Can Viking Therapeutics Hold Its Edge as Obesity Rivalry Heats Up?

Viking Therapeutics VKTX remains one of the few clinical-stage biotechs making meaningful progress in obesity drug development. The company is developing VK2735, an investigational novel dual GLP-1 and GIP receptor agonist (RA), in multiple clinical studies as oral and subcutaneous (SC) formulations for treating obesity.

Competition in the obesity market intensified earlier this week after Pfizer PFE announced its return to the space following the failure of its own weight loss pill earlier this year. The pharma giant announced plans to acquire obesity drug developer Metsera in a $4.9 billion deal. The transaction — expected to be completed before this year’s end — will add four novel clinical-stage incretin and amylin programs to Pfizer’s pipeline. This portfolio also includes Metsera’s lead candidate MET-097i, an injectable GLP-1 RA drug which is being evaluated in mid-stage studies for both weekly and monthly dosing schedules.

Why Pfizer’s Move Matters for Viking

Pfizer’s return brings back a heavyweight competitor in an already crowded obesity race. With massive R&D capabilities and deep pockets, Pfizer could swiftly advance the development of the Metsera portfolio. This is likely to create pressure on smaller biotechs like Viking Therapeutics, which have limited resources and face greater development and regulatory risks.

The timing of Pfizer’s re-entry is notable for VKTX, which recently reported mixed top-line results from a mid-stage study evaluating the oral formulation of VK2735. Patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing, versus 1.3% for placebo. However, dropout rates among VK2735-treated patients were higher than expected — raising questions about safety and tolerability. Viking has said it could mitigate these issues by using gradual dose escalation, but whether this approach will succeed remains uncertain.

Given the above challenges, all eyes are now on the SC version of VK2735, which recently entered late-stage development. This formulation is likely Viking Therapeutics’ best shot at competing with Eli Lilly LLY and Novo Nordisk NVO, which currently dominate this space with their injectable drugs, Zepbound and Wegovy, respectively. However, an update on these studies is not expected before early 2027.

Despite recent setbacks and intensifying competition, we believe that there is still room for smaller biotechs like VKTX to grab a share of the booming obesity market. Even though Viking’s mid-stage study results on the oral version were underwhelming, the company still successfully achieved its primary and secondary endpoints.

Competition Heating Up in the Obesity Space

According to research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by 2030. This is evident as both Lilly and Novo already generate a significant portion of their topline from the sales of their respective obesity drugs — a trend which is expected to continue in future quarters. To maintain their dominance in the market, both Lilly and Novo Nordisk are investing broadly in obesity and have several next-generation obesity drugs (both oral and injectable medications) currently either in clinical development or under regulatory review.

The tremendous popularity of the obesity space has also attracted the attention of several bigwigs, like Amgen, AbbVie and Merck.

In March, Amgen initiated two phase III studies on its investigational GIPR/GLP-1 RA drug, MariTide, in obesity as part of its comprehensive MARITIME phase III program. Since June, Amgen has initiated two additional late-stage studies in other obesity-related conditions. The drug has the potential for monthly and possibly less frequent dosing.

Both AbbVie and Merck entered the obesity space through a similar route — a licensing deal. While AbbVie forayed into the sector earlier this year after signing a licensing agreement with Denmark-based biotech Gubra for the latter’s experimental obesity drug, Merck secured a licensing deal for an investigational oral weight-loss drug developed by China-based Hansoh Pharma last December.

VKTX’s Price Performance, Valuation and Estimates

Shares of Viking Therapeutics have underperformed the industry year to date, as seen in the chart below.

From a valuation standpoint, VKTX is trading at a premium to the industry. Going by the price-to-book value (P/B) ratio, the company’s shares currently trade at 3.76 times trailing book value, higher than 3.22 for the industry. The stock is also trading above its five-year mean of 3.34.

Estimates for Viking’s 2025 loss per share have widened from $2.42 to $2.48 in the past 30 days. During the same timeframe, loss per share estimates for 2026 have increased from $3.10 to $3.15.

Viking Therapeutics currently carries a Zacks Rank #4 (Sell).

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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