Viking Therapeutics Slumps as Weight-Loss Pill Underwhelms

(Bloomberg) -- Viking Therapeutics Inc. plunged on Tuesday after its experimental obesity pill disappointed in a mid-stage study, marking another weaker-than-expected result for an oral alternative to popular weight-loss injections.

The pill, known as VK2735, helped patients lose up to 12.2% of their body weight, Viking said in a statement. However, roughly 28% of patients dropped out of the trial in just three months, dampening hopes that the pill could compete with treatments from Eli Lilly & Co. and Novo Nordisk A/S.

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“The thing to consider here is that patients discontinued at such a high rate over 13 weeks,” Mizuho’s Jared Holz said in a note.

Viking’s stock fell more than 40% at the start of regular trading in New York Tuesday, the most since April 2016.

The company might be able to mitigate the pill’s side effects by more gradually moving patients from low doses to higher ones, Chief Executive Officer Brian Lian said on a conference call with analysts. Viking is also looking into the potential for a lower dose of VK2735 to become a maintenance therapy for patients who have already lost weight on another medicine and need help keeping it off.

This is the second closely watched obesity study to disappoint in recent weeks, after an experimental pill from Lilly fell short of expectations in a late-stage trial. Still, the Viking results look “inferior” to Lilly’s, which was studied in a longer trial, Holz said.

Pills are seen as the next frontier in obesity medicine, but the science has been a challenge for drugmakers. Pfizer Inc., for example, terminated development of its oral drug, called danuglipron, earlier this year after one patient in a clinical trial developed signs of liver injury.

“Oral weight-loss programs continue to be highly controversial in terms of how they are perceived by the Street,” Holz said.

(Updates shares in fourth paragraph, company comment in fifth paragraph.)

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