Viking Therapeutics: Could GLP-1 Maker Be Acquired Pre-Approval?

Key Points

• Viking Therapeutics shares surged 13% on rumors of a potential buyout from a big pharma looking to add a GLP-1 franchise.
• Viking’s VK2735 is a dual GLP-1/GIP receptor agonist similar to Zepbound by Ely Lilly & Co., as users lost 14.7% of body weight in the first 13 weeks, and Ozempic only had a 10% weight loss.
• Analysts believe Viking Therapeutics has a 185.55% upside consensus price target of $97.29, with the highest price target at $138.00.

The GLP-1 industry is currently an oligopoly ruled by two pharmaceutical giants, Novo Nordisk A/S NYSE: NVO, maker of semaglutide under the Ozempic and Wegovy name brands, and Eli Lilly & Co. NYSE: LLY, maker of tirzepatide and dual GLP-1/GIP agonist treatment sold under Mounjaro and Zepbound name brands. As compounding facilities cease making compounded versions of their drugs, which are no longer on the FDA drug shortage list, the medical sector oligopoly will likely regain many more users to seal their dominance.

However, there are many contenders in the works. One of the most promising GLP-1 contenders is VK2735, a dual GLP-1/GIP receptor agonist similar to tirzepatide, owned by Viking Therapeutics Inc. NASDAQ: VKTX.

Oppenheimer Sets a $138 Price Target Based on Phase 2 Trial Results

Viking Therapeutics stock surged 121% on February 27, 2024, on its Phase 2 VENTURE clinical trials results of 14.7% weight loss after 13 weeks, rivaling tirzepatide at 15% and outpacing the 10% weight loss of semaglutide. William Blair initiated a $79 price target. Shares surged as high as $99.41 in the following days. VK2735 is such a profound contender that an Oppenheimer research analyst upgraded the price target to $138 per share on March 26, 2024.

Viking is also working on an oral version of VK2735 which has shown 6.8% weight loss at 28 days. Viking is awaiting Phase 3 trials for its subcutaneous injection in Q2 2025 and Phase 1 and 2 for its oral pill version. Assuming Viking produces successful Phase 3 results, an FDA approval could take until late 2027.

Speculation of Buyout Interest Surges Shares Viking Stock by 15%

Rumors of a potential acquisition of Viking Therapeutics before completing Phase 3 trials have been making the rounds, and shares ran up by 13% in the week ending February 21, 2025. M&A publication Betaville had an “uncooked” alert that caused volume to spike on takeover rumors.

Pfizer Inc. NYSE: PFE may be interested in the company as they are seeking to build a viable GLP-1 franchise. Its twice-a-day oral GLP-1 treatment, danuglipron, halted development in late 2023 due to high rates of gastrointestinal side effects and patient drop-outs in its Phase 2B study. Pfizer resumed development in July 2024 on a reformulated once-a-day pill.

There Is a Precedent for Pre-FDA Approval Acquisitions

While most biotech buyouts occur after FDA approval, there are rare occasions when the early study results are so impressive that a major pharma takes a chance and acquires the company even before FDA approval during clinical trials. On December 4, 2023, Roche Holding AG OTCMKTS: RHHBY announced a $2.7 billion buyout of privately held Carmot Therapeutics for its incretin-based GLP-1 therapies including dual GLP-1/GIP treatment CT-388 starting Phase 2, oral GLP-1 treatment CT-996 in Phase 1 and CT-868 for diabetes. Carmot was debating going public but instead accepted the buyout.

The $100 billion GLP-1 mark is so lucrative that big pharma doesn’t mind just being able to ante up to the table. Oppenheimer’s analyst Jay Olson sees Viking Therapeutics as a top acquisition target for a larger pharma lacking obesity drugs. Viking’s VK2735 could be a blockbuster in the making.

VKTX Stock Attempts to Break Out of a Descending Triangle Pattern

A descending triangle is typically a bearish chart pattern. It features a descending upper trendline acting as resistance and a flat lower trendline providing support. The pattern is confirmed when the stock breaks below the lower support line, although a breakout above the resistance line can occur less frequently.

VKTX was in a descending triangle with a descending upper trendline that started at $56.25, capping any bounce attempts. The flat-line lower trendline support is $28.64. The takeover speculation caused shares to surge through the upper trendline resistance on heavy volume in an attempt to break out of the descending triangle. The daily anchored VWAP is $31.94. The daily RSI is rising at the 51-band. Fibonacci (Fib) pullback support levels are at $31.90, $28.64, $26.93 and $24.53.

VKTX stock’s average consensus price target is 184.55% higher at $97.29, and its highest analyst price target is $138.00. It has 14 analysts' Buy Ratings and 1 Hold Rating. The stock has a 21.47% short interest.

Actionable Options Strategies: Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered calls at upside Fib levels executes a wheel strategy for income.