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Viking Therapeutics stock gets boost from positive news that obesity drugs reduced risk of heart attacks and strokes

The stock of biotech Viking Therapeutics Inc. was up 4% Wednesday to extend its week-to-date gains to 13%, after positive news on Novo Nordisk’s obesity drugs reducing the risk of cardio events ignited excitement about Viking’s program.

The San Diego-based company

is also developing a GLP-1 receptor agonist, in both injectable and oral form, as a treatment for obesity and diabetes.

The drugs use the same mechanism as Novo Nordisk’s


Wegovy and Ozempic and Eli Lilly’s

Mounjaro, mimicking the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.

Viking is expected to offer data from a Phase 1 trial of its VKTX2735 injectable therapy at Obesity Week in October and topline data from the oral treatment VK2735 by year-end, according to Truist analysts.

The analysts have a buy rating on the stock and a $32 price target that’s more than double its current price of about $14.

In July, Viking said it expects to launch a Phase 2 trial of VK2736 in the third quarter, following positive results in the Phase 1 trial.

The company is also developing a treatment for NASH, or nonalcoholic steatohepatitis. NASH is a more severe version of nonalcoholic fatty liver disease, or NAFLD, a range of conditions that occurs when excess fat builds up in liver cells.

An estimated 25% of Americans have NAFLD, while about 20% of those patients end up developing NASH, in which the inflammation and cell damage caused by the fat buildup can cause cirrhosis and liver failure. Most of those patients are also obese or have diabetes.

NASH is the main reason that patients require liver transplants and there are high hopes for the therapies currently in development.

 For more, see: Inside the NASH drug boom: New drugs for a ‘silent’ liver disease that affects millions near FDA approval

Wall Street hopes that NASH drugs may help the battered biotech stock sector recover from its two-year slump, but there is also uncertainty about the potential costs of these therapies as well as concerns about access to drugs that treat a condition associated with obesity.  

Truist said the positive news from Tuesday, that Wegovy reduced the risk of cardiovascular events by 20% in adults with overweight or obesity in a trial compared with placebo, is a positive for NASH drugs.

For more, read: Novo Nordisk’s Wegovy shows positive results in reducing risk of cardio events, not just weight loss

Major adverse cardiovascular events, or MACEs, are the endpoint in confirmatory trials of NASH drugs, they wrote in a note on Tuesday.

“In fact, NASH drugs need to demonstrate benefit in a cardiovascular outcomes trial (CVOT) for full approval where MACE is the approvable primary endpoint,” wrote analysts led by Joon Lee.

“This makes sense given the majority of NASH patients die from cardiovascular complications. Highly positive outcome from the SELECT trial implies that it’s also likely to garner full approval down the road in NASH,” Lee wrote, referring to the Novo Nordisk trial.

Roth MKM analyst Dylan Dupuis also reiterated a buy rating on Viking on Tuesday with a $32 price target.

Viking’s stock has gained 58% in the year to date, while the SPDR S&P Biotech exchange-traded fund
has fallen 4% and the S&P 500
has gained 17%.

This story originally appeared on Marketwatch

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