Viking Therapeutics (NASDAQ:VKTX) fell ~43% as analysts reacted to mid-stage trial data for its oral GLP-1/GIP dual receptor agonist VK2735, a potential rival to Eli Lilly’s (NYSE:LLY) orforglipron and Novo Nordisk’s (NVO) oral Wegovy.
Citing 13-week results, California-based Viking (NASDAQ:VKTX) said its once-daily tablet caused up to ~12% of weight loss from baseline in the study for obese or overweight adults with at least one weight-related condition.
While the experimental therapy was safe and well-tolerated throughout the study period, 20% of trial participants on VK2735 discontinued the therapy compared to 13% on placebo, according to the company.
Safety issues were also among the major concerns flagged in Eli Lilly’s (NYSE:LLY) recent late-stage trial results for orforglipron, which, however, indicated about 11% placebo-adjusted weight loss at the highest dose over 72 weeks.
LLY shares plunged ~14% after the announcement, marking its biggest intraday drop in more than two decades, while Novo Nordisk (NVO), whose oral version of popular weight loss therapy Wegovy is currently under FDA review, traded higher.
According to the Danish drugmaker’s new drug application, the once-daily therapy at 25mg has generated ~14% weight reduction over 64 weeks in a late-stage trial for overweight or obese adults with at least one weight-related health condition.
On Wall Street, Mizuho was among the first few brokerages to size up VK2735 against orforglipron.
“Data look inferior to LLY on almost all metrics, and the thing to consider here is that patients discontinued at such a high rate over 13 weeks vs. LLY in the mid-20% range—but over 72 weeks,” Bloomberg News reported, quoting analyst Jared Holz. The readout “probably shutters hope for VKTX as a big-time player in the oral obesity market over the near to medium term.”
However, Edmund Ingham, SA Investing Group Leader for Haggerston BioHealth, agreed that “high discontinuation rates and modest weight loss disappointed Wall Street” even though VK2735 succeeded in the study.
Ingham retained his Buy rating on Viking (NASDAQ:VKTX), arguing that “despite being underwhelming compared to Novo and Lilly’s oral GLP-1 drugs, VK2735 remains a top-three candidate in a massive, rapidly growing obesity market.”