Viking Therapeutics emerges as a strong weight loss drug player — or takeover target

Viking Therapeutics emerges as a strong weight loss drug player — or takeover target

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Biotech company Viking Therapeutics has emerged as a strong potential entrant — or takeover target — in the budding weight loss drug market. 

Viking is just one of several companies racing to join the growing space. Some analysts say the market could be worth $100 billion by the end of the decade.

Viking aims to compete with injectable drugs from Eli Lilly and Novo Nordisk. Their treatments sparked the weight loss drug industry gold rush over the past year despite their hefty price tags and barriers to insurance coverage. 

Some Wall Street analysts said Viking’s experimental obesity treatment may be “best-in-class.” In a midstage trial, an injectable version of Viking’s drug appeared to promote even greater weight loss than Eli Lilly’s Zepbound.

Viking gave a first glimpse at data from that study on Tuesday, and its shares soared 120%. The promising results make the company an impressive potential player in a market that will likely have room for more entrants in the coming years. 

Goldman Sachs projects that between 10 million and 70 million Americans will be taking weight loss drugs by 2028. Eli Lilly and Novo Nordisk have also struggled to offer enough supply of their treatments, giving other companies a chance to win market share.  

The new data also makes Viking a more attractive deal target for larger companies trying to break into the space or expand their obesity treatment offerings.

It’s too early to say whether Viking’s drug could have an edge over existing or developing weight loss treatments. It’s difficult to compare therapies without pitting them head to head in the same clinical trial. 

Viking also needs to conduct a late-stage study on its drug, and likely won’t launch the injection until the later part of the decade. The small company faces hurdles to entering the market, such as manufacturing enough of the drug to meet booming demand. But an acquisition by a larger company could help solve some of those issues.

Data suggests Viking’s drug may have an edge

Both drugs imitate two naturally produced gut hormones called GLP-1 and GIP. GLP helps reduce food intake and appetite. GIP, which also suppresses appetite, may also improve how the body breaks down sugar and fat.

Meanwhile, Novo Nordisk’s weight loss injection Wegovy only targets GLP-1. 

Analysts were particularly impressed by the weight patients lost after they took the highest dose of Viking’s drug. Those who received a weekly 15 milligram dose of the treatment lost 13.1% of their body weight on average after 13 weeks compared to those who took the placebo. 

Notably, there was no evidence of a plateau in weight reduction at week 13 for any dose of the drug. That suggests that “further weight loss might be achieved” by keeping patients on the treatment longer, Viking CEO Brian Lian said during a call with investors on Tuesday.

Viking’s drug data shows a “best-in-class profile” among both approved and experimental weight loss drugs with phase two trials, William Blair analyst Andy Hsieh wrote in a note Tuesday. Eli Lilly’s Zepbound generated roughly 7% weight loss relative to a placebo after 12 weeks in a phase three clinical trial, Hsieh noted.

Viking’s drug also appears to top Novo Nordisk’s weight loss injection Wegovy, according to a separate Tuesday note from BTIG analysts.

Based on chart data from a phase three trial, the analysts estimated that Wegovy caused around 5% weight loss at 13 weeks compared to a placebo.

Meanwhile, several analysts estimated that some doses of Eli Lilly’s experimental injection, retatrutide, caused between 9% and 13% weight loss relative to a placebo at 13 weeks based on chart data from a midstage trial.

The majority of adverse side effects that patients experienced after starting Viking’s drug were mild or moderate. Many of those instances were gastrointestinal, which is common across all weight loss and diabetes treatments.

Around 20% of patients who took the 15 milligram version of Viking’s drug discontinued treatment early in the study. That compares with around 14% of those taking the placebo who stopped early in the trial. 

But Jefferies analyst Akash Tewari wrote in a note Tuesday that Viking’s trial used faster “titration” in patients. That refers to increasing the dose size a patient takes over time until they reach a target dosage level. 

He said Viking may be able to make its drug easier for patients to tolerate in a future trial with slower titration, which could potentially lower the treatment’s efficacy. 

Viking still has a long way to go

Partnerships, buyouts are on the table 

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