Why Viking Therapeutics stock was so healthy on Wednesday

Viking therapeutics (VKTX 1.94%)a biotech stock that rose to prominence thanks to one of its investigational drugs gave investors more reasons to like it on Wednesday. The company’s share price rose nearly 2% following an upbeat new research note from an analyst; this increase was in positive contrast to the decrease of 0.2% a S&P 500 index.

Weight loss medicine in the spotlight

The author of that note was Oppenheimerto Jay Olson, who reiterated his Outperform (i.e., Buy) recommendation on Viking stock and his price target of $138 per share.

The biotech has been on the radars of many analysts and many investors thanks to VK2735, an investigational drug targeting obesity. This is the hottest segment of the pharmaceutical market, with GLP-1 drugs flying off the shelves of pharmacies in this country. VK2735 has so far shown good efficacy in clinical testing, raising hopes that it could be a blockbuster in a market that still has room for competition.

In addition, Viking is developing an oral formulation of VK2735; GLP-1 drugs currently approved by the Food and Drug Administration are delivered by injection.

Potentially over the counter

In Viking’s latest take, Olson focused on this formula, which he believes could make it to market as an over-the-counter (OTC) product. Currently available GLP-1 drugs require a prescription. Based on clinical trial data, the analyst believes oral VK2735 is a candidate for OTC status. If approved to do so, selling OTC “could be a highly differentiated and valuable lifecycle management strategy to preserve substantial brand equity well beyond patent expiration,” Olson wrote.