Is Viking Therapeutics the Next Blockbuster GLP-1 Stock?

Key Points

• Viking’s VK2735 GLP-1 drug has shown 13.1% placebo-adjusted weight loss in just 13 weeks in a Phase 2 study.
• It took Eli Lilly’s Zepbound 72 weeks to hit 20.1% placebo-adjusted weight loss.
• It took Novo Nordisk’s Wegovy 68 weeks to hit 12.4% placebo-adjusted weight loss.

When it comes to clinical weight-loss treatments, GLP-1 therapies have taken the medical sector by storm. What started as off-label use by celebrities and social media influencers for cutting weight became a viral sensation as type 2 diabetes medicine Ozempic kicked off the GLP-1 trend. Novo Nordisk A/S NYSE: NVO formulated a semaglutide treatment specially designed for obesity when they launched Wegovy in June of 2021.

Eli Lilly & Co. NYSE: LLY launched its own GLP-1/GIP dual agonist treatment for obesity, Zepbound, in December 2023. Zepbound is the most effective FDA-approved GLP-1 drug for weight loss.

Between Novo and Lilly, the GLP-1 industry has become an oligopoly with even less threat from compounders like Hims & Hers Health Inc. NYSE: HIMS after being taken off the drug shortage list.

However, there has been major buzz about a new GLP treatment from Viking Therapeutics Inc. NASDAQ: VKTX that threatens to disrupt the GLP-1 duopoly.

Why VK2735’s Dual GLP-1/GIP Action Could Disrupt the Weight Loss Market

Viking’s GLP-1 drug is named VK2735. It’s a dual GLP-1/GIP receptor agonist, similar to tirzepatide. GLP-1 (glucagon-like peptide-1) and GIP (gastric inhibitory polypeptide) are gut hormones responsible for curbing the appetite, boosting insulin and ultimately shedding weight.

VK2735 is being developed as both an injectable and an oral treatment. To become a "blockbuster," it must meet efficacy (big mean body weight loss), tolerability (fewer side effects), and something unique, such as dosing convenience (oral delivery and once-a-month shot). Semaglutide (Novo) and tirzepatide (Lilly) are the gold standards. Here are the recent weight loss results for each medication:

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• Wegovy (Novo Nordisk) had a 14.9% mean weight loss on the 2.4 mg weekly injection after 68 weeks during its Phase 3 STEP 1 study.
• Zepbound (Eli Lilly) had a 20.9% mean weight loss on the 15mg weekly injection after 72 weeks in its Phase 3 SURMOUNT-1 study.
• VK2735 (Viking) had a 14.7% mean weight loss on the 15 mg weekly injection at just 13 weeks in its Phase 2 VENTURE study.

A Game Changer for Speed and Dosing

The different weekly cycles may seem like comparing apples to oranges with different trial durations. Comparing them by time to weight loss results is pretty head-turning. VK2735 showed lightning-fast weight loss at 13.1% placebo-adjusted weight loss in 13 weeks. Compare that to Zepbound hitting 20.1% placebo-adjusted weight loss in 72 weeks and Wegovy taking 68 weeks for just 12.4% placebo-adjusted weight loss. The placebo-adjusted weight loss percentage takes the 14.7% weight loss and subtracts the 1.7% weight loss of the group taking a placebo to provide a more complete picture.

VK2735 sheds weight twice as fast as Zepbound and 5x faster than Wegovy. However, the game changer is the 171-day half-life, suggesting they may come out with a once-a-month injection compared to the weekly injections for the incumbents. This appeals not only to patients who want faster weight loss and less painful injections but also to health insurers who may end up opting for shorter periods of reimbursements, depending on pricing. This is what excited analysts so much as to issue a $138 high price target and $97.67 consensus analyst price target even before receiving an FDA approval. Viking will conduct its Phase 3 injectable trial in Q2 2025.

Why GLP-1 Treatments Are the Biggest Moneymakers for Pharma Giants

Analysts estimate the GLP-1 drug market to grow from $90 billion to $150 billion by 2030. Novo’s GLP-1 drugs have semaglutide as their active ingredient, while Lilly has tirzepatide. These GLP-1 treatments have grown to account for the largest portions of revenues. In 2024, Novo Nordisk reported a total revenue of $40.66 billion, of which $20.88 billion was attributed to its GLP-1 drugs, which accounted for 51.4% of total revenues. For Eli Lilly, total 2024 revenue was $45.04 billion, of which GLP-1 drugs generated $16.4 billion, representing 37% of total revenues.

A Blockbuster in the Making: A Long-Term CDMO Deal Signed

In long-term studies, Zepbound is still the leader, but as time goes on, VK2735 may even surpass Zepbound's 20.1% placebo-adjusted weight loss at 72 weeks. VK2735 had 13.1% weight loss in just 13 weeks; if it can hit 20% placebo-adjusted weight loss in less than 72 weeks, which is almost a certainty as there was no plateauing in the 13-week study, then Viking has a blockbuster on its hands. Viking is also confident enough to sign a long-term deal with CordenPharma, a contract development and manufacturing organization (CDMO), to develop its VK2735 injectable and oral drug formulations.