Novo Nordisk (NVO 0.84%), a Denmark-based drugmaker, is currently a leader in the rapidly growing weight loss market. The company's Wegovy has practically become a household name, and it has plenty more pipeline candidates in the works.
However, this area is attracting many more challengers looking to capitalize on its fast expansion. One of them is Viking Therapeutics (VKTX 2.47%), a mid-cap biotech. This smaller drugmaker has had a challenging year. But at current levels, it could have plenty of upside as the company works toward launching its first weight management medicine in the next few years.
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Working out a timeline for Viking's first launch
Viking's leading candidate is VK2735. This medicine mimics the action of two separate hormones, GLP-1 and GIP, similar to Eli Lilly's best-selling weight loss medicine, Zepbound. VK2735 completed phase 2 studies last year and is now in a pivotal clinical trial, which will largely determine its fate. Viking announced on Nov. 19 that it had ended enrollment for this phase 3 study.
Based on publicly available information about the study, we can attempt to estimate a general timeline for when the company may launch the subcutaneous formulation of VK2735. The trial officially began in June, with a target end date of August 2027. Assuming the data is positive and Viking takes several months to prepare the filing for regulatory authorities, it could be completed by the end of 2027 or early 2028.
Given the roughly 10 months typically required for review by the U.S. Food and Drug Administration, the medication could earn approval by late 2028 and hit the market in early 2029.
Will VK2735 be a serious challenger?
In a 13-week phase 2 study, VK2735 resulted in a mean placebo-adjusted weight loss of 13.1%, with no plateau observed. We can't be sure how it will perform in phase 3 studies; nor can we know, for now, whether it will prove as effective (or more so) than meds like Wegovy and Zepbound. However, these results are still highly competitive, and among the most promising yet seen for a mid-stage asset in the pharmaceutical industry.
NASDAQ: VKTX
Key Data Points
Viking's shares have been on a decline since the company first announced these results early last year, but that's understandable. Long-term shareholders took the opportunity to cash in some profits after shares soared last year.
However, in my view, the market is undervaluing VK2735's potential, particularly given its oral formulation, which has recently demonstrated success in mid-stage studies. Viking released top-line data in August. The market wasn't impressed due to high rates of study discontinuations resulting from adverse reactions. Still, an average weight loss of up to 12.2% in 13 weeks for an oral pill is quite impressive.
The highest dose, which had the best efficacy results, also had the highest rates of adverse reactions. Lower doses could also be commercially viable, once their potency is assessed in a longer clinical trial. Furthermore, Viking could somewhat mitigate the problem by slowly increasing the dosage of the medicine.
In short, Viking Therapeutics' oral and subcutaneous formulations of VK2735 both look highly promising, and could carve out a decent niche in this market.
There are more pipeline programs
Viking has another mid-stage asset called VK2809, which targets metabolic dysfunction-associated steatohepatitis (MASH), an area with a high unmet need. And the company is developing another weight loss candidate, although it's still in the pre-clinical stage; Viking expects to file an application to start human clinical trials next year. For a mid-stage biotech, Viking Therapeutics has a lot going on, and its competitive mid- and late-stage weight management programs look particularly exciting.
True, there are some risks, as there always will be with clinical-stage biotech companies, particularly related to potential clinical or regulatory setbacks. However, Viking Therapeutics' shares could skyrocket from their current levels if everything goes according to plan -- and based on available clinical data so far, things look promising. If you have above-average risk tolerance, consider this stock, which may disrupt the weight loss space in a few years.
