William Blair on Viking Therapeutic (VKTX) Sell-Off: 'extreme and unwarranted'

William Blair analyst Andy Hsieh reiterated an Outperform rating and {REMOVEPT} price target on Viking Therapeutic (NASDAQ: VKTX).

The analyst comments "Before markets opened on Tuesday, August 19, Viking announced Phase II VENTURE-Oral trial 13-week results of the oral formulation of VK2735 in 280 individuals living with obesity. Overall, at the highest doses, oral VK2735 met the lofty goals of achieving 10%-11% weight loss on a placebo-adjusted basis at week 13, easily outpacing orforglipron (roughly 6%, based on the Phase II study) and high-dose semaglutide (about 4%, based on the Phase III OASIS-4 trial) over a similar time frame. However, investors were concerned about the tolerability profile and the higher rates of discontinuation (both appeared worse than the Phase I study), which drove the sell-off. The stock is down 43% at the time of the publication, which we view as extreme and unwarranted. While we acknowledge that the tolerability profile is directionally worse than the Phase I study in totality, the 30 mg dose, which we believe could be selected as a potential maintenance dose in the pivotal study, demonstrated a placebo-like profile (the 60 mg cohort appears to have numerically higher frequencies of adverse events and discontinuation versus placebo). Given the COGS limitations, we believe it is unlikely that Viking will advance the 90 mg or 120 mg daily regimen. Accordingly, we are puzzled by the fixation on their respective tolerability profiles. Ultimately, as the growing body of evidence suggests, tolerability profiles can be further improved in a pivotal study when the titration step-up is expanded to four weeks as opposed to two weeks in VENTURE-Oral. Additional results are expected to be presented at a future medical meeting. In addition, the upcoming maintenance study investigating both subcutaneous (monthly) and oral (daily or weekly) VK2735 is planned to initiate later this quarter. Please see the note below for our detailed thoughts on the recent data readout."

For an analyst ratings summary and ratings history on Viking Therapeutic click here. For more ratings news on Viking Therapeutic click here.

Shares of Viking Therapeutic closed at $42.09 yesterday.

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