Viking Therapeutics - NOVO/LLY KILLER

Stocks
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I started a thread for this company, as it seems there hasn’t been much discussion about it previously. We’re talking about Viking Therapeutics, a company developing the obesity drug VK2735 and heading into Phase 3. In my opinion, the stock is significantly undervalued because test results show that the drug has the best tolerability on the market and also a significant weight loss effect. Viking Therapeutics is well-managed and has plenty of cash (approx. $1 billion) to carry out Phase 3. The company itself has stated that they are aiming for a buyout by Big Pharma.

The company’s most important drug is the GLP1/GIP dual agonist VK2735, which is available in both subcutaneous (subc) and oral versions.
The drug led to 13% weight loss (n=35) in 13 weeks and approx. 6% in six weeks.
This is nearly at the same level as Eli Lilly’s newest drug under development, Retatrutide.

In addition, the tolerability is top-tier.
From the company’s website:
"Among patients receiving VK2735 in the VENTURE study, the majority (92%) reported drug related TEAEs as mild or moderate in severity. The majority of TEAEs that were gastrointestinal (GI) in nature (95%) were also reported as mild or moderate. Nausea was reported among patients receiving both VK2735 (43%) and placebo (20%). Among subjects receiving VK2735, the majority of reported nausea (68%) was characterized as mild (32% moderate, none severe). Vomiting was reported in 25/140 (18%) VK2735-treated patients compared with none reported among patients receiving placebo. GI-related adverse events were generally observed early in treatment, with decreasing frequency upon repeat dosing. Across the combined VENTURE study arms, the weekly rate of nausea did not exceed 5% at any point after the first week of treatment. One patient receiving VK2735 experienced a serious adverse event (SAE) of dehydration that was characterized as related to study drug.

Prior to VENTURE, Viking initiated a Phase 1 SAD and MAD clinical trial of VK2735 in 2022. During the first quarter of 2023, the company announced results from this study, which demonstrated that treatment with VK2735 was safe and well-tolerated when dosed for up to 28 days in healthy obese volunteers. In addition, treatment with VK2735 led to mean weight loss of up to 18 pounds from baseline.

In the SAD portion of the Phase 1 study, VK2735 demonstrated promising safety and tolerability, as well as a predictable pharmacokinetic profile. Following single subcutaneous doses, VK2735 demonstrated a half-life of approximately 170 to 250 hours, a Tmax (time to reach maximum plasma concentration) ranging from approximately 75 to 90 hours, and excellent therapeutic exposures."

More info on the drug can be found on their website.

The company is excellently managed, and the CEO is experienced and knows his stuff. The company has about 30 employees, which is a perfect size for a company like this.
The company also has other drugs, but I can write more about them here later.

I believe the company’s drug is currently one of the best on the market based on the test results.
It should be noted that the sample size is only 35, which is quite a small sample for such a mass-market drug class as obesity medications.

I owned the stock a few months ago with a cost basis of around $50, but I bought more when the highly positive results came out regarding the start of Phase 3. I now have about 10% of my portfolio invested in this company with an average cost basis of $58.
-pharmacy student

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Here is another great site where you can find further analysis on the most important drugs in the obesity medication market.
The data may take a moment to load.

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Tirzepatide has already been invented. The GLP-1 train has already left and the market is divided. N=35 is certainly not enough to demonstrate its excellence in terms of efficacy yet. The half-life is slightly better than Tirzepatide’s, but it likely won’t suffice for bi-weekly dosing. And there was twice as much nausea compared to the placebo.

Why do you believe this is so great and how do you think it can compete against those who have already gained a foothold?

I would also suspect that Big Pharma is already eyeing targets other than GLP-1/GIP.

Hard pass.

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You are likely referring to Big Pharma companies like Merck, which mentioned they are targeting “next-generation” targets. You’re right, but many Big Pharma players like Pfizer and BMY don’t yet have a strong obesity drug contender.
The company also has the option to partner with a BP without selling the firm itself.
I believe every BP wants their own obesity drug because the market is so massive.
Since the VK2735 injection was granted permission to skip Phase 2b and jump straight to Phase 3, it shortens the time to market by about 2 years.

In my opinion, N=35 is already indicative enough when compared to the Phase 2 results and sample sizes of other drugs, but you are right that this is where the risk factor for this investment lies.
So far, however, the efficacy and tolerability have been quite good compared to other drugs.

Regarding the half-life and bi-weekly dosing, you are probably right that it’s not enough for that, but I think one of the company’s main selling points, in addition to the injection, is the oral VK2735, which has shown excellent results. If the oral version mimics the injection’s response even somewhat, there is a chance for this to be the first effective oral obesity drug. Rybelsus is a bit of a joke.

Apologies for the confusion, but the oral version has indeed completed Phase 1 and the injection Phase 2.
The oral version will proceed to Phase 2, and the injection was cleared to skip Phase 2b and go straight to Phase 3.
VK2735 oral and injection have slightly different side-effect profiles so far. No vomiting has been reported with the oral version during a month of use.
image
Here are, among others, the oral tolerability results.

“Given the promising weight loss signal demonstrated after 28 days of once daily, along with the excellent tolerability profile observed thus far, further dose-escalation has been evaluated at daily doses of up to 80 mg; dosing at 100 mg is ongoing. Results from these cohorts will be reported later this year. Viking believes that further benefits from oral dosing of VK2735 might be anticipated from longer dosing periods. To this end, the company plans to initiate a 13 week Phase 2 trial in patients with obesity in the fourth quarter of this year.”

I believe this will hold its own against established competitors due to its tolerability.
I don’t think it matters much to a person whether they lose 26kg or 28kg if the drug’s side effects are massive.
Yes, this too (as an injection) causes vomiting and nausea, but so do other drugs. The ratio of efficacy to side effects is quite essential, and it is looking very good for this drug.

I will be adding more data about this here in the coming days.

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Rochen CT-996 on suun kautta otettava ja 4 viikon tehossa parempi kuin vk2735:

After four weeks, participants on CT-996 had lost 7.3% of their body weight, on average, compared to a 1.2% reduction in the placebo cohort. The subjects had obesity but not type 2 diabetes. Roche said the 6.1% placebo-adjusted weight reduction is clinically meaningful.

The figure also looks commercially meaningful. Novo Nordisk linked its oral semaglutide formulation to a 12.7% placebo-adjusted reduction in weight in a phase 3 trial. But that drop came after 68 weeks and the molecule needs to be taken on an empty stomach with a sip of water. Lilly’s orforglipron, which has simpler dosing requirements, achieved 12.4% placebo-adjusted weight loss after 36 weeks in phase 2
Linkki uutiseen

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Roche didn’t publish statistical tolerability data, or at least I couldn’t find it myself. If you find it, I’d love to see it.
Press release from Roche’s website:

“The safety and tolerability profile was consistent with other oral GLP-1 receptor agonists and no unexpected safety signals were observed”

“CT-996 was well tolerated, with mostly mild or moderate gastrointestinal-related adverse
events, consistent with the safety profile of the incretin drug class. There were no treatment
discontinuations related to the study drug.1 The study results also showed that blood levels
of CT-996 were largely unaffected either during fasting or after a standardised high-fat meal.
Thus, CT-996 could potentially be dosed without regard to meal timing, thereby affording
greater dosing flexibility for patients.1 Based on the study data, CT-996 is anticipated to be
used not only as a therapy for achieving glycaemic control and inducing weight loss, but also
potentially for oral weight maintenance therapy following weight loss induced by injectables.”

What do you think that means?
To me, it means they don’t want to publish the data, even though it sounds very promising. But I want data, and they would surely publish that data if it were damn good.

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Agreed. The side-effect profile is likely similar to GLP-1 drugs in general.

I feel like the “obesity drugs” scene is a bit overbought at the moment, even though Novo/LLY pulled back slightly. For example, Pila Pharma next door and Gubra in Denmark have rocketed quite a bit, even though they are still at a very early stage. Who knows if Novo/LLY sellers are already moving their bets to next-generation drugs..

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Yeah, if we start talking about valuation, the whole market certainly has high expectations.
Personally, I believe the focus will remain on these GLP-1 drugs and dual agonists for quite a long time.
Novo’s pipeline has some quite interesting other mechanisms, and I’ve owned their shares for a while now.
I personally believe these GLP-1 analogs are similar to statins, and I think they will stay on the market for a long time. Mevastatin was developed in the 70s, even though Pfizer’s Lipitor didn’t reach its peak sales year until 2003.

I believe this obesity market is so massive that every Big Pharma player wants their own drug, as even a small market share can be worth several billions.
By acquiring VK2735 for, say, 10–15 billion, the buyer would immediately become a major player in the obesity drug scene.

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Returning to that Roche drug… Here’s a great piece of news I found about the company’s past activities in general:
https://www.medicalnewstoday.com/articles/251891

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In April, Roche CEO Teresa Graham considered Viking’s drug a pretty strong player, suggesting that Viking’s drug is one of the best in terms of tolerability:

image

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Viking Therapeutics rose 20% today. Now 15% of my portfolio.

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Luultavasti oraalinen VK2735 faasi 2 data tulee 2025 loppukeväästä.

“Given the promising weight loss signal demonstrated after 28 days of once daily dosing, along with the excellent tolerability profile observed at doses of up to 40 mg, further dose-escalation has been evaluated at daily doses of up to 100 mg. Results from this study have been accepted for poster presentation at the upcoming ObesityWeek meeting on November 3, 2024, in San Antonio, TX. Based on observations in the Phase 1 study, Viking believes that further benefits from oral dosing of VK2735 might be anticipated from longer dosing periods. To this end, the company plans to initiate a 13-week Phase 2 trial in patients with obesity in the fourth quarter of this year.”

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Obesity Week yielded stunning results for oral VK2735. At higher doses, it showed 9% weight loss within a month while maintaining a very mild side effect profile. Oppenheimer raised its price target from $135 to $164.

Screenshot_20241104-083657
Screenshot_20241104-083556

Stock +20% in pre-market.
My allocation is still at 15%; I’ll only start considering selling at the $200 mark. This is currently the best obesity drug coming to market.
Incredibly strong data released—it’s honestly insane how good the data is for the oral version.

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The market is acting a bit erratic, which is typical for clinical releases. In pre-market, the stock jumped to 93 USD, now it’s at 67.
I bought more around 65 following the positive news.
This is a good time for newcomers to jump in as well.

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In for a trade. These are typical “sell the news” situations where “anchor investors” reduce their risk, and sometimes selling volume can persist for a long time. They are tricky to time for that reason, so I would like to see, for example, a 5min TC (Trend Change). Only now could something like that happen.

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Novo’s CagriSema result was quite good, even though Mr. Market didn’t like it and it didn’t quite meet high expectations.

Viking’s position in the market looks tighter now.

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Yeah, a pretty okay result from CagriSema, but it probably isn’t anything special in terms of tolerability either. Novo will likely remain quite strong in the market. We’ll see what the retatrutide results look like for Lilly then.

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Recent turbulence in Viking’s stock price is due to two things:

The large amount of API (active pharmaceutical ingredient) and Merck’s acquisitions in China.

API affects the cost of drug manufacturing, and with an oral drug dose of around 100mg, the guys realized that this requires a bit more investment in manufacturing than initially thought. The drug itself works quite well.

Merck, a potential buyer of Viking, ended up buying a Chinese GLP1 company for 2 billion.
In my opinion, it’s not a big L for Viking, even though the stock took a big hit. Rather, it’s bearish for Merck.

If the allocation wasn’t so large, I’d probably buy more now.
I believe Viking will still maintain its strong position in the scene, but its valuation might have been slightly overshot, and I made a mistake there.

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LILY dropped all Friday after the open, when I was expecting an up day. I’ve been involved with Viking for some time, initially through a trade that then remained permanently in my portfolio. Was this just a “sell the news” event due to witching day for LILY, or is there some other correlation? VKTX has been falling steadily for quite some time now, waiting for news, as the markets surely have been too.

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I do not recommend day trading this stock, at least not in the near future. VKTX has recently (less than 2 months) been trading down, in addition to the previously mentioned reasons, also because the stock does not have any new catalyst in the immediate future. The stock had a big hype before the tolerability results, after which incredible results were obtained, but due to a large API and the lack of near-future catalysts, the stock has fallen lower in recent months, also due to the entire obesity drug market, which has declined in recent months.

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