On Tuesday, Truist Securities maintained a Buy rating on Viking Therapeutics (NASDAQ:VKTX) with a consistent price target of $120.00. The firm's stance comes in the wake of a market reaction to competitor Eli Lilly and Company's (NYSE:NYSE:LLY) strategic commercial update, which led to a roughly 10% intraday drop in Vertex (NASDAQ:VRTX)'s stock value compared to a 1% decline in the broader biotech index.
The analyst from Truist Securities suggests that the selloff presents an opportunity for investors to buy Viking shares. The reasoning provided includes the ongoing unmet need in the obesity market, which the analyst believes is now perceived as even greater.
Additionally, the potential for other branded GLP1 manufacturers to adopt a similar commercial strategy is seen as a positive, given the high demand and patients' willingness to pay out-of-pocket.
Truist Securities highlights that the strategy of offering lower-cost, vial-form doses could effectively target competitors that sell compounded GLP1s. This move, deemed clever, is expected to not only counteract the discount offered by Eli Lilly but also bypass the need to provide rebates to pharmacy benefit managers (PBMs).
The analyst concludes that Viking's commercial prospects for its GLP1 product, VK2735, may be incrementally positive following Eli Lilly's announcement. The firm reinforces the recommendation for investors to capitalize on the current dip in Viking's stock price.
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