One of many hottest development areas within the healthcare panorama nowadays is the weight problems drug market due to a category of medicine that is confirmed to be each efficacious and protected in medical research and in the actual world. You may be conversant in the highest sellers, resembling Eli Lilly‘s Zepbound or Novo Nordisk‘s Wegovy — they’ve made headlines as demand for them soared.
Actually, demand for these medication has been so sturdy that it even surpassed provide till the drugmakers took motion to scale up manufacturing capability — and this will likely not let up. The weight problems drug market could attain past $100 billion by 2030, in keeping with Morgan Stanley Analysis.
All of this has prompted traders to search for the subsequent Lilly or Novo Nordisk — an organization that will be part of these giants on this high-growth market. Viking Therapeutics (VKTX 0.67%) appears to suit the invoice, because it introduced incredible knowledge from trials of its weight reduction candidate final February — and the inventory delivered a 116% achieve for the complete 12 months.
Now, because the weight problems drug market alternative stays sturdy, is Viking a purchase in 2025?
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Elli Lilly and Novo Nordisk weight reduction medication
First, I am going to speak about this class of medicine, often called GLP-1 receptor agonists or twin GIP/GLP-1 receptor agonists. Novo Nordisk medication are within the former class, whereas Lilly’s are within the latter. In each circumstances, these medication act on hormones concerned within the digestion course of, serving to to cut back urge for food and regulate blood sugar ranges. They’re straightforward to make use of, self-administered weekly, and have confirmed to assist sufferers shed kilos.
Each of those medication have seen huge demand and introduced in blockbuster income. Demand has been so excessive, that these medication had been on the U.S. Meals and Drug Administration’s (FDA) record of medicine which can be in brief provide. The FDA just lately eliminated Lilly’s remedy from the record after the corporate considerably ramped up manufacturing capability, making certain better provide.
Now let’s speak concerning the new child on the town. Viking focuses on GIP/GLP-1 receptor agonists and has a candidate, VK2735, in late-stage medical trials. As an injectable (just like the Novo Nordisk and Lilly commercialized medication), VK2735 has accomplished section 2, and the subsequent step shall be section 3.
In section 2, Viking’s candidate confirmed as much as a 14.7% discount in imply physique weight after 13 weeks. The corporate is also growing VK2735 in an oral pill formulation, and that candidate simply entered a section 2 research. In an earlier trial, the oral candidate demonstrated weight lack of as much as 8.2% after simply 28 days.
Viking versus the market leaders
So is Viking a purchase in 2025?
It is essential to keep in mind that Novo Nordisk and Lilly, as huge pharma gamers, have the monetary assets and infrastructure to stay in management positions within the weight reduction drug market. They’re worthwhile corporations with full portfolios of merchandise, and income has climbed over time. Their market values high $300 billion and $600 billion, respectively, whereas Viking has a market cap of lower than $4 billion.
NVO Market Cap knowledge by YCharts.
All of this implies it is unlikely Viking will upset the market’s present leaders. That stated, this newer biotech participant might ultimately carve out a spot if all continues to go effectively in medical research. As I discussed earlier, weight reduction medication are in excessive demand, and that is anticipated to proceed, so there’s room for greater than a few gamers on this house.
Viking’s weight reduction candidate will not attain commercialization as quickly as this 12 months — however one thing else this 12 months might increase the inventory worth — promising clinical-trial knowledge. Viking shares have been identified to surge on sturdy clinical-trial outcomes.
When the corporate reported VK2735’s section 2 outcomes final 12 months, the inventory jumped 121% in a single buying and selling session. Viking gave again a few of these positive aspects, however nonetheless completed the 12 months, as talked about above, with a triple-digit improve. And the strong outcomes we have seen so removed from Viking supply us cause to be optimistic about VK2735.
That stated, something can occur throughout a medical trial, so investing in a biotech firm that does not but have merchandise in the marketplace entails some danger. However in case you can settle for that, scooping up shares of Viking might give you nice rewards — down the road, and at the same time as early as 2025.
