On Thursday, Truist Securities adjusted its outlook on Viking Therapeutics (NASDAQ:VKTX), significantly increasing the stock price target for the biopharmaceutical company's shares to $120 from the previous target of $38. The firm maintained its Buy rating on the stock.
The price target revision follows the analysis of new data regarding Viking Therapeutics' product VK2735, which is being developed for obesity and diabetes management. The drug has shown promising results, with evidence pointing to a best-in-class GLP1 (glucagon-like peptide-1) profile.
According to the analyst, VK2735 is approximately twice as effective in promoting weight loss when compared to tirzepatide, and it also exhibits numerical superiority over retatrutide, a triple agonist. This is coupled with a superior tolerability profile.
The firm's confidence in VK2735 is further bolstered by the introduction of a diabetes market model, which expands the drug's total addressable market (TAM). Truist Securities projects non-risk adjusted peak sales for VK2735 in the United States to reach $35 billion by the year 2043, covering both obesity and diabetes indications.
The potential for Viking Therapeutics' stock is further underscored by the anticipation of phase 1 data for an oral version of VK2735, which is expected in the upcoming weeks. The company's valuation could see additional upside should the oral formulation data prove positive.
The reiterated Buy rating and new price target reflect the analyst's optimism about the drug's market potential and Viking Therapeutics' growth prospects.
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