What happened
Shares of Viking Therapeutics (VKTX -2.71%) were up 89.7% for the week as of Thursday afternoon, after being up as much as 95.5% for the week, according to data provided by S&P Global Market Intelligence. The move up was largely due to positive early trials information on its obesity therapy. The biotech stock closed last Friday at $8.85, then rose to as high as $17.30 on Thursday.
So what
Viking, which focuses on treating metabolic and endocrine disorders, released phase 1 trial results for the subcutaneous use of its experimental drug VK2735 on Wednesday. In the trial of 88 patients, the therapy led to a 6% reduction in mean weight compared to a placebo.
Drugs that treat obesity have become a hot item, with Mounjaro, a diabetes drug from Eli Lilly, awaiting approval from the Food and Drug Administration (FDA) to treat obesity. Analysts have predicted Mounjaro, if approved to treat obesity, could be worth $25 billion a year or more in revenue.
VK2735 works similarly to Mounjaro and the already-approved Wegovy from Novo Nordisk. All three activate the GLP-1 hormone that triggers the feeling of fullness in the body after eating.
Now what
The huge jump reflects the excitement regarding the drug's potential earnings, particularly for a company with only $155 million in cash and no revenue last year. The company used the share's rise to announce on Thursday that it was selling $250 million of stock to raise funds for the development of an oral dosing phase 1 trial of VK2735, as well as a phase 2 trial of the therapy midway through this year.
The stock sale will also help the clinical-stage company develop the other drugs in its pipeline. The pipeline includes VK2809, which is in a phase 2a trial to treat nonalcoholic steatohepatitis (NASH) and fibrosis, as well as a phase 2a trial to treat nonalcoholic fatty liver disease; and VK0214 to treat X-linked adrenoleukodystrophy, a genetic disease that damages the membrane that covers nerve cells in the brain and spinal cord.
