Latest news with #VK2735
Globe and Mail
5 days ago
- Business
- Globe and Mail
Viking Therapeutics Posts Wider Q2 Loss
Key Points - Loss per share was $(0.58), falling short of analyst expectations by $(0.13), or 29.1% (GAAP, Q2 2025). - Research and development expenses rose to $60.2 million in Q2 2025, up from $23.8 million in the same period of 2024, as clinical activity scaled up. - Cash and short-term investments totaled $808 million as of Q2 2025, supporting ongoing late-stage trials. These 10 stocks could mint the next wave of millionaires › Viking Therapeutics (NASDAQ:VKTX), a clinical-stage biopharmaceutical company focused on treatments for obesity and metabolic diseases, released results for its second quarter on July 23, 2025. The key takeaway from the update was a higher-than-expected net loss (GAAP) for Q2 2025, driven by a sharp increase in research and development spending to support pipeline progress, particularly in later-stage obesity trials. The company reported a net loss per share of $(0.58) (GAAP), wider than the consensus GAAP estimate of $(0.45). There was no revenue reported or expected, in line with its clinical-stage status. Despite the larger operating loss and elevated cash burn, the company finished the quarter with significant liquidity, allowing it to continue funding large clinical programs. Overall, the period highlighted both progress and risks tied to advancing its lead drug candidate against strong competition. Source: Analyst estimates for the quarter provided by FactSet. Business Overview and Focus Areas Viking Therapeutics develops therapies for diseases tied to metabolism, with a pipeline that includes treatments for obesity, nonalcoholic steatohepatitis (a type of fatty liver disease often called NASH or MASH), and rare genetic disorders. Its business model centers on drug discovery and clinical development, aiming to secure approvals from regulators like the Food and Drug Administration (FDA) for products that meet areas of high unmet need. Recently, the company's main focus has been its obesity program, highlighted by its lead product VK2735, a glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptor agonist. It is developing both injectable and oral forms of this obesity treatment, advancing through late-stage trials. Other priorities include preparing for potential commercial launches and managing finances effectively to sustain R&D activity. Success in large, complex clinical trials and eventual regulatory approvals are the most important factors for its future. Quarter Highlights: Pipeline Progress and Financial Performance During the quarter, the company expanded clinical activities for VK2735, with one trial enrolling about 4,500 patients with obesity and another with around 1,100 patients who have both obesity and type 2 diabetes. These are randomized, double-blind, placebo-controlled clinical trials designed to measure weight loss after 78 weeks. The company completed enrollment for its Phase 2 oral VK2735 trial (VENTURE-Oral), with about 280 patients, in March 2025, and management expects top-line results in the second half of 2025. Previous data had shown promising effects for VK2735. Patients taking the injectable form achieved up to 14.7% weight loss after just 13 weeks in a Phase 2 study of VK2735 for obesity, as reported in 2024. For the oral formulation, prior short-term studies showed up to 8.2% weight loss in 28 days. These results place the company in direct competition with high-profile existing treatments for obesity, including Novo Nordisk's Semaglutide, and Eli Lilly's Tirzepatide, which are established standards in the field. Research and development expenses rose to $60.2 million in Q2 2025, up from $23.8 million in the same period of 2024, as costs increased from scaling up trial activity. These included higher spending on patient studies, drug manufacturing, and compensation. General and administrative costs also increased, mainly from higher employee compensation and stock-based pay, though this was partly balanced by lower legal and patent expenses. Ongoing investment in the pipeline drives these higher costs, but puts pressure on cash reserves and raises the risk of future fundraising. There were no revenues in the period, in line with the company's pre-commercial status. All operations remain funded by prior equity offerings and investment income. Ending liquidity was $808 million in cash and short-term investments as of June 30, 2025, down from $852 million on March 31, 2025. The company maintains this cash position to fund ongoing clinical work, especially as trial size and complexity grow. No new partnerships, licensing agreements, or direct commercialization steps were disclosed during the period. Looking Forward: Outlook and Upcoming Catalysts Management did not provide forward financial guidance for the remainder of fiscal 2025 or future quarters. It reaffirmed its focus on delivering key clinical readouts, especially top-line data from the VENTURE-Oral trial for its oral obesity drug in the second half of the year. The company also anticipates submitting an investigational new drug (IND) application for its DACRA program (a dual amylin and calcitonin receptor agonist for obesity) in the final quarter of the year. No new product revenues are expected until clinical milestones are achieved and regulatory approvals are secured. As the company grows its clinical footprint, future quarters will remain defined by the pace of patient enrollment, speed of key trial readouts, and any changes in spending or capital needs. Investors should watch for trial updates, changes in cash burn, and any partnering activity that might ease dilution risks or accelerate readiness for future product launches. VKTX does not currently pay a dividend. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,034%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of July 21, 2025
Yahoo
5 days ago
- Business
- Yahoo
VKTX Stock Down on Wider-Than-Expected Loss in Q2, Nil Sales
Viking Therapeutics VKTX reported second-quarter 2025 loss of 58 cents per share, wider than the Zacks Consensus Estimate of a loss of 44 cents. The company had incurred a loss of 20 cents per share in the year-ago quarter. Currently, Viking Therapeutics does not have any approved products in its portfolio. Hence, it it yet to generate revenues. More on VKTX's Q2 Earnings Research and development (R&D) expenses amounted to $60.2 million, compared with $23.8 million incurred in the year-ago period. This significant increase was primarily due to higher costs associated with clinical studies and manufacturing for the company's drug candidates, as well as increased employee-related expenses. General and administrative expenses amounted to $14.4 million, up 40% year over year, primarily due to higher employee-related expenses. Shares of VKTX were down 8% in after-market trading yesterday, likely due to a wider-than-expected loss incurred in the quarter on higher operating expenses. The stock has outperformed the industry so far this year, as seen in the chart below. Image Source: Zacks Investment Research As of June 30, 2025, Viking Therapeutics had cash, cash equivalents and short-term investments worth $808 million compared with $852 million as of March 31, 2025. 2025 Guidance While Viking did not provide hard numbers, it indicated on the conference call that R&D expenses are expected to rise sequentially by approximately 25% to one-third in the third and fourth quarters of 2025 compared with the second quarter. VKTX's Pipeline Updates Viking Therapeutics is one of the few biotech stocks that has shown immense potential in the obesity space. It is developing VK2735, an investigational novel dual GLP-1 and GIP receptor agonist, in different clinical studies as oral and subcutaneous (SC) versions for treating obesity. Last month, Viking Therapeutics started the phase III VANQUISH program to evaluate VK2735 SC in adult patients with or without type II diabetes (T2D) for 78 weeks. The program consists of two late-stage studies — the VANQUISH-1 study will enroll obese adults with at least one weight-related co-morbid condition, while the VANQUISH-2 study will enroll obese or overweight adults with T2D. VKTX is targeting enrollment of about 4,500 participants for the VANQUISH-1 study and around 1,100 for the VANQUISH-2 study. Viking is also evaluating the oral formulation of VK2735 in the ongoing phase II VENTURE-Oral Dosing study, which spans over 13 weeks. Data from this study is expected before this year's end. Additionally, the company reiterated plans to file an investigational new drug application with the FDA in the fourth quarter of 2025 to advance an internally developed amylin agonist program to clinical development for treating obesity. VKTX's Zacks Rank Viking currently carries a Zacks Rank #3 (Hold). Viking Therapeutics, Inc. Price Viking Therapeutics, Inc. price | Viking Therapeutics, Inc. Quote Our Key Picks Among Biotech Stocks Some better-ranked stocks from the sector are Akero Therapeutics AKRO, Amarin Corporation AMRN and Agenus AGEN. While AMRN and AKRO sport a Zacks Rank #1 (Strong Buy) each at present, AGEN carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. In the past 90 days, loss per share estimates for Akero's 2025 have improved from $4.08 to $3.93. Loss per share estimates for 2026 have narrowed from $4.30 to $4.27 during the same period. AKRO stock has surged 86% year to date. Akero's earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 48.90%. In the past 90 days, loss per share estimates for Amarin's 2025 have improved from $4.60 to $2.30. Loss per share estimates for 2026 have narrowed from $3.87 to $1.50 during the same period. AMRN stock has surged 61% year to date. Amarin's earnings beat estimates in two of the trailing four quarters, met the mark once and missed the mark on another occasion, delivering an average surprise of 29.11%. In the past 90 days, Agenus' bottom-line estimates for 2025 have significantly improved from a loss of $3.46 per share to earnings of $1.56. During the same timeframe, estimates for 2026 loss per share have narrowed from $3.91 to $1.99. AGEN stock has soared 122% so far this year. Agenus' earnings beat estimates in two of the trailing four quarters and missed the mark on the other two occasions, delivering an average negative surprise of 22.71%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Agenus Inc. (AGEN) : Free Stock Analysis Report Amarin Corporation PLC (AMRN) : Free Stock Analysis Report Viking Therapeutics, Inc. (VKTX) : Free Stock Analysis Report Akero Therapeutics, Inc. (AKRO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
16-07-2025
- Business
- Yahoo
H.C. Wainwright Reiterates a Buy Rating on Viking Therapeutics (VKTX), Sets a $102 PT
Viking Therapeutics, Inc. (NASDAQ:VKTX) is one of the best oversold NASDAQ stocks to buy now. On June 30, H.C. Wainwright analyst Joseph Pantginis reiterated a Buy rating on Viking Therapeutics, Inc. (NASDAQ:VKTX) and set a price target of $102.00. A microbiologist in protective gear studying samples in a laboratory. On June 25, Viking Therapeutics, Inc. (NASDAQ:VKTX) announced the initiation of the VANQUISH Phase 3 clinical program for VK2735, which is a dual agonist of the glucagon-like peptide 1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors. Management reported that VK2375 is under development in both subcutaneous and oral formulations to potentially treat metabolic disorders such as obesity. The VANQUISH Phase 3 program encompasses two studies evaluating VK2735: one in obese or overweight adults with type 2 diabetes and one in adults with obesity. Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage company that develops therapies for metabolic and endocrine disorders. While we acknowledge the potential of VKTX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
05-07-2025
- Business
- Yahoo
Why I Think Viking Therapeutics Is an Asymmetric Growth Opportunity
Wall Street's smartest money has quietly amassed over $150 million in bullish positions, with Goldman Sachs eliminating all downside hedges. Despite trading near 52-week lows due to biotech industry headwinds, Viking's oral GLP-1 drug shows unprecedented tolerability that could revolutionize obesity treatment. Upcoming phase 2 oral data expected in October or November 2025 represents a rare binary event where the market significantly undervalues the upside potential. 10 stocks we like better than Viking Therapeutics › Most investors have written off biotech stocks as a graveyard of broken dreams. While artificial intelligence (AI) captures Wall Street's imagination, the biotech industry -- once the crown jewel of innovation -- has been left for dead. But beneath the wreckage, Wall Street's sharpest funds are quietly positioning for what could be the most significant metabolic breakthrough in a generation. Viking Therapeutics (NASDAQ: VKTX) is developing VK2735, a dual GLP-1/GIP receptor agonist for obesity treatment. The company reported stellar phase 2 results in February 2024, showing 14.7% weight loss at 13 weeks with the injectable formulation. But here's what makes Viking different: Its drug demonstrated unprecedented tolerability with a 13% discontinuation rate that was no higher than placebo -- a stark contrast to competing GLP-1 drugs. In obesity treatment, tolerability isn't a luxury -- it's key to real-world adoption. Viking's breakthrough with VK2735 isn't just efficacy; it's safety. The drug's 13% discontinuation rate matched placebo -- unlike Wegovy and Zepbound, which see discontinuation rates typically five to 10 percentage points higher than their placebo groups. Tolerability indistinguishable from placebo could expand the entire obesity market -- not just capture share. The obesity drug market is projected to reach $200 billion by 2030, yet current treatments face significant limitations. Novo Nordisk's Wegovy and Eli Lilly's Zepbound require weekly injections and cause severe gastrointestinal side effects in many patients. Viking's oral formulation, currently in phase 2 trials with data expected in the October-to-November time frame, could be the first pill to roughly match injectable efficacy without the tolerability issues. Here's what Wall Street might be missing: Viking's superior tolerability profile doesn't just mean competing for market share -- it could lift the roof on the entire obesity category. With no greater discontinuation than placebo, VK2735 could dramatically expand the addressable market by reaching patients who currently avoid or quit treatment due to side effects. An effective, well-tolerated oral option could double or triple the number of patients seeking treatment. The numbers tell a compelling story: Viking showed a near-perfect dose-response relationship, with tolerability no different than placebo -- something no other GLP-1 developer has achieved. Every major pharma has tried and failed to create an effective oral GLP-1, with Pfizer discontinuing its program due to safety issues and an exceptionally high discontinuation rate (> 50%). Viking appears to have cracked the code based on the early data, and Wall Street seems to know it (more on that later). Viking's stock has plummeted 64% from its 52-week high of $81.73 to around $27 as of July 2. This devastation reflects broader structural damage in the biotech space rather than company-specific issues. Since interest rates have flipped higher, biotech as a whole has been crushed, leaving a bad taste in investors' mouths. The 2022 biotech collapse has created a vicious cycle. Great opportunities are no longer getting flagged for investors, as AI stocks dominate headlines and capture imaginations. Meanwhile, GLP-1 drugs have shown a mixed bag in clinical trials lately, suggesting to some that a top in efficacy and safety is near. But I believe that's shortsighted thinking. VK2735 has shown a differentiated clinical profile, with tolerability nearly indistinguishable from placebo in early studies -- something no other GLP-1 has achieved. While it's far too early to declare victory, the data suggests Viking may have solved one of the key challenges that has plagued obesity drugs. This widespread biotech pessimism has created the kind of mispricing sophisticated funds live for: quality assets trading at distressed valuations. It's the very definition of an asymmetric opportunity. While retail investors panic, institutional behavior reveals extreme confidence. Per the latest 13F filings, Balyasny Asset Management holds $71 million in bullish positions, up 542% from the previous quarter. Citadel owns $32 million, Susquehanna has $36 million, and Jane Street holds $17.5 million. Combined, these sophisticated quantitative funds have accumulated over $150 million in bullish positions. More telling is what Goldman Sachs just did: It eliminated 100% of its put positions while increasing calls by 350%. When one of Wall Street's premier trading desks removes all downside protection, it's signaling extreme confidence in the outcome. These institutions aren't speculating randomly -- they're arbitraging what they see as a massive market inefficiency. Their models likely show the same disconnect: a drug with tolerability on par with placebo, and a validated mechanism trading as if it has a 96.5% chance of complete failure. For quant funds that live and die by probabilities, this represents a rare mispricing opportunity. The divergence between institutional longs and retail shorts has reached an extreme. Short interest just increased to 30% of float as of June 13, up from 26% the prior month -- even as the smart money accumulates massive call positions. For context, 30% short interest is extraordinarily high for a clinical-stage biotech, putting Viking in the 99th percentile of U.S. equities for bearish bets. This sets the stage for a classic capitulation moment, where good news could ignite both fundamental revaluation and a violent short squeeze. Manufacturing is the Achilles' heel of most small-cap biotechs. Viking solved this early. In March 2025, the company inked a $150 million manufacturing deal with CordenPharma -- one of the world's premier peptide contract development and manufacturing organizations (CDMOs) -- giving Viking turnkey capacity for 100 million autoinjectors and 1 billion tablets annually, without dilution or costly infrastructure builds. This agreement removes a major overhang that has plagued other clinical-stage biotechs, as well as serves as a clear green flag that the broader market has curiously decided to ignore. After all, such an agreement would not have been signed without deep due diligence and extreme confidence in VK2735's clinical profile. Why? There is a tsunami of demand for GLP-1 manufacturing capacity right now. The phase 2 oral data release expected in the fourth quarter of 2025 represents a rare asymmetric opportunity. Based on the dose-response curves from the four-week data showing 6.8% weight loss, the oral formulation could potentially approach injectable-like efficacy. The full 13-week phase 2 data will reveal how close the oral formulation can get to the 14.7% weight loss seen with the injectable. At today's $3 billion market cap, Viking trades at a fraction of the value created by successful GLP-1 drugs. Eli Lilly has added over $300 billion in market value since Mounjaro's 2022 launch, while Novo Nordisk saw its valuation surge from under $200 billion to over $600 billion at its peak as Ozempic and Wegovy transformed the obesity market. Even with recent pullbacks, both companies have captured hundreds of billions in incremental value from their GLP-1 franchises alone. The market's high bar for new entrants was evident when Amgen's MariTide showed 20% weight loss but disappointed with 11% discontinuation rates in its phase 2 trial. When the data was released in November 2024, shares fell nearly 5% that day despite the solid efficacy. Yet Viking's parity with placebo appears to clear that bar with room to spare. If Viking's oral drug approaches the injectable's efficacy, the stock could see immediate revaluation to $200 to $300 per share, with longer-term potential exceeding $500. At current levels, the market is implying just a 3.5% probability of success for VK2735. That's absurd when you consider that metabolic drugs with positive phase 2 data typically have 45% to 50% success rates through approval. With VK2735's validated mechanism and placebo-like tolerability, a reasonable probability may range from 45% to 70% -- significantly above the market's implied odds. Even using just a 25% success rate -- below the industry average -- suggests the stock should trade above $100 right now. At $27, the market is pricing Viking as a lottery ticket. The data says it's closer to loaded dice. The risk-reward setup has convinced me to take a leveraged position through deep out-of-the-money call options -- admittedly a speculative position that could expire worthless. But with Viking having about $7.50 per share in cash, even equity investors have defined downside risk in a worst-case scenario. Add in 30% short interest providing squeeze fuel and institutional positioning at extreme levels, and the asymmetric opportunity becomes clear. Key risks include potential safety issues emerging in larger trials, manufacturing scale-up challenges despite CordenPharma's support, and commercial headwinds such as payer reluctance to cover costly new obesity treatments. But the statistical improbability of VK2735's tolerability profile, combined with the manufacturing validation and institutional positioning, suggests the smart money sees something the broader market is missing. My personal take on the maximum upside? If VK2735 secures oral GLP-1 leadership and achieves widespread commercial adoption, a strategic acquisition could command valuations approaching $750 per share within the decade -- though this remains a highly speculative scenario contingent on flawless execution. A lot has to happen between now and then to make this come to fruition. But the seed has been planted. VK2735 has a real shot at bending the curve on the obesity epidemic. Markets move in cycles. "Returning is the motion of the Tao," as Lao Tzu wrote -- when one extreme is reached, movement toward the opposite begins. Biotech will rise again. Viking offers investors a chance to front-run that rotation -- not by chasing speculative names, but by owning a promising asset with game-changing potential at what may prove to be generational lows. As biotech's cycle inevitably turns, those positioned early in assets like Viking may capture the steepest part of the revaluation curve. Before you buy stock in Viking Therapeutics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Viking Therapeutics wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $963,866!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 George Budwell has positions in Pfizer and Viking Therapeutics and has the following options: long January 2026 $55 calls on Viking Therapeutics, long January 2026 $60 calls on Viking Therapeutics, and long January 2027 $60 calls on Viking Therapeutics. The Motley Fool has positions in and recommends Amgen, Goldman Sachs Group, and Pfizer. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy. Why I Think Viking Therapeutics Is an Asymmetric Growth Opportunity was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
04-07-2025
- Business
- Globe and Mail
Why I Think Viking Therapeutics Is an Asymmetric Growth Opportunity
Key Points Wall Street's smartest money has quietly amassed over $150 million in bullish positions, with Goldman Sachs eliminating all downside hedges. Despite trading near 52-week lows due to biotech industry headwinds, Viking's oral GLP-1 drug shows unprecedented tolerability that could revolutionize obesity treatment. Upcoming phase 2 oral data expected in October or November 2025 represents a rare binary event where the market significantly undervalues the upside potential. Most investors have written off biotech stocks as a graveyard of broken dreams. While artificial intelligence (AI) captures Wall Street's imagination, the biotech industry -- once the crown jewel of innovation -- has been left for dead. But beneath the wreckage, Wall Street's sharpest funds are quietly positioning for what could be the most significant metabolic breakthrough in a generation. A differentiated player in the GLP-1 gold rush Viking Therapeutics (NASDAQ: VKTX) is developing VK2735, a dual GLP-1/GIP receptor agonist for obesity treatment. The company reported stellar phase 2 results in February 2024, showing 14.7% weight loss at 13 weeks with the injectable formulation. But here's what makes Viking different: Its drug demonstrated unprecedented tolerability with a 13% discontinuation rate that was no higher than placebo -- a stark contrast to competing GLP-1 drugs. In obesity treatment, tolerability isn't a luxury -- it's key to real-world adoption. Viking's breakthrough with VK2735 isn't just efficacy; it's safety. The drug's 13% discontinuation rate matched placebo -- unlike Wegovy and Zepbound, which see discontinuation rates typically five to 10 percentage points higher than their placebo groups. Tolerability indistinguishable from placebo could expand the entire obesity market -- not just capture share. The obesity drug market is projected to reach $200 billion by 2030, yet current treatments face significant limitations. Novo Nordisk 's Wegovy and Eli Lilly 's Zepbound require weekly injections and cause severe gastrointestinal side effects in many patients. Viking's oral formulation, currently in phase 2 trials with data expected in the October-to-November time frame, could be the first pill to roughly match injectable efficacy without the tolerability issues. Here's what Wall Street might be missing: Viking's superior tolerability profile doesn't just mean competing for market share -- it could lift the roof on the entire obesity category. With no greater discontinuation than placebo, VK2735 could dramatically expand the addressable market by reaching patients who currently avoid or quit treatment due to side effects. An effective, well-tolerated oral option could double or triple the number of patients seeking treatment. The numbers tell a compelling story: Viking showed a near-perfect dose-response relationship, with tolerability no different than placebo -- something no other GLP-1 developer has achieved. Every major pharma has tried and failed to create an effective oral GLP-1, with Pfizer discontinuing its program due to safety issues and an exceptionally high discontinuation rate (> 50%). Viking appears to have cracked the code based on the early data, and Wall Street seems to know it (more on that later). Why is the stock trading near 52-week lows? Viking's stock has plummeted 64% from its 52-week high of $81.73 to around $27 as of July 2. This devastation reflects broader structural damage in the biotech space rather than company-specific issues. Since interest rates have flipped higher, biotech as a whole has been crushed, leaving a bad taste in investors' mouths. The 2022 biotech collapse has created a vicious cycle. Great opportunities are no longer getting flagged for investors, as AI stocks dominate headlines and capture imaginations. Meanwhile, GLP-1 drugs have shown a mixed bag in clinical trials lately, suggesting to some that a top in efficacy and safety is near. But I believe that's shortsighted thinking. VK2735 has shown a differentiated clinical profile, with tolerability nearly indistinguishable from placebo in early studies -- something no other GLP-1 has achieved. While it's far too early to declare victory, the data suggests Viking may have solved one of the key challenges that has plagued obesity drugs. This widespread biotech pessimism has created the kind of mispricing sophisticated funds live for: quality assets trading at distressed valuations. It's the very definition of an asymmetric opportunity. The institutional positioning tells a different story While retail investors panic, institutional behavior reveals extreme confidence. Per the latest 13F filings, Balyasny Asset Management holds $71 million in bullish positions, up 542% from the previous quarter. Citadel owns $32 million, Susquehanna has $36 million, and Jane Street holds $17.5 million. Combined, these sophisticated quantitative funds have accumulated over $150 million in bullish positions. More telling is what Goldman Sachs just did: It eliminated 100% of its put positions while increasing calls by 350%. When one of Wall Street's premier trading desks removes all downside protection, it's signaling extreme confidence in the outcome. These institutions aren't speculating randomly -- they're arbitraging what they see as a massive market inefficiency. Their models likely show the same disconnect: a drug with tolerability on par with placebo, and a validated mechanism trading as if it has a 96.5% chance of complete failure. For quant funds that live and die by probabilities, this represents a rare mispricing opportunity. The divergence between institutional longs and retail shorts has reached an extreme. Short interest just increased to 30% of float as of June 13, up from 26% the prior month -- even as the smart money accumulates massive call positions. For context, 30% short interest is extraordinarily high for a clinical-stage biotech, putting Viking in the 99th percentile of U.S. equities for bearish bets. This sets the stage for a classic capitulation moment, where good news could ignite both fundamental revaluation and a violent short squeeze. A manufacturing partner validates the opportunity Manufacturing is the Achilles' heel of most small-cap biotechs. Viking solved this early. In March 2025, the company inked a $150 million manufacturing deal with CordenPharma -- one of the world's premier peptide contract development and manufacturing organizations (CDMOs) -- giving Viking turnkey capacity for 100 million autoinjectors and 1 billion tablets annually, without dilution or costly infrastructure builds. This agreement removes a major overhang that has plagued other clinical-stage biotechs, as well as serves as a clear green flag that the broader market has curiously decided to ignore. After all, such an agreement would not have been signed without deep due diligence and extreme confidence in VK2735's clinical profile. Why? There is a tsunami of demand for GLP-1 manufacturing capacity right now. The asymmetric setup ahead of oral data The phase 2 oral data release expected in the fourth quarter of 2025 represents a rare asymmetric opportunity. Based on the dose-response curves from the four-week data showing 6.8% weight loss, the oral formulation could potentially approach injectable-like efficacy. The full 13-week phase 2 data will reveal how close the oral formulation can get to the 14.7% weight loss seen with the injectable. At today's $3 billion market cap, Viking trades at a fraction of the value created by successful GLP-1 drugs. Eli Lilly has added over $300 billion in market value since Mounjaro's 2022 launch, while Novo Nordisk saw its valuation surge from under $200 billion to over $600 billion at its peak as Ozempic and Wegovy transformed the obesity market. Even with recent pullbacks, both companies have captured hundreds of billions in incremental value from their GLP-1 franchises alone. The market's high bar for new entrants was evident when Amgen 's MariTide showed 20% weight loss but disappointed with 11% discontinuation rates in its phase 2 trial. When the data was released in November 2024, shares fell nearly 5% that day despite the solid efficacy. Yet Viking's parity with placebo appears to clear that bar with room to spare. If Viking's oral drug approaches the injectable's efficacy, the stock could see immediate revaluation to $200 to $300 per share, with longer-term potential exceeding $500. At current levels, the market is implying just a 3.5% probability of success for VK2735. That's absurd when you consider that metabolic drugs with positive phase 2 data typically have 45% to 50% success rates through approval. With VK2735's validated mechanism and placebo-like tolerability, a reasonable probability may range from 45% to 70% -- significantly above the market's implied odds. Even using just a 25% success rate -- below the industry average -- suggests the stock should trade above $100 right now. At $27, the market is pricing Viking as a lottery ticket. The data says it's closer to loaded dice. The risk-reward setup has convinced me to take a leveraged position through deep out-of-the-money call options -- admittedly a speculative position that could expire worthless. But with Viking having about $7.50 per share in cash, even equity investors have defined downside risk in a worst-case scenario. Add in 30% short interest providing squeeze fuel and institutional positioning at extreme levels, and the asymmetric opportunity becomes clear. Time to look past the biotech wreckage Key risks include potential safety issues emerging in larger trials, manufacturing scale-up challenges despite CordenPharma's support, and commercial headwinds such as payer reluctance to cover costly new obesity treatments. But the statistical improbability of VK2735's tolerability profile, combined with the manufacturing validation and institutional positioning, suggests the smart money sees something the broader market is missing. My personal take on the maximum upside? If VK2735 secures oral GLP-1 leadership and achieves widespread commercial adoption, a strategic acquisition could command valuations approaching $750 per share within the decade -- though this remains a highly speculative scenario contingent on flawless execution. A lot has to happen between now and then to make this come to fruition. But the seed has been planted. VK2735 has a real shot at bending the curve on the obesity epidemic. Markets move in cycles. "Returning is the motion of the Tao," as Lao Tzu wrote -- when one extreme is reached, movement toward the opposite begins. Biotech will rise again. Viking offers investors a chance to front-run that rotation -- not by chasing speculative names, but by owning a promising asset with game-changing potential at what may prove to be generational lows. As biotech's cycle inevitably turns, those positioned early in assets like Viking may capture the steepest part of the revaluation curve. Should you invest $1,000 in Viking Therapeutics right now? Before you buy stock in Viking Therapeutics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Viking Therapeutics wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $963,866!* Now, it's worth noting Stock Advisor 's total average return is1,049% — a market-crushing outperformance compared to179%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 30, 2025 George Budwell has positions in Pfizer and Viking Therapeutics and has the following options: long January 2026 $55 calls on Viking Therapeutics, long January 2026 $60 calls on Viking Therapeutics, and long January 2027 $60 calls on Viking Therapeutics. The Motley Fool has positions in and recommends Amgen, Goldman Sachs Group, and Pfizer. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.
