With shares of Viking Therapeutics (VKTX 7.92%) flying 555% higher in the last three months, at least one financial analyst is saying that it can go even higher. On Feb. 28, Oppenheimer's Jay Olsen adjusted his price target from $46 to $116, which implies an upside of 36% from the stock's current price near $85.
A freshly priced stock offering closes on March 4 that will bring in an estimated $550 million on top of the $362 million in cash, equivalents, and investments it reported at the end of Q4. With that cash infusion, the biotech will soon have a rock-solid balance sheet. And, with some stellar data in hand from its phase 2 clinical trial for its VK2735 program to treat obesity, its path to commercializing its first medicine is clear.
However, it still isn't guaranteed, and it will take a while longer at best. Is the stock a buy at its current price level?
The balance of risk and reward is attractive right now
The boost to Viking's stock from the publication of its phase 2 obesity therapy data on Feb. 27 won't be enough to power it to reach Olsen's target. But, sometime in Q1 it'll also report some phase 1 data from the trial investigating VK2735's utility in treating obesity using an oral formulation of the candidate rather than an injection.
Additionally, this year it plans to publish some supplemental data from the ongoing phase 2b clinical trial of VK2809. VK2809 aims to treat nonalcoholic steatohepatitis (NASH, also known as metabolic-associated steatohepatitis or MASH), a liver disease that affects as many as 15 million people in the U.S. The company already published the topline results from the clinical trial, which was to reduce the liver fat content of patients. The data pertain to the secondary and exploratory endpoints of the study, which aim to investigate whether the candidate can actually reduce the level of liver tissue scarring that patients with MASH experience.
Notching more positive data for a program with a large target market would be very bullish.
