investorsHD

inHD

Link copied

This Weight-Loss Drug Stock Could Gain 200%. The Case for It to Challenge Novo, Lilly.

investing ideas :: 2025-01-27 :: source - marketwatch

By Elsa Ohlen

GLP-1 and GIP medicines help control blood sugar levels and appetite, thereby helping patients lose unwanted weight. (Dreamstime) - Marketwatch

In pharma, 2024 was all about weight-loss drugs and the two dominant players Novo Nordisk NVO nd Eli Lilly LLY racing to develop new, more effective, drugs. But 2025 may be all about the challengers. One of the most promising contenders hoping to get in on the lucrative market is biotech Viking Therapeutics VKTX.

The company has an injectable weight-loss treatment starting late-stage clinical trials this year, as well as an oral candidate in mid-stage trials. Jefferies analysts led by Roger Song see significant value in the company based on its leading GLP-1/GIP franchise, setting a $110 price target on shares, reflecting a 223% upside to the current price of $34. 

Related reading

GLP-1 and GIP are both gut hormones that help control blood sugar levels and appetite, thereby helping patients lose unwanted weight. 

Song says that while the initiation of Phase 3 studies for its injectable weight-loss drug could reaffirm Viking’s most advanced pipeline drugs, its oral Phase 2 trial could solidify the favorable efficacy versus tolerability profile, particularly for patients looking to maintain their weight-loss in the longer term.

Song, who covers small- and mid-cap biotech companies, is bullish on most of his coverage, with five Hold ratings and 32 Buy ratings. 

But it isn’t just Song who is bullish on Viking—all of the 14 analysts currently covering the stock on FactSet have a Buy rating on it, with a combined average target price of $112.

The biotech is also often mentioned as a likely acquisition target, including by Song. If another company buys Viking at a premium, that could result in a juicy payout for shareholders.

For investors, it all comes down to if the challenger narrative seems realistic, and if smaller companies can develop drugs as effective at treating obesity as Novo’s Ozempic/Wegovy and Lilly’s Mounjaro/Zepbound. And if so, whether they can secure the hefty initial investments required to get the large-scale production going needed to secure a meaningful market share.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

Source: Marketwatch

This week top market trends.

Recent global market news

investorsHD Media

Subscribe to our handles,follow the news 24/7

investorsHD & partners uses cookie to ensure your best user experience,by continue using investorsHD,we assume that you have agreed with our cookie terms & policy , to have more privacy experience,simply switch your browser to privacy mode, Learn about cookie

×