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Viking Therapeutics: Time To Start Scaling In

Mar. 09, 2020 11:22 AM ETViking Therapeutics, Inc. (VKTX)14 Comments


  • Despite meaningful progress, 2019 was a year of humdrum events for Viking Therapeutics and the share price was punished for it.
  • The recent market sell-off has forced VKTX to a new 52-week low, which has enticed me to move closer to clicking the buy button.
  • I discuss why I am looking to scale into a position during this period of high volatility.

A lot has happened in the market since my first Viking Therapeutics (NASDAQ:VKTX) article. Meanwhile, Viking has been dormant, with no major updates besides its Q4 earnings report and some updates on pipeline progress. Unfortunately, the share price has dropped by about 20% since that publication. This sharp pull-back in the market has triggered several of my buy alerts and VKTX was one of them. I plan to initiate my VKTX strategy and will develop a position ahead of VK2809’s pivotal study.

I intend to discuss the company’s recent Q4/2019 earnings and future milestones. In addition, I reveal my plans for starting my pilot position in VKTX and the required circumstances needed for me to add to my position.

A Humdrum 2019

2019 was a year of checking off major milestones, including the initiation of VK2809’s Phase IIb study in biopsy-confirmed NASH. The company’s lead program, VK2809, is an oral thyroid hormone receptor agonist that has a high selectivity from liver tissue as well as the beta receptor subtype. Back in September 2018, Viking publicized their optimistic results from their 12-week Phase II trial where patients receiving VK2809 experienced 54%-60% median relative reductions in liver fat compared ~9% in the placebo group.

Figure 1: VK2809 vs Placebo Liver Fat Content (Source: VKTX)

What is more, 77% to 100% of patients experienced at least a 30% relative reduction in liver fat, matched with 17% for placebo. Furthermore, 70% of VK2809 patients had at least a 50% relative reduction in liver fat content from their baseline. VK2809 also showed noteworthy decreases in LDL-C, trigs, and atherogenic proteins, which indicates a potential cardiovascular benefit. Viking believes VK2809’s potent liver-specific effects combined with its safety, tolerability and potential cardiovascular benefits, set it apart from competitive programs targeting NASH.

The company’s potential treatment for X-ALD

This article was written by

Biologics profile picture

Biologics is a full-time healthcare investor who developed a passion for biotech and life saving therapies after working in the medical field for years. His trade focus is around innovative companies developing breakthrough therapies and/or pharmaceuticals with catalysts for potential acquisitions.

He is the leader of the investing group Compounding Healthcare. Features of the group include: Several model healthcare portfolios, a weekly newsletter, a daily watchlist, and chat for dialogue and questions. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in VKTX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (14)

Biologics profile picture
Fresh 52-week highs...time to book profits?
mrmeman profile picture
@Biologics I took a little off the top when it broke $10. Will likely add back if it dips back under $8. JMTC. GLTA!
Biologics profile picture
Would like to see some consolidation over $8
Biologics profile picture
Going a good tip over the past month...I guess the overall market is taking her up.
The key words here are "up to $50 million." That doesn't mean right now, though it is tempting to believe that a company will buy back its own shares when the expected return from buying the shares exceeds the expected growth in the next year or so. Fine with me. As I wrote earlier, the company has more than adequate cash resources to continue its testing of its NASH drug and other drugs as well. I've held VKTX for almost a year and am now thinking about adding shares for my grandchildren under the Uniform Gifts to Minors Act. When they reach college age, they may not need a scholarship.
panzer profile picture
isnt it hilarious how stock market pros and the fund industry calls it just volatile when stocks lose 40 or 60 percent, but when the go up, the industry says they are going up.
Always appreciate an article in this space thank you. You follow the name closely, so if you are only going to buy "a minuscule amount of shares" even at the 52 week lows AND that you think its "possible VKTX remains beaten down for a prolonged period of time" basically tells me you have miniscule conviction at these levels so wait for lower prices...and that I will.
qwefnui profile picture
what are your thoughts on Akeros?
Earliest data from their phase 2 is March/April 2021 so this sell off (crash?) is a good place to start a position if the play is on the phase 2 data
Just hope you are right. Ever since I hold this position it's dropping... :(
VK2809 was initially tested for treating fatty liver disease, not NASH, but the data now seem to indicate efficacy for both. In addition, and unlike many other small, development stage biotech firms, Viking has sufficient cash to cover administration costs and further tests for at least two years – without the need to dilute existing shares.
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