Obesity Pipeline Expansion And Late Stage Trials Will Support Long Term Bullish Thesis

Catalysts

About Viking Therapeutics

Viking Therapeutics is a clinical stage biopharmaceutical company focused on therapies for obesity and related metabolic disorders.

What are the underlying business or industry changes driving this perspective?

• Advancement of VK2735 into large, late stage obesity trials, with both VANQUISH-1 and VANQUISH-2 designed around weight loss endpoints, positions the company to address growing medical demand for obesity treatments, which could be a key driver of future revenue once the program moves beyond current net losses.
• Parallel development of subcutaneous and oral formulations of the same GLP-1 and GIP co agonist, including plans to start Phase III oral trials and an oral maintenance strategy, directly responds to rising patient interest in flexible obesity treatment options and could support broader market reach and future earnings growth.
• A comprehensive manufacturing and supply agreement with CordenPharma for large scale API, fill and finish across both formulations is aligned with expanding use of peptide based obesity drugs, and provides an operational path to scale that may help support future margins if VK2735 reaches commercialization.
• VK2735’s extended half life and the ongoing maintenance dosing study, which is exploring less frequent injectable and oral regimens, are tailored to long term chronic weight management needs, and successful outcomes could support longer treatment duration per patient and higher sustained revenue.
• Expansion of the cardiometabolic pipeline with an amylin receptor agonist program moving toward first in human studies, alongside the hiring of a Chief Commercial Officer with obesity market experience, ties the business more closely to long term medical focus on weight and metabolic health and may diversify future revenue and earnings beyond VK2735.

Assumptions

How have these above catalysts been quantified?

• Viking Therapeutics currently has no revenue. Analysts are forecasting revenue to reach $118.5 million by March 2029.
• Analysts are not forecasting that Viking Therapeutics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Viking Therapeutics's profit margin will increase from 0.0% to the average US Biotechs industry of 10.9% in 3 years.
• If Viking Therapeutics's profit margin were to converge on the industry average, you could expect earnings to reach $12.9 million (and earnings per share of $0.1) by about March 2029, up from -$359.6 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 1109.1x on those 2029 earnings, up from -10.3x today. This future PE is greater than the current PE for the US Biotechs industry at 21.6x.
• Analysts expect the number of shares outstanding to grow by 2.89% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.06%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Viking is still a clinical stage company with no revenue and a net loss of $358.5 million in 2025, so any delay, failure or unexpected safety issue in the Phase III VANQUISH trials or the planned Phase III oral program could push out or reduce potential commercialization, directly limiting future revenue and delaying a possible path to positive earnings.
• Research and development expenses moved from $101.6 million in 2024 to $345 million in 2025. Combined with an annual net loss of $358.5 million and cash of $706 million at year end 2025, this shows that Viking is relying heavily on cash reserves to fund its expanding obesity and amylin pipelines. Sustained high spend or additional trials could lead to future equity raises that dilute shareholders and weigh on earnings per share.
• The obesity treatment market is evolving quickly, with strong early uptake for other oral peptides and new distribution models from companies like Ro and Hims. If VK2735 fails to differentiate on efficacy, tolerability, dosing flexibility or access, competition could cap pricing power and patient share, which would constrain potential revenue and pressure net margins over time.
• Viking’s long term story is heavily concentrated in a single mechanism: the dual GLP 1 and GIP co agonist VK2735 delivered in both subcutaneous and oral forms. Any change in medical practice, payer requirements, or regulatory expectations for GLP 1 based weight loss drugs, including demands for additional outcomes data, could limit use of VK2735 and reduce the likelihood of achieving the analyst implied revenue and earnings forecasts.
• The company is adding commercial leadership, expanding headcount and building out large scale manufacturing capacity under the CordenPharma agreement before any product approval. This increases fixed costs ahead of potential revenue and, if uptake of VK2735 or future amylin agonists is slower or smaller than anticipated, could lead to structurally lower net margins and weaker earnings for an extended period.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $92.72 for Viking Therapeutics based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $125.0, and the most bearish reporting a price target of just $35.0.
  
• In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $118.5 million, earnings will come to $12.9 million, and it would be trading on a PE ratio of 1109.1x, assuming you use a discount rate of 7.1%.
  
• Given the current share price of $32.14, the analyst price target of $92.72 is 65.3% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.