JPMorgan says this new player in the GLP-1 market could rally 45%

JPMorgan thinks Viking Therapeutics could be the next big name in the GLP-1 boom. The firm initiated coverage of the biopharmaceutical company with an overweight rating and a price target of $80 per share. JPMorgan’s forecast implies more than 46% upside from Tuesday’s $54.65 close. Viking Therapeutics is in the process of advancing its obesity drug VK-2735 , which would join the likes and rival peer GLP-1 drugs from Novo Nordisk and Eli Lilly , through clinical trials. In July, Viking said an injectable version of the drug would enter a phase 3 trial, while a phase 2 study of an oral version is about to begin. Investors are awaiting more details about the oral version, expected in early November, as a possible catalyst for the stock. Shares have advanced more than 204% in 2024. VKTX YTD mountain Viking Therapeutics stock. “Given investor sentiment on obesity assets, we expect shares to move up substantially on the back of this dataset,” analyst Hardik Parikh wrote in a note Wednesday. “We think this profile should give VKTX a role in the market despite significant long-term barriers (mfg requirements, intense competition) for its oral and even more for the subQ [subcutaneous] version.” Parikh expects Viking’s results to show that patients are able to tolerate the drug better than existing drugs such as Novo’s Wegovy and Eli Lilly’s Zepbound. Some patients who take these popular obesity drugs suffer nausea and gastrointensinal effects that force them to stop treatment. The drugs, which mimic incretins, or gut-derived hormones, slow down digestion and regulate blood sugar levels, making patients feel full longer. Both are administered via a weekly injection, but many patients would prefer to take a pill. Oral drugs also tend to be cheaper and easier to manufacture. JPMorgan forecasts the category could reach annual sales of roughly $120 billion by 2030, with oral sales accounting for about $30 billion by 2035. The analyst said VK-2735’s higher dose of up to 100 milligrams could show “slightly better efficacy than competitors with still a very good tolerability profile.”