Our Stock of the Week is Viking Therapeutics (VKTX). Viking is racing to launch an obesity drug that competes against Lilly (LLY) and Novo Nordisk (NVO). Preliminary results for its VK2735 showed excellent results with substantial weight reduction and fewer side effects than other GLP-1 drugs.
Substantial competition exists in this huge market, and stocks have been bouncing around on news of other companies entering the fray. Amgen (AMGN), for example, recently commented on its conference call that it was pleased with its GLP-1 drug and was moving to Phase III.
So far, there isn’t much information on some of the competition, but VKTX continues to have some of the best data and the fewest side effects.
Recently, Raymond James raised the firm’s price target on Viking Therapeutics to $118 from $116 and maintained a Strong Buy rating on the shares. The second quarter earnings update was broadly positive, given that VK2735 is advancing directly to Phase 3, which could take just 2.5 years from start to finish. The Phase 1 study of oral VK2735 advanced through 60mg and 80mg cohorts seemingly without any safety/tolerability issues, and the 100mg cohort is now enrolling. Viking’s Phase 1 oral VK2735 data abstract was submitted to ObesityWeek on November 3-6.
Other indications for VK275 besides obesity are extremely important, and some data should be updated soon. Viking is also speculated to be a potential takeover target for a large drug company that wants to enter the obesity market.
Technically, the stock has recently found some support in the $40s and is holding above its simple 200-day moving average. It is currently bumping up against overhead resistance at the downtrend line and may need a little pullback to consolidate gains. We are looking for trading range action between the 50-day and 200-day SMAs.
As always, we will not chase the stock to start the week but will look to aggressively trade it as it develops
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in VKTX. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
