Research house Maxim Group’s Jason McCarthy and Caroline Palomeque lifted their price target for Viking Therapeutics Co (NASDAQ:VKTX) to US$14, with a Buy rating, on the strength of its drug VK2809, which fights non-alcoholic fatty liver disease.
Viking expects to unveil the data from a 12-week phase 2 study of VK2809 in patients with hypercholesterolemia and non-alcoholic fatty liver disease during the second half of this year.
McCarthy and Palomeque are optimistic about the likely results as they have witnessed the success of a phase 2 trial for Viking’s rival Madrigal Pharmaceuticals (NASDAQ:MDGL), which has come out with a similar drug MGL-3196.
The two liver drugs, which are both thyroid hormone receptor beta agonists, work in similar ways and also treat NASH, a subset of non-alcoholic fatty liver disease in which fat builds up in the liver and causes inflammation and cell damage.
“Will Viking have the success Madrigal had (at the twelve-week mark)?” asked McCarthy and Palomeque in their note. “Given that VK2809 is the same class of drug as Madrigal's MGL-3196 (Thyroid Hormone Receptor Beta agonist (TRβ)), the MGL-3196 data and Viking's prior data we believe the probability of success favors Viking.”
McCarthy and Palomeque are particularly optimistic about Viking’s liver drug as they say it is more potent and more targeted to the liver than Madrigal’s MGL-3196. But Madrigal’s success bodes well for Viking regardless.
“In our view, the NASH space is so large, it’s likely that multiple drugs in the same class could reach the market and have success … remember Lipitor,” they wrote. “The bottom line, in our view, is success for Madrigal is a positive for Viking and VK2809.
Upon its expected release in November or December, the data from the Phase 2 study of VK2809 will hopefully reveal a significant reduction in LDL cholesterol as well as changes in liver fat content, triglycerides and other lipid biomarkers.
Shares in Viking Therapeutics closed slightly higher at US$9.39 Tuesday.