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Viking Therapeutics Inc., the clinical-stage biotech that wowed investors this week with promising data from a mid-stage trial of its weight-loss drug, is bolstering its balance sheet by issuing new shares.

The company, whose stock
VKTX,
+11.11%
has gained an impressive 152.5% in the week so far, priced a $550 million offering of 6.47 million shares at $85 a share late Wednesday, a discount over its closing price of $94.50.

Proceeds will be used for continued development of the weight-loss treatment VK2735 and NASH drug VK0214 and for R&D, working capital and general corporate purposes.

The stock was down 5% early Thursday.

Viking published the data from its Phase 2 trial dubbed Venture on Tuesday, sending its stock up 121% to a record that it broke on Wednesday. The stock is viewed as a cheaper entry for investors who want to play the mania around the new class of drugs, given that the two leaders in the space, Eli Lilly & Co.
LLY,
-0.96%
and Denmark’s Novo Nordisk
NVO,
-0.56%

NOVO.B,
-0.73%
have become relatively expensive.

VK2735 is Viking’s GLP-1 receptor agonist that it’s developing in both injectable and oral form as a treatment for obesity and diabetes.  use the same mechanism as Novo Nordisk’s Wegovy and Ozempic and Lilly’s Mounjaro, mimicking the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.

Analysts praised the data and said the company has become an attractive target for Big Pharma.

“The GLP-1/GIP space is ultimately a large/mega cap pharma space, in our view,’ said Maxim analysts Naz Rahman and Jason McCarthy.

“Viking has to partner for commercialization or likely late stage development. Considering the competitive nature of the product and the blockbuster growing market, we believe this further increases Viking’s attractiveness as a potential acquisition target with Viking’s NASH program being upside.”

All 10 analysts polled by FactSet have a buy or equivalent rating on the stock, even though Viking does not yet have a fully approved product on the market.

Jefferies analysts introduced a note of caution on Wednesday with a note to clients that pointed out the Viking’s drug is unlikely to get to market until 2029+. But analysts led by Akash Tewaria acknowledged the trial data were impressive.

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