Tuesday, June 26, 2018 11:39:49 AM
[Motley Fool]
George Budwell, The Motley Fool
,Motley Fool•June 26, 2018
Viking Therapeutics (NASDAQ: VKTX), a clinical-stage biotech, has seen its shares rise by more than 900% in the past 12 months. However, the biotech's shares have taken a breather in the past few sessions, thanks to President Donald Trump's ongoing trade war that has rocked the broader markets.
Turning to the details, Viking's stock has fallen by more than 16% in the past two trading sessions. Despite this double-digit pullback, I think this fear-driven move lower represents a compelling buying opportunity for risk-tolerant investors.
A doctor cupping their hands under a digital image of a liver.
A doctor cupping their hands under a digital image of a liver.
Image source: Getty Images.
Viking could become a major NASH player
The underlying reason Viking's stock shot up is primarily due to the company's experimental nonalcoholic steatohepatitis (NASH) drug VK2809. The market's enthusiasm is centered around two inter-related issues. First off, the NASH market is expected to balloon in size over the next few years, and potentially reach a peak value of $35 billion in annual sales.
If that line holds true, this emerging space should be able to support multiple new drugs, meaning that the current leaders in the field -- Intercept Pharmceuticals (NASDAQ: ICPT) and Genfit -- probably won't be able to monopolize the market before other competitors like Viking get their drugs past the FDA. In fact, this market is so large it could feasibly support several blockbuster level products.
Second, Vikings shares got a boost from the positive midstage trial results for Madrigal Pharmaceuticals' (NASDAQ: MDGL) MGL-3196 not long ago. As VK2809 and MGL-3196 share a similar mechanism of action, Wall Street apparently believes MGL-3196's midstage results will turn out to be a preview for VK2809's midstage trial that's scheduled to readout later this year. While speculative, the bottom line here is that Viking could be developing a drug capable of generating over $1 billion in annual sales at its peak. That's a sizable revenue stream for a company with a market cap of only $617 million right now.
Although Viking still has to shepherd VK2809 through the risky clinical trials process, the key takeaways are that this drug is arguably de-risked at this stage in light of Madrigal's successful readout with a similar product candidate, and that the industry leaders won't have enough time to establish an entrenched position. As such, Viking does appear to be grossly undervalued when viewed in this context.
What's next?
As usual for clinical-stage biotechs, Viking took advantage of this run-up in its share price to raise capital earlier this month. But that savvy business decision arguably makes this stock all the more attractive right now. With the threat of heavy dilution off the table for now and a key data readout on the horizon, Vikings' shares appear ready to regain their momentum once this political storm fades away.
As proof, Madrigal has already started to attract the attention of potential suitors, and the same fate could be in store for Viking. The big unknown, though, is whether big pharma will wait until VK2809 reads out to make an offer, or whether a suitor will take the plunge to secure this high-value asset before VK2809's midstage readout. After all, Madrigal is reportedly attracting interest from suitors, but the company's stately $4.26 billion market cap may turn out to be a tough barrier to overcome in terms of getting a deal done. As such, Viking might prove to be a much more attractive option based on the company's far cheaper valuation and VK2809's overall similarity to MGL-3196
https://finance.yahoo.com/news/viking-therapeutics-buy-dip-152700948.html
GO VKTX
"PEACE"
Recent VKTX News
- Viking Therapeutics to Report Financial Results for First Quarter 2024 on April 24, 2024 • PR Newswire (US) • 04/17/2024 08:05:00 PM
- Viking Therapeutics Announces Results from Phase 1 Clinical Trial of Oral Tablet Formulation of Dual GLP-1/GIP Receptor Agonist VK2735 • PR Newswire (US) • 03/26/2024 11:03:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 12:54:02 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 12:52:22 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 03/04/2024 09:52:52 PM
- Viking Therapeutics Announces Closing of Public Offering of Common Stock Including Full Exercise of Underwriters' Option to Purchase Additional Shares • PR Newswire (US) • 03/04/2024 09:45:00 PM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 03/01/2024 09:13:40 PM
- Viking Therapeutics Announces Pricing of $550 Million Public Offering of Common Stock • PR Newswire (US) • 02/29/2024 01:50:00 AM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 02/27/2024 10:21:23 PM
- Viking Therapeutics Announces Proposed Public Offering of Common Stock • PR Newswire (US) • 02/27/2024 09:19:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/27/2024 12:04:52 PM
- Viking Therapeutics Announces Positive Top-Line Results from Phase 2 VENTURE Trial of Dual GLP-1/GIP Receptor Agonist VK2735 in Patients with Obesity • PR Newswire (US) • 02/27/2024 12:03:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/10/2024 01:59:57 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/09/2024 09:01:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/09/2024 12:40:13 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/09/2024 12:38:45 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/08/2024 09:56:27 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/08/2024 09:33:26 PM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 02/07/2024 10:33:13 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/07/2024 10:24:07 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/07/2024 09:09:21 PM
- Viking Therapeutics Reports Fourth Quarter and Year-End 2023 Financial Results and Provides Corporate Update • PR Newswire (US) • 02/07/2024 09:05:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/01/2024 01:39:53 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 01/31/2024 10:32:24 PM
- Viking Therapeutics to Report Financial Results for Fourth Quarter and Year-End 2023 on February 7, 2024 • PR Newswire (US) • 01/31/2024 09:05:00 PM
VPR Brands LP Reports Record Annual Financial Performance for Fiscal Year 2023 • VPRB • Apr 19, 2024 11:24 AM
Coinllectibles' Subsidiary, Grand Town Development Limited, Acquires Rare Song Dynasty Ceramics Worth Over USD28million • COSG • Apr 18, 2024 8:03 AM
ILUS Provides Form 10-K Filing Update • ILUS • Apr 17, 2024 9:54 AM
Glucotrack Announces Expansion of Its Continuous Glucose Monitoring Technology to Epidural Glucose Monitoring • GCTK • Apr 17, 2024 8:00 AM
Maybacks Global Entertainment To Fire Up 24 New Stations in Louisiana • AHRO • Apr 16, 2024 1:30 PM
Cannabix Technologies Begins Certification of Contactless Alcohol Breathalyzer, Re-Brands product series to Breath Logix • BLOZF • Apr 16, 2024 8:52 AM