Can Viking Therapeutics Compete with Eli Lilly’s Weight Loss Giants?
Eli Lilly (NYSE: LLY) has been making headlines lately with its impressive earnings, largely thanks to its weight loss drugs, Mounjaro and Zepbound. Mounjaro, primarily prescribed for type 2 diabetes, is often used off-label for weight control, while Zepbound is specifically designed for weight management. These dual GIP/GLP-1 receptor agonists regulate hormones that affect digestion, aiding in appetite control and blood sugar management. While Lilly and its competitor Novo Nordisk currently lead the weight loss drug market, new entrants like Viking Therapeutics are emerging with promising developments.
Impressive Results from Viking Therapeutics
Viking’s candidate, VK2735, also a dual GIP/GLP-1 receptor agonist, has shown significant results. In a phase 2 study, participants achieved an average weight reduction of up to 14.7% after 13 weeks. Plans for phase 3 trials, the final step before regulatory review, are underway as Viking meets with regulators this quarter.
During Obesity Week, a key event focused on advancements in weight loss, Viking presented data on an oral version of VK2735. A phase 1 trial demonstrated an average weight loss of 8.2% after just 28 days, with high doses being well tolerated. This oral formulation could simplify medication administration for patients, positioning Viking as a strong contender.
Challenges and Opportunities in the Weight Loss Market
The competitive landscape is challenging. Major players like Lilly and Novo Nordisk hold first-mover advantages, as they invest heavily in advertising, manufacturing, and the development of new products. Lilly is also advancing its own oral weight loss drug through phase 3 trials, potentially bringing it to market ahead of Viking.
Despite the competition, there’s a significant opportunity for growth in the weight loss drug market, projected to reach $130 billion by the end of the decade, a notable increase from prior estimates of $100 billion. This demand has even placed Lilly and Novo Nordisk’s drugs on the FDA’s drug shortage list, pushing them to expand their manufacturing capabilities.
Viking’s Bright Future?
Even if Viking Therapeutics enters the market later, it could still capture a share. With a market cap of $6.7 billion compared to Lilly’s $777 billion, Viking can thrive with a smaller slice of the obesity drug market. Additionally, a partnership or buyout could propel Viking forward, attracting interest from industry players eager to enter the weight loss sector.
Now, back to the initial question: Should you overlook Lilly in favor of this biotech? It depends on your risk tolerance. Cautious investors might prefer Lilly’s solid track record and dividend payments, while those willing to take risks for potential growth may find Viking appealing, especially given its potential as a high-flying stock with positive developments looming in the future.
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*Stock Advisor returns as of November 11, 2024
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
