Viking Therapeutics Inc(NASDAQ:VKTX) is up 120% over the last 30 days and close to 135% over the last three months.
The company is a biotechnology stock that has a pretty robust pipeline of early-stage assets, but it is one asset in particular that is drawing the attention of markets right now and that is – concurrently – pushing Viking’s share price higher.
Here is a look at the asset in question and why it could be a major upside driver before the end of this year for Viking and its shareholders.
So, the drug in question is called VK5211 and it’s what’s called a third-generation non-steroidal Selective Androgen Receptor Modulator (SARM). The company is attempting to get it approved as a therapy for maintenance or improvement of lean body mass (LBM), bone mineral density (BMD), and function in patients recovering from non-elective hip fracture surgery.
That sounds like a pretty specific target population, but it’s actually incredibly large. In the US alone, 1/3 of people over the age of 65 have a fall, with approximately 10-15% of falls in the elderly resulting in hip fracture. Further, 60% of those who fell the previous year will fall again the following year. Additionally, use of a number of drugs commonly prescribed to the elderly – antidepressants, sedatives, neuroleptics etc. – has been shown to increase the chances of hip fracture.
The consequences of this sort of fracture are severe – there is an 18-33% mortality rate within the first year and 25-75% do not regain pre-fracture function. Two years after a hip fracture only 58% of men and 77% of women are alive.
With VK5211, Viking is attempting to address these consequences.
The drug serves to stimulate androgen receptors, which in turn, increases the production of various androgens – the most prominent (and the most important here) of which is testosterone. Testosterone promotes the growth of healthy bone and muscle tissue, which should serve to improve the degree to which a patient achieves post fracture recovery.
Early data conducted both by the company and by outside entities investigating this sort of approach to treatment has suggested that SARM’s can dramatically improve recovery and, right now, Viking is attempting to build on this data with some safety and efficacy numbers of its own as part of a large-scale phase 2 study in hip fracture patients.
And it’s this trial that we are looking at near-term as being a potential major upside catalyst for the company.
If Viking can get this asset to market, analysts put peak sales at around $600 million annually. This is a company that is currently valued (at open market) at a just $72 million market capitalization.
If the data from the phase 2 in question hits press as positive, therefore, and points to a near-term advance into a pivotal trial in the same indication, Viking should pick up a large degree of speculative attention ahead of pivotal initiation.
So what are looking for next?
Well, as mentioned, it’s all about the phase 2 data at this stage and that’s why we’re highlighting this one as want to watch right now. The company announced early on in the year as part of a business update (that came with the most recent financials) that data from the phase 2 trial is expected to hit press at some point during the fourth quarter of 2017. That gives management around 10 weeks to get data collected and in the hands of markets if it is to meet its own target.
A purchase agreement secured on October 2 with Lincoln Park Capital adds a potential $16.25 million cash figure to the balance sheet, meaning there is plenty of runway to carry through to the catalyst in question.
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Image courtesy of Phalinn Ooi via Flickr
Disclosure: We have no position in VKTX and have not been compensated for this article.