Viking Therapeutics Shares Drop After Q4 EPS Miss Estimates

Viking Therapeutics (NASDAQ: VKTX) shares fell 8% post-market after the biotech company issued its Q4 earnings report and a pipeline update. The company reported a net loss of $0.32 per share with no revenue, missing earnings estimates of a $0.27 per share loss. Despite the miss, Viking Therapeutics' strong cash position and promising pipeline provide reasons for investors to remain optimistic about the company's long-term prospects.

Viking Therapeutics ended the year with a strong cash position of $903 million, representing a 149% increase from 2023. This substantial cash buffer provides an estimated 3-4 year runway at current burn rates, ensuring the company's financial stability and ability to fund late-stage trials and potential commercialization efforts. The company's robust financial foundation is particularly important as it prepares to initiate Phase 3 studies for VK2735 in obesity in 2Q25.

The company's R&D expenses increased significantly, up 51% year-over-year to $31.0 million in Q4. This investment surge primarily supports manufacturing scale-up and clinical development, indicating preparation for late-stage trials. The 74% increase in G&A expenses to $15.3 million reflects infrastructure building for potential commercialization. While the increased expenses may raise concerns about higher burn rates and potential dilution, Viking Therapeutics' strong cash position helps mitigate these concerns.

Viking Therapeutics' obesity program, centered around VK2735, is positioned in a rapidly expanding market. The dual formulation strategy (subcutaneous and oral VK2735) could provide a competitive advantage, offering patients a unique transition pathway. The impressive Phase 2 VENTURE results, showing up to 14.7% weight loss, suggest a best-in-class profile that could capture substantial market share. The company plans to initiate Phase 3 trials evaluating subcutaneous VK2735 in obesity in 2Q25, further validating the market's confidence in the drug's potential.

Viking Therapeutics' diversified pipeline, including programs targeting MASH and X-ALD in addition to obesity, provides multiple value drivers and risk mitigation. The VOYAGE trial results in MASH, with 63-75% resolution rates, position VK2809 as a leading candidate in this indication. The company's progress with VK2809 demonstrates its commitment to developing therapies for multiple indications, reducing the risk associated with a single drug candidate.

Investors can expect several upcoming catalysts, including:

* Initiation of Phase 3 studies for subcutaneous VK2735 in obesity in 2Q25.
* Completion of the Phase 2 VENTURE-Oral Dosing Trial evaluating VK2735 in obesity.
* Advancements in the internally developed dual amylin and calcitonin receptor agonist (DACRA) candidate, with an IND application planned before the end of 2025.
* Updates on discussions with the FDA for advancing VK2809 to late-stage development.

While Viking Therapeutics' shares fell 8% post-market after the Q4 earnings report, the company's strong cash position, strategic R&D acceleration, and diversified pipeline provide reasons for investors to remain optimistic about the company's long-term growth prospects. The upcoming catalysts, including the initiation of Phase 3 studies for VK2735 and advancements in the DACRA candidate, offer opportunities for share price appreciation as investors anticipate positive developments in the company's clinical pipeline and potential drug approvals.