Viking Therapeutics Inc. (NASDAQ: VKTX) has taken investors on a wild ride since the beginning of 2024. At one point, VKTX stock was up 375% from its closing price on January 2, 2024. But it’s been a steady move lower. As of the market close on April 15, 2025, the stock is within 10% of that January 2024 close.
This week alone has been wild. Viking stock shot up approximately 12% on news that it was preparing to start a phase 3 study for its GLP-1 weight loss drug candidate, VK2735. However, the stock is struggling to hold those gains as investors got a reminder of the practical costs of these drugs that could hold back adoption.
GLP-1 drugs were among the best-performing stocks in 2024. But the popularity of the drugs comes with a cost. And figuring out how to manage that cost should inform your decision to buy VKTX stock.
VK2735 Has Game-Changer Potential
If you’re new to this niche, GLP-1 drugs are subcutaneous in nature. That’s a precise medical way of saying that patients need to have a shot administered under the skin. The same is true of VK2735, but it’s also where the company may have a game-changing benefit.
Specifically, the company is also testing an oral version of VK2735. This would remove one obstacle that patients have with the injectable drugs (i.e. fear of needles). Additionally, some testing suggests that oral GLP-1 drugs may have a lower rate of side effects. The trade-off, however, could be that they take longer to deliver weight loss results.
Investors are Selling the News Coming From Washington
GLP-1 drugs are delivering massive benefits to patients. However, those benefits come at a massive cost. As of this writing, those drugs are not covered by Medicare or Medicaid when used for weight loss.
Stocks of GLP-1 companies like Novo Nordisk A/S (NYSE: NVO) and Eli Lilly & Co. (NYSE: LLY) shot higher in November 2024 when the Biden administration proposed a new rule that would have allowed GLP-1 drugs to be covered by Medicare and Medicaid for low income and older patients with a body mass index (BMI) over 30. Such coverage could expand access by over 7 million.
However, on April 11, the Centers for Medicare and Medicaid Services (CMS) announced it would not be finalizing the Biden rule. The organization did not provide additional comment. Health and Human Services Secretary Robert Kennedy, while acknowledging that GLP-1 drugs have a place in the treatment of obesity, has expressed a preference for ensuring that lifestyle changes are evident before moving patients to obesity drugs.
Regardless of Secretary Kennedy’s personal preferences, the challenge will be to figure out a regulatory framework for GLP-1 drugs as it relates to Medicare and Medicaid. Current estimates say that adding such coverage would increase healthcare costs dramatically. In fact, Kennedy said one estimate saw the average employer would have to pay double their current amount for health care costs to employees.
Owning VKTX Stock Will Require Conviction
[content-module:Forecast|NASDAQ: VKTX]The takeaway for investors is that Viking Therapeutics has the potential to be a multi-bagger stock in time. As of April 15, 2025, the Viking Therapeutics analyst forecasts on MarketBeat have a consensus price target of $89.75, which would be a gain of over 288%.
However, as investors have seen with other medical stocks, you’ll have to hold the stock for several years before VK2735 receives approval. And that’s assuming it does receive approval. And by that point, there will likely be competition from other biopharmaceutical companies. Plus, the regulatory environment in Washington could dilute the potential upside for investors.
The stock is popular with traders, particularly short sellers. Short interest in VKTX stock is over 20%, which suggests that the stock may not have found a bottom yet.
After all that, if you’re still interested in getting on board, you’ll want to wait until after the company reports earnings on April 23. Trading is likely to be volatile between now and then, and even if the report is strong, you’ll still have time to start a position.
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