Viking Therapeutics' 2025 Volatility Shifts Focus to Subcutaneous Drug Amid Oral Safety Concerns

What happened

Viking Therapeutics saw its stock fluctuate in 2025 primarily due to mixed clinical results from its obesity drug programs. The oral formulation of VK2735 encountered significant tolerability issues in Phase 2 trials, prompting a market sentiment reset. In contrast, the subcutaneous version demonstrated compelling efficacy with up to 14.7% mean weight loss and is now preparing for Phase 3 studies. The company also reported positive Phase 2b data for its MASH candidate VK2809, bolstered by $807.7 million in cash and secured manufacturing capacity to support operations through late 2026. Consequently, Viking's near-term prospects are anchored on executing its subcutaneous obesity trials while refining the oral strategy in a competitive landscape.

Implication

The tolerability setbacks in oral VK2735 have narrowed the investment case to focus on the subcutaneous formulation's upcoming Phase 3 trials, which offer clearer efficacy signals. Viking's strong cash position provides a safety net against operational risks, reducing the likelihood of near-term dilution. Manufacturing agreements with CordenPharma enhance potential commercialization readiness, though success hinges on competitive efficacy and tolerability. However, the obesity and MASH markets remain crowded with established and emerging therapies, requiring flawless clinical execution for Viking to capture value. Overall, the stock presents speculative upside if subcutaneous data validate efficacy, but remains vulnerable to clinical missteps and competitive pressures.

Thesis delta

The investment thesis has evolved from a balanced optimism around dual-route obesity therapy to a heightened emphasis on the subcutaneous VK2735 due to oral tolerability challenges. While the speculative BUY stance is maintained based on subcutaneous efficacy and financial runway, expectations for the oral program have been downgraded, making Phase 3 success more pivotal for valuation gains.