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Shares of Novo Nordisk and Eli Lilly slid Thursday after San Diego-based Viking Therapeutics announced that it’s advancing an experimental weight loss drug to a late-stage clinical trial.
The news brings Viking’s potential Ozempic-alternative closer to hitting the market. Viking is one of many pharma companies racing to break up the current weight loss drug duopoly held by Novo Nordisk, the manufacturer of Ozempic and Wegovy, and Eli Lilly, the maker of Zepbound.
Morgan Stanley analysts anticipate the global market for these drugs, known as GLP-1 treatments, will reach $105 billion by 2030.
Viking stock skyrocketed nearly 40% following the news, while shares of Novo Nordisk and Eli Lilly fell 2% and 3%, respectively.
Viking said on Wednesday that after receiving written responses from the U.S. Food and Drug Administration (FDA), it plans to advance its weekly injection VK2735 into a phase 3 trial.
An earlier, smaller trial found that VK2735 helped users achieve an average weight loss of 14% from baseline numbers, plus 13% compared with a placebo after 13 weeks of treatment.
Viking is set to meet with the FDA later this year to go over its phase 2 trial, and details and timing of its upcoming phase 3 trial will be disclosed after that meeting.
William Blair analysts said in a note they expect the phase 3 trial to start in early 2025 — just three years after Viking started its phase 1 trial for the weight loss drug. The investment bank commended Viking for the speed at which they’re developing VK2735.
The company also announced that it is planning a phase 2 trial of an oral version of VK2735 for the fourth quarter of this year.
A previous small clinical study found that patients taking a daily 40mg dose of Viking’s weight loss pill lost an average of up to 5.3% of their body weight in just 28 days.