The company’s latest presentation supports the idea that its flagship program will generate billions of dollars.
Up more than 531% in the past 12 months, Viking Therapeutics (VKTX 0.59%) It’s an interesting product, to say the least. And as of early November, there’s another big green light that suggests investors who take the plunge will be wealthier than before. Assuming plans to compete in the anti-obesity drug market come to fruition in the next few years, even an investment in the $5,000 range could see meaningful upside.
With that in mind, let’s take a look at why this stock is worth buying.
The candidate seems to be going from strength to strength.
As you may know, Viking does not yet have a drug approved for sale, but it does have a very promising investigational drug aimed at helping people lose weight quickly and safely. In other words, we aim to compete directly with companies such as: Eli Lilly and novo nordiska major pharmaceutical company that currently bisects most of the weight loss drug market.
The investment thesis supporting Viking’s acquisition is stronger than ever, with VK2735, a leading candidate for obesity treatment, showing promise, according to new data presented by the company at its Obesity Week 2024 conference on Nov. 4. This is because there is increasing evidence to support this idea. Even if it faces resistance from incumbents, it could gain significant market share if approved for sale.
VK2735 has been tested in two formulations. One is a weekly injection and the other is a daily pill. The tablet formulation is expected to enter Phase 2 clinical trials by the end of this year, while the injectable formulation is expected to enter Phase 3 clinical trials relatively soon, pending discussions with regulatory authorities.
The company said in its presentation that among healthy volunteers given 28 days of VK2735, the highest-dose tablet version tested, participants lost an average of 6.8% of their body weight, while participants who received a placebo tablet lost 6.8% of their body weight. shared that the decline was only 1.4%. In addition, weight loss was maintained for at least one month after treatment was discontinued, and similar results were obtained in a study using an injectable formulation. The most common side effect was mild nausea.
These data provide further evidence that Viking has an effective weight-loss candidate in-house in multiple formulations, which is another green light for the stock. Management also mentioned the potential for lower doses of VK2735 tablets to help patients maintain their lost weight long-term. This is a critical feature that major competitors such as Novo Nordisk and Eli Lilly currently do not have a solution for.
One day, companies may be able to make money from patients for years, not just the time it takes to lose excess weight. And that’s another bullish factor in the Vikings’ favor.
There aren’t that many barriers to worry about
According to its third-quarter earnings report, Viking has $930 million in cash, cash equivalents, and short-term investments, and no long-term debt. Operating expenses for the trailing 12 months were just $134 million. As such, the company has sufficient resources to advance both formulations of VK2735 through the remaining clinical trials, while still having sufficient funds to invest in other research and development (R&D) programs.
Perhaps they even have enough funding to launch and fully fund additional clinical programs in obesity to completion. A biotech stock’s balance sheet will never be better than this company’s current status. This is particularly true if the company in question does not yet have a drug on the market.
This means that if you bought this stock today for $5,000, your stock is unlikely to be diluted by a new stock offering, even if you hold the stock for a long time. It also means the Vikings can afford to experience some stumbles in their clinical programs before becoming a problem.
However, this stock is not without risks. Market expectations for the sales potential of the two VK2735 programs seem to be so high that new data from corresponding clinical trials undercut the pound, despite the fact that financially speaking the consequences are serious. There is a vulnerability in that stock prices may fall rapidly due to Even if you meet with such an accident, you will easily survive.
That won’t happen as long as the company continues to make an impression. And since you just won another victory, there’s a good chance your investment today will lead to big profits.
