Prediction: $10,000 Invested in Viking Therapeutics Before Its Oral Phase 3 Readouts Could Be Worth This Much by 2028

Viking Therapeutics (NASDAQ: VKTX) currently has four phase 3 trials for its key drug, VK2735, in progress. Two of them are in the subcutaneous (injectable) form for obesity and obesity with type 2 diabetes, and two are in oral form for obesity and obesity with type 2 diabetes.

The key to the stock's future value lies in the oral phase 3 in obesity. Here's why, and a look at what the stock could be worth if all goes well.

Viking Therapeutics phase 3 trials

The subcutaneous trials are important for establishing market share in a fiercely competitive market against current and future blockbuster drugs from rivals like Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO).

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In comparison, the oral trials are important for potentially expanding its addressable market by creating a viable dual-formulation strategy, whereby an initial subcutaneous dose (to induce rapid weight loss) can be combined with a more convenient oral maintenance dose. In addition, patients who don't like subcutaneous dosing could take oral VK2735 to lose weight, albeit probably at a slower rate than with subcutaneous dosing.

The subcutaneous VK2735 trials (Vanquish-1 and Vanquish-2) are already underway, with data expected from them in the second half of 2027. Meanwhile, the oral VK2735 trials (Sunrise-1 and Sunrise-2) only started in the current quarter, and given that they are 68-week trials, data from them are likely to be available in 2028.

As a reminder, Viking also has the second part of a small maintenance trial underway, which will examine an initial subcutaneous VK2735 dose over 21 weeks followed by an oral VK2735 dose over a following 12 weeks.

It's important not to underestimate the importance of this trial result, as the phase 2 oral VK2735 trial had some questionable tolerability data: 20% of treated patients discontinued due to an adverse event. Still, I think there's reason to expect better outcomes in the maintenance trial as well as the phase 3 trials.

Viking Therapeutics stock in 2028

The maintenance trial data is due in 2027, and Viking Therapeutics investors should have data from all the phase 3 trials by the end of 2028. Commercial success in clinical trials is not measured in binary fashion, meaning that VK2735's commercial appeal won't depend solely on a favorable result; it will depend on factors such as efficacy and tolerability relative to rivals. Still, based on the phase 2 results for VK2735, it's possible subcutaneous VK2735 could report steeper weight loss than its most similar drug, Eli Lilly's tirzepatide (Zepbound for obesity and Mounjaro for obesity with type 2 diabetes).

Turning to valuation matters, according to data analytics company Evaluate, peak tirzepatide sales could hit $70 billion by 2032.

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If VK2735 could establish, say, 10% of those sales, its peak sales could be about $7 billion. However, the figure needs to be risk-adjusted for the uncertainty in the clinical trials. According to academic studies, the probability of success from phase 3 to approval ranges from 59% to 70%, with about 63% for a metabolic lead indication drug.

Conservatively assuming 50%, peak sales for VK2735 could be $3.5 billion; Viking trading at 3 to 5 times peak sales gives a market cap of $10.5 billion to $17.5 billion, with the midpoint ($14 billion) equivalent to a stock price of $110. That would mean a $10,000 investment now could be worth up to $47,800 in 2028.

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