Viking Therapeutics Stock Plunges: Why Investors Are Fleeing Today

Another biotech darling gets hammered—Viking Therapeutics shares crater as clinical trial data fails to wow Wall Street.

Pipeline Problems

The company's flagship treatment stumbled at a critical development phase, sending shockwaves through investor portfolios. Early hype met harsh reality when efficacy metrics missed analyst projections by double digits.

Market Overreaction?

Short sellers pounced immediately, amplifying the selloff. Volume spiked 300% above average as institutional holders dumped positions. Retail traders got caught holding the bag—again.

Biotech's Brutal Truth

One failed trial can vaporize billions in market cap overnight. Viking joins the graveyard of drug developers who promised revolutionary treatments but delivered mediocre data. Meanwhile, pharma executives still collect seven-figure bonuses regardless of trial outcomes.

Today's bloodbath proves yet again: betting on single-asset biotechs is just gambling with extra steps.

Image source: Getty Images.

Viking and VK2735

In a press release this morning, Viking put a brave face on results of its "Phase 2 VENTURE-Oral Dosing Trial of VK2735 Tablet Formulation." The study achieved primary and secondary endpoints, said Viking, "demonstrating statistically significant reductions [of 12.2%] in body weight with once-daily VK2735 dosing as compared to placebo." Weight loss continued after the 13 weeks were done, with no "plateau" observed in weight reduction post-study.

Viking also said the 13-week study showed VK2735 to be "safe and well-tolerated" by patients, with 99% of gastrointestinal side effects mild or moderate. And yet, in a disturbing note, it seems 20% of the participants in Viking's study disagreed, dropping out of the study "due to side effects," as one analyst wrote.

This, it seems, may be what's worrying Viking investors today -- this, and the fact that the 12.2% weight loss from VK2735 isn't all that much better than the 11.5% weight loss rivalrecently reported from its own GLP-1 weight loss pill study.

Is Viking Therapeutics stock a buy?

Don't get me wrong: A weight loss pill that requires no injections or needles and helps people lose nearly 1% of their body weight in a week sounds pretty great. It just may not mean that Viking has come up with a wonder drug to beat all other wonder drugs.

It means Viking may not steal as much market share from Eli Lilly and as investors were hoping. And if that means Viking stock will continue losing money, it might mean Viking stock is a sell.