The pharmaceutical company Viking has recently become one of the most volatile stocks on Wall Street due to the announcement of a new experimental obesity drug. It is an oral pill born in the wake ofOzempicwhich should overcome one of the main defects of the current treatment against excess fat mass: the fact that it must be taken via injection.
When the pill was announced by Viking as effective after a limited study, the company’s value suddenly increased. In the following days, however, several analysts showed that, at the moment, the company would not have the production capacity to support the costs of mass production of the drug.
Viking’s new anti-obesity pill
At the ObesityWeek, convention for the treatment and prevention of obesity which ended on Sunday 3 November, the pharmaceutical company Viking Therapeutics presented the results of a study on a new weight loss pill, VK2735. Nine patients who took the highest dose, 100 milligrams, lost it in 28 days 8.2% of your fat massversus 1.4% of those who received the placebo.
A study that quickly caused the shares of Viking, has become one of the most prominent pharmaceutical companies on the American stock exchange. This new drug comes in the wake of Ozempic, a medicine originally designed for diabetes by the Danish company Novo Nordisk. Its success was such that it changed the economy of the whole of Denmark, but now several competitors, including Viking, are trying to overcome the main problem associated with this drug.
Ozempic in fact, it is still linked to a therapy that requires injections. This in the long term complicates the recruitment, which must be carried out carefully, and therefore limits its commercial potential. Furthermore, its success has had a disastrous impact on its availability for primary patients: diabetics. Making a pill out of a similar active ingredient would solve both problems, but some observers are not convinced that Viking has the tools to market it.
Doubts about Viking’s ability to produce the new pill
In fact, on Monday Viking shares tumbled 11%following some analyzes that have reduced Viking’s ability to mass produce the new pill: “We are not saying that it is impossible for Viking to make this drug, but we believe that it is too expensive, with an investment and a level of specialization that neither Lilly nor Novo have at the moment,” said James Shin, an analyst at Deutsche Bank.
Novo Nordisk is the company that produces Ozempic while Eli Lilly is one of Viking’s main competitors in the creation of an oral weight loss drug. Lilly itself is expected to reveal the results of its research on the matter by April 2025. Viking has however quadrupled its market capitalization in the last year. The company believes the market for an oral obesity pill could hit $150 billion early next decade.
