VKTX, TERN, GPCR Shares Rally As Novo Nordisk Sounds Willingness Towards Portfolio-Expansion Deals

• Viking CEO Brian Lian said at the conference earlier this week that the strategic interest in weight-loss drug deals is broader than it appears.
• Lian also said in October that the company is “certainly receptive” to outside interest in its obesity program.
• Novo recently lost out to Pfizer in the bidding war for smaller obesity drugmaker Metsera but completed its acquisition of Akero therapeutics in December.

Shares of obesity drugmaker Viking Therapeutics (VKTX) rallied 17% on Wednesday after Denmark-based Wegovy producer Novo Nordisk (NVO) said it is on the lookout for merger and acquisition deals to boost its drug portfolio.

Novo CEO Mike Doustdar said on Tuesday during the annual JP Morgan Healthcare conference that the company will continue searching for molecules, assets, and companies that are complementary to its portfolio.

Other obesity drug manufacturing stocks also rallied at the time of writing, including Terns Pharmaceuticals (TERN), and Structure Therapeutics (GPCR). TERN shares rose 10% at the time of writing while GPCR stock rose 6%.

Novo’s Recent Acquisition Attempts

Doustdar said that the company can afford any amount for an asset, provided it is worth it. Talking about Novo Nordisk’s recent $10 billion bid to acquire smaller obesity drug maker Metsera, the CEO said, “We stopped at $10 billion in Metsera because to us, it was not worth a penny more.” Novo lost out to Pfizer in the bidding war.

However, in December, Novo completed its acquisition of Akero Therapeutics for up to $5.2 billion in a bid to gain access to its experimental drug Efruxifermin, being developed for the treatment of compensated cirrhosis due to metabolic dysfunction-associated steatohepatitis (MASH).

Viking’s Obesity Pipeline

The subcutaneous formulation of Viking Therapeutics' lead candidate VK2735 is currently in late-stage trials for obesity. In a mid-stage trial, patients achieved up to 14.7% mean weight loss in 13 weeks on the drug.

The company is also studying a tablet formulation of the drug.

Viking CEO Brian Lian said at the conference earlier this week that the strategic interest in weight-loss drug deals is broader than it appears.

"I think the interest is probably broader than is visible. I think that there are more parties sort of circling around the space and very intrigued," Lian said while adding that he thinks there is a "fair amount of interest” across the industry.

Lian also said in October that the company is “certainly receptive” to outside interest in its obesity program.

“...having a larger party involved would be, you know, very helpful in driving the program through commercialization,” he said. “That said, I don't think it's mandatory. I think it's probably a preference, but it's not mandatory. We're prepared to go alone, but we're also prepared to engage with anybody who's interested.”

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around VKTX stock stayed within the ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘high’ to ‘extremely high’ levels.

A Stocktwits user opined that Novo might buy Viking for about $10 billion, representing massive upside from its current near $4 billion market cap.

VKTX stock has gained 5% over the past 12 months. 

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