Oppenheimer maintained an Outperform rating on Viking Therapeutics (NASDAQ:VKTX) with a steady price target of $138.00. The firm's stance comes in the wake of underwhelming performance from competing oral obesity drugs. Oppenheimer highlighted the potential for Viking's oral GLP1 drug, should it be made available over-the-counter (OTC), as a unique and valuable approach to brand longevity post-patent.
Viking Therapeutics' oral candidate, VK2735, is seen as a potential OTC drug based on current clinical data. The company is anticipated to provide updates during Obesity Week, scheduled for early November. The transition from prescription to OTC status could be a strategic move to maintain brand value and attract larger partners interested in a competitive obesity treatment with sustainable profit prospects.
The firm expects that the possibility of VK2735 becoming an OTC medication is likely a key consideration for potential partners. These partners are looking for a strong entry into the obesity market that could offer a prolonged revenue stream following the substantial investments required for clinical development, commercialization, and manufacturing.
Oppenheimer's confidence in Viking Therapeutics is underscored by the potential of VK2735 to stand out in a crowded obesity treatment market. If the drug achieves OTC status, it could significantly extend its market presence and financial returns beyond the period of patent protection.
The focus now turns to the upcoming Obesity Week event, where the industry will be looking for further insights into VK2735's clinical progress and market potential. Viking Therapeutics' strategy could redefine the company's trajectory and mark a significant milestone in the treatment of obesity.
Viking Therapeutics reported positive results in its Phase 2 VENTURE trial for obesity treatment with VK2735 and the Phase 2b VOYAGE trial for NASH and fibrosis with VK2809. The company also announced a strong financial position with over $900 million in cash reserves. Analysts from JPMorgan, Morgan Stanley, and Truist Securities have expressed positive views on Viking Therapeutics, highlighting the potential of VK2735 as a significant player in the obesity treatment market.
JPMorgan initiated coverage on Viking Therapeutics with an Overweight rating and a price target of $80.00, anticipating that the market for GLP-1s, a class of drugs to which VK2735 belongs, will be substantial. Morgan Stanley reaffirmed its Overweight rating and $105.00 price target on Viking Therapeutics, emphasizing the tolerability of VK2735. Truist Securities maintained a Buy rating on Viking Therapeutics with a consistent price target of $120.00, suggesting the recent dip in Viking's stock value presents an opportunity for investors.
These developments come as Viking Therapeutics is preparing for an end-of-Phase 2 meeting with the FDA to discuss the registration path for VK2809 and is planning to advance VK2735 into Phase 3 development for obesity. The company is also exploring monthly dosing options and new therapeutic areas.
InvestingPro Insights
As Viking Therapeutics (NASDAQ:VKTX) navigates the competitive landscape of obesity treatments, financial metrics and analyst perspectives from InvestingPro provide a deeper understanding of the company's market position. With a market capitalization of $7.24 billion and a high Price / Book multiple of 7.85, Viking's valuation reflects investor expectations for future growth. Notably, the company's liquid assets surpass short-term obligations, indicating a solid financial footing for upcoming strategic moves.
InvestingPro Tips suggest that Viking holds more cash than debt, a positive sign for financial stability. Additionally, there's an optimistic sentiment among analysts, as evidenced by five of them revising their earnings estimates upwards for the upcoming period. However, it's important to note that analysts do not expect the company to be profitable this year, and the firm has not been profitable over the last twelve months. This context is crucial for investors considering the potential of VK2735 as it progresses towards possibly becoming an over-the-counter drug.
Viking's share performance has been noteworthy, with a significant return of 430.9% over the past year. This momentum could be a factor in attracting partnership interest for VK2735. For those looking to delve deeper into Viking Therapeutics' prospects, InvestingPro offers additional tips to guide investment decisions. The platform currently lists 11 more InvestingPro Tips for VKTX, available at https://www.investing.com/pro/VKTX.
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