What Does the Future Hold for Viking Therapeutics in 5 Years?

What Does the Future Hold for Viking Therapeutics in 5 Years?

Today, Viking Therapeutics (NASDAQ:VKTX) has no products, no income and, fortunately, almost no debt. By early 2029, there is a good chance that none of these facts will still be true if biotechnology still exists. People who buy stocks today are likely to be either very satisfied or very disappointed, with little chance of falling somewhere in between.

Here’s what could happen in the next five years and how it could affect the company and its shareholders.

Suppose this giant catalyst fires

The buzz surrounding Viking today comes from its VK2735 program to treat obesity. On April 27, the company released results from its Phase 2 clinical trials, with data indicating that the drug appears to be very effective in helping with weight loss when administered over a 13-week period. At the highest doses tested, patients lost 14.7% of their body weight, while patients given the placebo control lost only 1.7%.

A phase 3 clinical trial will soon follow, and in the next few years it is possible that the drug will be approved for sale. If that happens, Viking shares will be limitless, as the market for very profound obesity therapies could be worth as much as $77 billion by 2030, according to analyst estimates. Morgan Stanley. Its shares have already soared 119% in the last 30 days and it has yet to make a single dollar in sales.

And if the rest of VK2735 development goes as planned, more gains will likely follow. Viking is currently testing an oral formulation of the same drug in phase 1 trials, and being able to take a daily pill rather than receiving an injection will undoubtedly make the therapy all the more sought after, assuming it works just as well and it doesn’t. There are no worse side effects. The precise financial impact of marketing an anti-obesity pill is difficult to calculate, but it could arguably be enormous.

Either way, in 2029, Viking will have an entirely new clinical-stage product pipeline filled with new metabolic disease candidates. It could also seek to expand the approved indications on the labels of its marketed drugs. Finally, it is reasonable to expect more collaborative activity, as management will be interested in betting on some of its smaller peers with promising projects. Research and development programs or technologies if they manage to obtain a place in the market.

There’s a chance the future won’t be so sunny

Now that we’ve looked at the optimistic trajectory Viking Therapeutics could take over the next five years, it’s time to consider the less favorable possibilities. If V2735 fails to satisfy Food and Drug Administration regulators during its Phase 3 trials, or if the company’s regulatory filing is rejected for another reason, it won’t be the end of the road.

Viking’s program to treat metabolic dysfunction-associated steatohepatitis (MASH, formerly known as NASH) is currently in Phase 2b clinical trials. According to Research Nester, the market for MASH drugs could exceed $48 billion annually by 2035, and rising global obesity rates are expected to be a key driver of demand growth. Biotechnology will therefore still have a chance to penetrate a massive market.

But it could also fail in this market, because MASH has always been a difficult disease to treat. Or if competitors see their obesity drugs continue to gain traction over time, and they probably will, they could ultimately reduce the need for therapies to treat MASH. In other words, the upside potential for shareholders will likely be very limited compared to sunnier scenarios.

Right now, the evidence indicates that this company’s stock will be higher in five years than it is today. Although substantial risks remain, the likelihood that the system will receive a major safety signal during its late-stage clinical trials is diminishing as data continues to flow.

So if you are willing to wait for the bull thesis to play over the next few years, invest – just know that while this stock looks great right now, winning is not guaranteed in the biotech sector.

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.

Where will Viking Therapeutics be in 5 years? was originally published by The Motley Fool

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