Viking Therapeutics (VKTX 2.04%) is a sizzling biotech inventory due to the corporate’s file of reporting good information from its cardiometabolic illness packages, and there is not any signal of that repute being tarnished.
The truth is, Viking simply gave traders an replace which companies up its standing as a really promising firm. This is what it reported, and why it is another excuse to purchase the inventory.
Its newest information means that this market is sort of inside attain
At The Liver Assembly annual convention on Nov. 19, Viking reported some section 2b scientific outcomes from considered one of its packages, VK2809, which goals to deal with metabolic dysfunction-associated steatohepatitis (MASH). After 52 weeks of therapy, throughout all the dose ranges examined, 69% of sufferers noticed their MASH resolve with no additional worsening of liver fibrosis (toughening of the tissue). Over the identical interval, 51% of the sufferers noticed their fibrosis enhance by no less than one customary grade, and a big majority of sufferers additionally noticed their diploma of liver fats decline by greater than 30%.
These are very optimistic outcomes, particularly the therapeutic of fibrosis in most sufferers, as fibrosis has historically been a troublesome symptom to handle in MASH. VK2809 thus appears destined to advance into section 3 trials and maybe past; that is a brand new cause to purchase Viking inventory.
It is also an extension of the primary funding thesis for doing so. Per a report by Imaginative and prescient Analysis, the marketplace for MASH medication could possibly be price greater than $16 billion by 2030; others see it rising to be almost 50% bigger than that, and sooner. The chance is more likely to be big both means. Viking’s addressable market most likely will not be as massive as that proper off the bat, however with extra analysis and improvement (R&D) work, it may plausibly attain many of the market finally.
At the moment, Madrigal Prescription drugs is the one competitor out there for MASH therapeutics, though Novo Nordisk and different firms are additionally on the verge of coming into it. That implies that if Viking can get VK2809 out the door after finishing section 3 scientific trials, it’s going to have a great likelihood to safe a big share of the market and thus generate loads of income over time. However there’s additionally a threat that its late-stage scientific trial information will fail to show superiority or significant benefits relative to Madrigal’s candidate, which may ship a blow to the inventory.
There are already plenty of causes to purchase this inventory
As favorable as the brand new information are, VK2809 is not the one program in Viking’s pipeline, neither is it probably the most developed, or the one with the best potential for earnings.
The star of the present is VK2735, the biotech’s candidate for treating weight problems, which is a market that could possibly be price as a lot as $100 billion by round 2030. The corporate lately wrapped up its section 2 scientific trials with nice outcomes, and it is very possible that its injected formulation will enter late-stage testing subsequent 12 months. Its oral formulation will provoke a section 2 trial earlier than the tip of this 12 months, and (assuming it performs as nicely and finally earns approval) would possibly finally have a fair bigger complete addressable market.
What’s extra, Viking has round $930 million in money, equivalents, and short-term investments. That is more likely to be greater than sufficient juice to push no less than VK2735 to commercialization with out the corporate taking up debt or issuing extra shares of its inventory. Whether or not it has sufficient sources to do the identical with its MASH program on the identical time is much less clear, however given the dimensions of its struggle chest relative to its trailing-12-month working bills of $134 million, it’s possible.
So, inside the subsequent three years or so, it is simple to ascertain this biotech having two completely different blockbuster medication in the marketplace. For a pre-revenue enterprise like Viking, that is very bullish, so the outlook on this inventory is sort of favorable.
