Viking Therapeutics emerges as competitor

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Biotech firm Viking Therapeutics has emerged as a robust potential entrant — or takeover goal — within the budding weight reduction drug market

Viking is only one of a number of corporations racing to hitch the rising area. Some analysts say the market might be value $100 billion by the top of the last decade. Viking goals to compete with injectable medication from Eli Lilly and Novo Nordisk, which sparked the load loss drug business gold rush over the previous 12 months regardless of their hefty worth tags and limitations to insurance coverage protection. 

Viking’s drug may change into a robust rival. Some Wall Road analysts mentioned its experimental weight problems therapy could also be “best-in-class.” In a midstage trial, an injectable model of Viking’s drug appeared to advertise even better weight reduction than Eli Lilly’s Zepbound.

Viking gave a primary glimpse at knowledge from that examine on Tuesday, and its shares soared 120%. The promising outcomes make the corporate a powerful potential participant in a market that can possible have room for extra entrants within the coming years. 

Goldman Sachs tasks that between 10 million and 70 million People will probably be taking weight reduction medication by 2028. Eli Lilly and Novo Nordisk have additionally struggled to supply sufficient provide of their remedies, giving different corporations an opportunity to win market share.  

The brand new knowledge additionally makes Viking a extra enticing deal goal for bigger corporations attempting to interrupt into the area or broaden their weight problems therapy choices.

It is too early to say whether or not Viking’s drug may have an edge over current or growing weight reduction remedies. It is troublesome to check therapies with out pitting them face to face in the identical scientific trial. 

Viking additionally must conduct a late-stage examine on its drug, and certain will not launch the injection till the later a part of the last decade. The small firm faces hurdles to getting into the market, corresponding to manufacturing sufficient of the drug to fulfill booming demand. However an acquisition by a bigger firm may assist resolve a few of these points.

Knowledge suggests Viking’s drug could have an edge

Viking’s part two trial adopted greater than 170 sufferers who’re obese or overweight. They acquired totally different dose sizes of the injectable drug or a placebo.

The trial didn’t immediately examine Viking’s therapy to different medication. Nonetheless, many analysts in contrast Viking’s injection to Eli Lilly’s Zepbound, largely as a result of they work the identical approach. 

An injection pen of Zepbound, Eli Lilly’s weight reduction drug, is displayed in New York Metropolis on Dec. 11, 2023.

Brendan Mcdermid | Reuters

Each medication goal two naturally produced intestine hormones referred to as GLP-1 and GIP. The mixture is alleged to sluggish the emptying of the abdomen, make individuals really feel full for longer and suppress urge for food by slowing starvation indicators within the mind. In the meantime, Novo Nordisk’s weight reduction injection Wegovy solely targets GLP-1. 

Analysts had been notably impressed by the load sufferers misplaced after they took the very best dose of Viking’s drug. Those that acquired a weekly 15 milligram dose of the therapy misplaced 13.1% of their physique weight on common after 13 weeks in comparison with those that took the placebo. 

Viking’s drug knowledge reveals a “best-in-class profile” amongst each permitted and experimental weight reduction medication with part two trials, William Blair analyst Andy Hsieh wrote in a word Tuesday. Eli Lilly’s Zepbound generated roughly 7% weight reduction relative to a placebo after 12 weeks in a part three scientific trial, Hsieh famous.

Viking’s drug additionally seems to high Novo Nordisk’s weight reduction injection Wegovy, in line with a separate Tuesday word from BTIG analysts.

Based mostly on chart knowledge from a part three trial, the analysts estimated that Wegovy triggered round 5% weight reduction at 13 weeks in comparison with a placebo.

In the meantime, a number of analysts estimated that some doses of Eli Lilly’s experimental injection, retatrutide, triggered between 9% and 13% weight reduction relative to a placebo at 13 weeks primarily based on chart knowledge from a midstage trial.

Nearly all of opposed unintended effects that sufferers skilled after beginning Viking’s drug had been gentle or average. A lot of these cases had been gastrointestinal, which is widespread throughout all weight reduction and diabetes remedies.

Round 20% of sufferers who took the 15 milligram model of Viking’s drug discontinued therapy early within the examine. That compares with round 14% of these taking the placebo who stopped early within the trial. 

However Jefferies analyst Akash Tewari wrote in a word Tuesday that Viking’s trial used sooner “titration” in sufferers, which refers to rising the dose dimension a affected person takes over time till they attain a goal dosage degree. 

He mentioned Viking could possibly make its drug simpler for sufferers to tolerate in a future trial with slower titration, which may doubtlessly decrease the therapy’s efficacy. 

Viking nonetheless has a protracted solution to go

Regardless of the compelling knowledge, Viking has much more work to do earlier than it will probably compete within the weight reduction drug market. 

The corporate plans to fulfill with the U.S. Meals and Drug Administration later this 12 months to debate a scientific improvement plan for the therapy. 

Viking CEO Brian Lian advised traders on a name Tuesday that the corporate will possible conduct one other part two trial that might final six to 9 months.

Jefferies’ Tewari estimates that Viking’s therapy will not attain the market till 2029 or later. A late-stage trial on the drug might be prolonged. Eli Lilly’s part three examine on Zepbound lasted two and a half to 3 years.

The late entrance of Viking’s drug is one purpose why Tewari does not imagine the corporate will meaningfully reduce into Eli Lilly’s market.

The pharmaceutical big may additionally launch a slate of different weight reduction remedies over the subsequent few years which will have benefits over Zepbound, whether or not they supply extra weight reduction or comfort. They embody Eli Lilly’s experimental capsule orforglipron and the broadly watched retatrutide, which mimics three intestine hormones as an alternative of two. 

An Eli Lilly and Firm pharmaceutical manufacturing plant is pictured in Branchburg, New Jersey, on March 5, 2021.

Mike Segar | Reuters

Analysts from Deutsche Financial institution added in a word Tuesday that manufacturing the remedies “at scale to fulfill outsized demand has confirmed to be no straightforward feat,” which provides Eli Lilly and Novo Nordisk a “defensive moat” towards rivals.

Viking acknowledged this hurdle on the decision Tuesday. Lian mentioned the corporate has sufficient provide of the drug to help its scientific trials, however its manufacturing capability is inadequate for a industrial rollout. 

However Lian famous that the corporate is “spending a number of time” evaluating a number of manufacturing processes to grasp “what’s quickest, what’s highest yielding, what’s most cost-effective and what’s most scalable.” 

Partnerships, buyouts are on the desk 

Viking’s spectacular knowledge may make it a horny goal for a takeover or partnership with a big pharmaceutical firm. That might give Viking the industrial and manufacturing capabilities wanted to compete within the weight reduction drug market. 

William Blair’s Hsieh added that giant pharmaceutical corporations may maximize the worth of Viking’s therapy as a result of they might higher navigate the rebate and reimbursement panorama for weight reduction medication.

Some analysts count on different corporations to have excessive curiosity in Viking.

“This very nicely might be on the buying record for any large-cap pharma or biotech firm that wishes to be within the weight problems market however at present does not have a drug. There are many them on the market,” Oppenheimer analyst Jay Olson advised CNBC. 

He added that an organization may “pay a reasonably vital premium for Viking and decide this up … for a comparatively low worth in comparison with the potential that exists for a drug like this.” As of Friday, Viking had a market cap of greater than $8.5 billion.

Injection pens of Novo Nordisk’s weight reduction drug Wegovy are proven on this picture in Oslo, Norway, on Nov. 21, 2023.

Victoria Klesty | Reuters

Viking is an interesting deal goal due to extra than simply the brand new knowledge. Wall Road is keen for the corporate to launch early-stage trial outcomes on an oral model of its weight reduction therapy this quarter. 

The BTIG analysts famous that the mental property protection for each variations of the drug extends past 2040, “boding nicely” for potential partnership discussions. 

Viking additionally has different medication in improvement, together with an oral therapy for a sure type of liver illness. Eli Lilly, Novo Nordisk and different drugmakers are additionally racing to see whether or not their medication can deal with that very same situation. 

Viking hasn’t disclosed any particulars about its discussions with potential companions. However the firm has “all the time been open to associate discussions since day one, so we’re all the time opportunistically evaluating no matter is introduced to us,” Lian mentioned throughout Viking’s fourth-quarter earnings name final month. 

Different drugmakers have pursued offers over the previous 12 months to carve out an area within the weight reduction drug market. 

Swiss firm Roche mentioned it could purchase the privately held U.S. weight problems drugmaker Carmot Therapeutics for $2.7 billion. AstraZeneca signed a licensing settlement with Chinese language biotech firm Eccogene to develop an weight problems capsule. 

Even Novo Nordisk and Eli Lilly have snapped up smaller weight problems drug corporations this 12 months to take care of their dominance available in the market.

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