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 ...

Group 1 - Viking Therapeutics (NASDAQ: VKTX) is identified as a high potential investment opportunity in the obesity treatment sector, characterized as reasonably de-risked due to positive early vetting of endocrine and metabolic therapeutics [1] - The biotechnology sector is noted for its binary outcomes, which can occur even at late stages of development, indicating inherent risks associated with investments in this field [1] Group 2 - The article emphasizes the importance of rigorous risk management and a long-term perspective on value creation in investment strategies, particularly in the context of biotechnology [1]

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 - The obesity drug market is highly lucrative, with Eli Lilly and Novo Nordisk generating billions in sales, prompting other companies like Pfizer to explore acquisition opportunities in this space [1][2]. Group 1: Pfizer's Position and Strategy - Pfizer recently discontinued its experimental obesity drug danuglipron due to safety concerns, putting it at a disadvantage in the obesity market [2]. - The company has nearly $20.5 billion in cash and short-term investments, with a revenue of $63.6 billion and a profit exceeding $8 billion in 2024, despite a significant debt load of around $64 billion [7][8]. Group 2: Potential Acquisition Targets - Altimmune is a promising target for Pfizer, with its experimental GLP-1/glucagon dual receptor agonist pemvidutide having completed successful phase 2 testing for obesity and plans for further studies in liver disorders and alcohol-related diseases [3][4]. - Viking Therapeutics is another potential acquisition candidate, expecting to begin phase 3 testing of its GLP-1/GIP receptor dual agonist VK2735 for obesity this year, alongside ongoing phase 2 studies for an oral formulation [5][6]. Group 3: Financial Feasibility of Acquisitions - Altimmune's market cap is below $400 million, making it a feasible acquisition for Pfizer without incurring additional debt [8]. - Viking Therapeutics has a market cap of nearly $3 billion, but Pfizer could still finance this acquisition comfortably with its cash reserves [9]. Group 4: Future Considerations - Pfizer may delay acquisition decisions until it assesses the clinical development of its other experimental obesity drug, PF-07976016, but must act quickly to avoid losing potential targets to competitors [10][11].

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].