Viking Therapeutics Stock Tanks: Is This Beaten-Down Biotech a Buy on the Dip?

Viking Therapeutics just got mauled—shares are bleeding out after brutal market reaction. Retail investors are scrambling while institutions watch from the sidelines.

What’s Behind the Plunge?

No fundamental news triggered this sell-off—just classic market overreaction. The biotech sector’s volatility strikes again, turning solid holdings into panic-sell candidates overnight.

Dip or Trap?

Smart money knows: brutal corrections often create prime entry points. But catching falling knives requires steel nerves and a long-term horizon—most traders lack both.

Biotech’s brutal landscape separates innovators from gamblers. Viking’s pipeline still holds promise, but the market’s treating potential like perishable goods—another day, another discount.

Wall Street’s short-term memory remains its most reliable feature. Today’s crisis becomes tomorrow’s buying opportunity—assuming you’ve got the stomach to hold through the storm.

Image source: Getty Images.

When bad news drops, investors have a tendency to sell first and ask questions later. Let's take a closer look at why Viking Therapeutics fell, and what's left of its late-stage pipeline to see if it could be a bad-news buy on the dip.

Why Viking Therapeutics' stock was beaten severely

Anti-obesity drugs that act on glucagon-like peptide-1 (GLP-1) receptors are all the rage lately. Semaglutide, whichmarkets under three different brand names as treatments for diabetes and obesity, racked up $17.6 billion in sales during the first half of 2025.

Tirzepatide, a treatment thatmarkets as Mounjaro for diabetes and as Zepbound for obesity, hasn't been on the market half as long as semaglutide. In the first half of 2025, tirzepatide sales more than doubled year over year to reach $14.7 billion.

Tirzepatide's rapid ascent can be attributed to a dual mode of action that appears more effective at weight reduction than drugs that only act on GLP-1 receptors, like semaglutide. It activates the same GLP-1 receptors as semaglutide, plus it acts on glucose-dependent insulinotropic polypeptide (GIP) receptors. Expectations for VK2735 are high because it's a dual GLP-1 and GIP receptor agonist that is similar to tirzepatide.

Viking Therapeutics' stock was beaten severely on Aug. 19 because the rate of adverse reactions recorded suggests oral VK2735 is not going to be a popular alternative to injectable versions of tirzepatide or semaglutide. Among patients randomized to receive the two highest doses of oral VK2735 tested, 35% reported vomiting in the phase 2 Venture trial after 13 weeks. To put this in perspective, just 13% of patients reported vomiting after taking the maximum recommended dose of Eli Lilly's Zepbound for about a year and a half in studies that led to its approval from the Food and Drug Administration (FDA).

Anti-obesity treatments are given to generally healthy patients for a long time. This means physicians who prescribe them are more concerned with safety and tolerability than efficacy. Even if Viking Therapeutics can convince the FDA to approve oral VK2735, getting physicians to prescribe an anti-obesity drug that made over one-third of clinical-trial participants vomit WOULD be an uphill battle.

Viking Therapeutics has more in the pipeline

The oral version of VK2735 probably isn't going anywhere, but it isn't the only candidate in Viking's pipeline. In June, the company started a phase 3 trial with the injectable version. The Vanquish trial is expected to enroll about 4,500 adults with obesity or who are overweight with a comorbidity such as diabetes.

In a phase 2 trial with VK2735, patients lost up to 14.7% of their weight after 13 weeks. The rapid weight loss suggests it can compete fiercely with Eli Lilly's tirzepatide, if eventually approved. We'll know more about its ability to compete when the company reports the Vanquish trial results, which it expects in about two years.

Even if VK2735 crashes and burns for unforeseen reasons, Viking Therapeutics still has a pair of thyroid hormone receptor-beta agonists in clinical-stage testing. VK2809 is an injectable MASH treatment that has already succeeded in a phase 2 study. More recently, VK0214, an oral thyroid hormone receptor-beta agonist, demonstrated efficacy in a phase 1 rare-disease trial.

A bargain buy on the dip

Commercial-stage biotechnology stocks tend to trade at mid-to-high single-digit multiples of sales. With a market cap that has fallen to around $2.9 billion at recent prices, investors aren't expecting much from injectable VK2735 or the rest of Viking's pipeline.

The demise of oral VK2735 is disappointing, but it isn't the end of the road for this pre-commercial-stage drugmaker. For investors with a strong risk tolerance, adding some shares to a diversified portfolio now could be a smart move.