On Friday, B.Riley initiated coverage on Viking Therapeutics (NASDAQ:VKTX) stock with a Buy rating and a price target of $109.00. The firm's confidence in Viking's lead program, VK2735, and its potential to significantly impact the treatment landscape for obesity, type 2 diabetes, and metabolic dysfunction-associated steatohepatitis (MASH) underpins this positive outlook.
Viking's VK2735, a GLP1/GIP agonist, is noted for its innovative induction and maintenance paradigm, which includes a weekly injection and a potential monthly oral or injectable dose. B.Riley highlights the program's impressive Phase II and Phase I results for weight loss and gastrointestinal tolerability in the obesity and type 2 diabetes market segment.
Despite these promising results, Viking's stock price is currently approximately 50% below its 52-week high. B.Riley anticipates that the upcoming end-of-phase 2 (EOP2) meeting with the FDA will provide clarity on the Phase III registration-enabling program, which is expected to involve around 4,500 participants.
The firm also expects that forthcoming updates on manufacturing capacity and competitive positioning will drive significant value for Viking by the end of 2025. The analyst sees potential in Viking's broader portfolio, especially in combination and sequencing-based regimens that include drugs targeting amylin (DACRA), SARM, and THR-beta.
The market is also awaiting updates on competing therapies from Novo Nordisk (NYSE:NVO), Amgen (NASDAQ:AMGN), and Roche, which could further highlight VK2735's unique position in the market. Viking Therapeutics' pursuit of these innovative treatment regimens is set to capture the attention of investors and industry observers alike as the company advances its clinical programs.
In other recent news, Viking Therapeutics has reported positive results from its Phase 2b clinical trial of VK2809 for treating non-alcoholic steatohepatitis (NASH), achieving significant reductions in liver fat content and improvements in fibrosis.
The company has also made headway in its clinical trials for VK2735, a candidate for weight management, with Laidlaw, Jefferies, and BTIG maintaining their Buy ratings on the company. Recent developments have shown VK2735 leading to significant weight loss results, bolstering confidence for its progression to a Phase 2a clinical trial.
Viking Therapeutics' Q3 2024 financial results revealed a net loss of $24.9 million, with research and development expenses of $22.8 million and general and administrative expenses rising to $13.8 million. Despite these figures, the company's cash and equivalents remain strong at $930 million, supporting its future clinical trials.
Analysts from Laidlaw, Jefferies, and BTIG expressed optimism about VK2735's prospects, anticipating that it could position Viking competitively in the obesity treatment market. Furthermore, Viking plans to advance VK2735 into Phase 3 and initiate a Phase 2 obesity study for the same. These recent developments underscore Viking Therapeutics' progress in the field of obesity medication development.
InvestingPro Insights
Viking Therapeutics' (NASDAQ:VKTX) promising clinical developments are reflected in its recent market performance. According to InvestingPro data, the company has seen an impressive 346.63% price total return over the past year, aligning with B.Riley's optimistic outlook. This strong performance is particularly noteworthy given that the stock is currently trading at only 51.94% of its 52-week high, suggesting potential upside in line with the analyst's $109 price target.
InvestingPro Tips highlight that Viking holds more cash than debt on its balance sheet and has liquid assets exceeding short-term obligations. These factors provide financial flexibility as the company advances its clinical programs, particularly the promising VK2735 for obesity and related conditions.
However, investors should note that Viking is not currently profitable, with an adjusted operating income of -$133.97 million over the last twelve months. This is consistent with the InvestingPro Tip indicating that analysts do not anticipate profitability this year, which is typical for biotech companies in the development stage.
For those interested in a deeper dive into Viking Therapeutics' financial health and market position, InvestingPro offers 11 additional tips, providing a comprehensive analysis to inform investment decisions in this dynamic biotech stock.
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