Viking Therapeutics (VKTX) is a key focus. The company is working on VK2735, an obesity drug that aims to compete with offerings from Eli Lilly (LLY) and Novo Nordisk (NVO). Preliminary results showed significant weight reduction and fewer side effects than other GLP-1 drugs.
Amgen (AMGN) recently announced in its earnings call that it is advancing its GLP-1 drug to Phase III trials. Despite the lack of specific details and reports of significant side effects, Amgen’s stock saw a notable increase, underscoring the immense potential of an effective GLP-1 drug.
While Viking initially dipped on Amgen’s announcement, the strong response to vague data highlights the value placed on potential obesity treatments. Viking is also exploring additional applications for VK277 and is in discussions with the FDA for the next phase of the VK275 study. Additionally, the company is rumored to be a potential acquisition target for a larger pharmaceutical company aiming to enter the obesity market.
Analysts are bullish on VKTX, with nine “buy” ratings and an average target price of $113.50—around 50% higher than its current price. The lowest target is $90, still above the current price, which is below $80.
The chart setup for VKTX looks promising. Following the initial positive results for VK2735, the stock gapped up and has been trading in a narrowing range, testing trend lines and exhibiting slight volatility on news. This pattern is often a precursor to a breakout that attracts momentum traders, and a move past $80 could bring in both momentum and speculative traders.