After communicating with regulatory institution FDA, USA's Viking Therapeutics unexpectedly made progress in advancing weight loss drug VK2735 to phase III clinical trials, which may lead to an advance of its launch time by one year. This drug is expected to be injected once a month, which is more convenient than the same magical medicine from Eli Lilly and Novo Nordisk. The oral version of VK2735 will start phase II trials in the fourth quarter of this year. Coupled with the bullish news from Swiss pharmaceutical company Roche in the same field, Eli Lilly's stock has fallen by 14% in eight trading days, the worst since 2020, reducing its market cap by more than 120 billion USD from its peak.
On Thursday, July 25th, a clinical-stage biopharmaceutical company headquartered in San Diego, USA.$Viking Therapeutics (VKTX.US)$The highest stock price rose by 38.7%, the best performance in five months, and finally rose by 28%, reaching a two-month high since May 20th.
At the same time, the 'weight-loss drug duo' of the US pharmaceutical company Eli Lilly and Co. and Danish company Novo Nordisk both fell. After Eli Lilly fell as much as 6.3%, it closed down 4.5%, the lowest since the end of May, and its market cap has shrunk by more than 120 billion US dollars from its historical high on July 15th. Novo Nordisk's US stock fell 4% and closed down 2.84%, hitting a two-and-a-half-month low since May 8th.
This is mainly due to Viking Therapeutics accelerating the development of its weight loss injection VK2735, which has entered the third and final stage of clinical trials after receiving a written response from the US Food and Drug Administration (FDA).
Previously, the company had been more conservative, stating that after a positive result in a Phase 2 trial at the end of February, it was preparing to launch another Phase 2, or mid-term study, called "Phase 2b".
Justin Zelin, an analyst at BTIG, pointed out that the decision to advance to Phase 3 clinical trials ahead of schedule could shorten the development time of Viking Therapeutics' injection weight loss drug by one year. The market had previously estimated that the drug would be launched in 2029.
In other words, Viking Therapeutics' new drug program will adjust the medication burden to once a month, making it more attractive than the current weekly injection of the "weight loss dual" of Ozempic and Wegovy from Novo-Nordisk and the same drug, Zepbound, from Eli Lilly.
More importantly, Viking Therapeutics' plan for a new drug will make injections once a month, becoming the first company in the weight loss drug field to do so, which will be more attractive than the current weekly injection of drugs by the "weight loss dual".
Naz Rahman, an analyst at investment firm Maxim Group, said VK2735 may be the best injection of its kind, with monthly injections being a more convenient option or a major competitive advantage, as it's known that patients cannot achieve perfect compliance with once-a-week treatment.
In fact, after the close on Wednesday, Viking Therapeutics announced second-quarter results, which boosted its stock price by 10% and laid the foundation for Thursday's explosive rise. Although the company had no revenue in the second quarter, its net loss of $22.3 million was higher than the $19.2 million loss in the same period last year, but its EPS was a loss of 20 cents per share, better than Wall Street's expected loss of 27 cents per share.
Dr. Brian Lian, CEO of the company, said the Phase 2 VENTURE study of VK2735 for the treatment of obesity showed that after 13 weeks of treatment, patients lost about 15% of their body weight from baseline, and safety and tolerability were good. Before advancing to Phase 3 clinical trials of the drug, a Phase 2 wrap-up meeting will be held with the FDA in the fourth quarter of this year to discuss the design and timing of the Phase 3 trial.
He also mentioned another important piece of information: the oral version of VK2735 weight loss drug also showed encouraging safety and tolerability, as well as positive clinical activity signs in a Phase 1 study, and will start a Phase 2 trial in the fourth quarter of this year. "Test subjects reported an average weight loss of 5.3% from baseline after taking the drug orally for 28 days, and dosage escalation is still ongoing," he said.
VK2735 has the same mechanism of action as Eli Lilly's and other "miracle drugs" for weight loss, using a dual agonist of the novel glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors to treat metabolic diseases such as diabetes, and producing good weight loss effects by improving satiety and blood sugar metrics. Analysts such as Morgan Stanley predict that by 2030, the global market for GLP-1 therapy could reach $150 billion.
Some analysts say that Viking Therapeutics' acceleration of the development of its injection weight loss drug has dealt a heavy blow to competitors Eli Lilly and Co. and Novo-Nordisk, partly because Viking's drug is being developed for injection and oral versions at the same time, and the injection is more convenient in terms of drug administration time, which is closer to "introducing a potentially sensational drug". At the same time, the weight loss miracle drugs of Eli Lilly and Co. and Novo-Nordisk are facing a shortage of supply, "which means there is room for competitors to enter the market."
Currently, analysts are bullish on the prospects of VK2735's Phase 3 clinical trial, with investment bank William Blair predicting that the trial will begin in early 2025, at a pace that is impressive after the drug's Phase 1 testing three years ago. In addition, some people are optimistic about other promising candidate drugs from Viking Therapeutics, especially their VK2809 for non-alcoholic steatohepatitis (NASH).
Competition in the market for oral weight-loss drugs, where Viking Therapeutics is located, is also intensifying. Pfizer recently announced plans to further test its daily weight-loss drug danuglipron. Swiss pharmaceutical company Roche announced earlier this month that patients using its oral weight-loss drug CT-996 lost 6.1% more weight than those using a placebo within one month.
In addition, it has been found that several recent news in the field of weight-loss drugs have had the greatest impact on the stock price of Eli Lilly and Co. Over the past eight trading days, the stock has fallen as much as 14%, the worst performance in eight days since 2020:
In the past week, news of new weight-loss drugs released by Viking Therapeutics and Roche Holding AG has led to a sell-off of Eli Lilly and Co.'s shares. The drop shows that as competitors' substitute drugs gradually approach the market, investors believe that Lilly and Novo Nordisk's dominant position in the weight-loss drug market may come to an end. Jared Holz, an expert at Mizuho Medical, said that the weight-loss drug field will not always present a situation where "two heroes dominate".
Last Wednesday, Swiss pharmaceutical giant Roche announced that its second candidate weight-loss drug acquired from Carmot Therapeutics showed positive results in early trials. After the announcement, Roche's stock price soared by 6%. Meanwhile, the stock prices of weight-loss 'duo' Novo Nordisk and Eli Lilly both fell by 3.77% and 2.7%, respectively.$ROCHE HOLDING AG (RHHBY.US)$Roche announced that its second obesity drug candidate acquired from Carmot Therapeutics showed positive results in early trials. After the announcement, Roche's stock price soared by 6%, while the stock prices of the 'Obesity Duo' Novo Nordisk and Eli Lilly and Co fell by 3.77% and 2.7%, respectively.
Editor/Somer