Goldman Sachs Rates Viking Therapeutics Neutral Amid Weight Loss Drug Competition

Goldman Sachs has initiated coverage of Viking Therapeutics (VKTX.US), assigning it a "neutral" rating and setting a target price of $30 per share. The investment bank highlighted the intense competition in the weight loss drug market as a significant challenge for the company's flagship obesity treatment, VK2735.

Analyst Richard Lau referenced the phase 2 clinical trial data of VK2735, a GLP-1/GIP dual agonist, suggesting that it could pose a strong challenge to existing injectable weight loss drugs and next-generation therapies. However, the market is currently characterized by fierce competition, which could limit VK2735's potential.

Lau noted, "Our in-depth analysis of the commercial landscape indicates that the obesity drug market is extremely competitive with high barriers to entry." He pointed out issues such as continuously falling prices and strict payment restrictions.

Unlike established weight loss therapies such as Novo Nordisk's semaglutide and Eli Lilly's tirzepatide, the potential of VK2735 in treating other chronic diseases like diabetes remains unproven.

Lau further added, "With numerous next-generation therapies based on different mechanisms of action (such as triple agonists, amylin) set to enter the market, considering Viking's smaller size and relatively limited resources, we are not optimistic about its competitive capabilities."