Viking spikes as J.P. Morgan recommends ahead of key obesity drug readout

Shares of Viking Therapeutics (NASDAQ:VKTX) traded higher in the premarket on Wednesday as J.P. Morgan launched its coverage with a buy-equivalent rating of Overweight, citing an upcoming early-stage trial readout for the company’s oral obesity therapy VK2735.

Analyst Hardik Parik also placed Viking (VKTX) under a positive catalyst watch ahead of the readout, set for a presentation at the medical conference, Obesity Week, scheduled in San Antonio, Texas, in early November.

“We recommend being long into the upcoming readout for oral-2735, which we think should lead to substantial up move for shares,” Parik wrote with an $80 price target on the stock.

VK2735, a dual agonist of the glucagon-like peptide 1 ((GLP-1)) and glucose-dependent insulinotropic polypeptide (GIP) receptors, has already shown “competitive efficacy” at low doses with “very few” side effects linked to the gastrointestinal system, according to Parik.

“We think higher dose cohorts could show even more competitive efficacy with still a very good tolerability profile,” he added.

The analyst projects ~10% of the market share for VK2735 in the U.S. oral obesity drug market, which remains uncharted territory for leading weight loss drugmakers Novo Nordisk (NVO) and Eli Lilly (LLY). Viking (VKTX) shares do not fully reflect this opportunity, Parik concluded.