Viking Therapeutics shares jump 35.7% on VK2735 weight loss data

Viking Therapeutics Inc. (NASDAQ: VKTX) shares surged 35.67 percent on Tuesday to close at $40.85, ending the session just $2 below the stock's 52-week high. The rally followed the company's release of clinical trial data for its weight loss drug candidate, VK2735.

In a 21-week study, patients receiving VK2735 lost between 16 and 19 percent of their body weight, while those in the placebo group saw no weight loss. The trial involved weekly dosing that began at lower levels and escalated every two weeks starting in Week 3. By the end of the study, participants were on final doses of 15 mg, 17.5 mg, 20 mg, or 22.5 mg.

The company highlighted that during a 12-week maintenance period, side effects were minimal. Reported issues included nausea, vomiting, diarrhea, constipation, and stomach discomfort. Viking Therapeutics framed the primary benefit of VK2735 as its ability to help patients maintain weight loss without requiring frequent self-injections.

CEO Brian Lian stated that the maintenance dosing results demonstrate the significance of VK2735's unique half-life and pharmacokinetic profile. He noted that these characteristics appear to enable an effective approach to achieving and maintaining weight loss goals for patients living with obesity. The company is currently testing whether injection frequency can be reduced to every two weeks or once a month.

Despite the positive stock reaction, Goldman Sachs maintained a neutral stance on Viking Therapeutics shares. The investment firm described the results as encouraging but anticipated, citing the study design's multiple dosing options. Goldman Sachs emphasized the need for a longer follow-up period to assess the durability of weight loss maintenance, particularly for monthly doses.

The firm reiterated its $38 price target for Viking Therapeutics stock. This target represents a 7 percent discount from the latest closing price of $40.85.

Institutional investors had already shown bullish sentiment toward Viking Therapeutics prior to the release of the clinical trial data. Data from Insider Monkey indicated that 47 hedge funds held positions in the stock in the second quarter, an increase from 44 in the first quarter.

Combined holdings for these funds rose by 25 percent to $551 million in the second quarter, up from $441 million in the previous quarter. Because these figures predate the new trial results, market participants are now monitoring updated third-quarter holdings data to determine if the clinical findings have triggered additional buying interest.