Viking Therapeutics: Among the Oversold Biotech Stocks to Buy Now

Viking Therapeutics (VKTX) has been on a rollercoaster ride in recent months, with its stock price plummeting despite positive clinical data and promising pipeline. However, this volatility presents an opportunity for investors to snap up shares of this biotech company at a discounted price. Here's why Viking Therapeutics is among the oversold biotech stocks to buy now.

Viking Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel therapies for metabolic and endocrine disorders. The company's lead drug candidate, VK2809, is an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta (TRβ), currently in Phase IIb clinical trials for treating patients with biopsy-confirmed non-alcoholic steatohepatitis (NASH) and non-alcoholic fatty liver disease (NAFLD). Additionally, Viking is developing VK5211, an orally available non-steroidal selective androgen receptor modulator (SARM) for muscle wasting and other indications.

Viking Therapeutics' stock price has been volatile in recent months, with shares plummeting despite positive clinical data and a promising pipeline. The company's Phase 2b clinical trial of VK2809 in patients with biopsy-confirmed NASH/MASH demonstrated robust liver fat reductions, histologic results demonstrating NASH/MASH resolution and fibrosis improvement, and promising tolerability and safety. However, the stock price has not reflected these positive results, presenting an opportunity for investors to buy in at a discounted price.

One reason for the stock's recent decline may be the broader market concerns surrounding the obesity drug sector, following Eli Lilly's Q4 miss. However, Viking Therapeutics' obesity franchise, led by VK2735, a dual agonist of the glucagon-like peptide 1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors, remains promising. In a Phase 2 study, VK-2735 demonstrated significant weight loss, with participants losing an average of 15.9% of their body weight after 16 weeks of treatment. Additionally, Viking is evaluating an oral tablet formulation of VK-2735 in Phase 2 testing, which could provide an additional option for patients and potentially increase market share.



Another reason for the stock's recent decline may be the broader market concerns surrounding the biotech sector, following a sell-off in high beta market sectors. However, Viking Therapeutics' strong clinical data and promising pipeline make it an attractive investment opportunity. The company's obesity franchise, led by VK2735, has the potential to capture a significant share of the market, given the growing prevalence of obesity and the need for effective treatments. Additionally, Viking's NASH/MASH franchise, led by VK2809, has the potential to address a significant unmet medical need and capture a substantial market share.

Investors should keep an eye on Viking Therapeutics' upcoming FDA meeting for its obesity franchise, which is expected to provide clarity on the roadmap for a Phase III registration program. Positive guidance or milestones from this meeting could lead to an increase in the company's stock price, as investors gain confidence in the development program and the potential market opportunity for VK2735. Conversely, any unexpected challenges or delays could lead to a decrease in the stock price, as investors reassess the risks and timelines associated with the development program.

In conclusion, Viking Therapeutics is among the oversold biotech stocks to buy now, given its strong clinical data, promising pipeline, and discounted stock price. The company's obesity franchise, led by VK2735, has the potential to capture a significant share of the market, while its NASH/MASH franchise, led by VK2809, has the potential to address a significant unmet medical need. Investors should keep an eye on the company's upcoming FDA meeting for its obesity franchise and consider adding Viking Therapeutics to their portfolios at the current discounted price.