Why Viking Therapeutics Stock Briefly Popped Today


What happened

Shares of the developmental-stage biotech Viking Therapeutics (NASDAQ:VKTX) jumped by as much as 11.2% in pre-market action Thursday morning. The company’s shares perked up in response to an intriguing top-line readout for the experimental X-linked adrenoleukodystrophy (X-ALD) drug dubbed VK0214 in a phase 1 trial.

X-ALD is an inherited disease characterized by the gradual loss of a key structural protein (myelin) encasing the nerves in the brain and spinal cord. Previously, Viking was granted orphan drug designation by the Food and Drug Administration (FDA) for VK0214 as a treatment for this often fatal genetic disorder. 

A researcher inspecting a vial.

Image source: Getty Images.

So what

Turning to the details, Viking reported that this small phase 1 trial, consisting of healthy volunteers, yielded both favorable safety results (no adverse events), and some encouraging hints at efficacy. Most notably, patients treated with VK0214 in the study demonstrated reductions in low-density lipoprotein cholesterol (LDL-C), triglycerides, and apolipoprotein B across all dose levels. Viking thus plans to kick off a second phase 1 trial to evaluate the drug in X-ALD patients in the coming weeks.    

Now what

Is Viking’s stock a strong buy in the wake of these early-stage trial results? The long and short of it is that the biotech’s fate truly rests with its lead candidate VK2809; an experimental drug currently in mid-stage development for the high-value liver disease known as nonalcoholic steatohepatitis (NASH). VK0214, in short, is simply icing on the cake. So while these early trial results are definitely a step in the right direction, they don’t necessary change the biotech’s underlying investing thesis. 

READ:  Why Wix Stock Plunged Today

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.




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