Viking Therapeutics' Q3 Catalyst That Could Turn Eli Lilly's and Novo Nordisk's Daily Weight Loss Pill Strategy Upside Down

The key to understanding the investment case for Viking Therapeutics (NASDAQ: VKTX) stock lies in the benefits of having a weight-loss drug, namely VK2735, in development in both subcutaneous (injection) and oral forms. It differentiates Viking from competitors such as Eli Lilly (NYSE: LLY) and may offer benefits over Novo Nordisk's (NYSE: NVO) Wegovy (semaglutide). Moreover, a major near-term event is approaching, which will change how investors view weight-loss drugs.

The case for buying Viking Therapeutics stock

The investment rationale is based on successful Phase 3 trial results for VK2735 in subcutaneous (currently in Phase 2, with results expected from mid-2027) and in oral (with Phase 3 expected to start in late 2026).

While those timelines might not seem exciting, investors should note that Viking is due to release results from an extremely important Phase 1 maintenance clinical in the third quarter of this year. In fact, these results could make or break the investment case for the stock.

Viking Therapeutics Phase 1 maintenance clinical trial

The aim and structure of the trial are as follows:

• All participants (about 180) will receive VK2735 subcutaneously or a placebo for 19 weeks.
• After week 19, "participants will be transitioned to a range of VK2735 maintenance dosing options including monthly subcutaneous doses, daily oral doses, weekly oral doses, or placebo" for an additional 12 weeks.

As such, some participants will receive a combination of subcutaneous and oral VK2735, and the results will be compared with those from various other combinations, the benefit being that they'll take different formulations of the same molecule.

Image source: Getty Images.

Two things to look out for in the results

While Eli Lilly is developing an oral GLP-1 agonist, Foundayo (orforglipron), it's a separate molecule from its leading subcutaneous Dual GLP-1/GIP agonist, Zepbound (tirzepatide). Novo Nordisk's Wegovy is approved in subcutaneous and oral formulations.

However, there's evidence suggesting that the oral version of VK2735 is more effective than Wegovy oral and Foundayo. For example, in the Phase 2 Venture oral trial, VK2735 produced a 12.2% mean weight loss after just 13 weeks, compared with 16.6% mean weight loss after 64 weeks in the Phase 3 Oral Wegovy trial. Similarly, Foundayo reported 12.4% weight loss at its highest dose after 72 weeks.

However, the Phase 2 Venture study was limited by safety and tolerability issues, resulting in a 20% discontinuation rate among treated participants as a result of adverse events.

Image source: Getty Images.

The hope is that the Phase 1 maintenance data will yield a combination of efficacy and useful safety and tolerability data, thereby increasing confidence in the Phase 3 trials for VK2735 and its potential as a dual-formulation therapy.

Thinking further ahead, if the efficacy data from the Phase 3 trials for subcutaneous and oral formulations demonstrates a combination of efficacy advantages and good safety and tolerability, then a regimen of an initial subcutaneous dose followed by an oral pill could outpace Eli Lilly's and Novo Nordisk's offerings. The key is to improve safety and tolerability, and a big clue to whether Viking can do that will come with the upcoming Phase 1 maintenance trial results.

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