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Investing.com - Viking Therapeutics (NASDAQ:VKTX) shares fell 43% on Tuesday to $24.14, marking a significant reversal from its 52-week high of $81.73, following the announcement of its Phase II VENTURE-Oral trial results for VK2735 in obesity patients, despite meeting key efficacy targets. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt.
The 13-week study of 280 individuals showed the oral formulation achieved 10%-11% weight loss on a placebo-adjusted basis at the highest doses, outperforming competitors like orforglipron (approximately 6%) and high-dose semaglutide (about 4%) over similar timeframes. With a market capitalization of $2.69 billion and analyst consensus remaining bullish, InvestingPro analysis indicates the stock may be undervalued at current levels.
Investor concerns centered on tolerability issues and higher discontinuation rates compared to earlier Phase I studies, triggering the significant sell-off despite William Blair maintaining an Outperform rating on the stock.
The 30 mg dose, which analysts believe could become a maintenance dose in pivotal studies, demonstrated a placebo-like safety profile, while higher doses of 60 mg, 90 mg, and 120 mg showed increased adverse events and discontinuations.
Viking plans to present additional results at a future medical meeting and expects to initiate a maintenance study investigating both subcutaneous (monthly) and oral (daily or weekly) formulations of VK2735 later this quarter.
In other recent news, Viking Therapeutics reported positive results from its Phase 2 VENTURE-Oral Dosing trial for its oral obesity drug, VK2735. The trial demonstrated significant weight loss in patients, with reductions of up to 12.2% over 13 weeks, compared to a 1.3% reduction for those on placebo. Despite these promising results, BTIG has maintained its Buy rating on Viking Therapeutics, setting a price target of $125.00, even though the stock has seen a 40% decline. The decline is attributed to concerns about tolerability and discontinuation rates at higher doses of VK2735, as well as competitive pressures in the obesity treatment market.
Additionally, Mizuho (NYSE:MFG) released a comparative analysis suggesting that Eli Lilly (NYSE:LLY)’s obesity treatment results outperform those of Viking Therapeutics. Mizuho’s research highlights Viking’s clinical data as "inferior to LLY on almost all metrics," raising concerns about patient discontinuation rates during the trial period. Despite the mixed reviews and competition, the positive trial outcomes for VK2735 have sparked interest in Viking Therapeutics’ potential in the obesity treatment space.
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