Viking Therapeutics Shares Drop 24% Amid Competition Challenges

Viking Therapeutics faces a 24% drop in December driven by competition. This severe decrease raises concerns for investors as Merck’s new deal poses a threat to Viking's leading drug pipeline, VK2735, potentially impacting future stock performance.

Date: 04-01-2025

AI Rating: 4

Impact of Competition on Viking Therapeutics
The report clearly highlights the intensified competition faced by Viking Therapeutics from Merck, which significantly affected its stock price, leading to a 24% decrease in December. Merck's strategic move, securing licensing rights for HS-10535, represents a sizable risk for Viking, particularly as it develops VK2735 concurrently, intending to target the lucrative obesity market.

Market Threats
Merck's commitment with Hansoh Pharma, including a hefty up-front payment of $112 million and potential additional milestone payments worth $1.9 billion, indicates the serious intent behind their new drug. If HS-10535 reaches the market successfully, it could directly threaten Viking's market share and revenue potential associated with VK2735.

Product Advantages
Given that VK2735 is an orally administered drug while HS-10535 is still under development with an uncertain outcome, there remains a glimmer of hope for Viking investors. If Viking's drug can attain regulatory approval and successfully penetrate the market before HS-10535 does, it may mitigate some of the competitive pressures.

Investor Sentiment
This increasingly competitive landscape, led by large pharmaceutical players like Merck, is a substantial cause for concern among Viking Therapeutics shareholders. The current valuation reflects this uncertainty and the potential for continuing bearish pressure in the near term as investors reassess the viability of VK2735 against emerging competition.

Stocks: VKTX MRK