Why Viking Therapeutics' Stock Surge Signals a Strategic Buy Opportunity in the Obesity Drug Market

The obesity drug market is undergoing a seismic shift. With global sales projected to surpass $173 billion by 2031, the sector has become a battleground for innovation, driven by the explosive success of GLP-1/GIP therapies. Amid this frenzy, Viking Therapeutics (NASDAQ: VKTX) has emerged as a standout contender, leveraging a dual-pathway mechanism, a dual-formulation strategy, and a strategic position in a post-Pfizer landscape. For aggressive biotech investors, the company's recent stock surge—spurred by its Phase 3 trial initiation and robust cash reserves—signals a compelling speculative play in a high-growth sector.

Pipeline Potential: A Dual-Pathway Powerhouse

Viking's lead candidate, VK2735, is a dual agonist of the GLP-1 and GIP receptors, a mechanism that has already demonstrated superior efficacy in Phase 2 trials. In the VENTURE study, patients achieved up to 14.7% weight loss over 13 weeks, with 88% reaching at least 10% reduction. These results, coupled with a favorable safety profile (mild/moderate GI events), position VK2735 as a best-in-class candidate. The Phase 3 VANQUISH program—enrolling 5,600 patients across two trials—aims to validate these outcomes over 78 weeks, with endpoints targeting ≥5%, ≥10%, and ≥20% weight loss.

What sets Viking apart is its dual-formulation approach. While injectable VK2735 advances through Phase 3, the oral version is in Phase 2, with top-line data expected in late 2025. This oral formulation could address a critical unmet need: patient adherence. Unlike competitors like Eli Lilly (LLY) and Novo Nordisk (NVO), who rely on injectables, Viking's oral option could capture a broader market segment, particularly as patient-friendly delivery becomes a key differentiator.

Competitive Advantage: Filling the Pfizer Vacuum

Pfizer's abrupt exit from the GLP-1 obesity race in 2025—due to liver toxicity concerns with danuglipron—has created a void in the small-molecule segment. This exit underscores the challenges of developing oral GLP-1 drugs, but it also highlights Viking's unique positioning. While Pfizer's failure raises safety red flags, Viking's oral VK2735 has shown dose-dependent weight loss in Phase 1 trials without severe adverse events.

The competitive landscape is further tilted in Viking's favor. Novo Nordisk's Wegovy and Eli Lilly's Zepbound dominate the injectable space, but both face pressure from generic semaglutide and the need for oral alternatives. Meanwhile, Roche's failed acquisition of Carmot Therapeutics and Merck's stalled programs have left the market ripe for disruption. Viking's dual-pathway mechanism and oral formulation could outperform existing therapies, particularly as insurers and patients prioritize cost-effective, convenient treatments.

Financials and Strategic Flexibility

Despite its clinical-stage status, Viking boasts a $808 million cash runway as of June 2025, providing ample flexibility to advance VK2735 through Phase 3 and beyond. This financial strength is critical in a sector where Phase 3 trials can cost hundreds of millions. Moreover, Viking has secured a supply agreement with Corden Pharma, ensuring capacity for 100 million autoinjectors and 1 billion oral tablets—a strategic move to prepare for commercialization.

The company's pipeline also includes VK2809 (NASH) and DACRA (dual amylin/calcitonin agonists), which could diversify revenue streams. However, the real value lies in Viking's potential as an acquisition target. With major pharma firms like Bristol Myers Squibb (BMY) and Merck (MRK) seeking to bolster their obesity portfolios, Viking's dual-agonist platform and oral formulation could attract a premium.

Investment Thesis: Speculative but Rewarding

For aggressive investors, Viking presents a high-risk, high-reward opportunity. The key catalysts include:
1. Positive Phase 3 readouts in 2026, which could trigger a valuation leap.
2. Oral formulation data in late 2025, validating Viking's dual-formulation strategy.
3. Partnership or acquisition by a major pharma player, particularly if competitors face setbacks.

While Viking's current market cap (~$3 billion) reflects its clinical-stage status, the potential for a 10x return exists if VK2735 gains FDA approval and captures even a fraction of the $100 billion obesity market. However, risks remain: Phase 3 trials are inherently uncertain, and the oral formulation's success hinges on maintaining efficacy and safety.

Conclusion: A Strategic Buy for Biotech Agnostics

Viking Therapeutics is not for the faint of heart. Its stock is volatile, and its success depends on clinical and regulatory milestones. But for investors who can stomach the risk, the company's dual-pathway mechanism, oral formulation, and strategic positioning in a post-Pfizer market make it a standout speculative play. As the obesity drug sector evolves, Viking's ability to deliver both injectable and oral solutions—backed by strong Phase 2 data and a robust cash balance—positions it to outmaneuver competitors and capture a significant market share.

Investment Advice: Buy VKTX at current levels for a long-term speculative position, with a stop-loss at $15/share. Monitor Phase 3 updates and oral formulation data in 2025 for potential re-entry points.