One of many greatest sensations fueling the healthcare house proper now’s the treatment class of glucagon-like peptide-1 (GLP-1) agonists. Even in the event you aren’t conversant in the time period “GLP-1,” you have in all probability heard of Ozempic and Wegovy. Each drugs are GLP-1 agonists, used to deal with diabetes and weight problems, respectively.
These therapies have develop into blockbuster medication for his or her maker, Novo Nordisk, and have helped gasoline beneficiant features for traders within the inventory. Whereas Novo Nordisk presently dominates the GLP-1 business, a lot of different gamers need to enter the house.
One main entrant is Viking Therapeutics (NASDAQ: VKTX). Under, I will break down the place Viking stands in its pursuit of the burden loss market, and assess whether or not shopping for the inventory might be like investing in Novo Nordisk in the beginning of the Ozempic revolution.
Viking has a number of drug candidates in its pipeline. However the one which traders appear most honed in on is VK2735 — a twin GLP-1 and GIP receptor agonist targeted on treating weight problems. As a twin agonist, VK2735 might wind up being a extra optimum remedy for weight problems and diabetes than single-pathway GLP-1 medicines equivalent to Ozempic or Wegovy.
In late October, Viking introduced that will probably be assembly with the Meals and Drug Administration (FDA) throughout the fourth quarter, in regards to the correct steps and protocols to maneuver VK2735 right into a part 3 medical trial.
Given the data above, you would possibly assume shopping for Viking inventory now — previous to part 3 trials — is a profitable alternative. Nonetheless, there may be fairly a bit to think about moreover anecdotal updates about VK2735.
To this point in 2024, shares of Viking have rocketed by a whopping 323% — placing its market cap proper round $8.8 billion. Contemplating that the corporate would not generate income, it is exhausting to justify this valuation.
On the intense aspect, I believe Viking is in a reasonably stable monetary place.
On the finish of the third quarter, it boasted $930 million of money and equivalents on its steadiness sheet. Moreover, the corporate has spent roughly $105 million in working bills by the primary 9 months of the yr. This means an annual run price of roughly $140 million in spending on analysis and growth (R&D) and different administrative bills, suggesting that Viking has ample liquidity to proceed funding its operations.
I see Viking Therapeutics as largely a speculative alternative. Whereas information from its medical trials thus far have been encouraging, there are nonetheless loads of unknowns surrounding the part 3 research.
