On Tuesday, Viking Therapeutics (NASDAQ:VKTX) saw its price target increase to $125 from the previous $100, while retaining a Buy rating by BTIG.
The biopharmaceutical company's stock experienced a significant rise, approximately 25%, following the release of promising initial human data for its oral VK2735 treatment. The data indicated a 3.3% placebo-adjusted weight loss in the highest dose cohort after 28 days, which was within the upper range of the anticipated 15-25% stock strength based on prior expectations.
The study results demonstrated a clear dose-response relationship across various dosing levels, ranging from 2.5mg to 40mg, involving a total of 37 participants. Notably, there was no sign of the efficacy plateauing, even at the highest tested dosage.
Additionally, the placebo response was higher than anticipated at 2.1%, which may be subject to change with further updates. Viking Therapeutics' oral VK2735 has shown strong efficacy and a potentially best-in-class safety and tolerability profile, positioning it as a leading oral incretin agent in the obesity market.
Viking's management has not yet disclosed specific details regarding the chemistry formulation or bioavailability of the drug. However, the company's approach is believed to be distinct and superior to Novo Nordisk's (NYSE:NVO, NR) SNAC technology, which is noted for its poor bioavailability of around 1%. Viking intends to continue escalating doses in the Phase 1 study and is planning to initiate a Phase 2 study for oral VK2735 in obese patients in the second half of 2024.
In addition to weight loss, Viking Therapeutics also measured various laboratory metabolic markers, including lipids, glucose, and insulin levels, the results of which are expected to be revealed later in the year. The positive outcome of the initial data has led to the reiteration of the Buy rating and an increase in the price target for Viking Therapeutics, reflecting the optimism surrounding the potential of oral VK2735.
InvestingPro Insights
Following the optimistic update from BTIG on Viking Therapeutics, it's important to consider the company's financial health and market performance to understand the bigger picture. According to InvestingPro, Viking Therapeutics is trading at a high Price / Book multiple of 21.72, indicating that the market has high expectations for the company's future growth and profitability. Despite not being profitable over the last twelve months, with an operating income of approximately -$100.83 million, the company has shown a remarkable price performance, with a 1 Year Price Total Return of 681.81%.
InvestingPro Tips suggest that Viking Therapeutics operates with a moderate level of debt, which is a positive sign for investors concerned about financial stability. Additionally, the company's liquid assets exceed short-term obligations, providing some financial cushion. However, analysts do not anticipate the company will be profitable this year, which is a critical factor for potential investors to consider. For those looking to delve deeper into Viking Therapeutics' financials and market performance, InvestingPro offers a comprehensive suite of additional tips—there are 13 more tips available on their platform. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which could be a valuable resource for making informed investment decisions.
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