An analyst recently expressed a positive outlook on Viking Therapeutics’ leading pipeline program.
On Monday, Viking Therapeutics’ stock experienced an upward movement due to external factors. The company’s shares rose by nearly 3%, outperforming the S&P 500 index, which closed the trading session 0.4% higher. This increase was largely driven by a favorable assessment from a market analyst.
Michael Ulz, an analyst from Morgan Stanley, highlighted the significant potential of Viking’s investigational weight-loss drug, VK2735. His optimistic evaluation led him to rate the biotech company as overweight, with a price target of $105 per share. VK2735 has shown promising results in early- and mid-stage clinical trials, with expectations of progressing to a critical and comprehensive phase 3 trial soon. Success in this trial and subsequent FDA approval could position the drug as a strong competitor to popular GLP-1 drugs such as Novo Nordisk’s Wegovy and Eli Lilly’s recently approved Zepbound.
In his latest research note, Ulz commented on the potential for share price improvement, stating, “Our scenario analysis suggests a favorable risk/reward (+30%/+15%/-20%). We see potential for meaningful upside.”
Ulz’s report outlines three possible future outcomes for VK2735. In the most probable scenario, if the drug achieves modest increases in weight loss and maintains a safety profile similar to earlier trials, the share price could rise by 30%. The other two scenarios envisage less impressive lab results, with moderate performance leading to a 15% upside, and a lack of additional weight loss at higher doses resulting in a potential 20% downside.
