Viking Tops Novo As Obesity Pill Brawl Continues, But Shares Dive

Viking Therapeutics’ (VKTX) highly anticipated weight-loss pill topped Wall Street’s expectations — and a rival pill from Novo Nordisk (NVO) — after just four weeks of treatment. But, after rallying in premarket trades and opening higher, Viking stock tumbled.

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Patients who took the highest dose of Viking’s pill, 100 milligrams, lost 8.2% of their body weight. That compares to a 1.4% loss for patients who took a placebo. The 6.8% difference is far better than investors’ expectations the obesity pill to outperform the placebo by 5% to 6%, William Blair analyst Andy Hsieh said.

Further, that topped Novo’s amycretin, another weight-loss pill. Amycretin recipients lost 5% more body weight over four weeks than placebo recipients.

Viking Therapeutics is positioning its pill as a maintenance option for patients who first lost weight while using its injection. Novo and Eli Lilly (LLY) lead the market for obesity treating injections. But the pill market remains wide-open.

“Given the scarcity value in transitioning patients from the active weight-loss phase with an injectable to the maintenance phase with the identical molecule, formulated orally, it is our view that the Street will likely view the data favorably and Viking shares could advance to the upper end of recent trading ranges,” Hsieh said in a report.

Viking Therapeutics At ObesityWeek

Viking Therapeutics delivered its news Sunday in a presentation at ObesityWeek.

Importantly, the oral version of VK2735 appears tolerable. Drugs that target GLP-1 tend to cause gastrointestinal problems. But there was only one incident of vomiting and none of the patients discontinued treatment early.

The company also unveiled promising results for its injection. The study showed “stellar” weight loss from weeks 12 to 16, Leerink Partners analyst Thomas Smith said in a report. More than eight in 10 patients — 83% — maintained their weight loss out to 19 weeks.

Viking Therapeutics expects to hold a meeting with the Food and Drug Administration in the fourth quarter to finalize its Phase 3 plans. The company will likely run two studies — one in patients with type 2 diabetes and one in nondiabetic patients with obesity. While the company is currently looking at its injection as a weekly shot, there’s evidence it could also work as a monthly dose.

“Overall, we believe these data reinforce best-in-class potential for VK2735, which has shown compelling weight loss and differentiated safety/tolerability in obese patients using both oral and (under-the-skin shot) formulations — an aspect we view as a key differentiator vs. competing obesity agents,” Smith said.

He kept his outperform rating on Viking stock.

Viking Stock Pulls Back From Big Gains

Viking stock toppled 8.3% to 66.88, reversing from a early high of 79.10. Even then, shares were well off their premarket high above 90. VKTX stock did find support at the 50-day line.

Shares are forming a cup-with-handle base with a buy point at 81.73, according to MarketSurge.

The handle formed after Viking said it plans to test another obesity treatment that uses four different targets to stoke weight loss. Eli Lilly is studying a weight-loss drug with three targets. Its Zepbound uses the same dual mechanism — mimicking GLP-1 and GIP — as Viking’s VK2735.

Eli Lilly stock fell 1.4% to 807.55. Shares plunged 8.3% last week after Eli Lilly put up a rare sales miss for Zepbound and its diabetes drug Mounjaro.

Novo Nordisk stock sank 1.7% to 110.01. Shares fell 1.3% last week, continuing a sell-off from its late June peak.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

Viking Tops Novo As Obesity Pill Brawl Continues, But Shares Dive

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