While most investors pile into Eli Lilly (LLY 0.10%) or flee from struggling Novo Nordisk (NVO 1.02%), they're missing a compelling opportunity in the clinical-stage space. Novo recently lost nearly $70 billion in market cap after cutting 2025 guidance and warning of slowing Wegovy momentum, while the broader biotech industry's recent reawakening has created pockets of value among companies with differentiated approaches to weight management.
Viking Therapeutics (VKTX 2.29%) represents exactly this type of overlooked opportunity, trading at a valuation of just $3.7 billion as of Aug. 1, despite owning one of the most strategically valuable obesity platforms in development. Here's what investors need to know right now.
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A critical catalyst approaches
The investment thesis for Viking centers on an imminent inflection point. The company is expected to report Phase 2 data for its oral VK2735 candidate in the second half of 2025, with September appearing most likely based on trial timelines and enrollment trends.
Viking has already demonstrated that its dual GLP-1/GIP mechanism can drive substantial weight loss, with the highest dose of injectable VK2735 producing up to 14.7% body weight reduction over 13 weeks and 88% of patients achieving at least 10% weight loss. The safety profile was favorable, with most adverse events classified as mild to moderate and primarily gastrointestinal.
The upcoming oral data will test whether this level of efficacy and tolerability can be achieved in a more convenient, patient-friendly form. Success would mark a major step forward in oral obesity drug development and significantly strengthen Viking's strategic position.
Competitive landscape creates opportunity
The obesity drug market's competitive dynamics are shifting in Viking's favor. Pfizer (PFE 0.53%) recently abandoned its lead GLP-1 program after encountering severe gastrointestinal side effects.Roche spent $2.7 billion acquiring Carmot Therapeutics, only to see key candidates fail in clinical trials. Even market leader Novo Nordisk faces mounting pressure from generic semaglutide compounds and continues to struggle with a credible oral successor to Wegovy.
These setbacks have created a wide-open competitive lane for Viking's differentiated approach, potentially offering superior efficacy and fewer side effects compared to single-pathway competitors. The dual-receptor mechanism also underpins the strong clinical results already seen with the injectable version in earlier trials.
Viking's strategic positioning becomes even more compelling when considering the broader market dynamics. The obesity drug market is projected to reach $100 billion in annual sales by 2030, yet few companies have successfully advanced oral alternatives through clinical development. This scarcity premium could drive significant strategic interest if Viking's oral data support a best-in-class profile.
Multiple value creation pathways
Viking's investment appeal extends beyond binary clinical success. The company offers multiple pathways to value creation, starting with potential strategic partnerships or acquisition interest. Major pharmaceutical companies, including Pfizer, Merck, and Bristol Myers Squibb, face significant patent cliff challenges over the coming years, creating urgent demand for new revenue drivers.
Viking's unpartnered status, clean intellectual property position, and manageable valuation make it an attractive target for companies seeking to plug obesity drug portfolio gaps. The timing appears particularly favorable given the limited number of advanced oral GLP-1 assets available for acquisition.
Alternatively, Viking could pursue independent commercialization through innovative partnership models. The rise of direct-to-consumer healthcare platforms such as Hims & Hers demonstrates growing market acceptance of subscription-based treatment models. An oral maintenance therapy could integrate seamlessly into such platforms, potentially creating recurring revenue streams with attractive margins.
Even Novo Nordisk, despite its top-two position in the market, could emerge as a strategic suitor. The company recently cut 2025 guidance and warned of slowing Wegovy momentum, while facing new leadership under CEO Maziar Doustdar. Acquiring Viking's differentiated platform could provide instant credibility and critical pipeline reinforcement.
Risks remain significant but manageable
As with all clinical-stage biotechnology investments, Viking carries substantial execution risk. The oral formulation may not mirror the injectable version's efficacy all that closely, potentially limiting commercial appeal. Moreover, regulatory pathways for obesity drugs continue evolving, and manufacturing scale-up presents additional challenges.
Competition from established players also poses ongoing threats. Eli Lilly's Zepbound continues gaining market share, while other companies advance competing oral formulations. Viking's ultimate success depends on demonstrating clear differentiation rather than simply achieving clinical efficacy.
However, these risks appear manageable given Viking's competitive injectable data, combined with the strategic value of dual-modality approaches. The company's experienced management team and sufficient cash runway provide additional downside protection.
The readout determines everything
Viking Therapeutics offers a compelling risk-reward proposition heading into what could be a transformative clinical readout. The company's dual-pathway approach addresses validated market needs, while competitive setbacks have created strategic scarcity in oral obesity drug development.
Success with the oral VK2735 data could trigger multiple value creation scenarios, from strategic acquisition at substantial premiums to licensing partnerships that unlock recurring revenue models. Even independent development remains a viable path, given the massive market opportunity and limited competition.
For investors willing to accept clinical-stage biotech risk, Viking's current valuation appears attractive relative to the potential outcomes. The forthcoming readout will ultimately determine whether this thesis proves correct, but the setup suggests favorable risk-adjusted returns for those positioned ahead of the catalyst.
