On Wednesday, JPMorgan initiated coverage on Viking Therapeutics (NASDAQ:VKTX) stock with an Overweight rating and set a price target of $80.00. The firm is closely monitoring Viking Therapeutics as it approaches a significant milestone with its drug candidate, oral-2735.
The upcoming phase 1 data readout, scheduled to be presented at Obesity Week on November 3-6, is expected to showcase the drug's competitive profile, including impressive tolerability.
The financial institution anticipates that the market for GLP-1s, a class of drugs to which oral-2735 belongs, will be substantial, projecting approximately $120 billion in U.S. market sales by 2030.
Oral medications are predicted to become increasingly important within this market segment. JPMorgan suggests that the forthcoming data could lead to a considerable rise in Viking Therapeutics' share value.
The optimism is partly based on headline data from lower doses of oral-2735, which indicated competitive efficacy with minimal gastrointestinal side effects. Analysts believe that higher dose cohorts may reveal even stronger efficacy while maintaining a favorable tolerability profile.
JPMorgan's analysis suggests that oral-2735 could capture around 10% of the large U.S. oral obesity market. This projection is underpinned by the drug's promising profile, which, according to the firm, is not yet fully accounted for in Viking Therapeutics' current stock valuation.
In other recent news, Viking Therapeutics has been making significant strides in the biopharmaceutical sector. The company reported positive results from its Phase 2 VENTURE trial for obesity treatment with VK2735 and the Phase 2b VOYAGE trial for NASH and fibrosis with VK2809. These developments were accompanied by a robust financial standing, with Viking Therapeutics boasting over $900 million in cash reserves.
Truist Securities maintained a Buy rating on Viking Therapeutics, with a consistent price target of $120.00. This stance was taken in the wake of a market reaction to competitor Eli Lilly (NYSE:LLY)'s strategic commercial update, which resulted in a dip in Viking's stock value.
The firm suggests that this presents an opportunity for investors to buy Viking shares, especially considering the high demand in the obesity market and the potential for other branded GLP1 manufacturers to adopt a similar commercial strategy.
These recent developments underscore the company's commitment to advancing its drug candidates and expanding its clinical programs. Plans are underway to advance VK2735 into Phase 3 development for obesity and to explore monthly dosing options, further solidifying Viking Therapeutics' position in the industry.
InvestingPro Insights
As Viking Therapeutics (NASDAQ:VKTX) gears up for the release of its phase 1 data on oral-2735, InvestingPro offers some key insights into the company's financial health and market performance. Notably, Viking Therapeutics holds more cash than debt on its balance sheet, indicating a strong financial position that could support its continued research and development efforts. Additionally, with 5 analysts having revised their earnings upwards for the upcoming period, there is a sense of optimism surrounding the company's future financial performance.
InvestingPro data reveals a market capitalization of $6.02 billion for Viking Therapeutics, which, despite its lack of profitability over the last twelve months and a high Price / Book multiple of 6.57, has experienced a notable 246.32% return over the past year. This suggests a robust investor confidence that could be further buoyed by the upcoming data readout from the company's drug candidate trials.
InvestingPro offers a total of 11 tips on Viking Therapeutics, providing additional insights for investors looking to make informed decisions. While the company does not pay a dividend, indicating a reinvestment of earnings into growth and development, the impressive year-to-date price total return signifies a strong market performance that investors may find encouraging.
For those interested in a deeper analysis, more InvestingPro Tips on Viking Therapeutics can be found at https://www.investing.com/pro/VKTX, offering a comprehensive view of the company's financial landscape and investment potential.
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