Viking Therapeutics Faces Stock Pressure Amid Market Competition

Investors are evaluating Viking Therapeutics’ potential amidst a 65% decline in shares since early 2024. The company’s experimental drugs show promise, but competition from established players could weigh heavily on future performance.

Date: 08-02-2025

AI Rating: 5

Current Performance and Market Position

Viking Therapeutics (NASDAQ: VKTX) has experienced a significant decline of about 65% from its peak in 2024. This drop raises concerns among investors, especially when juxtaposed against strong competitors in the obesity drug market, such as Eli Lilly and Novo Nordisk.

Reasons for Potential Growth

The report highlights the potential of Viking's weight loss candidate, VK2735, which could be a stronger alternative to current treatments like Eli Lilly’s tirzepatide. Viking's VK2735 has demonstrated promising results, particularly in its phase 2 trial, showing a weight reduction of 14.7%. Further, an oral formulation of VK2735 showed a weight reduction after just 28 days. Additionally, Viking's candidate VK2809 for treating metabolic dysfunction is poised for phase 3 testing, indicating ongoing development in its pipeline.

Risks and Market Challenges

Despite the potential shown by VK2735, there are considerable risks to consider. Viking is significantly behind in the race to market compared to Eli Lilly, which is already advancing its products, including a next-generation anti-obesity treatment. With the FDA's timeline expected to delay VK2735’s entry until at least two years from now, Viking might struggle to capture market share against more established and quicker-moving competitors. The uncertainty around VK2809’s effectiveness in the market also adds another layer of risk.

Conclusion

Overall, while Viking Therapeutics holds potential with its drug candidates, the path to profitability appears burdensome given the current competitive landscape and FDA approval delays. Investors should remain cautious, and while there may be upside if the drugs succeed, the risk factors cannot be underestimated.

Stocks: VKTX LLY