Viking Therapeutics (VKTX -2.44%) delivered one of the most anticipated obesity readouts of the year -- and Wall Street promptly panicked. Shares plummeted 40% after the company released Phase 2 results from its oral VK2735, dropping from $42 to around $26 as investors fixated on tolerability concerns.
Look closer, though. At just 13 weeks, VK2735's 12.2% weight loss signal is unusually strong -- though direct comparisons are imperfect since Eli Lilly's orforglipron and Novo Nordisk's (NVO -2.34%) oral semaglutide achieved their respective 12.4% and 15% results over 68 to 72 weeks. The discontinuation rate of 28% versus 18% for placebo -- driven mainly by gastrointestinal side effects from aggressive titration -- appears addressable with refined dosing protocols.
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Two parallel development paths
Viking launched its Phase 3 VANQUISH program on June 25, 2025, with two massive trials now enrolling. VANQUISH-1 targets 4,500 adults with obesity, while VANQUISH-2 focuses on 1,100 obese or overweight adults with type 2 diabetes. Both 78-week studies will test three weekly injectable doses (7.5 mg, 12.5 mg, 17.5 mg) against placebo, with the primary endpoint measuring percentage change in body weight.
The injectable's earlier Phase 2 data showed 14.7% weight loss at 13 weeks with no plateau observed. Most side effects were mild to moderate and declined throughout the study. In an exploratory maintenance cohort, patients who down-titrated from 90 mg to 30 mg maintained their weight loss with fewer adverse events -- potentially enabling transitions from injectables to pills for long-term management.
Next steps for the oral program
For the oral formulation, the Food and Drug Administration (FDA) will likely require a Phase 2b trial to refine titration before advancing to Phase 3. While this delays the oral program, it doesn't derail Viking's overall strategy.
The market opportunity remains massive. Goldman Sachs recently revised its 2030 obesity market forecast to $95 billion, and even a 2% share would imply roughly $1.9 billion in annual revenue. That's a significant chunk of change for a company with a $2.9 billion market cap.
The company is exploring monthly dosing for the injectable alongside its weekly option. While competitors such as Amgen's MariTide already offer monthly administration, Viking is one of only two companies, alongside Novo Nordisk, to demonstrate strong efficacy with the same molecule in both oral and injectable forms -- a strategy that could allow patients to move seamlessly between regimens.
Partnership potential
With Phase 3 underway and $808 million in cash (as of June 30, 2025), Viking has a runway but faces a $300 million bill for its registrational program. This makes partnership increasingly likely after full dataset analysis and FDA feedback.
Big Pharma remains eager for obesity assets. While Pfizer exited danuglipron, companies like AbbVie, Roche, and Amgen actively pursue obesity deals. Viking offers one of the few late-stage opportunities remaining, with the recent stock collapse making acquisition more feasible.
Valuation gap
Wall Street maintains an average price target of around $87 to $90 per share, suggesting 200% upside from current levels. The disconnect stems from misunderstood trial design -- aggressive titration maximized efficacy signals but compromised tolerability. Commercial dosing would use gentler escalation, likely matching the injectable's stronger safety profile.
CDC data shows that 40% of U.S. adults have obesity, so the addressable market is enormous. Viking's current valuation prices in failure rather than a solvable execution issue.
For investors willing to look past near-term noise, Viking's dual-formulation strategy and Phase 3 momentum suggest the sell-off created opportunity. The 40% drop looks overdone. Viking stumbled in execution, not science -- and in biotech, science is what ultimately wins.
