Viking Therapeutics (NASDAQ: VKTX) the last month of 2024 didn’t exactly grab the hearts of traders. The biotech company’s share value fell by 24% in December, mainly due to the renewed competitive aggressive transfer of the real into a potentially very profitable segment of the pharmaceutical market.
Intensification of competition
This contender is rugged and reliable: the world’s leading pharmaceutical company Merck (NYSE: MRK).
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In mid-December, Merck announced that it had entered into a licensing agreement with Chinese biotech company Hansoh Pharma for the company’s investigational weight loss drug. If developed effectively, HS-10535 would undoubtedly represent a dominant option for Viking’s No. 1, VK2735. This is also a remedy for weight problems; has been successfully screened in medical trials and is comparatively developed in its exemplary process.
It is also an oral drug, giving it an advantage over competing products in the US market that are already common for Food and Drug Administration (FDA) dysfunction. They are Novo Nordiskis Wegovy and Eli Lilly‘s Zepbound, each delivered by injection.
Merck’s deal with Hansoh offers the storied queer world company licensing rights to HS-10535, which is currently in sample. Merck has already earmarked a deal for it, signing an entry-level deal of $112 million as part of the deal. The company also agreed to pay its Chinese partner as much as $1.9 billion in milestones and royalties, assuming the drug is in fact brought to market.
The stakes are high in weight loss sports. With exactly two GLP-1 drugs common mainly for weight loss in the US, the market is still large. Meanwhile, such drugs are less popular in a country notable for its high accusations of weight problems. Individuals appreciate the assumption that they are willing to abandon weight loss and exercise regimens instead of simply taking a drug to shed approximately pounds. So, build question is very correct right now and can honestly stay that way.
Viking should not give up
While Viking traders are morally excited about Merck’s transfer – the company is hilly, extremely efficient and clearly aware – I wouldn’t be willing to throw in the towel properly, but. The HS-10535 may quietly find itself in its sample cycle, and it is unknown how effective it will be with confidence in the extinguishing stamp.
So the VK2735 seems to value a bigger bet to build it to the sanctified level of commercialization. Provided it’s an oral medication instead of an injection, make sure it’s an instant-on drug.
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Eric Volkman does not own any of the shares mentioned. The Motley Fool has positions in and recommends Merck. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the creator and inventor, substantially no longer imitating those Nasdaq, Inc.
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