Why Viking Therapeutics Stock Was Victorious This Week

Viking Therapeutics (NASDAQ: VKTX), a biotech that has shot to prominence thanks to a weight-loss drug it is developing, was a winning stock this week. Over the course of the past five trading days, its price rose by almost 18%, according to data compiled by S&P Global Market Intelligence. It seems a global health agency is ready to support the kinds of medications the company is working on.

WHO is backing weight-loss drugs?

On Thursday, citing a memo it had reviewed, Reuters reported that no less a body than the United Nations' World Health Organization (WHO) is gearing up to back the use of obesity drugs. The agency will officially support the use of such medications by adults struggling to lose weight, and will make a push to improve access to the drugs for lower- and middle-income patients.

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Drugs approved specifically for weight loss are led in the U.S. by Novo Nordisk's Wegovy and Zepbound from Eli Lilly. Given that they are relatively easier means of shedding pounds than a consistent diet and exercise regime, they have proven to be highly popular among the public in a country with a worsening obesity problem.

With the runaway success of those two treatments, rival pharmaceutical and biotech companies are racing to develop their own weight-loss drugs. Among the leaders in the race is Viking, whose VK2735 has performed extremely well in phase 2 clinical trials. If the drug eventually wins approval and hits pharmacy shelves, it's certain to at least approach the popularity of Zepbound and Wegovy.

A worldwide problem

Needless to say, it'll get an additional boost from the generally well-respected WHO backing obesity treatments. Although weight management is a particularly vexing challenge in the U.S., it is by no means limited to this country; Viking and its peers have a market throughout the world for this kind of drug.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.