Biotech Viking Therapeutics Inc. (NASDAQ: VKTX) has seen a strong positive momentum, with the stock up more than 340% year-to-date. The main reason is encouraging data from a trial of a weight-loss drug candidate. Demand for such drugs is very high, and if approved, Viking Therapeutics could have a product with high sales volumes.
A year ago, Ffin.kz reported on the potential of the drug candidate VK2735, which is being developed by specialists at Viking Therapeutics. Unlike some already approved drugs with the “side effect” of weight loss, VK2735 is initially being developed and planned for approval specifically as a means of reducing excess weight. This means that Viking Therapeutics’ drug has a potentially much larger addressable market than its competitors.
In early 2023, it was revealed that during testing, VK2735 showed significant weight loss in test subjects: approximately 15% of body weight in three months.
Against this backdrop, VKTX shares received several positive recommendations from Wall Street analysts. Thus, a buy recommendation was given by analysts at BTIG, Oppenheimer and Stifel, with the highest target price being $138.
VK2735 is still in its early stages of research. Even if the trial continues successfully and is approved by regulators, it will take several years for Viking Therapeutics to see sustainable revenue from VK2735. It is unlikely to receive accelerated approval because it does not address an urgent therapeutic need, such as treating patients with life-threatening diseases for which there are currently no effective drugs.
In addition, VK2735 is being tested as an injectable drug, meaning injections are required. This is less convenient than tablets.
However, Viking Therapeutics remains in the spotlight for investors as effective weight loss drugs remain one of the areas with the greatest profit potential in the pharmaceutical industry.
On March 28, VKTX shares were priced at $82.
