Is it believed that purchasing this prominent biotech company's stock is now impractical? Here's a reason why there may still be opportunity.

In the world of healthcare stocks, Viking Therapeutics (NASDAQ: VKTX) has been a subject of interest due to its drug candidate, VK2735. The excitement around VK2735 was primarily centered on its oral formulation, which, despite recent trial results, remains a significant aspect of the stock's potential.

Viking Therapeutics' VK2735 showed a body weight reduction of 12.2% in the Venture phase 2 trial. However, the trial resulted in a 20% rate of discontinuation due to adverse events, causing investor disappointment. The safety and tolerability data from the trial are a concern, particularly in light of Pfizer discontinuing development of an oral weight loss drug in the same class due to disappointing tolerability data.

The discontinuation rates due to adverse effects in the Venture trial for Viking Therapeutics' VK2735 were higher than those in phase 3 trials of oral weight loss drugs by Eli Lilly and Novo Nordisk. A comparison of discontinuation rates and body weight reduction between Viking Therapeutics, Eli Lilly, and Novo Nordisk, sourced from Viking Therapeutics, Eli Lilly, and Physicians Academy for Cardiovascular Education, reveals this trend.

In the Oasis-1 phase 3 trial, Novo Nordisk's semaglutide resulted in a body weight reduction of 15%, while Eli Lilly's orforglipron resulted in a body weight reduction of 12.4% at the highest dosage in the Attain-1 phase 3 trial.

Despite these concerns, VK2735 could potentially be used as a maintenance therapy for patients who have already lost weight through treatment. A larger pharmaceutical company may be interested in acquiring Viking or partnering with it to develop VK2735 in oral form and help it through phase 3 testing.

The stock's current state may be too pessimistic, potentially offering an opportunity to buy into the healthcare stock VKTX. However, it's important to note that phase 3 results from VK2735 in subcutaneous form are not expected until 2027, which could be considered a long-term catalyst.

As of today, Viking Therapeutics' stock (NASDAQ: VKTX) saw a 1.73% change, with a current price of $26.99. Despite the lack of near-term catalysts, Viking Therapeutics may have more options than the market currently perceives.

In conclusion, while the recent trial results for VK2735's oral formulation have raised concerns, the potential for VK2735 as a maintenance therapy and the possibility of partnerships or acquisitions could provide opportunities for VKTX in the future. The long-term catalyst of phase 3 results in subcutaneous form remains a beacon of hope for investors.