Viking Therapeutics (NASDAQ: VKTX) didn’t exactly capture investors’ hearts in the final month of 2024. The biotech company’s share price eroded by 24% in December, primarily on the back of a rival’s aggressive move into a potentially very lucrative segment of the pharmaceutical market.
That rival is a large and determined one: global pharmaceutical incumbent Merck (NYSE: MRK).
In mid-December, Merck announced it had entered into a licensing deal with China-based biotech Hansoh Pharma for that company’s investigational weight-loss drug. If developed successfully, the drug, labeled HS-10535, would surely pose a serious threat to Viking’s No. 1 pipeline program, VK2735. This, too, is an obesity drug; it has tested well in clinical trials and is relatively advanced in its development process.
It is also an orally administered treatment, giving it an advantage over competing products on the American market that are already Food and Drug Administration (FDA)-approved for the disorder. These are Novo Nordisk‘s Wegovy and Eli Lilly‘s Zepbound, both of which are delivered via injection.
Merck’s arrangement with Hansoh gives the former company exclusive global licensing rights to HS-10535, which is currently in development. Merck has already committed quite significantly to this, signing on to a $112 million up-front payment in the deal. The company has also agreed to pay its Chinese partner as much as $1.9 billion in milestone payments and royalties, assuming, of course, that the drug is ultimately brought to market.
The stakes are high in the weight-loss game. With only two GLP-1 drugs approved specifically for weight loss in the U.S., the market is still wide open. Meanwhile, such drugs are enjoying white-hot popularity in a country notable for its high rates of obesity. Americans love the idea of being able to jettison diet and exercise regimes in favor of simply taking a drug to shed pounds. So, demand is currently very strong and should remain so.
While Viking investors are right to be concerned with Merck’s move — the company is large, powerful, and obviously has a plan — I wouldn’t be ready to throw in the towel just yet. HS-10535 still has some distance to go in its development cycle, and there’s no telling how efficacious it’ll ultimately prove to be.
VK2735, then, seems like a better bet to make it to the hallowed commercialization stage. Given that it’s an oral treatment rather than an injectible, it’s sure to be a go-to treatment from the jump.
Ever feel like you missed the boat in buying the most successful stocks? Then youâll want to hear this.
On rare occasions, our expert team of analysts issues a âDouble Downâ stock recommendation for companies that they think are about to pop. If youâre worried youâve already missed your chance to invest, now is the best time to buy before itâs too late. And the numbers speak for themselves:
-
Nvidia: if you invested $1,000 when we doubled down in 2009, youâd have $374,613!*
-
Apple: if you invested $1,000 when we doubled down in 2008, youâd have $46,088!*
-
Netflix: if you invested $1,000 when we doubled down in 2004, youâd have $475,143!*
Right now, weâre issuing âDouble Downâ alerts for three incredible companies, and there may not be another chance like this anytime soon.
See 3 âDouble Downâ stocks »
*Stock Advisor returns as of December 30, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.
Why Viking Therapeutics Stock Plummeted by 24% in December was originally published by The Motley Fool
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
