Is Beaten-Down Viking Therapeutics Stock a Buy on the Dip?

Core Viewpoint - Viking Therapeutics' stock price plummeted by 39.2% following disappointing clinical trial results for its oral obesity candidate VK2735, primarily due to safety concerns related to higher dosages [1][4]. Group 1: Clinical Trial Results - VK2735 demonstrated significant weight loss, with patients losing up to 14.7% of their weight after 13 weeks of daily dosing [11]. - However, the safety profile was concerning, as 35% of patients in the higher dosage groups reported vomiting, compared to only 13% for Eli Lilly's Zepbound [8][9]. - The adverse reactions raise doubts about VK2735's viability as a competitive alternative to existing injectable obesity treatments [8][9]. Group 2: Market Context - The anti-obesity drug market is currently dominated by GLP-1 receptor agonists, with Novo Nordisk's semaglutide generating $17.6 billion in sales in the first half of 2025, and Eli Lilly's tirzepatide reaching $14.7 billion [5][6]. - Tirzepatide's success is attributed to its dual action on GLP-1 and GIP receptors, setting high expectations for VK2735, which is also a dual receptor agonist [7]. Group 3: Future Prospects - Viking Therapeutics is not solely reliant on VK2735; it has initiated a phase 3 trial for an injectable version of VK2735, expected to enroll around 4,500 adults [10]. - The company also has two thyroid hormone receptor-beta agonists in clinical testing, with VK2809 having already succeeded in a phase 2 study [12]. - Despite the setback with oral VK2735, the company still holds potential for future growth through its other candidates [14]. Group 4: Investment Considerations - With a market cap around $2.9 billion, the current valuation suggests that investors are not expecting significant outcomes from VK2735 or the rest of Viking's pipeline [13]. - For investors with a high risk tolerance, this may present a buying opportunity as the company continues to develop its other drug candidates [14].