Viking Therapeutics Marks Its Spot as a Strong Player in the Weight Loss Drug Market

Biotech firm Viking Therapeutics has positioned itself as a strong new contender or acquisition target in the weight loss drug market, according to CNBC.

Over the years, the weight loss drugs market has seen a surge in competition, with Viking being just one of many aiming for dominance in this arena. Some analysts suggest that by the end of the decade, the market could potentially reach a value of $100 billion.

In the competition for injectable weight loss drugs, Eli Lilly and Novo Nordisk stand out as Viking’s main competitors. Even with their high price points and obstacles to insurance coverage, both companies’ treatments have ignited high demand in the weight loss market over the past year.

Last week, Viking revealed its first bit of data, and its shares shot up 120%. The positive results position the firm as a strong potential player in the space, and there is also scope for more companies to enter in the years to come.

According to Goldman Sachs’ prediction, as reported by Reuters, between 10 million and 70 million Americans will be taking weight loss drugs by 2028. However, Eli Lilly and Novo Nordisk have found it challenging to offer the supply to meet the demand, which opens up opportunities for companies like Viking to step in.

The data that has been revealed further enhances Viking’s appeal as a potential acquisition target for larger companies looking to enter or expand their presence in the obesity treatment environment.

Viking went through a two-stage trial, which looked at over 170 overweight and obese patients. They all received varying doses of the injectable drug or a placebo. The trial, however, did not directly compare Viking’s treatment to other drugs. Many analysts still compare Viking’s injection to Eli Lilly’s Zepbound because they work in a similar way.

Both Viking and Zepbound mimic two naturally produced gut hormones named GLP-1 and GIP. GLP aids the reduction of food intake by shrinking the appetite. GIP, which also reduces appetite, may additionally enhance the body’s metabolism of fat and sugar. Novo Nordisk’s weight loss injection Wegovy, however, only targets GLP-1.

Analysts were particularly impressed by the amount of weight loss observed in patients who received the largest dose of Viking’s drug. Individuals who were administered a weekly 15-milligram dose of the treatment experienced an average weight loss of 13.1% after 13 weeks, in comparison to those who were given the placebo.

During a call with investors last week, Viking CEO Brian Lian said that there was no evidence of a plateau in weight reduction at week 13 for any dose of the drug. That suggests that “further weight loss might be achieved” by keeping patients on the treatment for more time.

In a note, last week, William Blair analyst Andy Hsieh said that “Viking’s drug data shows a ‘best-in-class profile’ among both approved and experimental weight loss drugs with phase two trials.” Additionally, “Eli Lilly’s Zepbound generated roughly 7% weight loss relative to a placebo after 12 weeks in a phase three clinical trial.”

In a separate note last week, BTIG analysts said Viking’s drug looks to top Novo Nordisk’s weight loss injection Wegovy.

In terms of Viking being a target for acquisition, some analysts expect other companies to have a high interest in the company. Speaking to CNBC, Oppenheimer analyst Jay Olson said, “This very well could be on the shopping list for any large-cap pharma or biotech company that wants to be in the obesity market but currently doesn’t have a drug. There are plenty of them out there.”

Olson added that a company could “pay a pretty significant premium for Viking and pick this up … for a relatively low price compared to the potential that exists for a drug like this.”