Viking Therapeutics Stock Surges on Analyst Coverage Initiation and Market Potential

Viking Therapeutics, Inc. (VKTX) shares soared by more than 11% on Wednesday, February 20, 2025, following the initiation of coverage by J.P. Morgan analyst Hardik Parikh. The analyst assigned an overweight (buy) rating to the company, with a price target of $80 per share, suggesting nearly 32% upside potential from the current level. This positive sentiment was driven by the company's recent clinical trial results, market trends, and the analyst's bullish outlook on the obesity drug market.



Parikh's initiation of coverage comes on the heels of positive top-line results from Viking Therapeutics' Phase 2 clinical trial of VK2735, a dual agonist of the glucagon-like peptide 1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors. The study successfully achieved its primary and all secondary endpoints, with patients receiving VK2735 demonstrating statistically significant reductions in body weight compared with placebo. The drug was also shown to be safe and well-tolerated, with the majority of treatment-emergent adverse events being categorized as mild or moderate.

The analyst's bullish outlook is further supported by the growing market potential for GLP-1 receptor agonists in the obesity sector. Parikh estimates U.S. market sales of around $120 billion in 2030, with oral formulations playing an increasingly important role. This aligns with Viking Therapeutics' focus on developing oral GLP-1/GIP co-agonists, such as VK2735, which could tap into this lucrative market.



Viking Therapeutics' pipeline also includes other promising drug candidates, such as VK0214, which has shown encouraging results in a Phase 1b clinical trial for the treatment of X-linked adrenoleukodystrophy (X-ALD). The potential for additional indications and revenue streams may have contributed to the analyst's bullish outlook and the subsequent stock price increase.

In conclusion, the surge in Viking Therapeutics' stock price on Wednesday reflects the perceived value and potential of the company's drug candidates, particularly VK2735, as evidenced by the company's recent clinical trial results and pipeline. The positive market reaction suggests that investors are optimistic about the company's future prospects and the potential of its drug candidates to generate significant returns.