Viking Therapeutics shares rise on plans to check weight-loss injections

Concept of a weight loss drug.

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Shares of Viking Therapeutics rose more than 20% on Thursday after the biotechnology company announced plans a day earlier to advance its experimental weight-loss injection into late-stage testing earlier than expected.

This brings the San Diego-based company one step closer to entering the hugely popular GLP-1 market, which analysts say could grow to $150 billion by the end of the decade.

Viking is one of several small and large pharmaceutical companies that want to compete in this area Novo Nordisk And Eli Lillywhose demand for GLP-1 antibodies for weight loss and diabetes has skyrocketed in the last two years.

Shares of Novo Nordisk and Eli Lilly fell more than 1 percent on Thursday.

Viking had previously stated that the company expected to begin another mid-stage study of its weekly injection, called VK2735, after the company reported positive results from another phase two study in late February.

But after the company received written feedback from the U.S. Food and Drug Administration (FDA), it decided to move the injection directly into a Phase 3 trial, CEO Brian Lian said during a conference call on Wednesday.

Lian said the company is preparing to meet with the FDA in the fourth quarter to discuss the design and timing of this Phase 3 trial, with plans to initiate the study afterward.

The decision will likely shorten Viking's development timeline for the injection by a year, BTIG analyst Justin Zelin said in a note Wednesday. Currently, analysts expect the drug to hit the market in 2029, Zelin said.

During the call, Lian added that Viking plans to test VK2735 as a monthly injection in a future study, which could make the treatment a more convenient option than Eli Lilly's Zepbound and Novo Nordisk's Wegovy, both of which are taken once a week.

Viking Therapeutics' drug promotes weight loss by targeting GLP-1 and another hormone called GIP, the same hormones targeted by Eli Lilly's Zepbound and its diabetes counterpart Mounjaro.

Patients who received the Viking injection weekly in a Phase 2 study lost up to 14.7 percent of their body weight after 13 weeks, or 13.1 percent compared to placebo.

Viking is also developing an oral version of VK2735. This pill resulted in a weight loss of 3.3% compared to a placebo in an early study.