Shares of Viking Therapeutics VKTX plunged 42% yesterday after it reported top-line data from the phase II VENTURE-Oral Dosing study, which evaluated the safety and efficacy of the oral formulation of its experimental obesity drug, VK2735.
Though the study successfully achieved its primary and secondary endpoints, a large number of patients dropped out due to adverse events.
More on VKTX’s VENTURE-Oral Dosing Study Results
The 13-week study enrolled around 280 adults who were either obese or overweight and had at least one weight-related co-morbid condition. These patients were evenly randomized to one of the six dosing arms of the drug or placebo.
Per Viking, body-weight reductions were progressive at all doses throughout the study. Patients on the highest dose (120 mg) of oral VK2735 lost up to 12.2% of their body weight (26.6 lbs) after 13 weeks of daily dosing, compared with 1.3% in the placebo group. The company noted that the weight loss had not plateaued, suggesting potential for additional benefit in a longer study.
However, what led to the share price crash was the higher-than-expected patient discontinuation rates in the study. Per Viking, about 28% of VK2735-treated participants dropped out, compared with 18% for placebo. This raised questions about the drug’s tolerability and drove the steep sell-off, with some investors also citing dampened prospects for Viking as an acquisition target.
Year to date, Viking’s shares have lost over 39% against the industry’s 3% growth.
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Recent Developments in the Obesity Pill Space
This marks the second time this month that a much-awaited study on an obesity pill disappointed investors. Earlier this month, pharma giant Eli Lilly LLY reported a similar setback when it announced results from a late-stage study on orforglipron, its once-daily oral GLP-1 pill for obesity. While data from the study showed that treatment with the LLY drug achieved up to 12.4% weight loss, it missed investors’ expectations. Like Viking, Lilly also reported higher patient discontinuation rates in the ATTAIN-1 study.
The obesity market has garnered much interest lately, with two companies, Lilly and Novo Nordisk NVO, dominating this space with their respective injectable obesity drugs, Zepbound and Wegovy. According to research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by 2030.
In order to capitalize on the rapidly expanding obesity market, Eli Lilly, Novo Nordisk and Viking Therapeutics are racing to introduce oral weight-loss pills. However, it seems very likely that Novo Nordisk may become the first one to market an obesity pill — a regulatory filing is currently under review by the FDA seeking approval for an oral version of Wegovy. Notably, Novo was also the first to capitalize on the opportunity with injectable obesity drugs.
Viking Therapeutics, Inc. Price
Viking Therapeutics, Inc. price | Viking Therapeutics, Inc. Quote
VKTX’s Zacks Rank
Viking currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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