Viking Therapeutics stock doubled on May 31
On May 31, Viking Therapeutics (VKTX), a California-based biotechnology firm, closed at $9.99—a rise of ~101% from the previous day’s closing price of $4.97. The stock price nearly doubled on the news of the positive Phase-II clinical trial results from Madrigal Pharmaceuticals’ (MDGL) NASH (non-alcoholic steatohepatitis) candidate MGL-3196. The news triggered a rise of ~150% in Madrigal Pharmaceuticals’ stock price. On the same day, the SPDR S&P Biotech ETF (XBI) rose ~1.5%.
Why did Viking Therapeutics rise?
The news triggered an upward rally in Viking Therapeutics stock. Viking Therapeutics’ NASH drug VK2809, which is under Phase-II trial, has a similar mechanism of action as Madrigal’s MGL-3196. Investors expect to see similar results from Viking Therapeutics’ NASH candidate. The mid-stage clinical trial of Viking Therapeutics’ VK2809 is expected to be complete after a month. The study data are expected sometime in the second half of fiscal 2018. The data are expected to be positive and will likely boost the company’s stock prices.
The news also triggered a decline of more than 10% in Intercept Therapeutics’ (ICPT) stock price. Intercept Therapeutics’ NASH candidate Ocaliva is in late-stage trials. However, there are some safety concerns regarding the drug. The results of Intercept Therapeutics’ NASH drug trial aren’t expected until next year.
NASH is a serious liver disease that causes inflammation and organ damage due to excess fat buildup. Currently, there aren’t any approved therapies for NASH. NASH is expected to be a multibillion-dollar drug market in the near future. The increasing rate of obesity around the world is leading to an increase in NASH cases worldwide. Apart from the smaller biotech players, Gilead Sciences (GILD), Pfizer (PFE), and Allergan (AGN) are some of the bigger players in the market. They’re developing a NASH pipeline to tap this lucrative market.