JPMorgan says this new company in the GLP-1 market could rise 45%
JPMorgan thinks Viking Therapeutics could be the next big name in the GLP-1 craze. The firm initiated coverage of the biopharmaceutical company with an outperform rating and a price target of $80 a share. JPMorgan’s forecast implies an upside of more than 46% from Tuesday’s close of $54.65. Viking Therapeutics is in the process of developing its obesity drug VK-2735, which will join similar GLP-1 drugs and peer rivals from Novo Nordisk and Eli Lilly in clinical trials. In July, Viking said an injectable version of the drug would enter phase 3 trials, while a phase 2 study of an oral version is about to begin. Investors are looking for more details on the oral version, expected in early November, as a possible catalyst for the stock. The stock is up more than 204% in 2024. Viking Therapeutics shares are up VKTX YTD. “Given investor sentiment around the fat asset, we expect the stock to rise significantly on this data set,” analyst Hardik Parikh wrote in a note Wednesday. “We think this profile will give VKTX a role in the market despite significant long-term headwinds (manufacturing requirements, stiff competition) for oral and even more so for subQ.” [subcutaneous] version.” Parikh expects Viking’s results to show that patients can tolerate the drug better than existing drugs such as Novo’s Wegovy and Eli Lilly’s Zepbound. Some patients taking these popular obesity drugs experience nausea and gastrointestinal side effects that force them to stop treatment. The drugs, which mimic incretins or gut-derived hormones, slow digestion and regulate blood sugar, helping patients stay full longer. Both are given as weekly injections, but many patients prefer to take pills. Oral drugs also tend to be cheaper and easier to manufacture. JPMorgan forecasts that the drug could reach annual sales of about $120 billion by 2030, with oral sales accounting for about $30 billion by 2035. Higher doses of VK-2735, up to 100 milligrams, could show “slightly better efficacy than competitors but still has a very good tolerance profile”.
