Sailing To Biotech Valhalla

In a market full of duds and darlings, every once in a while, you stumble upon a stock that skyrockets so fast it gives you whiplash. Viking Therapeutics (VKTX) is that stock and boy, am I glad I trusted my gut on this one.

We're talking a journey from $4 to $62 in what feels like a blink of an eye - a voyage straight to biotech Valhalla, if you will. A 1,500% gain? Somebody hand me my horn of mead – and maybe a bigger treasure chest.

See what I did there? Viking stock, sailing to Valhalla – sorry, I couldn't resist. Anyway, if you missed out on this raid, don't worry. This biotech longship is still sailing strong, and it’s only getting started.

Now, I've seen my fair share of biotech booms and busts over the years, from the dizzying heights of the genome sequencing craze to the sobering lows of failed drug trials.

But this obesity drug market? It's shaping up to be the mother of all biotech booms.

At the heart of Viking's meteoric rise is a little molecule called VK-2735, a GLP-1 / GIP receptor agonist.

In layman's terms, it's a weight loss wonder drug that's got Wall Street salivating like Pavlov's dogs at dinnertime.

And why wouldn't they? We're talking about a market that could be worth north of $150 billion annually by the early 2030s.

Let's crunch some numbers, shall we? In the first half of 2024, Novo Nordisk's (NVO) dynamic duo, Ozempic and Wegovy, raked in a cool $11.7 billion.

Not to be outdone, Eli Lilly's (LLY) tag team of Mounjaro and Zepbound pulled in $6.66 billion. That's enough cash to make even a seasoned hedge fund manager's eyes water.

But here's where it gets really interesting. Viking's VK-2735, in its Phase 2 Venture study, showed weight loss results that could make even the most stubborn bathroom scale do a double-take. We're talking up to 14.7% weight loss from baseline in just 13 weeks.

Now, before you start maxing out your credit cards to buy Viking stock, let's pump the brakes a bit. This data is still in its infancy, like a toddler taking its first wobbly steps.

We're talking about a study with just 35 patients. That's barely enough people to fill a small yoga class, let alone stake billions of dollars on.

And let's not forget about safety. While VK-2735 seems to be playing nice overall, there are a few wrinkles to iron out.

The highest dose saw a 20% dropout rate, which is about as concerning as finding a shark in your swimming pool. Most patients experienced some side effects, with nausea, diarrhea, and constipation leading the pack.

Not exactly a walk in the park, but then again, no pain, no gain, right?

Looking ahead, Viking's still got its work cut out. They're aiming to kick off a Phase 3 study by Q1 2025, which means we might not see VK-2735 hit the market until Q1 2027. In biotech years, that's practically an eternity.

But here's the kicker - this delay might actually work in Viking's favor. While they're dotting their i's and crossing their t's, Novo Nordisk and Eli Lilly are out there doing the heavy lifting, expanding the market and greasing the wheels with insurers.

Still, Viking's not resting on its laurels. They're working on a monthly dosing regimen and an oral version of VK-2735.

If they pull that off, it could be a game-changer. After all, who wouldn't prefer popping a pill over jabbing themselves with a needle?

Of course, this isn't a one-horse race. The obesity drug market is starting to look like a biotech version of the Oklahoma Land Rush, with everyone from Amgen (AMGN) to Pfizer (PFE) trying to stake their claim.

But with $935 million in the bank and a net loss of only $50 million for the half-year, Viking's got the financial firepower to go the distance.

So, what's the play here? Well, given the market's current love affair with all things GLP-1, Viking's strong financial position, and the potential of both VK-2735 and their NASH candidate VK2809, I'm cautiously bullish on Viking stock.

It's a high-risk, high-reward proposition, but then again, isn't that what makes this game so damn exciting? Just don't forget to pack your Dramamine - this ride's bound to have some turbulence.