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.
Last week, Amgen (AMGN) commented on its conference call that it was pleased with its GLP-1 drug and was moving to Phase III. No details were given, and early reports indicated substantial side effects, but Amgen stock went up by an amount equal to about three times the market cap of VKTX.
VKTX dipped on the news at first, but the strong reaction of Amgen stock to these very vague comments illustrates the huge value of an effective GLP-1 drug.
There are other indications for VK275, and some data should be updated in the near future. Viking is also speculated to be a potential takeover target for a large drug company that wants to join the obesity market.
What we really like here is the great chart setup. Following the initial results for VK2735 the stock gapped up and has been in a narrowing trading range. There has been a little volatility on various news events, but the narrow range and the test of the trend line is a great setup for a breakout move that attracts momentum buyers.
As always, we don’t plan to chase the stock on Monday morning but will be aggressively trading it as things develop.
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.
