Why Viking Therapeutics stock took a hit on Tuesday

News from a deep-pocketed rival hurt the biotech Viking therapeuticshis (NASDAQ: VKTX) stock on Tuesday. Said rival seems determined to dominate a very hot therapeutic area these days, and it might be hard for a relatively small fry like Viking to compete. Amid such worries, investors sold the biotech, sending its share price down more than 6% during the trading session. That was a good day for stocks in general, with S&P 500 the index increases by 0.2%.

A discount offer stirs up the obesity drug segment

That huge competitor is Eli Lilly (NYSE: LLY)which announced Tuesday that its weight-loss drug Zepbound will be made available to patients in single-dose vials containing either 2.5 milligrams or 5 milligrams of the product. According to the pharmaceutical giant, the price of these new offerings is at least 50% cheaper than that of competing GLP-1 obesity treatments.

“This new option helps millions of adults with obesity access the medications they need, including those who are ineligible for the Zepbound Savings Card program, those without employer coverage, and those who must pay for themselves without insurance said Eli Lilly. press release presenting the new doses.

This affects Viking as the biotech nears the final stages of developing its own weight loss drug. This will soon be put into practice in a phase 3 clinical trial.

The right products for the right market

Because GLP-1 drugs offer the tantalizing possibility of weight loss without exercise, they have become extremely popular in the US — a country with many overweight people. There are very few approved obesity drugs on the market, hence Eli Lilly’s clear attempts to establish an early foothold in the segment. Viking certainly has its work cut out for it if and when its weight loss products hit drugstore shelves.

Should you invest $1,000 in Viking Therapeutics right now?

Before buying shares in Viking Therapeutics, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and Viking Therapeutics was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $774,894!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

The story continues

See the 10 stocks »

*The stock advisor returns starting August 26, 2024

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Viking Therapeutics stock took a hit on Tuesday was originally published by The Motley Fool