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Biotech company Viking Therapeutics has emerged as a powerful potential entrant — or takeover goal — within the budding weight reduction drug market.
Viking is just one among several firms racing to affix the growing space. Some analysts say the market could possibly be value $100 billion by the top of the last decade.
Viking goals to compete with injectable drugs from Eli Lilly and Novo Nordisk. Their treatments sparked the burden loss drug industry gold rush over the past 12 months despite their hefty price tags and barriers to insurance coverage.
Some Wall Street analysts said Viking’s experimental obesity treatment could also be “best-in-class.” In a midstage trial, an injectable version of Viking’s drug appeared to advertise even greater weight reduction than Eli Lilly’s Zepbound.
Viking gave a primary glimpse at data from that study on Tuesday, and its shares soared 120%. The promising results make the corporate a formidable potential player in a market that may likely have room for more entrants in the approaching years.
Goldman Sachs projects that between 10 million and 70 million Americans can be taking weight reduction drugs by 2028. Eli Lilly and Novo Nordisk have also struggled to supply enough supply of their treatments, giving other firms a likelihood to win market share.
The brand new data also makes Viking a more attractive deal goal for larger firms attempting to break into the space or expand their obesity treatment offerings.
It’s too early to say whether Viking’s drug could have an edge over existing or developing weight reduction treatments. It’s difficult to match therapies without pitting them face to face in the identical clinical trial.
Viking also must conduct a late-stage study on its drug, and certain won’t launch the injection until the later a part of the last decade. The small company faces hurdles to entering the market, corresponding to manufacturing enough of the drug to fulfill booming demand. But an acquisition by a bigger company could help solve a few of those issues.
Data suggests Viking’s drug can have an edge
Viking’s phase two trial followed greater than 170 patients who’re obese or obese. They received different dose sizes of the injectable drug or a placebo.
The trial did indirectly compare Viking’s treatment to other drugs. Still, many analysts compared Viking’s injection to Eli Lilly’s Zepbound, largely because they work the identical way.
An injection pen of Zepbound, Eli Lilly’s weight reduction drug, is displayed in Latest York City on Dec. 11, 2023.
Brendan Mcdermid | Reuters
Each drugs imitate two naturally produced gut hormones called GLP-1 and GIP. GLP helps reduce food intake and appetite. GIP, which also suppresses appetite, may additionally improve how the body breaks down sugar and fat.
Meanwhile, Novo Nordisk’s weight reduction injection Wegovy only targets GLP-1.
Analysts were particularly impressed by the burden patients lost after they took the very best dose of Viking’s drug. Those that received a weekly 15 milligram dose of the treatment lost 13.1% of their body weight on average after 13 weeks in comparison with those that took the placebo.
Notably, there was no evidence of a plateau in weight reduction at week 13 for any dose of the drug. That means that “further weight reduction is perhaps achieved” by keeping patients on the treatment longer, Viking CEO Brian Lian said during a call with investors on Tuesday.
Viking’s drug data shows a “best-in-class profile” amongst each approved and experimental weight reduction drugs with phase two trials, William Blair analyst Andy Hsieh wrote in a note Tuesday. Eli Lilly’s Zepbound generated roughly 7% weight reduction relative to a placebo after 12 weeks in a phase three clinical trial, Hsieh noted.
Viking’s drug also appears to top Novo Nordisk’s weight reduction injection Wegovy, based on a separate Tuesday note from BTIG analysts.
Based on chart data from a phase three trial, the analysts estimated that Wegovy caused around 5% weight reduction at 13 weeks in comparison with a placebo.
Meanwhile, several analysts estimated that some doses of Eli Lilly’s experimental injection, retatrutide, caused between 9% and 13% weight reduction relative to a placebo at 13 weeks based on chart data from a midstage trial.
The vast majority of hostile unwanted effects that patients experienced after starting Viking’s drug were mild or moderate. Lots of those instances were gastrointestinal, which is common across all weight reduction and diabetes treatments.
Around 20% of patients who took the 15 milligram version of Viking’s drug discontinued treatment early within the study. That compares with around 14% of those taking the placebo who stopped early within the trial.
But Jefferies analyst Akash Tewari wrote in a note Tuesday that Viking’s trial used faster “titration” in patients. That refers to increasing the dose size a patient takes over time until they reach a goal dosage level.
He said Viking may have the opportunity to make its drug easier for patients to tolerate in a future trial with slower titration, which could potentially lower the treatment’s efficacy.
Viking still has an extended technique to go
Despite the compelling data, Viking has much more work to do before it might compete in the burden loss drug market.
The corporate plans to fulfill with the U.S. Food and Drug Administration later this 12 months to debate a clinical development plan for the treatment.
Viking CEO Brian Lian told investors on a call Tuesday that the corporate will likely conduct one other phase two trial that would last six to nine months.
Jefferies’ Tewari estimates that Viking’s treatment won’t reach the market until 2029 or later. A late-stage trial on the drug could possibly be lengthy. Eli Lilly’s phase three study on Zepbound lasted two and a half to a few years.
The late entrance of Viking’s drug is one reason why Tewari doesn’t imagine the corporate will meaningfully cut into Eli Lilly’s market.
The pharmaceutical giant could also launch a slate of other weight reduction treatments over the following few years which will have benefits over Zepbound, whether or not they offer more weight reduction or convenience. They include Eli Lilly’s experimental pill orforglipron and the widely watched retatrutide, which mimics three gut hormones as a substitute of two.
An Eli Lilly and Company pharmaceutical manufacturing plant is pictured in Branchburg, Latest Jersey, on March 5, 2021.
Mike Segar | Reuters
Analysts from Deutsche Bank added in a note Tuesday that manufacturing the treatments “at scale to fulfill outsized demand has proven to be no easy feat.” They said that provides Eli Lilly and Novo Nordisk a “defensive moat” against rivals.
Viking acknowledged this hurdle on the decision Tuesday. Lian said the corporate has enough supply of the drug to support its clinical trials, but its manufacturing capability is insufficient for a business rollout.
But Lian noted that the corporate is “spending numerous time” evaluating multiple manufacturing processes to grasp “what’s fastest, what’s highest yielding, what’s most cost-effective and what’s most scalable.”
Partnerships, buyouts are on the table
Viking’s impressive data could make it a horny goal for a takeover or partnership with a big pharmaceutical company. That would give Viking the business and manufacturing capabilities needed to compete in the burden loss drug market.
William Blair’s Hsieh added that enormous pharmaceutical firms could maximize the worth of Viking’s treatment because they may higher navigate the rebate and reimbursement landscape for weight reduction drugs.
Some analysts expect other firms to have high interest in Viking.
“This thoroughly could possibly be on the shopping list for any large-cap pharma or biotech company that desires to be within the obesity market but currently doesn’t have a drug. There are many them on the market,” Oppenheimer analyst Jay Olson told CNBC.
He added that an organization could “pay a fairly significant premium for Viking and pick this up … for a comparatively low price 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 shown on this photo in Oslo, Norway, on Nov. 21, 2023.
Victoria Klesty | Reuters
Viking is an appealing deal goal due to greater than just the brand new data. Wall Street is anticipating the corporate to release early-stage trial results on an oral version of its weight reduction treatment this quarter.
The BTIG analysts noted that the mental property coverage for each versions of the drug extends beyond 2040, “boding well” for potential partnership discussions.
Viking also has other drugs in development, including a promising oral treatment for a certain type of liver disease. Eli Lilly, Novo Nordisk and other drugmakers are also racing to see whether their drugs can treat that very same condition.
Viking hasn’t disclosed any details about its discussions with potential partners. But the corporate has “all the time been open to partner discussions since day one, so we’re all the time opportunistically evaluating whatever is presented to us,” Lian said during Viking’s fourth-quarter earnings call last month.
Other drugmakers have pursued deals over the past 12 months to carve out an area in the burden loss drug market.
Swiss company Roche said it will buy the privately held U.S. obesity drugmaker Carmot Therapeutics for $2.7 billion. AstraZeneca signed a licensing agreement with Chinese biotech company Eccogene to develop an obesity pill.
Even Novo Nordisk and Eli Lilly have snapped up smaller obesity drug firms this 12 months to take care of their dominance available in the market.
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