Maxim Gets Even More Bullish on Viking Therapeutics (VKTX) on Back of Encouraging NASH Data Read-Out

Maxim's Jason McCarthy now spotlights 67% in return potential for VKTX shares.


Viking Therapeutics Inc (NASDAQ:VKTX) stock is on a mad dash today, vaulting up 69% and earning price target boost from Maxim analyst Jason McCarthy. The source of the frenzy burning up Wall Street today? The biotech player unleashed positive 36-week data for Madrigal’s NASH asset MI-3196, a Thyroid Hormone Receptor Beta agonist (TRβ), the same class of drug as Viking’s 2809. Notably, Phase 2 trial data in NAFLD/Hypercholesterolemia is anticipated in the back half of the year.

McCarthy cheers the results, highlighting: “The Madrigal data, in our view, suggests that this class of drug may be successful as a treatment for NASH. We have reduced the risk factor in our model from 90%, to 50%, as well as made some other minor adjustments.”

In reaction, the analyst reiterates a Buy rating on VKTX stock while bumping up the price target from $8 to $14, which implies a nearly 67% upside from current levels. (To watch McCarthy’s track record, click here)

“Madrigal […] data suggests Viking’s VK2809 could also have similar success, in our view. In addition, VK2809 has previously published data demonstrating that it is more potent and more targeted to the liver. As such, VK2809 dosing of 10mg/day is significantly lower than MGL-3196 at 80mg/ day (and titrated up as needed). Nonetheless, the bottom line, in our view, is success for Madrigal is a positive for Viking and VK2809,” continues McCarthy.

Diving into the Madrigal data, McCarthy underscores the following main insights: 1. Liver fat reduction appears to point to improvements in NASH and NAS. 2. The liver fat reduction exhibited at 12 weeks continued through the 36-week marker. 3. A correlation was drawn between NASH resolution and “NO” worsening of fibrosis, the analyst emphasizes. 4. McCarthy notes that, “On the call, too much fibrosis in our view.” Improvement seen in fibrosis bigger picture hit 29% against the placebo’s 23%, which is a step up for those with resolved NASH. While the analyst sees this as a “positive signal,” he sees 9 months as a fairly “short” time period, considering scarring happens over a longer period of time- and accordingly take its time in terms of healing.

Ultimately, the analyst takes the results as an encouraging indicator for TRβ in NASH: “Positive data for Madrigal is a positive for Viking, same class of drug suggesting that targeting TRβ may be a viable therapeutic pathway in NASH. Viking has $75M in cash, an asset in VK5201 that we believe remains undervalued and now a viable NASH asset in VK2809.”

TipRanks suggests a strong bullish consensus betting on VKTX stock. All 4 analysts polled in the last 3 months rate a Buy on the biotech stock. With a return potential of nearly 26%, the stock’s consensus target price stands at $10.83.

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