Shares of Viking Therapeutics VKTX fell 6% on Tuesday after pharma giant Eli Lilly LLY announced the launch of single-dose vials of its popular obesity drug, Zepbound (tirzepatide). These new vials are priced at least 50% lower than the list price of competing GLP-1 medicines for obesity.
A four-week supply of the 2.5 mg vials has been priced at $399 while the same for the 5 mg dose will cost $549. Zepbound is available in a single-dose pen (autoinjector), which is priced at about $1,000 for a month’s supply. The newer versions of the drug will be launched without an autoinjector and patients will require a syringe to inject themselves.
Through this launch, Lilly intends to meet supply shortages for Zepbound, which has been experiencing high demand. The vials should be easier to manufacture than pens and can help improve supply.
These cheaper versions of Zepbound will be available through Lilly’s direct-to-consumer website called LillyDirect for self-pay by patients with a valid on-label prescription. The availability of these vials is expected to broaden access for obesity patients especially those without insurance.
Why Did Lilly’s Move Impact VKTX Stock?
Lilly’s intent to launch these vials seems simple — it wants to strengthen its presence in the obesity market and also lower the use of compounded versions of Zepbound used in several pharmacies, weight loss clinics and medical spas.
While the move does benefit LLY, it sent Viking’s stock down. It seems investors were concerned about the impact of Lilly’s decision on the small biotech whose obesity drug is nearing late-stage development.
Though it does not have any marketed drugs in its portfolio, VKTX is one of the few biotechs that has shown immense potential in the obesity space, all thanks to the treatment potential of its investigational GLP-1 drug VK2735. The drug, which is being evaluated as a subcutaneous (SC) injection and as an oral pill, demonstrated superior weight reduction in clinical studies. While VKTX is making preparations to advance SC formulation to late-stage development, it intends to start a mid-stage study on the oral formulation of the drug in obesity patients before 2024-end.
Year to date, Viking’s shares have skyrocketed 230% against the industry’s 0.1% fall.
Image Source: Zacks Investment Research
Other Players in the GLP-1 Market
Another company with an approved marketed drug that competes with Lilly in the GLP-1 space is Novo Nordisk NVO. Novo’s semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. NVO is also working to improve the supply of Wegovy in response to rising demand but has not been as successful as Lilly in its efforts. The launch of these affordable versions of Zepbound could put further pressure on Novo Nordisk.
Amgen AMGN also has a GLP-1 receptor candidate, MariTide (maridebart cafraglutide), for obesity in its pipeline. Top line 52-week data from the phase II study on MariTide in adults with overweight or obesity is expected in late 2024. AMGN is planning to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and type-II diabetes. It plans to begin a phase II study on the candidate in type II diabetes in late 2024.
Market Potential in the Obesity Drugs Space
Despite the presence of pharma bigwigs like Lilly and Novo in this space, we believe that there is room for small biotechs like Viking Therapeutics, which is still a couple of years from making a regulatory filing for its obesity drug.
Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $130 billion by 2030. This is evident from the fact that despite raking in billions from sales of their respective obesity drugs, Lilly and Novo are still unable to cope with existing demand. The firms are not only investing heavily to optimize their respective production capacities but have also started evaluating multiple other novel obesity candidates.
Viking Therapeutics, Inc. Price
Viking Therapeutics, Inc. price | Viking Therapeutics, Inc. Quote
VKTX Zacks Rank
Viking Therapeutics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Viking Therapeutics, Inc. (VKTX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
