Viking Therapeutics Soared After Its Latest GLP-1 Data. Is It Too Late to Buy?

Today, a very valuable market -- one heading toward $100 billion by the end of the decade -- is dominated by two pharma giants, Eli Lilly and Novo Nordisk. And this is the weight loss drug market. Lilly and Novo each sell GLP-1 drugs, products that have seen soaring demand and have delivered blockbuster revenue.

But a new potential player is waiting in the wings and has been taking important steps forward. Viking Therapeutics (NASDAQ:VKTX) is testing its candidate, VK2735, in late-stage trials in injectable and oral formulations, and so far, data have been strong. Just this week, the company released an exciting update from a maintenance dosing study of its injectable formulation. That prompted the stock to soar 35% in one trading session.

Now, the question is: Is it too late to buy this potential GLP-1 winner? Let's find out.

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GLP-1 drugs have taken the market by storm

So, first, let's talk about GLP-1 drugs and Viking's potential future position in this market. GLP-1 products have taken the weight loss market by storm as they have helped so many people -- from celebrities to the general public -- lose weight quickly and safely. You may recognize the names of some of these products, such as Lilly's Mounjaro and Zepbound, and Novo's Ozempic and Wegovy. They work by interacting with hormonal pathways involved in the digestion process, and as a result, help control appetite and blood sugar levels. Doctors prescribe these drugs for patients who have type 2 diabetes and/or obesity.

Though these pharma giants lead this market, there is room for new players, given the sustained high demand. Until Lilly and Novo ramped up their manufacturing a couple of years ago, their products were on the U.S. Food and Drug Administration's shortage list.

Viking could carve out share in the market due to this need for more GLP-1 products and due to certain elements that make Viking stand out. Here's the first: Viking's VK2735, if successful, would be the first oral dual GLP-1/GIP agonist to reach commercialization. The "dual" nature means it acts on two hormonal pathways rather than just one. Current oral weight loss drugs, as GLP-1s, act on one pathway.

And the second big advantage is that VK2735 could become the only dual agonist to reach the market in oral and injectable formulations. This may prompt doctors and patients to more easily switch from one to the other, since the key ingredient is the same.

Trial volunteers on Viking's GLP-1 maintained their weight loss

This next advantage has to do with the latest trial data, released this week. And it concerns maintenance dosing. The idea is that after patients have lost a certain amount of weight, they may be able to reduce the frequency of dosing and maintain the weight loss. Viking's trial demonstrated fantastic results in this area.

Trial participants were given injections weekly for 21 weeks, then for the following 12 weeks, injections happened every other week or monthly. As much as 97% of weight loss was maintained for those who transitioned to every-other-week dosing, and up to 90% of weight loss was maintained for the monthly dosing group.

Viking stock soared in one trading session, as mentioned above, on this data, as the proven ability to maintain weight loss through less frequent dosing is a clear positive point for this potential drug.

Should you buy Viking stock?

Now, let's return to our question: Is it too late to buy Viking after its recent surge? Not necessarily. This stock is known to react to trial data — a strong phase 2 update a couple of years ago resulted in a 100% gain in one day. So, additional trial news is likely to be a catalyst for stock performance. Of course, this involves some risk because any disappointment could weigh heavily on the shares; it's important for investors to be comfortable with that idea before buying Viking or any other biotech stock.

But, for investors who don't mind this risk, Viking makes a fantastic buy today. The stock, at its current price, still has room to run, with trial updates, potential regulatory approval, and sales down the road as possible catalysts.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.