Post Obesity Pill Results Reveal: Buy, Sell or Hold VKTX Stock?

Shares of Viking Therapeutics VKTX plunged 36% in the past week after it reported mixed top-line results from a mid-stage study evaluating the safety and efficacy of the oral formulation of its experimental obesity drug, VK2735.

Though patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing compared with 1.3% in the placebo group, a significant number of patients also dropped out of the study.

Though management did assure investors that they might be able to mitigate the side effects of oral VK2735 by gradually moving patients from low doses to higher ones, the results have raised negative sentiments around Viking’s stock. While many investors raised questions on the drug’s tolerability and safety profile, some even cited dampened prospects for Viking as an acquisition target.

Let’s analyze the company’s strengths and weaknesses to understand how to play the stock amid the recent share price decline.

Competition in the Obesity Space Heating Up

The obesity market has garnered much interest lately, with two companies, Eli Lilly LLY and Novo Nordisk NVO, dominating this space with their respective injectable obesity drugs Zepbound and Wegovy. According to research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by 2030.

In order to capitalize on the rapidly expanding obesity market, Eli Lilly, Novo Nordisk and Viking Therapeutics are racing to introduce oral weight-loss pills. Initially, investors thought LLY could dominate the oral obesity space like it is doing in the injectables space. However, the recently reported results from a late-stage study on Lilly’s once-daily oral GLP-1 pill were underwhelming, and, like Viking, also reported higher patient discontinuation rates.

These setbacks have likely paved the way for Novo Nordisk’s resurgence in the obesity space, which has been looking for a way to gain an edge over archrival Lilly. Currently, there are no approved pills for weight-loss management. A regulatory filing is currently under review by the FDA seeking approval for an oral version of Wegovy. Notably, Novo was also the first to capitalize on the opportunity with injectable obesity drugs. If the filing for the oral version is approved, Novo could once again take charge of the space.

Though Viking is also evaluating a subcutaneous version of VK2735 in two recently initiated late-stage studies, the data is not likely to be expected until the end of 2026 or early 2027.

Lack of Marketed Products: A Woe for VKTX

The company does not have any marketed drugs in its portfolio, nor does it have any collaboration partners. As a result, it has to shoulder significant cash burn due to ongoing clinical studies. This was also likely the reason that Viking has now decided to focus only on the obesity pipeline while exploring collaboration opportunities for its non-alcoholic steatohepatitis (NASH) and X-linked adrenoleukodystrophy (X-ALD) candidates.

Assuming that the late-stage results on VK2735 SC are positive, they are still at least a couple of years away from potential commercialization.

VKTX Stock Performance, Valuation & Estimates

In the year so far, shares of Viking Therapeutics have plunged 38% against the industry’s 4% growth. The stock has also underperformed the broader Medical sector and the S&P 500 during this timeframe, as shown in the chart below. VKTX shares are currently trading below the 50 and 200-day moving averages.

VKTX Stock Underperforms Industry, Sector & S&P 500

The company is trading at a premium to the industry. Going by the price/book ratio, the stock currently trades at 3.63 times trailing 12-month book value, higher than 2.98 times for the industry.

Estimates for Viking Therapeutics’ 2025 and 2026 loss per share have widened significantly in the past 30 days.

How to Play VKTX Stock

In our opinion, investors should steer clear of this Zacks Rank #4 (Sell) stock. Viking has its fair share of problems, including the lack of a stable income stream and the presence of pharma giants like Lilly and Novo in its target market spaces.

Although the company boasts a strong cash position ($808 million as of June 2025-end) and carries no debt, recent concerns over the tolerability and safety profile of oral VK2735 raise red flags. Adding to this, the stock’s premium valuation and downward revisions to earnings estimates make it difficult to justify building or increasing positions at this stage.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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