If you'd like to learn more about how to best position yourself in undervalued stocks mispriced by the market to end May, consider joining Out Fox The Street .Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in VKTX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not re ...

Viking Therapeutics (NASDAQ: VKTX ) is a reasonably de-risked high potential play in obesity treatments. The play is de-risked because early vetting of endocrine and metabolic therapeutics is positive. Although biotechnology bets are subject to binary outcomes, sometimes even as late asI am a stock analyst with over 20 years of experience in quantitative research, financial modeling, and risk management. My focus is on equity valuation, market trends, and portfolio optimization to uncover high-growth invest ...

A major C-suite change at a potential competitor was a key factor behind the rise of Viking Therapeutics (VKTX 3.61%) stock on Friday, which closed the trading session 3% higher. That figure was well higher than the 0.7% increase of the benchmark S&P 500 index.What's new at NovoThat rival is Novo Nordisk, which announced that its current CEO Lars Jørgensen is to vacate his position. This is the Denmark-based pharmaceutical company that vaulted to prominence earlier this decade when its Wegovy became the fi ...

Core Insights - Viking Therapeutics has seen a significant stock price increase of nearly 18% over the past week, driven by the potential support from the World Health Organization (WHO) for obesity medications [1][2] - The WHO is preparing to officially endorse the use of obesity drugs for adults, aiming to enhance access for lower- and middle-income patients [2] - The U.S. market for weight-loss drugs is currently dominated by Novo Nordisk's Wegovy and Eli Lilly's Zepbound, which have gained popularity due to their effectiveness compared to traditional weight loss methods [4] - Viking's VK2735 has shown promising results in phase 2 clinical trials, positioning the company as a strong competitor in the weight-loss drug market [5] - The global obesity issue presents a vast market opportunity for Viking and its competitors, especially with the WHO's backing [6]

Core Insights - Viking Therapeutics is positioned to potentially capitalize on a rapidly growing weight loss drug market projected to reach $150 billion by the early 2030s [1][7] - The company is focused on developing its lead drug candidate, VK2735, which is a dual GLP-1 and GIP receptor agonist aimed at treating obesity [8] - Viking's stock has experienced significant volatility since its IPO, reflecting the inherent risks associated with pre-revenue biopharmaceutical companies [3][6] Company Overview - Viking Therapeutics is a clinical-stage biopharmaceutical company with a narrow pipeline, currently developing two compounds in late-stage clinical trials [6] - The company has no sales or profits, which is typical for pre-revenue firms in the pharmaceutical sector [4] - Viking has a market capitalization of $2.9 billion, indicating potential investment upside if it successfully penetrates the weight loss market [10] Drug Development and Trials - VK2735 has shown promising results in its phase 2 trials, with patients losing up to 14.7% of their body weight in 13 weeks [9] - The company is conducting both injectable and oral versions of VK2735, with the injectable version performing well in trials [9] - Viking is preparing to initiate phase 3 trials for VK2735, with expectations for FDA approval potentially by mid- to late-2028 [10] Financial Position - Viking Therapeutics has over $851 million in cash and no debt, providing a solid financial foundation for ongoing development [11] - The company's cash burn rate was approximately $88 million over the past year, suggesting it has sufficient funding for several years [11]

Core Viewpoint - Viking Therapeutics has experienced a significant decline in stock price in 2025, down 35% year to date, despite a strong performance in 2024 due to promising clinical progress [1][2][3] Group 1: Company Performance - The company's leading candidate, VK2735, an investigational GLP-1 weight loss therapy, showed excellent phase 2 results and is expected to advance to phase 3 studies soon [5] - Viking's market cap is approximately $3 billion, and it is considered one of the more promising bets in the weight loss therapy sector, despite competition from larger companies like Eli Lilly and Novo Nordisk [8][6] - The company is also developing VK2809 for metabolic dysfunction-associated steatohepatitis (MASH), which has also passed phase 2 studies, and VK0214 for X-linked adrenoleukodystrophy, which has completed phase 1 studies [9][10] Group 2: Financial Position - Viking Therapeutics ended the first quarter with $852 million in cash and equivalents, down from $903 million at the end of 2024, indicating a solid financial position to support ongoing studies [11] - The company is expected to access additional funding easily due to its clinical progress, which should mitigate any immediate funding concerns [11] Group 3: Market Context - The weight loss market is experiencing rapid growth, with sales of existing therapies increasing significantly, and analysts predict continued growth in this sector at least until the early 2030s [7] - Despite the influx of investigational weight loss therapies, most have shown modest results, making Viking's promising data stand out in the competitive landscape [8]

Core Viewpoint - Cantor Fitzgerald believes that Viking Therapeutics' GLP-1 diet drug VK2735 has the potential to become a "multi-blockbuster," significantly boosting the company's stock value [1][4]. Group 1: Stock Performance - Viking Therapeutics' shares increased by 12.5% on Tuesday following positive endorsements from Wall Street analysts [1]. - The stock saw a rise after Truist Securities analyst Joon Lee lowered his price target but predicted benefits from phase 3 clinical trial news for VK2735 [2]. Group 2: Analyst Predictions - Cantor Fitzgerald's analyst Steven Seedhouse predicts that Viking's stock price could quadruple from $29 to $104 within a year, emphasizing a strong buy recommendation [2]. - Seedhouse's thesis is centered on VK2735, which is entering phase 3 development for general obesity, and he believes that even the injectable form alone could more than triple the stock's value [3]. Group 3: Drug Comparison and Potential - Seedhouse argues that VK2735's formulation is superior to Eli Lilly's tirzepatide, suggesting it will outperform Lilly's Zepbound and Mounjaro [4]. - The potential development of a VK2735 pill, which would eliminate the need for injections, is seen as an additional positive factor, with phase 2 data expected in the second quarter of 2025 [3].

Core Viewpoint - Viking Therapeutics is positioned for potential growth in the obesity treatment market, with a significant focus on its upcoming phase 3 clinical trials for the GLP-1 drug VK2735, despite facing competition from established players like Novo Nordisk and Eli Lilly [1][2]. Company Summary - Truist Securities analyst Joon Lee has lowered the price target for Viking Therapeutics from $95 to $75, citing increasing competition in the obesity space, yet still views 2025 as a critical year for the company [1]. - Viking Therapeutics aims to become a major player in the weight loss market, potentially joining Novo Nordisk and Eli Lilly, with even a small market share in the multibillion-dollar GLP-1 drug market being significant for the company's financials [2]. - The company currently has no revenues and is considered speculative, but achieving any drug market entry would be a notable success [3]. Financial Projections - Analysts predict Viking Therapeutics will generate less than $2 million in revenue for the current year, with expectations of rapid growth to $38 million by 2027 and reaching $729 million by 2029, the year analysts anticipate the company will turn a profit [4].

Research and Development - The company incurred $101.6 million in research and development expenses for the year ended December 31, 2024, primarily related to various clinical trials [118]. - For the three months ended March 31, 2025, the company reported $40.4 million in research and development expenses, focusing on ongoing clinical trials [118]. - Research and development expenses increased by 71.7% to $41.4 million for the three months ended March 31, 2025, compared to $24.1 million in the same period of 2024 [129]. - The company expects to incur increased research and development expenses as it advances VK2735, VK2809, and VK0214 programs [128]. - The company expects to initiate Phase 3 clinical studies of VK2735 in the second quarter of 2025 based on FDA feedback [102]. - VK2735's Phase 1 trial was completed in March 2023, leading to the initiation of the Phase 2 VENTURE study in September 2023 [101]. - The Phase 2 VENTURE study of VK2735 demonstrated statistically significant mean body weight reductions of up to 14.7% from baseline after 13 weeks [102]. - VK2809 achieved its primary endpoint in the VOYAGE study, with significant reductions in liver fat content observed from baseline to Week 12 [109]. - In the VOYAGE study, up to 75% of VK2809-treated patients achieved NASH/MASH resolution with no worsening of fibrosis compared to 29% for placebo [110]. - VK0214 demonstrated significant reductions in plasma levels of VLCFAs in a Phase 1b clinical trial, indicating its potential for treating X-ALD [113]. - The company plans to file an investigational new drug application for its new DACRA program in the second half of 2024 [114]. Financial Performance - General and administrative expenses rose by 41.2% to $14.1 million for the three months ended March 31, 2025, up from $10.0 million in the same period of 2024 [131]. - Total other income increased by 46.5% to $9.8 million for the three months ended March 31, 2025, compared to $6.7 million in the same period of 2024 [133]. - Cash used in operating activities was $52.3 million for the three months ended March 31, 2025, compared to $6.1 million in the same period of 2024 [141]. - Cash provided by investing activities was $63.2 million for the three months ended March 31, 2025, primarily from proceeds of maturities of investments [144]. - As of March 31, 2025, the company had cash, cash equivalents, and short-term investments totaling $851.9 million, sufficient to fund operations through at least June 30, 2026 [134]. - The company anticipates continued losses as it advances drug candidates and seeks regulatory approvals, necessitating additional capital to fund operations and clinical trials [148]. Stock Repurchase and Investments - The company repurchased 729,034 shares under a prior stock repurchase program, which was completed by March 18, 2024 [136]. - A new stock repurchase program was authorized in February 2025, allowing for the purchase of up to $250.0 million in shares over two years [140]. - As of March 31, 2025, cash and cash equivalents amounted to $37,940,000, an increase from $26,676,000 in 2024 [154]. - Short-term investments classified as available-for-sale totaled $813,918,000, down from $875,936,000 in 2024 [154]. - The total cash and short-term investments reached $851,858,000, compared to $902,612,000 in 2024 [154]. - A 10% increase or decrease in short-term interest rates would result in an annual interest income change of approximately $686,000 [154]. - The investment portfolio is primarily composed of U.S. government securities, investment-grade corporate bonds, and money market funds [151]. - The company does not hold any investments for trading purposes, focusing instead on preserving capital and ensuring liquidity [152]. - Interest income from cash and short-term investments will vary with fluctuations in U.S. interest rates [153]. - The company has implemented guidelines to limit the term-to-maturity of its investment instruments to manage interest rate risk [152]. - The fair value of the company's investments is not materially exposed to interest rate risk due to the conservative nature of the instruments held [152]. - The investment policy includes credit quality standards and limits exposure to any single issue or type of instrument [151].

Financial Performance - Viking Therapeutics reported a first-quarter 2025 loss of 41 cents per share, which is wider than the Zacks Consensus Estimate of a loss of 34 cents, and a loss of 26 cents in the same quarter last year [1] - Research and development expenses increased by 72% year over year to $41.4 million, primarily due to higher manufacturing expenses for drug candidates and increased employee-related costs [1] - General and administrative expenses rose to $14.1 million, up 41% year over year, attributed to higher legal fees and employee-related expenses [2] - As of March 31, 2025, the company had cash, cash equivalents, and short-term investments totaling $852 million, down from $903 million as of December 31, 2024 [4] Stock Performance - Shares of Viking Therapeutics declined by 2% in after-market trading, likely due to the wider-than-expected loss and increased operating expenses [2] - Year-to-date, the stock has decreased by 36%, compared to a 7% decline in the industry [2] Pipeline Developments - Viking Therapeutics is developing VK2735, a novel dual GLP-1 and GIP receptor agonist, for obesity treatment, with both oral and subcutaneous versions in clinical studies [5] - The company completed enrollment in the phase II VENTURE-Oral Dosing study for VK2735, with data expected by the end of this year [6] - Viking is on track to initiate a late-stage study for VK2735 SC in the second quarter of 2025 and plans to file an IND application with the FDA for an amylin agonist program by the end of this year [7] Company Ranking - Viking Therapeutics currently holds a Zacks Rank of 4 (Sell) [8]