Viking Short Interest Hits 5-Year High After Weight-Loss Drug Stumble, But Retail Clings To Bullish Mood For Now

The stock plunged last week after Phase 2 obesity drug results showed strong weight loss but higher discontinuation rates due to side effects, despite analysts' continued bullish views.

Viking Therapeutics reportedly saw short interest jump from 26.4% to 30.8% last week, the highest since early 2020.

Days-to-cover rose from 10.2 to 11.1, even with heavy volumes. Viking’s stock, which had more than doubled from April lows ahead of the data, fell nearly 45% intraday Tuesday and ended the week down 36%, leaving it 35% lower year-to-date, according to Ortex data compiled by The Fly. 

Topline Phase 2 data from the 280-patient Venture-Oral trial showed that once-daily VK2735 tablets achieved a mean weight loss of up to 12.2% at 13 weeks compared to placebo, with early statistical significance observed at higher doses and no plateau effect. 

A maintenance cohort suggested rapid weight loss induction followed by continued reductions at lower doses, supporting a potential commercial angle. 

However, discontinuation rates reached 28%, compared with 18% for the placebo, mostly due to gastrointestinal-related adverse events, which investors judged more troubling than those observed in Phase 1. 

Viking noted most events were mild or moderate and emphasized the development of both oral and injectable formulations.

Analysts broadly defended the company. Leerink called the selloff “overdone,” Jefferies noted that investors were underappreciating dosing optimization, Stifel highlighted VK2735’s potency and flexibility compared to peers, and H.C. Wainwright described the weight-loss profile as “encouraging” despite tolerability concerns. 

All reiterated ‘Buy’ or ‘Outperform’ ratings, with targets ranging from $95 to $118.

On Stocktwits, retail sentiment for Viking was ‘extremely bullish’ amid ‘extremely high’ message volume.

One user suggested the company could quickly regain momentum with a big-pharma partnership and several new trial starts, arguing that gastrointestinal side effects are a known feature of GLP-1 drugs and that future studies may demonstrate improved tolerability. 

In their view, Viking’s long-term story is intact, with the upcoming subcutaneous Phase 3 trial seen as the main driver if no deal materializes.

Others emphasized that Viking risks losing investor confidence if it does not provide a more transparent and scientifically detailed explanation of the Phase 2 results. 

They argued that prolonged short selling thrives on silence and that additional analyses highlighting efficacy signals would help restore sentiment and reframe the narrative.

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