Viking Therapeutics (VKTX 0.87%), a biotech stock that has rocketed to prominence thanks to one of its investigational drugs, gave investors more reason to like it on Wednesday. The company's share price rose by almost 2% following an analyst's bullish new research note; that increase stood in positive contrast to the 0.2% decline of the S&P 500 index.
Weight loss drug in the spotlight
The author of that note was Oppenheimer's Jay Olson, who reiterated his outperform (i.e., buy) recommendation on Viking stock, and his $138-per-share price target.
The biotech has appeared on the radars of numerous analysts and many investors because of its VK2735, an investigational drug that targets obesity. This is the hottest segment of the pharmaceutical market, with GLP-1 medications flying off pharmacy shelves in this country. VK2735 has demonstrated good efficacy in clinical testing so far, raising hopes that it could be a blockbuster in a market that still has room for competition.
Additionally, Viking is developing an oral formulation of VK2735; the GLP-1 drugs currently approved by the Food and Drug Administration are delivered via injection.
NASDAQ: VKTX
Key Data Points
Over-the-counter potential
In his latest take on Viking, Olson zeroed in on that formulation, which he believes could hit the market as an over-the-counter (OTC) product. The currently available GLP-1 drugs require a prescription. Based on clinical trial data, the analyst believes oral VK2735 is a candidate for OTC status. If it were approved for this, being sold OTC "could be a highly differentiated, valuable life-cycle management strategy to preserve substantial brand equity well beyond patent expiry," Olson wrote.
