What occurred
Viking Therapies‘ ( VKTX -11.08%) shares were down by 9.9% on heavy volume since 11:14 a.m. ET on Monday. This substantial drop was because of Pfizer‘s ( PFE -3.68%) statement that it will advance its oral glucagon-like peptide-1 receptor agonist danuglipron into late-stage screening later on this year. As an outcome, Viking’s midstage weight-loss prospect, VK2735, might deal with stiff competitors from yet another market giant.
So what
Viking’s shares have actually been skyrocketing this year, in big part since of the development of VK2735 as an unique treatment for weight-loss. Nevertheless, the biotech’s midstage weight problems prospect is still a number of years behind market leaders such as Eli Lilly, Novo Nordisk, Amgen, and Pfizer.
To take on these very first movers, VK2735 will require to have a best-in-class profile. That’s possible provided its outstanding security and effectiveness profiles up until now. Nevertheless, since of the extremely competitive nature of the marketplace, Viking can’t manage any significant medical obstacles with VK2735. The drug is essential to Viking’s worth proposal, with some experts approximating its peak sales at more than $ 6 billion annually
Now what
Is Viking’s stock a buy on this pullback? It depends upon your convenience with danger. Viking is likewise establishing a midstage nonalcoholic steatohepatitis (NASH) drug, VK2809, that might strike smash hit status prior to completion of the years. So there’s an outdoors opportunity the business may be harboring 2 all-star drugs in its pipeline. As an outcome, the small-cap biotech’s shares might be woefully underestimated at present levels. That stated, Viking’s shares are dangerous since of the high level of competitors in both NASH and weight problems.
George Budwell has positions in Pfizer. The Motley Fool has positions in and suggests Pfizer. The Motley Fool suggests Amgen and Novo Nordisk. The Motley Fool has a disclosure policy