Investors didn't exactly launch a raid on Viking Therapeutics (VKTX 1.37%) stock during Monday's trading session. The shares tumbled by nearly 7% on the back of discouraging news about one of the company's drug candidates.
Viking, a clinical-stage biotech that concentrates on metabolic and endocrine disorders, announced that its VK0214 program has been put on ice for now by the Food and Drug Administration (FDA).
The company explained that the American regulator is requesting an additional preclinical study on the drug, which is being tested as a treatment for X-linked adrenoleukodystrophy (X-ALD), a genetic disorder that targets the membrane covering nerve cells in the brain and spine.
Viking took pains to emphasize that the FDA's request "is not due to any findings from ongoing or previously completed studies" and that it plans to submit the solicited information in the second quarter of this year.
While the biotech identifies its current VK0214 study as a phase 1b trial, in the FDA's opinion, it is falls under the phase 2 category. Viking said that phase 2 testing requires a rodent genotoxicity study to proceed; hence, the regulator's request.
It's important to note that, while inconvenient, this FDA-mandated hold is not due to issues with VK0214 itself, errors in conducting the study, or any other factor that might presage potential failure. Rather, it's procedural based on the distinction between clinical trial phases. As such, the market's sell-off feels like a bit of an overreaction that is perhaps due for a correction in the coming days.
Viking said in its disclosure that it "does not expect the long-term development timeline for VK0214 to be significantly impacted." It aims to resume dosing in the drug's trial later this year and did not provide more specific timing.