Key Points
-
The key trial results for VK2735 are still years away.
-
There are some useful indicative results coming from a phase 1 maintenance trial over the next six or so months.
-
VK2735 demonstrated the potential to generate relatively swift weight loss in phase 2 trials.
- 10 stocks we like better than Viking Therapeutics ›
Following an excellent run in June, when the stock rose by more than 19%, Viking Therapeutics (NASDAQ: VKTX) stock recently dipped, potentially creating a buying opportunity for an exciting growth stock with huge potential in the weight-loss drug sector. Is the dip enough to make the stock a buy?
Wall Street loves Viking Therapeutics
According to Visible Alpha, the Wall Street consensus price target for the stock is just below $91, representing a potential 150% return from the current price. The analyst’s excitement about the stock stems from its lead drug candidate, VK2735, and its potential in the highly lucrative weight-loss market.
VK2735 is being developed as a dual formulation therapy, whereby, for example, it can be initially taken by injection (subcutaneously) and later in oral form as a maintenance dose or to continue weight loss. Investors are also hoping the promising efficacy data (VK2735 appears to have a steeper velocity of weight loss than rival drugs) from the phase 2 trials (oral and subcutaneous) will be repeated in phase 3 trials. The subcutaneous phase 3 trial is in progress, while the oral phase 3 trial will begin in the fourth quarter of this year.
Is it a stock to buy?
VK2735 is a potential game changer for the company, but risks remain, not least due to some questionable tolerability data from the phase 2 oral trial. Moreover, the phase 3 results from the subcutaneous VK2735 trial won’t be available until late 2027 at the earliest, and the oral 2735 phase 3 results aren’t due until 2028.
That said, there is a phase 1 maintenance dosing trial (participants will take subcutaneous VK2735 for 19 weeks before switching to a range of subcutaneous and oral maintenance doses) in progress, with results from the subcutaneous period due in the current quarter and the oral maintenance results due in the first half of 2027.
Wall Street says “buy,” but cautious investors may want to wait to monitor the maintenance trial results before buying in, as the phase 3 results won’t come out for a while.
Should you buy stock in Viking Therapeutics right now?
Before you buy stock in Viking Therapeutics, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Viking Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $371,842!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,244,783!*
Now, it’s worth noting Stock Advisor’s total average return is 900% — a market-crushing outperformance compared to 207% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.
