On Thursday, Morgan Stanley reaffirmed its Overweight rating and $105.00 price target on shares of Viking Therapeutics (NASDAQ:VKTX). The firm's positive outlook is buoyed by early tolerability results of Viking's oral VK2735, which is being developed as a weight loss treatment.
Viking's VK2735 showed promising initial Phase 1 data, indicating up to 5.3% weight loss at the highest 40mg dose over four weeks, with a notably clean safety profile. This data contrasts favorably with recent findings from Roche's CT-996, which, despite showing weight loss of 2.3%-7.3%, also reported increased gastrointestinal adverse events at higher doses.
Morgan Stanley highlighted the significance of VK2735's safety profile, especially as higher doses were recently completed without safety concerns. The upcoming Obesity Week conference, scheduled for November 3-6, 2024, in San Antonio, is set to provide updated Phase 1 data for VK2735 at increased doses of 60mg, 80mg, and 100mg.
The anticipation is that the updated data will demonstrate even greater weight loss while maintaining tolerability. With these developments, Viking Therapeutics could potentially commence a Phase 2 study in the fourth quarter of 2024.
Morgan Stanley expects the forthcoming data to further solidify VK2735's position in the weight loss treatment landscape, potentially driving additional upside for Viking Therapeutics.
InvestingPro Insights
As Viking Therapeutics (NASDAQ:VKTX) garners positive attention from Morgan Stanley, the InvestingPro platform provides additional insights that could be pertinent to investors. According to the latest data, Viking Therapeutics holds a market capitalization of approximately $6.74 billion. The company's performance over the past year has been notably strong, with a 300.72% return, reflecting significant investor optimism and market momentum.
InvestingPro Tips highlight that Viking Therapeutics currently holds more cash than debt on its balance sheet, which could be indicative of financial stability and potential for sustained investment in drug development. Furthermore, the company has seen five analysts revise their earnings upwards for the upcoming period, suggesting that there is a positive sentiment among experts regarding Viking's financial prospects.
While the company is not expected to be profitable this year, and suffers from weak gross profit margins, the significant returns over the last week, three months, and year underscore the market's positive reaction to Viking's strategic initiatives and development milestones. There are over 12 additional InvestingPro Tips available for Viking Therapeutics, which interested investors can explore for deeper analysis and insights.
For those looking to make informed decisions, the InvestingPro platform offers a comprehensive set of tools and metrics, including a fair value estimate of $34.92, which can help in evaluating the company's current market position and future potential.
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