Shares of Viking Therapeutics (NASDAQ: VKTX) plunged roughly 40% on Tuesday following the release of midstage clinical trial results for its obesity pill, which fell short of investor expectations. The biotech company’s stock dropped to about $23.80 from Monday’s close of $42.09, wiping nearly $1.3 billion from its market capitalization and bringing it down to around $2.69 billion.
The trial showed that Viking’s once-daily tablet helped patients lose up to 12.2% of their body weight over roughly three months, and the company noted that weight loss had not yet plateaued, suggesting additional reductions could be possible in a longer study. However, the trial was overshadowed by high discontinuation rates and notable side effects. Approximately 28% of patients stopped treatment for reasons including gastrointestinal issues such as nausea, which affected 58% of participants, and vomiting, reported by 26%. In contrast, placebo participants reported rates of 48% and 10%, respectively.
Analysts pointed out that while the weight-loss efficacy was broadly comparable to other oral obesity drugs, the shorter duration of Viking’s study combined with the elevated dropout rate cast doubt on the company’s ability to compete effectively in the rapidly evolving oral obesity market. Jared Holz, a health care equity strategist at Mizuho, said the data “probably shutters hope for [Viking] to be a bigtime player in the oral obesity market over the near to medium term.”
The results could reinforce the dominance of major players such as Eli Lilly and Novo Nordisk, which are developing oral weight-loss treatments that may reach the market years ahead of Viking’s VK2735. In phase three trials, Eli Lilly’s oral forglipron pill helped patients lose 12.4% of body weight at the highest dose, or 11.2% accounting for discontinuations over 72 weeks—significantly longer than Viking’s 13-week study. Holz highlighted that the longer trial and lower dropout rate make Lilly’s treatment appear far more competitive in a head-to-head comparison.
Viking’s drug works by mimicking two naturally occurring gut hormones, GLP-1 and GIP. GLP-1 suppresses appetite and reduces food intake, while GIP may also improve the body’s metabolism of sugar and fat. Eli Lilly’s oral therapy and the oral form of Novo Nordisk’s Wegovy target GLP-1, though Wegovy includes dietary restrictions that Viking’s pill does not. Despite the setback, Viking noted that the medication’s weight-loss potential and mechanism remain promising, but the disappointing tolerability profile and early discontinuations present significant challenges in competing with established market leaders.
The high-profile trial outcome underscores the difficulties facing smaller biotech firms trying to enter the lucrative obesity and diabetes drug markets, where competition from larger, well-capitalized pharmaceutical companies is fierce. Viking’s VK2735, while innovative, now faces a more uncertain path to commercialization in an environment dominated by Eli Lilly and Novo Nordisk, both of which have advanced clinical programs and established global reach.
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