Oral weight-loss drug "flips over"! Viking Therapeutics Inc. (VKTX.US) stock price crashes by 42%, shorts make a profit of 5.21 billion US dollars overnight.

On Tuesday, Viking Therapeutics Inc. (VKTX.US) experienced the largest drop in stock price in history, allowing traders who shorted the company to make a huge profit and turning around the losses they had incurred so far this year. According to data from Matthew Unterman, Managing Director of S3 Partners LLC, the biotechnology company's stock price plummeted by 42% on Tuesday, resulting in paper gains of $521 million for short sellers in a single day. This brought their profits for the year to over $380 million, compared to a loss of approximately $140 million as of Monday's closing. This stock price drop was due to the mid-term results of an experimental oral weight loss drug: the side effects of the drug caused approximately 28% of patients to drop out of the trial within three months. This shattered market expectations that the oral drug could compete with popular weight loss injection products from Eli Lilly (LLY.US) and Novo Nordisk A/S Sponsored ADR Class B (NVO.US). "The drug tolerance issue overshadowed the efficacy data," noted research report led by Piper Sandler analyst Biren Amin, and added that a high proportion of nausea and vomiting symptoms were observed in all treatment groups in the study. It is reported that this is the second disappointing oral weight loss drug study in recent times. Earlier this month, Eli Lilly's stock price plummeted by 14% in a single day after it announced that the results of its experimental weight loss drug did not meet Wall Street's expectations, marking the largest drop since 2000. Nevertheless, analysts remain bullish on Viking Therapeutics stock, with nearly 90% of analysts giving it a "buy" rating. An average target price of around $90 implies over three times the upside from the current trading price. In a report, Oppenheimer & Co. analyst Jay Olson wrote, "We believe today's weakness in Viking Therapeutics stock is a buying opportunity, as the market's concerns about tolerance issues appear to be excessive," reiterating an "outperform" rating and a target price of $100.