Executive Summary / Key Takeaways

• Viking Therapeutics is strategically advancing a differentiated pipeline in metabolic and endocrine disorders, headlined by its dual GLP-1/GIP agonist VK2735 and liver-selective TRß agonist VK2809, targeting large, validated markets like obesity and NASH.
• Positive Phase 2 data for subcutaneous VK2735 (up to 14.7% weight loss at 13 weeks) and encouraging Phase 1 data for the oral formulation (up to 5.3% weight loss at 28 days) underpin the company's prioritization of this franchise, with Phase 3 for the subcutaneous form expected to start in Q2 2025 and Phase 2 oral data anticipated in 2H 2025.
• VK2809 demonstrated compelling 52-week histology results in Phase 2b NASH/fibrosis (up to 75% NASH resolution, up to 57% >=1-stage fibrosis improvement), positioning it favorably against competitors, though Viking intends to seek a partner for its complex and costly Phase 3 development.
• A strong cash position of $851.9 million as of March 31, 2025, provides runway through at least June 30, 2026, enabling aggressive clinical execution and strategic manufacturing investments (like the CordenPharma agreement), significantly de-risking near-term operations.
• While facing intense competition from established players like Novo Nordisk (NVO) and Eli Lilly (LLY) and requiring substantial future funding, Viking's differentiated mechanisms, dual formulation strategy for VK2735, and potential for best-in-class profiles offer distinct competitive advantages that could drive significant long-term value.

The Ascent of Viking Therapeutics: Building a Differentiated Portfolio in Metabolic Disease

Viking Therapeutics, a clinical-stage biopharmaceutical company founded in 2012, has strategically positioned itself within the burgeoning landscape of metabolic and endocrine disorders. The company's journey began with foundational licensing agreements, notably with Ligand Pharmaceuticals (LGND), which provided the intellectual property backbone for several key programs. Over the past decade, Viking has evolved from an early-stage entity focused on preclinical studies and initial clinical trials to a company with multiple promising assets in mid- to late-stage development, underpinned by a recent significant capital infusion. This evolution reflects a deliberate strategy to target large, validated markets with potentially differentiated therapies, leveraging specific technological approaches to carve out a competitive niche.

The competitive environment in metabolic disorders, particularly obesity and NASH, is characterized by intense activity and the presence of large, well-resourced pharmaceutical companies. Established players like Novo Nordisk and Eli Lilly dominate the GLP-1 space with blockbuster drugs like Wegovy and Zepbound, demonstrating significant weight loss efficacy and driving substantial revenue growth. Madrigal Pharmaceuticals (MDGL) recently entered the NASH market with the first approved therapy, Rezdiffra, highlighting the potential for novel mechanisms in this underserved area. Viking competes directly with these companies through its lead programs, VK2735 and VK2809, aiming to differentiate through mechanism, administration route, and potentially superior safety or efficacy profiles in specific patient populations. While larger competitors benefit from extensive commercial infrastructure and deeper financial pockets, Viking's strategic focus on specific receptor targets and dual mechanisms represents a calculated approach to challenge the status quo and capture market share.

Viking's technological foundation rests on two primary pillars: dual GLP-1/GIP receptor agonism and tissue-selective thyroid hormone receptor beta (TRß) agonism. VK2735 combines the activity of GLP-1 and GIP, a mechanism shared with Eli Lilly's tirzepatide, which has demonstrated potent weight loss. Viking's approach with VK2735 has yielded promising clinical results, with the subcutaneous formulation showing mean body weight reductions up to 14.7% from baseline after just 13 weeks in the Phase 2 VENTURE study, compared to 1.6% for placebo. The oral formulation also demonstrated encouraging activity, with dose-dependent reductions up to 5.3% from baseline after 28 days in a Phase 1 study. These results appear competitive with early data from other incretin-based therapies and suggest the potential for further weight loss with longer treatment duration, as indicated by the lack of plateau observed in the studies.

The company's TRß agonist programs, VK2809 and VK0214, leverage a mechanism distinct from incretins, focusing on liver-selective activation of the TRß receptor. This selectivity is designed to maximize therapeutic effects in the liver (relevant for NASH) while minimizing potential off-target effects associated with TRß activation in other tissues, such as the heart. VK2809, targeting NASH and fibrosis, demonstrated impressive histological improvements in the Phase 2b VOYAGE study at 52 weeks. Up to 75% of patients achieved NASH resolution without worsening fibrosis (vs. 29% for placebo, p<0.0001), and up to 57% achieved at least a 1-stage improvement in fibrosis without worsening NASH (vs. 34% for placebo, p<0.5.00). Notably, up to 48% achieved both endpoints (vs. 20% for placebo, p<0.1.00). These figures compare favorably to the histological benefits reported for Madrigal's Rezdiffra and position VK2809 as a potentially best-in-class therapy for NASH. VK0214, a similar TRß agonist for the rare disorder X-ALD, showed first-in-class results in a Phase 1b trial, achieving significant reductions in plasma very long chain fatty acids (VLCFAs), with a ~38% reduction in C26 VLCFA relative to placebo. The strategic intent behind these selective mechanisms is to offer differentiated safety and tolerability profiles, potentially leading to higher patient adherence and broader applicability compared to less selective or more systemically active alternatives.

Operational Execution and Financial Strength Fueling Pipeline Advancement

Viking's operational strategy is centered on efficiently advancing its clinical pipeline, primarily through reliance on contract research organizations (CROs) for clinical trials and contract development and manufacturing organizations (CDMOs) for drug supply. This model allows the company to maintain a relatively lean internal structure while accessing specialized expertise and infrastructure. As of March 31, 2025, Viking had 112.29 million shares outstanding. The company's financial health was significantly bolstered by a public offering in March 2024, which generated substantial net proceeds. This resulted in a robust cash, cash equivalents, and short-term investments balance of $851.9 million as of March 31, 2025, down from $907.2 million at December 31, 2024, reflecting ongoing R&D investments. Management projects this cash position is sufficient to fund operations through at least June 30, 2026.

The company's operating expenses have increased as its pipeline has matured. For the three months ended March 31, 2025, total operating expenses were $55.469 million, a significant increase from $34.073 million in the same period of 2024. This rise was primarily driven by increased research and development expenses, which grew from $24.103 million to $41.391 million year-over-year. The main contributors to this R&D increase were higher spending on manufacturing for drug candidates ($10.5 million increase), clinical studies ($6.7 million increase), stock-based compensation ($1.8 million increase), and salaries and benefits ($1.2 million increase), partially offset by a decrease in preclinical study costs ($2.9 million decrease). General and administrative expenses also increased, from $9.970 million to $14.078 million, largely due to higher legal and patent services ($2.8 million increase), stock-based compensation ($1.5 million increase), and insurance ($0.3 million increase). The net loss for Q1 2025 was $45.629 million, compared to $27.356 million for Q1 2024, reflecting the increased investment in development activities. Interest income provided a partial offset, increasing from $6.745 million to $9.864 million due to the larger cash balance.

A critical operational step taken in March 2025 was entering into broad, multi-year manufacturing agreements with CordenPharma for VK2735. These agreements secure dedicated capacity for the annual manufacture of multiple metric tons of API and provide significant fill/finish capacity for both injectable (100 million autoinjectors, 100 million vial/syringe products) and oral (over 1 billion tablets) formulations. These capacities are expandable at Viking's option and are intended to support a potential multi-billion-dollar annual product opportunity. The agreements involve prepayments totaling $150 million between 2025 and 2028, which will be credited against future orders. This strategic move addresses potential manufacturing scalability risks, a known challenge in the GLP-1 space, and signals the company's confidence in the program's potential commercialization.

Outlook and Strategic Priorities

Viking's outlook is firmly focused on advancing its lead programs, particularly the VK2735 franchise. Based on positive Phase 2 data and constructive dialogue with the FDA, the company plans to initiate Phase 3 clinical studies for the subcutaneous formulation of VK2735 in the second quarter of 2025. The Phase 3 program is expected to include two studies, one in obese subjects and one in obese subjects with type 2 diabetes, utilizing multiple doses (7.5mg, 12.5mg, 17.5mg) and targeting a 52-week treatment window. The company is also exploring less frequent dosing options, such as monthly administration, for the subcutaneous formulation, potentially as a maintenance regimen, which may require a bridging study.

The oral tablet formulation of VK2735 is also a key priority. Following promising Phase 1 data and completion of enrollment in the 13-week Phase 2 VENTURE-Oral Dosing trial in March 2025, initial results are expected in the second half of 2025. This formulation is strategically important as it offers a convenient alternative for patients and the potential to transition from the injectable form, utilizing the same molecule.

While the VK2809 program demonstrated compelling 52-week histology data in NASH/fibrosis, Viking's stated preference is to pursue partnering or licensing opportunities for its future development. This decision likely reflects the significant investment and complexity associated with Phase 3 NASH trials, particularly the requirement for liver biopsies, and allows Viking to prioritize its internal resources and focus on the obesity market opportunity. Similarly, the VK0214 program for X-ALD, despite positive Phase 1b results, is also intended for partnering.

Looking further ahead, Viking plans to file an IND for its novel Dual Amylin and Calcitonin Receptor Agonist (DACRA) program in the second half of 2025 and initiate a Phase 1 trial. This preclinical program has shown promising weight loss effects and is viewed as a potential next-generation therapy, particularly in combination with other mechanisms like GLP-1/GIP agonism, which could offer enhanced efficacy. The company is actively building its internal team in key areas like regulatory affairs, clinical development, and manufacturing to support the aggressive development pace across these programs.

Risks and Considerations

Investing in Viking Therapeutics carries significant risks inherent in the clinical-stage biopharmaceutical sector. The company has a limited operating history and continues to incur substantial losses, which are expected to increase as its programs advance into larger, more costly clinical trials. While the current cash position provides runway through mid-2026, Viking will require significant additional capital to complete its planned Phase 3 trials and pursue potential commercialization, and future financing may not be available on acceptable terms or at all.

The success of Viking's pipeline is highly uncertain. Clinical trials may fail to demonstrate sufficient safety or efficacy, encounter delays in enrollment or completion, or be terminated due to unforeseen adverse events. Regulatory approval is not guaranteed, and even if approved, drug candidates may face restrictions on use or fail to gain market acceptance due to competition, pricing, or reimbursement challenges. Reliance on third parties for clinical trials and manufacturing introduces execution risk, and manufacturing scalability, despite the CordenPharma agreement, remains a potential challenge in a high-demand market. The company also faces risks related to intellectual property protection and litigation. The competitive landscape is intense, with larger companies possessing greater resources and potentially launching competing therapies sooner.

Conclusion

Viking Therapeutics stands at a pivotal juncture, armed with positive clinical data for its lead programs and a strong balance sheet to fund near-term development. The core investment thesis centers on the potential for VK2735 to compete effectively in the massive obesity market, leveraging both subcutaneous and oral formulations, and the potential for VK2809 to offer a differentiated, best-in-class profile in the NASH market, albeit likely through a partnership. The company's technological focus on specific receptor targets and dual mechanisms provides a foundation for potential differentiation in efficacy, safety, and tolerability against established and emerging competitors.

While significant risks remain, particularly regarding the successful execution of large, costly Phase 3 trials and the need for future funding, Viking's strategic investments in manufacturing capacity and internal capabilities, coupled with its aggressive development timelines, demonstrate a clear path forward. The initiation of Phase 3 studies for subcutaneous VK2735 and the readout from the Phase 2 oral trial in the coming months represent critical milestones for the obesity franchise. Simultaneously, the potential for a partnership for VK2809 and the advancement of the novel DACRA program offer additional avenues for value creation. For investors, the story is one of a focused biopharma company aiming to translate promising early data and strategic capital deployment into commercial success within high-value metabolic markets, navigating competitive pressures through targeted innovation.