their body weight over four weeks of treatment with its pill.
And Corbus Pharmaceuticals said mice lost up to 31.4% of their body weight over 19 days of treatment with the highest dose of its drug. Corbus' drug interacts with CB1, a receptor that plays a role in modulating appetite and energy. Novo's CB1-focused drug led to psychiatric side effects, but that doesn't appear to be the case for the Corbus drug.
Viking stock plunged 13.4% to 63.14, reversing from an earlier gain. In premarket action, the top-notch biotech stock was trading above 90. Meanwhile, Corbus stock surged 8.2% to 18.31, and AstraZeneca shares closed roughly flat at 71.43. Eli Lilly and Novo Nordisk stocks fell 1.6% and 2%, respectively.
Viking Therapeutics At ObesityWeek
Viking Therapeutics is positioning its pill as a maintenance option for patients who first lost weight while using its injection. Novo and Lilly lead the market for obesity treating injections. But the pill market remains wide-open.
"Given the scarcity value in transitioning patients from the active weight-loss phase with an injectable to the maintenance phase with the identical molecule, formulated orally, it is our view that the Street will likely view the data favorably and Viking shares could advance to the upper end of recent trading ranges," Hsieh said in a report.
Importantly, the oral version of Viking Therapeutics' VK2735 appears tolerable. Drugs that target GLP-1 tend to cause gastrointestinal problems. But there was only one incident of vomiting and none of the patients discontinued treatment early.
Further, the results topped Novo's amycretin, another weight-loss pill. Amycretin recipients lost 5% more body weight over four weeks than placebo recipients. Novo stock fell 1.8%, in response, trading at 109.96. Lilly shares also slumped 1.2% to 808.78.
'Stellar' Results From Injection
Viking Therapeutics also unveiled promising results for its injection. The study showed "stellar" weight loss from weeks 12 to 16, Leerink Partners analyst Thomas Smith said in a report. More than eight in 10 patients — 83% — maintained their weight loss out to 19 weeks.
Viking expects to hold a meeting with the Food and Drug Administration in the fourth quarter to finalize its Phase 3 plans. The company will likely run two studies — one in patients with type 2 diabetes and one in nondiabetic patients with obesity. While the company is currently looking at its injection as a weekly shot, there's evidence it could also work as a monthly dose.
"Overall, we believe these data reinforce best-in-class potential for VK2735, which has shown compelling weight loss and differentiated safety/tolerability in obese patients using both oral and (under-the-skin shot) formulations — an aspect we view as a key differentiator vs. competing obesity agents," Smith said.
He kept his outperform rating on Viking stock.
Viking Stock Pulls Back From Big Gains
Viking stock is forming a cup-with-handle base with a buy point at 81.73, according to MarketSurge.
The handle formed after Viking said it plans to test another obesity treatment that uses four different targets to stoke weight loss. Eli Lilly is studying a weight-loss drug with three targets. Its Zepbound uses the same dual mechanism — mimicking GLP-1 and GIP — as Viking's VK2735.
Lilly shares remain under pressure. Eli Lilly stock plunged 8.3% last week after the company put up a rare sales miss for Zepbound and its diabetes drug Mounjaro. Novo stock also fell 1.3% last week, continuing a sell-off from its late June peak.
Shares of Roche, which is also working on a weight-loss pill, rose a fraction to 39.44.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
