Why is vktx down shoul I sale

Here are some points to consider before deciding whether to sell your Viking Therapeutics (VKTX) stock:

1. **Impact of Novo Nordisk's Positive Results**: VKTX's recent decline can be attributed to Novo Nordisk's announcement of positive phase 1 results for its experimental obesity drug, amycretin. This is a potential concern because amycretin showed an average weight loss of 13.1% after 12 weeks, which matches the placebo-adjusted mean weight loss achieved by VKTX's VK2735 in a phase 2 study. As amycretin is an oral pill, more convenient for patients than VK2735's subcutaneous administration, it could compete with VK2735 for market share.
2. **Market Competition and Future FDA Approval**: The competition from other weight loss drugs, including those from Eli Lilly and Novo Nordisk, is intensifying. The anti-obesity market is expected to be worth $100 billion by 2030, indicating significant opportunity. However, VK2735's approval is not guaranteed, and even if it is approved, it may face challenges in a highly competitive market.
3. **Financial Considerations**: VKTX's financials show that it has burned through $55 million in cash and incurred losses totaling $94 million in the trailing 12 months. The company's valuation has soared over 230% in the past 12 months, making it difficult to see significant upside at current levels. The stock's momentum is waning due to sustainability concerns related to the lack of approved products for revenue.
4. **Upcoming Earnings and Clinical Trial Updates**: Investors are awaiting VKTX's latest earnings results, which will likely include an update on the drug's progress. Positive developments could lead to an uptick in volume. However, the need for a larger phase 3 study and FDA review adds to the timeline for approval, which could be at least a year away.

In conclusion, while VKTX has potential, the current stock price may not reflect its future prospects realistically. The decision to sell should be based on your risk tolerance, investment horizon, and confidence in the company's long-term potential. If the stock price has already incorporated overly optimistic expectations, selling might be prudent to avoid potential downside risks.