Biotech Values

[Mufaso]

VKTX Buyout rumors- Thanks for sharing. I do not think that is a surprise to you or anyone else who regularly follows this board that Viking is a buyout candidate. Good to know though that the rumor is getting “internet blog press” just like many in the traditional media have suggested.

As a review of reasons why VKTX is a buyout candidate:

• Number 1 reason is a successful phase 1 of their obesity drug VK2735 as an injectable that had outstanding efficacy in weight loss AND liver fat reduction. Given the recent deals involving other obesity compounds in early-stage testing (Roche’s buyout of Carmot for approx. $3b and AZN’s licensing deal w China's Eccogene for $2B) interest is high.
  
• VK2735 MOA (Dual GLP1/GIP agonist) is the same as LLY’s Mounjaro/Zepbound which currently owns the Best-in-class title. Carmot who is the only other company to my knowledge to have a compound go through ph1 testing with the same MOA but it is off the market. Also- VK2705 may yet succeed as an oral and they may be the only company with an ORAL using the dual GLP1/GIP agonist MOA.
  
• Adding to the interest, Viking has another mid stage asset for NASH with an MOA like the presumed NASH leader’s drug (MDGL’s resmetirom) plus a candidate drug in an indication that may net a Pediatric PRV in a reasonably large market with no good treatment option. This is an important kicker for a large pharma facing a "patent cliff" without a presence in metabolic indications as they get a "portfolio" with some multiple diverse assets in the space to build upon. (VKTX's Nash drug VK2809 has blockbuster potential by itself.)
  
• The company has not staffed to go beyond stage 2 for any of its assets. (still under 30 employees) Combine that with the fact that the CEO is a former investment banker/analyst and the company has basically hung out a for sale sign.
  
• The number 1 and 2 pharma companies globally by market cap (LLY and NVO) are in that position because they have an approved GLP1 based compound.

Who could buy/partner with VKTX? A better question might be who would not buy VKTX as every single large pharma CEO worth his salt is interested in playing in the Obesity market. So, who would not buy VKTX:

• Roche bought Carmot and Astra Zeneca partnered with Ecogene so they are both out
  
• Eli Lilly is out because Mounjaro/Zepbound’s MOA is the same as VK2735’s and the FTC would see this as Anti-competitive. I am not sure if the same would be said of Novo Nordisk from a an FTC standpoint but they are probably out as well given they probably wouldn’t want to compete against themselves.
  
• Pfizer’s Bourla said they are not doing any more acquisitions for a while and they have other things to focus on like the SGEN acquisition. I think they are out even though they have tried really hard in Obesity (and NASH) with nothing to show for it so far.
  
• I suspect several of the remaining pharma companies will make inquires as they have seen what a GLP1 drug can do for share price/market cap. A "bidding war" is a real possibility if multiple interested parties come forward..

Here is a list of the top pharma Companies (shown below in Black) by market cap (over 45B) who could be VKTX suitors:

 
 Rank	Company		Market Cap	Country 
 1	Eli Lilly 	$633.80 B	 USA	 
 2	Novo Nordisk 	$506.66 B	 Denmark	 
 3	J&J		$377.00 B	 USA 
 4	Merck 		$320.32 B	 USA 
 5	AbbVie 		$297.79 B	 USA 
 6	Roche 		$217.45 B	 Switzerland 
 7	Novartis 	$212.00 B	 Switzerland	 
 8	AstraZeneca 	$203.50 B	 UK		 
 9	Amgen 		$172.96 B	 USA 
 10	Pfizer 		$152.05 B	 USA	 
 11	Sanofi 		$123.61 B	 France 
 12	Vertex		$109.43 B	 USA 
 13	Regeneron	$102.97 B	 USA	 
 14	BMY		$99.11 B	 USA 
 15	GILD		$95.89 B	 USA 
 16	CSL 		$94.38 B	 Australia 
 17	GSK		$82.60 B	 UK 
 18	Merck KGaA	$69.14 B	 Germany 
 19	Daiichi Sankyo 	$58.17 B	 Japan	 
 20	Takeda		$45.63 B	 Japan