Viking Therapeutics' Oral Weight Loss Drug Stumbles: VK2735 Data Leaves Investors Underwhelmed

Viking Therapeutics, a company that had been riding a wave of investor excitement in the burgeoning weight-loss drug market, recently unveiled Phase 1 trial data for its highly anticipated oral weight-loss candidate, VK2735. The reveal, however, has been met with a significant dose of market skepticism, leading to a sharp decline in its stock value.

The initial results for oral VK2735, a dual GLP-1/GIP receptor agonist, showed a dose-dependent reduction in body weight, which is a positive sign.

Participants receiving the highest dose of 40mg once daily demonstrated an average weight loss of 5.6% at day 28. While any weight loss is encouraging, the market's reaction suggests these figures didn't quite live up to the lofty expectations set by the success of other players in the field.

A key point of contention for investors and analysts alike is the comparison to Eli Lilly's impressive oral weight-loss drug, orforglipron.

Eli Lilly's compound showcased a 9.4% weight reduction after 12 weeks in its trials. Viking's data, though from a shorter 28-day study, appears less compelling when directly juxtaposed with Lilly's longer-term, more significant outcomes. Furthermore, concerns have emerged regarding a potential plateauing of the weight loss effect observed with VK2735 at earlier time points, which raises questions about its long-term efficacy trajectory.

Safety-wise, VK2735 exhibited a profile consistent with other drugs in its class, with most adverse events being mild to moderate gastrointestinal issues like nausea and vomiting.

These are generally anticipated side effects for GLP-1 agonists and are typically manageable.

Despite the company's efforts to highlight the positive aspects of the data, the market's response was swift and brutal. Viking Therapeutics' stock plunged, reflecting the significant disappointment among investors who had perhaps anticipated a more robust or competitive showing against established and emerging rivals.

Analysts from firms like Oppenheimer, while maintaining an 'Outperform' rating, acknowledged the observed plateauing effect, stating, 'while we recognize that weight loss appears to be plateauing, it is important to note that the study ran only 28 days and there is still room to optimize the dose.' However, others, like Stifel, expressed clear disappointment, noting the market's high hopes for the company's oral program.

The highly competitive landscape of the obesity drug market means that every percentage point of weight loss and every nuance in efficacy and safety data is scrutinized.

While Viking Therapeutics still has a long road ahead in developing VK2735, these initial results serve as a stark reminder that even promising candidates must deliver exceptional performance to capture and maintain investor confidence in this high-stakes therapeutic area.