Viking Therapeutics stock falls 37% on high dropout rate in obesity trial

Investing.com — Viking Therapeutics (NASDAQ:VKTX) stock plunged as much as 37% Tuesday after revealing results from its Phase 2 VENTURE-Oral Dosing trial for its oral obesity treatment, while Eli Lilly (NYSE:LLY) shares gained 1.5% as analysts pointed to competitive advantages.

The trial demonstrated that Viking’s oral tablet formulation of VK2735, a dual GLP-1 and GIP receptor agonist, met its primary endpoint with patients losing up to 12.2% of body weight after 13 weeks compared to 1.3% for placebo.

Despite the weight loss efficacy, the 28% treatment discontinuation rate among patients receiving VK2735 versus 18% for placebo raised significant concerns among investors and analysts.

Mizuho analyst Jared Holz highlighted competitive disadvantages compared to Eli Lilly’s offerings: “Data look inferior to LLY on almost all metrics and the thing to consider here is that patients discontinued at such a high rate over 13-weeks vs. LLY in the mid 20% range — but over 72-weeks; A much longer trial, and therefor LLY looks far better head-to-head. This probably shutters hope for VKTX a bigtime player in the oral obesity market over the near to medium term.”

JPMorgan analyst Hardik Parikh offered a more balanced view, noting, “In 13 weeks, the three highest-dosing arms of 60/90/120mg showed avg pbo-adj weight loss of ~7.5%, 10%, 11%, which we think is very strong compared with other orals in development. Tolerability overall was manageable, but it was worse than we expected based on the ph1 performance.”

Parikh added that while the adverse event profile wasn’t as clean as in Phase 1 trials, “we still think oral vk-2735 offers strong efficacy with a manageable tolerability profile.”

Viking reported that 99% of gastrointestinal-related adverse events were mild or moderate. The company also highlighted an exploratory maintenance dosing arm showing weight loss could be maintained at lower doses.

The major adverse events included vomiting rates of 20-35% in the three highest dose arms compared to about 10% for placebo, and nausea rates of approximately 58% for patients on treatment versus 48% for placebo.

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