Viking Therapeutics (VKTX) Stock: Next Stop, $28?


Investors love biotech stocks for the lottery ticket-like returns they can offer if a company strikes medical gold. Case in point: Viking Therapeutics (VKTX), whose shares jumped nearly 100% since yesterday. The cause of all the enthusiastic commotion? The biotech firm reported positive phase 2 results for its liver-selective thyroid receptor beta agonist VK2809 for the treatment of non-alcoholic fatty liver disease (NAFLD) and elevated cholesterol (LDL-C). The study met its primary endpoint (reduction of LDL) and key secondary endpoint (reduction in liver fat) when compared to placebo.

In reaction, H.C. Wainwright analyst Joseph Pantginis reiterated a Buy rating on VKTX, while boosting the price target to $28.00 (from $15.00), which represents a potential upside of 31% from current levels. (To watch Pantginis’ track record, click here)

Pantginis commented, “We believe there was an increased focus VK2809’s safety profile, including an ongoing bear case surrounding liver function tests. To this end, we believe the 12-week profile has gone far to answer potential concerns thus far removing this potential overhang, even if the view was held by just a few. VK2809 treated patients showed an encouraging overall safety profile, which in our view, may further prove the superiority of Viking’s VK2809 vs. its peers in the NASH arena. In fact, it is worth mentioning that due to such higher (liver) safety while maintaining substantial efficacy, Viking has potential flexibility in the future for dose modification if need be.”

“We believe that we have been taking a stepwise approach to Viking’s valuation, even in the face of the positive MDGL data, which we believe VK2809 could be superior. To this end, our current valuation change is based primarily on: (1) adjustment to base year; (2) increasing our projected chance of success for VK2809 from 30% to 55%; and (3) increasing our projected peak sales from $1.3 billion to $1.95 billion. We highlight that we have not broken out potential geographies for the drug’s commercialization, and continue to believe that our peaks sales estimate remains conservative,” the analyst concluded.

Pantginis is certainly not the first analyst with an optimistic outlook for VKTX, with TipRanks analytics showcasing the stock as a Strong Buy. Out of 5 analysts polled in the last 3 months, all 5 are bullish on Viking stock. With a return potential of nearly 24%, the stock’s consensus target price stands at $27.00. (See VKTX’s price targets and analyst ratings on TipRanks)

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