Viking Therapeutics Initiates Pivotal Phase 3 Trial: Here's Why Investors Have Reason for Optimism After a Disappointing Phase 2

Biopharmaceutical company trial results are full of uncertainty; just ask Viking Therapeutics (NASDAQ: VKTX) investors, who have been on a bit of a roller-coaster ride with the company's key weight loss drug, VK2735, in its oral formulation. Still, the latest announcement of the initiation of two phase 3 trials creates a lot of promise for investors. Here's why.

Viking Therapeutics and VK2735

As a reminder, Viking already has the weight loss drug in two phase 3 trials in subcutaneous (injectable) form, namely for obesity (VANQUISH-1) and adults with type 2 diabetes who have obesity or are overweight (VANQUISH-2). It's also undergoing a smaller maintenance trial to test a combination of an initial subcutaneous VK2735 dose followed by an oral VK2735 maintenance dose, following a successful maintenance trial using subcutaneous VK2735 as the maintenance dose.

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The development of subcutaneous and oral formulations of VK2735 is part of Viking's dual-formulation strategy. That's why it recently announced the initiation of phase 3 trials for oral VK2735 for obesity (SUNRISE-1) and adults with type 2 diabetes with obesity or weight issues (SUNRISE-2)

Viking Therapeutics and oral VK2735

As with all oral medications, there are concerns about safety and tolerability. As such, investors were delighted with the exemplary tolerability data coming from the phase 1 oral VK2735 trial (MAD) in 2024. The 28-day MAD trial involved 37 treated patients, of whom "mild nausea was reported in five (14%) VK2735-treated subjects," with no vomiting, and only one reporting diarrhea. According to the press release, "no clinically meaningful differences were reported for GI-related adverse events among subjects treated with VK2735 compared with placebo."

While phase 1 trials tend to be small, tolerability is generally excellent. That's why investors were shocked by the safety and tolerability results from the phase 2 oral VK2735 (VENTURE-Oral) trial.

In common with MAD, the 13-week VENTURE-Oral showed good efficacy, but unfortunately, it had a 20% discontinuation rate due to adverse events among treated participants. The result caused the stock to crash.

Why investors have cause for optimism over the phase 3 oral VK2735 trials

First, the phase 2 trial appeared to have a difficult cohort, with 13% of the placebo group also discontinuing due to an adverse event.

Second, the phase 2 trial used a relatively aggressive titration, with 13 weeks of daily oral dosing. The phase 3 trial will be over 68 weeks. In addition, as CEO Brian Lian disclosed during a Morgan Stanley conference, in phase 2, "we had dosed people with 4 tablets, and they were a little bit larger tablets. That wasn't a great experience for some people." Management is focused on reducing the tablet size and count for the phase 3 trial.

Third, management has lowered the maximum dosing in the phase 3 trial. Whereas phase 1 had dosing from 2.5 mg to 40 mg, phase 2 was more aggressive, going from 15 mg to 120 mg, and phase 3 is designed to dose at 27.5 mg, 35 mg, and 55 mg doses.

All told, the combination of a potentially easier trial cohort, longer, less aggressive titration (treated patients have more time to adjust), and less aggressive dosing may well yield a more favorable phase 3 outcome.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.