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AMGN vs. VKTX: Which Biotech Stock Is the Better Obesity Play?
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Key Takeaways
{\"0\":\"Amgen is advancing MariTide in late-stage obesity studies with promising monthly dosing potential.\",\"1\":\"Viking\'s VK2735 showed weight loss benefits but faced high dropout rates in its oral study.\",\"2\":\"AMGN stock posts gains with rising estimates, while VKTX stock sinks with widening projected losses.\"}
Though Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) do not currently market any obesity drugs, they are among the few biotechs that have shown immense potential in this space.
Amgen boasts a strong presence in oncology, cardiovascular disease, inflammation, bone health and rare disease markets. It has some key pipeline assets, with a focus on the lead obesity candidate, MariTide.
On the other hand, Viking Therapeutics is a clinical-stage biotech firm. Its investigational dual GLP-1 and GIP receptor agonist, VK2735, has shown blockbuster potential in early to mid-stage studies for treating obesity.
Let's examine the fundamentals of the two stocks to make a prudent choice.
The Case for AMGN
Amgen’s diverse portfolio and global reach position it well in a changing pharma landscape. Key medicines like Evenity, Repatha and Blincyto, as well as newer medicines like Tavneos and Tezspire, are driving sales, more than offsetting declining revenues from oncology biosimilars and mature products like Enbrel. New biosimilar launches are also contributing to top-line growth.
The 2023 acquisition of Horizon Therapeutics has significantly expanded Amgen's rare disease business by adding several rare disease drugs, including Tepezza, Krystexxa and Uplizna, to its portfolio.
Amgen’s key pipeline candidate is GIPR/GLP-1 receptor MariTide, which is in late-stage development. In March, the company started two phase III studies evaluating MariTide for 72 weeks in people with obesity, with or without type II diabetes (T2D). Since June, Amgen has initiated two additional late-stage studies in other obesity-related conditions.
Unlike the currently marketed obesity drugs like Eli Lilly’s (LLY - Free Report) Zepbound and Novo Nordisk’s (NVO - Free Report) Wegovy that require weekly injections, MariTide is being tested for monthly dosing. The drug’s late-stage development was supported by data from phase II studies, wherein treatment with MariTide resulted in up to approximately 20% average weight loss over 52 weeks, without reaching a weight loss plateau in people who were obese or overweight but without T2D. However, the weight loss reduction was at the lower end of investor expectations, which ranged from 20% to 25%. In T2D patients who were obese or overweight, the weight loss reduction was approximately 17% at 52 weeks.
Beyond obesity, Amgen has promising late-stage pipeline drugs across several therapeutic areas, which represent significant commercial potential. These include bemarituzumab (for first-line gastric cancer), rocatinlimab (for eczema and prurigo nodularis) and olpasiran (for atherosclerotic cardiovascular disease).
Amgen also boasts a strong biosimilars portfolio, which includes Bekemv (biosimilar of AstraZeneca’s Soliris), Wezlana (J&J’s Stelara) and Pavblu (Regeneron’s Eylea). It is also developing biosimilar versions of blockbuster oncology drugs like Bristol Myers’ Opdivo, Merck’s Keytruda and Roche’s Ocrevus in phase III studies.
However, pricing headwinds and competitive pressure are negatively impacting the sales of many products. Sales of best-selling drugs, Prolia and Xgeva, are expected to decline in 2025, mainly in the second half, due to patent erosion.
The Case for VKTX
Viking Therapeutics has shown immense potential in the booming obesity market. VK2735 has demonstrated blockbuster potential, with superior weight reduction capabilities in clinical studies, both as a subcutaneous (SC) injection and an oral pill.
Yet, the VKTX stock suffered a major setback last month after it reported mixed top-line results from a mid-stage study evaluating the safety and efficacy of the oral formulation of VK2735. Patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing, compared with 1.3% in the placebo group. However, a significant number of patients dropped out of the study due to adverse events. The discontinuation rate among VK2735-treated participants was about 28% compared with 18% for placebo.
The higher-than-expected dropout rates in the study were a disappointment. Viking Therapeutics assured investors that it might mitigate the side effects of oral VK2735 by gradually moving patients from lower to higher doses. However, the results have raised concerns about the drug’s tolerability and safety profile. Some investors also worry that the safety concerns seen in the oral formulation could affect the SC version, which was recently advanced into late-stage development. An update on VK2735 SC is not expected until the end of 2026 or early 2027.
Viking Therapeutics is also expanding its obesity pipeline beyond VK2735. It plans to file an investigational new drug application to begin clinical studies of its novel dual amylin and calcitonin receptor agonist (DACRA) for obesity treatment later this year.
The company’s pipeline also includes promising candidates for non-alcoholic steatohepatitis (NASH) and X-linked adrenoleukodystrophy (X-ALD) indications. VKTX is actively exploring partnership opportunities for these candidates, which could provide additional funding and validation.
Still, Viking's biggest challenge lies in its lack of an approved product and the intense competition from pharma giants that already dominate the obesity landscape.
How Do Estimates Compare for AMGN & VKTX?
The Zacks Consensus Estimate for Amgen’s 2025 sales and EPS implies a year-over-year increase of 6.7% and 6.4%, respectively. EPS estimates for both 2025 and 2026 have been trending upward over the past 60 days.
Image Source: Zacks Investment Research
Devoid of a marketed product, we expect VKTX’s 2025 loss per share to widen by nearly 146%. Loss estimates for 2025 and 2026 have widened over the past 60 days.
Image Source: Zacks Investment Research
Price Performance and Valuation of AMGN & VKTX
Year to date, shares of Amgen have gained over 5%, while those of VKTX have plummeted 40%. In comparison, the industry has risen nearly 4%, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, Amgen seems to be more expensive than Viking Therapeutics, going by the price/book (P/B) ratio. AMGN’s shares currently trade at 19.86 times trailing book value, higher than 3.41 for VKTX.
Image Source: Zacks Investment Research
AMGN or VKTX: Which is a Better Pick?
Amgen remains a financially robust, dividend-paying blue-chip stock with a dominant commercial footprint across multiple therapeutic areas. Its strong year-over-year revenues and profits suggest long-term potential.
Viking has its fair share of problems, like the lack of marketed drugs and the presence of pharma giants in targeted markets. Though the company has a strong cash balance to carry out its day-to-day operations for the next few years, it is highly dependent on its pipeline drugs for growth.
Hence, AMGN is a safer pick at present (despite its pricey valuation), as we believe there is room for growth buoyed by solid fundamentals and a positive uptrend in stock price movement.
Also, Amgen carries a Zacks Rank #3 (Hold) while Viking Therapeutics has a Zacks Rank #4 (Sell). This further reinforces Amgen’s more favorable standing in the current investment landscape.
Image: Bigstock
AMGN vs. VKTX: Which Biotech Stock Is the Better Obesity Play?
Key Takeaways
Though Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) do not currently market any obesity drugs, they are among the few biotechs that have shown immense potential in this space.
Amgen boasts a strong presence in oncology, cardiovascular disease, inflammation, bone health and rare disease markets. It has some key pipeline assets, with a focus on the lead obesity candidate, MariTide.
On the other hand, Viking Therapeutics is a clinical-stage biotech firm. Its investigational dual GLP-1 and GIP receptor agonist, VK2735, has shown blockbuster potential in early to mid-stage studies for treating obesity.
Let's examine the fundamentals of the two stocks to make a prudent choice.
The Case for AMGN
Amgen’s diverse portfolio and global reach position it well in a changing pharma landscape. Key medicines like Evenity, Repatha and Blincyto, as well as newer medicines like Tavneos and Tezspire, are driving sales, more than offsetting declining revenues from oncology biosimilars and mature products like Enbrel. New biosimilar launches are also contributing to top-line growth.
The 2023 acquisition of Horizon Therapeutics has significantly expanded Amgen's rare disease business by adding several rare disease drugs, including Tepezza, Krystexxa and Uplizna, to its portfolio.
Amgen’s key pipeline candidate is GIPR/GLP-1 receptor MariTide, which is in late-stage development. In March, the company started two phase III studies evaluating MariTide for 72 weeks in people with obesity, with or without type II diabetes (T2D). Since June, Amgen has initiated two additional late-stage studies in other obesity-related conditions.
Unlike the currently marketed obesity drugs like Eli Lilly’s (LLY - Free Report) Zepbound and Novo Nordisk’s (NVO - Free Report) Wegovy that require weekly injections, MariTide is being tested for monthly dosing. The drug’s late-stage development was supported by data from phase II studies, wherein treatment with MariTide resulted in up to approximately 20% average weight loss over 52 weeks, without reaching a weight loss plateau in people who were obese or overweight but without T2D. However, the weight loss reduction was at the lower end of investor expectations, which ranged from 20% to 25%. In T2D patients who were obese or overweight, the weight loss reduction was approximately 17% at 52 weeks.
Beyond obesity, Amgen has promising late-stage pipeline drugs across several therapeutic areas, which represent significant commercial potential. These include bemarituzumab (for first-line gastric cancer), rocatinlimab (for eczema and prurigo nodularis) and olpasiran (for atherosclerotic cardiovascular disease).
Amgen also boasts a strong biosimilars portfolio, which includes Bekemv (biosimilar of AstraZeneca’s Soliris), Wezlana (J&J’s Stelara) and Pavblu (Regeneron’s Eylea). It is also developing biosimilar versions of blockbuster oncology drugs like Bristol Myers’ Opdivo, Merck’s Keytruda and Roche’s Ocrevus in phase III studies.
However, pricing headwinds and competitive pressure are negatively impacting the sales of many products. Sales of best-selling drugs, Prolia and Xgeva, are expected to decline in 2025, mainly in the second half, due to patent erosion.
The Case for VKTX
Viking Therapeutics has shown immense potential in the booming obesity market. VK2735 has demonstrated blockbuster potential, with superior weight reduction capabilities in clinical studies, both as a subcutaneous (SC) injection and an oral pill.
Yet, the VKTX stock suffered a major setback last month after it reported mixed top-line results from a mid-stage study evaluating the safety and efficacy of the oral formulation of VK2735. Patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing, compared with 1.3% in the placebo group. However, a significant number of patients dropped out of the study due to adverse events. The discontinuation rate among VK2735-treated participants was about 28% compared with 18% for placebo.
The higher-than-expected dropout rates in the study were a disappointment. Viking Therapeutics assured investors that it might mitigate the side effects of oral VK2735 by gradually moving patients from lower to higher doses. However, the results have raised concerns about the drug’s tolerability and safety profile. Some investors also worry that the safety concerns seen in the oral formulation could affect the SC version, which was recently advanced into late-stage development. An update on VK2735 SC is not expected until the end of 2026 or early 2027.
Viking Therapeutics is also expanding its obesity pipeline beyond VK2735. It plans to file an investigational new drug application to begin clinical studies of its novel dual amylin and calcitonin receptor agonist (DACRA) for obesity treatment later this year.
The company’s pipeline also includes promising candidates for non-alcoholic steatohepatitis (NASH) and X-linked adrenoleukodystrophy (X-ALD) indications. VKTX is actively exploring partnership opportunities for these candidates, which could provide additional funding and validation.
Still, Viking's biggest challenge lies in its lack of an approved product and the intense competition from pharma giants that already dominate the obesity landscape.
How Do Estimates Compare for AMGN & VKTX?
The Zacks Consensus Estimate for Amgen’s 2025 sales and EPS implies a year-over-year increase of 6.7% and 6.4%, respectively. EPS estimates for both 2025 and 2026 have been trending upward over the past 60 days.
Image Source: Zacks Investment Research
Devoid of a marketed product, we expect VKTX’s 2025 loss per share to widen by nearly 146%. Loss estimates for 2025 and 2026 have widened over the past 60 days.
Image Source: Zacks Investment Research
Price Performance and Valuation of AMGN & VKTX
Year to date, shares of Amgen have gained over 5%, while those of VKTX have plummeted 40%. In comparison, the industry has risen nearly 4%, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, Amgen seems to be more expensive than Viking Therapeutics, going by the price/book (P/B) ratio. AMGN’s shares currently trade at 19.86 times trailing book value, higher than 3.41 for VKTX.
Image Source: Zacks Investment Research
AMGN or VKTX: Which is a Better Pick?
Amgen remains a financially robust, dividend-paying blue-chip stock with a dominant commercial footprint across multiple therapeutic areas. Its strong year-over-year revenues and profits suggest long-term potential.
Viking has its fair share of problems, like the lack of marketed drugs and the presence of pharma giants in targeted markets. Though the company has a strong cash balance to carry out its day-to-day operations for the next few years, it is highly dependent on its pipeline drugs for growth.
Hence, AMGN is a safer pick at present (despite its pricey valuation), as we believe there is room for growth buoyed by solid fundamentals and a positive uptrend in stock price movement.
Also, Amgen carries a Zacks Rank #3 (Hold) while Viking Therapeutics has a Zacks Rank #4 (Sell). This further reinforces Amgen’s more favorable standing in the current investment landscape.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.