Raymond James Beats the Drum for Viking Therapeutics (VKTX) Stock

Viking Therapeutics (VKTX) has currently five drugs in its development pipeline. Those drugs are targeting a variety of diseases including diabetes, metabolic diseases, and anemia. However, nonalcoholic steatohepatitis (NASH) is driving the show.

On September 18, Viking reported a robust VK2809 in non-alcoholic fatty liver disease (NAFLD) Phase II trial readout, exceeding investor expectations. Since then, VKTX shares jumped over 50%, but Raymond James analyst Steven Seedhouse believes substantial upside remains given the potential best-in-class nature of VK2809 and unmet medical need in a significantly large patient population.

Seedhouse reiterates an Outperform rating on VKTX with a price target of $43, which implies an upside of 171% from current levels. (To watch Seedhouse’s track record, click here)

Seedhouse wrote, “Phase 2 data in NAFLD are quite impressive and answer many key questions investors had about VK2809: 1) Will it be as potent on liver fat reduction as MGL-3196 and other NASH drugs (it actually looks better)? 2) Will transient, asymptomatic ALT elevations observed mostly at higher doses (mostly 20mg, and 40mg) in patients in a prior 14-day Phase 1 dyslipidemia study manifest in the Phase 2 NAFLD study at 10mg over 12 weeks (they didn’t)? 3) Will the overall efficacy/safety profile be competitive given questions about VK2809’s selectivity for TR-β and for the liver (which despite some investor skepticism, we had previously argued was very good)? All in all, data were very impressive and increase our conviction that VK2809 will successfully navigate clinical development in NASH and be approved (raising probability-of-success from 55% to 70%; modeling launch now in 2024), and given the strong profile relative to MGL-3196, we now model identical launch trajectories for both drugs ($3.9B risk-adjusted peak sales).”

Net net, a lot on the Street are clamoring behind this drug maker, as TipRanks analytics exhibit VKTX as a Strong Buy. Out of 6 analysts polled in the last 3 months, all 6 are bullish on the stock. With a return potential of 83.5%, the stock’s consensus target price stands at $28.60. (See VKTX’s price targets and analyst ratings on TipRanks)

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