Goldman Sachs Group, Inc. evaluates the trial results of Viking Therapeutics' oral drug VK2735: Significant efficacy but tolerability is questionable, more suitable for weight maintenance.

Goldman Sachs Group, Inc. released a commentary report this week on the recent trial results of Viking Therapeutics (VKTX.US) and mentioned the impact on Eli Lilly (LLY.US). Recently, Viking Therapeutics announced that its oral drug VK2735 used in the phase II VENTURE oral dosing trial for obesity treatment met its primary endpoint, with positive top-line results. Goldman Sachs Group, Inc. gave a target price of $33 based on valuation analysis. The results showed that in the dose groups of 15mg to 120mg, the average weight loss reported ranged from 2.3% (adjusted for placebo to 1%) to 12.2% (adjusted for placebo to 10.9%). In the placebo group, 13% of patients discontinued treatment due to adverse reactions, while this proportion was about 20% in patients receiving oral VK2735 treatment. The most common reason for discontinuation was gastrointestinal-related adverse reactions. In addition, in an exploratory dosing cohort, patients were treated with a 90mg dose for 6 weeks, followed by a reduction to 30mg for 7 weeks, with weight loss after 6 weeks adjusted for placebo being 6.7% and 7.9% after 13 weeks. The results published are consistent with the view of the firm that injectables will maintain the largest market share, while oral VK2735 is more suitable for weight maintenance. The firm believes that rapid titration may be one of the reasons why oral VK2735 achieved competitive weight loss results in week 13. It should be noted that compared to phase III studies of oral semaglutide and oral orforglipron, the phase II trial of oral VK2735 used a faster titration rate. Faster titration may accelerate weight loss, but at the cost of a higher rate of adverse reactions. The high gastrointestinal adverse reaction rate and discontinuation rate may be due to high placebo effect and rapid titration. After adjusting for placebo, the firm estimates that by week 13, the discontinuation rate of oral VK2735 in the high dose group (60mg to 120mg) is about 10%-20%, still higher than the discontinuation rate of 5%-8% due to adverse reactions in the 12mg and 36mg dose groups in the orforglipron phase III trial at week 72. By week 13, the gastrointestinal adverse reaction rate of oral VK2735 adjusted for placebo is also higher than the data from week 72 from the orforglipron trial, but relatively lower than the data from week 12 of oral amycretin. Weight maintenance is more suitable for oral VK2735. Viking Therapeutics envisions that patients can undergo induction therapy with weekly subcutaneous injections of VK2735 to quickly reach their target weight, and then continue with this regimen or switch to monthly subcutaneous injections or daily oral dosing to help maintain weight. As a proof of concept, the weight loss data of patients treated with a 90mg dose for 6 weeks and then reduced to 30mg oral VK2735 for 7 weeks supports the potential of low-dose oral formulations for weight maintenance. Regarding the impact on Eli Lilly (LLY.US), analyst Assad Haider pointed out that orforglipron possesses relatively superior tolerability characteristics, and its trial in the maintenance scenario (ATTAIN-MAINTAIN) is currently ongoing, with clear differences in positioning compared to VK2735. He emphasized that the future development path of Eli Lilly depends on dynamic events by the end of 2025. The firm stated in the report that after the data from the orforglipron ATTAIN-1 trial was released, Viking Therapeutics saw a cumulative 19% increase over two days, and Novo Nordisk A/S Sponsored ADR Class B (NVO.US) increased by about 12%, indicating that the market is conducting a wide reassessment of the competitive landscape in the oral weight loss drug sector. Subsequently, the firm's research on key opinion leaders (KOLs) showed that doctors generally have a more positive overall evaluation of orforglipron; compared to the oral semaglutide of Novo Nordisk A/S Sponsored ADR Class B, doctors expect similar prescription volumes for these two drugs. From the phase II VENTURE oral dosing trial of VK2735, the firm drew interpretations for Eli Lilly (note that the VENTURE trial lasted 13 weeks, while the ATTAIN-1 trial lasted 72 weeks, so they are not directly comparable), specifically: 1) The tolerability of VK2735 appears to be weaker than orforglipron, and key opinion leaders (KOLs) have always emphasized that tolerability is an important factor for widespread use of drugs; 2) The results of the maintenance treatment cohort are significant, indicating that patients may have a more extensive ability to maintain weight loss through low-dose medication, which may also apply to orforglipron - it is worth noting that the ATTAIN-MAINTAIN trial that Eli Lilly is currently conducting (expected to complete main research by January 2026) is exploring the effects of maintenance treatment after injectable therapy; 3) The firm still believes that the value positioning of oral VK2735 and orforglipron is significantly different, so they are not direct competitors; VK2735 focuses more on maintenance treatment, there is currently no data on the outcomes-related plan, and uncertainty about the time of market entry. Since the data from the ATTAIN-1 trial was released, Eli Lilly's stock price has rebounded by about 14% from its low point, and the firm believes that the market reaction was slightly excessive, with the future development path depending on dynamic events by the end of 2025.