Viking Therapeutics Inc. (NASDAQ:VKTX) soared by a whopping 35.67 percent on Tuesday to close at $40.85 apiece—just $2 shy of its 52-week high—after reporting stellar results from its weight loss drug candidate, VK2735.
After 21 weeks of clinical trial, the company said that enrolled patients who took VK2735 successfully lost 16 to 19 percent of their body weight, versus none in the placebo group.
Participants were randomized to receive weekly doses of VK2735 or placebo for 21 weeks. Beginning in Week 3, VK2735 doses were escalated every two weeks until final doses of 15 mg, 17.5 mg, 20 mg, or 22.5 mg were reached.
During the 12-week maintenance period, only minimal side effects were observed, such as nausea, vomiting, diarrhea, constipation, and stomach discomfort.
For illustration purposes only. Photo by Cherries on Shutterstock
The Selling Point
The weight-loss percentage figures appeared to be just secondary.
For Viking Therapeutics Inc., the selling point of VK2735 is the ability for patients to maintain their weight loss without having to inject themselves regularly.
Instead of every week, the company is testing whether people can take injections every two weeks or once a month.
“The results of our innovative maintenance dosing study continue to demonstrate the significance of VK2735’s unique and differentiated half-life and PK profile, which appear to enable an effective new approach to achieving and maintaining the weight loss goals of patients living with obesity,” Viking Therapeutics Inc. CEO Brian Lian said.
Analyst Remains Neutral
Despite the solid data, investment firm Goldman Sachs remained neutral about Viking Therapeutics Inc., saying that the results were encouraging but were anticipated given the study design with multiple dosing options.
Goldman Sachs believed that a longer follow-up period is required to assess the durability of weight loss maintenance, especially for monthly doses.
The investment firm also reiterated its $38 price target for the stock, or a 7 percent discount from its latest closing price.
Hedge Funds More Bullish
Institutional investors, however, were bullish about their long-term growth prospects for Viking Therapeutics Inc. even prior to the results.
Data from Insider Monkey showed that in the second quarter of the year, 47 hedge funds held positions in the stock, up from 44 in the first quarter of the year.
More notably, their combined holdings increased by 25 percent to $551 million from $441 million quarter-on-quarter.
As these predate the clinical trial data, investors will then have to watch out for the updated third-quarter hedge fund holdings to determine whether the results have helped encourage further buying in the stock.
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