On Tuesday, Oppenheimer maintained its positive stance on Viking Therapeutics (NASDAQ:VKTX), reiterating an Outperform rating and a $138.00 price target. The firm's outlook is based on anticipated data for higher doses of VK2735, Viking's oral treatment under study.
Recent Phase 1 results for a 40mg dose demonstrated a 5.3% weight loss over 28 days compared to a 2.1% loss with a placebo, which equates to a 3.3% placebo-adjusted weight loss with a significance of p=0.0006. The treatment's tolerability was notable, with only about 25% of participants experiencing mild nausea, suggesting a broad therapeutic window.
The market is awaiting further data from ObesityWeek, scheduled from November 3-6, where results for increased doses of 60/80/100mg are expected to be unveiled. Analysts predict these higher doses may yield up to approximately 6% efficacy in weight loss. If the incidence of nausea remains below 40%, it could enhance VK2735's competitive edge in the market.
Oppenheimer's scenario analysis for Viking Therapeutics shares anticipates a potential 35% upside, with a 75% probability of success (POS) should the upcoming results confirm incremental weight loss without significant tolerability issues. Conversely, there could be a 40% downside, with a 25% POS if the data fails to show additional benefits or raises concerns about the drug's tolerability.
Viking Therapeutics is viewed as being in a strong position with its oral and subcutaneous versions of VK2735. The company's prospects are hinged on the upcoming release of data, which could significantly impact its share value. As the medical community and investors look forward to the outcomes presented at ObesityWeek, VKTX shares are expected to react accordingly.
In other recent news, Viking Therapeutics has made significant strides in the biopharmaceutical sector, reporting positive results from its Phase 2 VENTURE trial for obesity treatment with VK2735 and the Phase 2b VOYAGE trial for NASH and fibrosis with VK2809.
The company also boasts a robust financial standing, with over $900 million in cash reserves. Morgan Stanley (NYSE:MS) reaffirmed its Overweight rating and $105.00 price target on Viking Therapeutics, highlighting the promising potential of VK2735. JPMorgan (NYSE:JPM) initiated coverage with an Overweight rating and set a price target of $80.00, while Truist Securities maintained a Buy rating with a consistent price target of $120.00.
Analysts from these firms maintain a positive outlook on Viking Therapeutics, especially as the company is preparing for an end-of-Phase 2 meeting with the FDA to discuss the registration path for VK2809 and plans to advance VK2735 into Phase 3 development for obesity.
InvestingPro Insights
Viking Therapeutics' (NASDAQ:VKTX) financial metrics and market performance offer additional context to the company's potential in the obesity treatment market. According to InvestingPro data, Viking's market capitalization stands at $6.98 billion, reflecting significant investor interest in its pipeline. The company's strong return over the past year, with a remarkable 437.17% price total return, aligns with the positive sentiment surrounding its VK2735 treatment.
InvestingPro Tips highlight that Viking holds more cash than debt on its balance sheet, which could provide financial flexibility for continued research and development. Additionally, five analysts have revised their earnings upwards for the upcoming period, suggesting growing confidence in the company's prospects.
However, it's important to note that Viking is not currently profitable, with a negative operating income of $124.68 million over the last twelve months. This is consistent with the InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year. This financial situation is typical for biotech companies in the development stage, where significant investments are made before potential commercialization.
The upcoming data release at ObesityWeek could be a pivotal moment for Viking, potentially impacting its valuation. Currently, the stock is trading at a high Price / Book multiple of 7.58, reflecting high growth expectations. Investors should consider that InvestingPro offers 13 additional tips for Viking Therapeutics, which could provide further insights into the company's financial health and market position.
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