Viking Therapeutics Shares Plummet Amid Rival's Licensing Deal

In light of a recent report, shares of Viking Therapeutics fell over 10% following Merck's announcement of a licensing deal for an obesity drug. This development poses a potential threat to Viking’s own promising obesity treatment, VK2735, as competition intensifies in the market.

Date: 21-12-2024

AI Rating: 4

The report highlights a significant impact on the stock price of Viking Therapeutics (NASDAQ: VKTX), which experienced a decline of just over 10% following a licensing deal by Merck. The exclusive deal for a GLP-1 obesity treatment, HS-10535, could pose competition for Viking's VK2735, potentially affecting its market position if HS-10535 successfully advances through clinical trials.

The deal requires Merck to make an upfront payment of $112 million for the rights to HS-10535 and includes potential milestone payments that could total up to $1.9 billion, plus royalties. This financial commitment from Merck indicates strong confidence in the drug's market potential, which can lead to a shift in investor sentiment away from Viking and towards Merck.

The introduction of a new competitor, particularly from a well-capitalized company like Merck, adds uncertainty to Viking’s prospects. While VK2735 is described as promising, the report acknowledges the challenges for a smaller company facing a major player like Merck.

Stocks: VKTX MRK NVO