Viking Therapeutics (VKTX), a biotechnology company known for its development of a weight-loss drug, experienced a significant rise in its stock price this week. Over the past five trading days, the company’s stock increased by approximately 18%, as reported by S&P Global Market Intelligence. This surge is attributed to support from a global health agency for the medications Viking is developing.
WHO Supports Weight-Loss Drugs
On Thursday, Reuters reported that the World Health Organization (WHO) plans to endorse the use of obesity drugs. According to a memo reviewed by the news agency, WHO aims to officially support these medications for adults facing challenges with weight loss and seeks to enhance access for lower- and middle-income patients.
Currently, in the U.S., Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound lead the market for weight-loss drugs. These treatments are preferred by many due to their effectiveness compared to traditional diet and exercise methods, particularly as the country grapples with rising obesity rates.
Following the success of these treatments, pharmaceutical and biotech firms are vying to develop their own solutions. Viking Therapeutics is among the frontrunners, with its drug VK2735 performing well in phase 2 clinical trials. If approved, VK2735 is expected to attain popularity similar to that of Zepbound and Wegovy.
A Global Challenge
The endorsement from WHO is anticipated to further boost the acceptance of obesity treatments. While weight management poses a significant challenge in the U.S., it is a global issue, providing a broad market for Viking and its competitors worldwide.
Note: Eric Volkman has no position in any of the mentioned stocks. The Motley Fool recommends Novo Nordisk and Viking Therapeutics, as stated in their disclosure policy.
