Viking Therapeutics Plunges 34%: Is This Your Golden Buying Opportunity?

Biotech stock Viking Therapeutics tanks 34%—creating potential entry point for bold investors.

Market bloodbath or bargain hunt?

The sudden drop shakes confidence but reveals potential upside for those with risk appetite. Pharmaceutical volatility meets opportunity as the stock tests key support levels.

Smart money watches closely—will retail investors panic sell or recognize the discount?

Remember: Wall Street's 'dip' is often Main Street's cliff—but sometimes the fall creates the foundation for the next rally.

Image source: Getty Images.

The billion-dollar weight loss market

Before answering that question, let's look at the general weight loss drug market and consider Viking's position. As mentioned, Lilly and Novo Nordisk are leaders, with Lilly selling Mounjaro and Zepbound and Novo Nordisk selling Ozempic and Wegovy. Most of us know a friend or family member who has tried one of these products, and many celebrities such tennis superstar Serena Williams andchief Elon Musk have touted their benefits.

This class of weight loss drugs -- GLP-1 and dual GIP/GLP-1 receptor agonists -- has become so popular Lilly's and Novo Nordisk's have spent some time on the U.S. Food and Drug Administration's drug shortage list. And the market is set to continue growing, withResearch forecasting that today's $28 billion market will reach $95 billion by 2030.

Considering the strength of demand and market forecast, it's fair to say there's room for additional players. And this is where Viking comes in. The biotech is developing a dual GIP/GLP-1 receptor agonist and is testing the candidate in oral FORM in a phase 2 trial and in injectable form in a phase 3 trial.

Difficult comparisons

In the latest data concerning the oral version of VK2735, the candidate resulted in 12.2% average weight loss at three months, and weight loss didn't plateau -- this means patients might continue shedding pounds. It's difficult to directly compare Viking to commercialized drugs or to clinical trials of potential rivals -- the treatment regimen or the trial designs may be different, so comparisons aren't apples to apples.

But some investors focused on the idea that the 12.2% average weight loss was at the highest dose, while current injectable formats have demonstrated greater weight loss at lower doses. For example, in a phase 3 trial, tirzepatide, commercialized as Mounjaro and Zepbound, produced an average of 15% weight loss at 5mg doses. It's important to keep in mind, though, that those results were after 72 weeks. Another point that worried investors was the 28% discontinuation rate in the Viking trial -- if patients are troubled by side effects, they might stop taking the drug, and this clearly could get in the way of sales over time.

Should you worry about the latest trial data?

So let's progressively MOVE back to our question about whether Viking is a buy. The first thing to ask ourselves is whether we really should be concerned about the latest trial data, and my answer to that is "no." It's important to remember that Viking was testing a high dose and this over a rather short period of time. The company could adjust these parameters and improve the overall efficacy/safety profile. Viking even said in the data report that the pace of weight loss in the trial suggests lower doses and longer dosing periods may produce compelling results.

All of this means Viking's weight loss candidate remains promising -- and one that could potentially lead to blockbuster revenue down the road. Should you buy the stock? Biotech companies that, like Viking, don't yet have products on the market are somewhat risky -- they haven't yet proven their ability to commercialize a product and generate revenue. So if you're a cautious investor, Viking may not be right for you. But if you don't mind some risk in exchange for high growth potential, now, on the dip, is a great time to get in on this potential weight loss winner.