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Viking Obesity Pill Faces Steep Climb Against Lilly's Tirzepatide, Analyst Calls Downtrend Reaction 'Extreme'
Benzinga· 2025-08-19 18:44
Core Insights - Investors are disappointed with Viking Therapeutics Inc.'s VKTX data from its Phase 2 trial of an obesity pill, VK2735, which showed a mean body weight reduction of up to 12.2% after 13 weeks from baseline, but concerns over tolerability and higher discontinuation rates have led to a significant stock sell-off [1][3]. Group 1: Trial Results - Participants receiving VK2735 demonstrated a mean body weight reduction of up to 12.2% after 13 weeks from baseline [1]. - VK2735 showed up to a 10.9% reduction in body weight compared to the placebo, with no plateau observed for weight loss at 13 weeks [1]. - All doses of VK2735 greater than 15 mg demonstrated statistically significant differences relative to the placebo on key secondary endpoints, assessing the proportion of subjects who achieved at least 5% and 10% weight loss [2]. Group 2: Tolerability and Discontinuation - Concerns have arisen regarding the tolerability profile of VK2735, with higher rates of discontinuation compared to the Phase I study, which contributed to the stock sell-off [3]. - The 30 mg dose of VK2735 showed a placebo-like safety profile, while the 60 mg group reported higher adverse events and discontinuations [3]. - There is potential for improved tolerability in pivotal studies if the titration period is extended to four weeks instead of the two weeks used in the VENTURE-Oral study [4]. Group 3: Market Position and Future Outlook - Viking's obesity franchise is viewed favorably from an M&A perspective by big pharma, with William Blair previously naming Viking as a top pick for 2025 and reiterating an Outperform rating on its shares [4]. - The company is unlikely to pursue 90 mg or 120 mg doses due to cost-of-goods constraints, making the debate over their tolerability less relevant [4]. - Comparisons with Eli Lilly's tirzepatide indicate that VK2735's dose levels are inferior in terms of weight loss at 13 weeks, raising concerns about its competitive position in the market [5]. Group 4: Stock Performance - VKTX stock has experienced a significant decline, down 41.04% at $24.82 as of the last check on Tuesday [6].
What is the Intent Behind Eli Lilly's Recent M&A Deals Spree?
ZACKS· 2025-06-19 15:26
Core Insights - Eli Lilly (LLY) has signed a definitive agreement to acquire Verve Therapeutics (VERV) for nearly $1.3 billion, enhancing its pipeline with gene therapies targeting heart diseases, including VERVE-102, aimed at reducing cholesterol levels [2][10] - This acquisition marks LLY's third targeted M&A deal in 2025, following a $2.5 billion deal for Scorpion Therapeutics' oncology drug and a $1 billion acquisition of SiteOne Therapeutics to strengthen its neuroscience pipeline [3][10] - LLY aims to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience therapeutic areas, which is expected to benefit the company in the long term [3][10] M&A Activity - M&A activity in the pharma/biotech sector has significantly increased in 2025 after a passive 2024, indicating a focus on portfolio expansion and pipeline innovation [5] - Sanofi (SNY) is set to acquire Blueprint Medicines for up to $9.5 billion to enhance its portfolio in rare immunological diseases [6] - Johnson & Johnson acquired Intra-Cellular Therapies for approximately $14.6 billion, adding the antidepressant drug Caplyta to its neuroscience portfolio [7] Stock Performance and Valuation - LLY's shares have risen 1.7% this year, outperforming the industry, which has declined by 1.2%, as well as the S&P 500 index [8] - The stock currently trades at a price/earnings ratio of 30.06, higher than the industry average of 15.05, but below its five-year mean of 34.54 [12] - Earnings estimates for LLY have declined for 2025 from $23.06 to $21.95 per share and for 2026 from $31.15 to $30.91 over the past 60 days [15]