On Monday, Laidlaw sustained its Buy rating on Viking Therapeutics (NASDAQ:VKTX), with a price target set at $110.00. The firm's analyst highlighted the positive results from a Phase I study of VKTX's oral VK2735, presented yesterday at an ObesityWeek meeting. The study indicated that the highest dose of 100mg showed significant efficacy in weight loss and acceptable safety in gastrointestinal tolerability. The analyst noted that these results appear superior to other oral obesity drugs currently in development, positioning VK2735 as a potential best-in-class medication.
The analyst's comments came after Viking Therapeutics reported these findings, which are seen as a crucial step forward for the company's obesity treatment. The data demonstrated that the higher dose (>40mg) of VK2735 led to a "clear-cut and clean superior outcome" in efficacy, specifically in terms of weight loss, without compromising safety.
This positive outcome has already had an impact on Viking Therapeutics' stock value. Following the company's recent earnings call, VKTX shares have seen a significant increase. The Laidlaw analyst expressed a belief that the stock will continue to appreciate in value moving forward, given the promising results of the study.
The market's response to the study's results and the analyst's reiterated rating could be a driving force for potential value growth for Viking Therapeutics. The company's progress in developing VK2735 as an oral treatment for obesity is now under the spotlight, with expectations set for future developments in their clinical trials.
Viking Therapeutics' achievements are especially notable as they compete in the dynamic field of obesity medication development. With the analyst's positive outlook, investors and industry watchers may keep a close eye on the company's next steps in advancing VK2735 through the clinical process.
In other recent news, Viking Therapeutics reported its Q3 2024 financial results, revealing a net loss of $24.9 million. Research and development expenses increased to $22.8 million, while general and administrative expenses rose to $13.8 million. Despite these figures, the company's cash and equivalents stood at a strong $930 million, supporting its strategic plans for future clinical trials.
In terms of clinical updates, Viking's drug candidate VK2735, developed for weight management, has shown promising results. Notably, high doses of VK2735 have led to significant weight loss results at the four-week mark, alongside favorable gastrointestinal tolerability. This has boosted confidence in the drug's progression to a Phase 2a clinical trial in the fourth quarter of 2024.
Analysts from Jefferies and BTIG maintained their Buy rating on Viking Therapeutics, expressing optimism about the drug's prospects. The firms anticipate that VK2735 could position Viking competitively in the obesity treatment market. Furthermore, Viking plans to advance VK2735 into Phase 3 and initiate a Phase 2 obesity study for the same.
InvestingPro Insights
Viking Therapeutics' recent positive study results and the subsequent analyst rating are reflected in the company's strong market performance. According to InvestingPro data, VKTX has shown an impressive year-to-date price total return of 291.62% and a remarkable 1-year price total return of 590.81%. This aligns with the InvestingPro Tip highlighting the company's "high return over the last year."
Despite these gains, the company faces financial challenges. An InvestingPro Tip notes that Viking Therapeutics "is not profitable over the last twelve months," which is supported by the reported operating income of -$133.97 million for the last twelve months as of Q3 2023. This financial situation is typical for biotech companies in the development stage, focusing on advancing promising treatments like VK2735.
Investors should also consider that the stock is "trading at a high Price / Book multiple" of 8.25, according to another InvestingPro Tip. This suggests that the market has high expectations for Viking's future performance, likely influenced by the positive Phase I study results and analyst optimism.
For those interested in a deeper analysis, InvestingPro offers 12 additional tips for Viking Therapeutics, providing a more comprehensive view of the company's financial health and market position.
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