Key Points
The safety and tolerability data were at odds with an earlier phase 1 trial, and not as good as a comparable drug trial result from Eli Lilly.
Viking may decide to take VK2735 (oral form) through phase 3, or a peer could step in and buy or partner with it.
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Shares of Viking Therapeutics (NASDAQ: VKTX) rose by almost 10% at 11 a.m. ET today. This follows a significant fall the previous day on the release of its eagerly awaited top-line results from a phase 2 trial of its weight loss drug VK2735 in oral form. The oral formulation offers convenience over subcutaneous (injected) formulations.
Viking Therapeutics VK2735 phase 2 results
The phase 2 results were successful in weight loss reduction, but less so in safety and tolerability. In comparison, a phase 3 trial for pharma giant Eli Lilly’s (NYSE: LLY) orforglipron in weight loss resulted in a mean percentage weight loss of 7.8% at the lowest dosage to 12.4% at the highest dosage. Meanwhile, the VK2735 phase 2 ranged from a mean reduction of 2.3% to 12.2% at the highest dosage.
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The key difference is that the discontinuation rate due to adverse effects in Eli Lilly’s phase 3 trial was 10.3% at the highest dosage, compared to 20% overall in the Viking phase 2 trial.
What it means to investors
A few analysts are saying the sell-off is overdone, and with good reason. Recall that Viking’s trial, although disappointing, is only a phase 2 with 280 enrolled patients, compared to Eli Lilly’s phase 3 with 4,500.
Image source: Getty Images.
It’s also at odds with the earlier phase 1 trial, which indicated good safety and tolerability.
As such, a larger company may step in to try to improve tolerability and take VK2735 (oral form) through phase 3 by buying Viking or partnering with it. However, it could be a while before there’s any upside catalyst to the stock price coming from trial data, as the phase 3 trial for oral VK2735 only started in June. It’s a disappointing update, but there’s still upside potential for the stock from here.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.
