VKTX Stock Heads Toward Worst Day In Over A Year Just Days After Promising Weight Loss Drug Data — Here’s What’s Driving The Selloff

Viking Therapeutics priced an upsized financing deal at a 16% discount from the stock’s closing price on Wednesday.

• Viking priced around 7.86 million shares at $35 each, along with $225 million of convertible notes.
• The company plans to use the proceeds primarily to advance weight loss therapy VK2735.
• VK2735 recently showed 16% to 19% weight loss after 21 weeks.

Shares of Viking Therapeutics (VKTX) fell more than 12% in pre-market trading on Thursday, putting them on track for their worst session in more than a year, after the biotech firm priced an upsized stock and convertible debt offering at a discount, just days after reporting promising data for its weight-loss treatment.

Upsized Offering At 16% Discount

The company priced 7.86 million shares at $35 apiece, raising about $275 million before expenses. The offering price represents a roughly 16% discount to Wednesday's closing price. Viking also priced $225 million of 2% convertible senior notes due 2032, bringing the combined offerings to about $500 million before potential additional purchases by underwriters.

Both offerings were increased from Viking’s original plans to raise $200 million through shares and another $200 million through convertible notes.

Viking plans to use the proceeds primarily to fund the development and potential commercialization of its weight-loss drug VK2735, and support other research programs.

While Viking had about $501.7 million in cash and short-term investments as of June 30, its spending is rising as it advances its drug pipeline. R&D expenses nearly doubled to $115.8 million in the second quarter from $60.2 million a year earlier.

Selloff Comes Days After Promising VK2735 Data

The fundraising follows Viking’s positive VK2735 maintenance study results on Tuesday. Patients receiving weekly VK2735 lost roughly 16% to 19% of their body weight after 21 weeks, with no signs of a plateau.

Patients who switched to less frequent dosing maintained much of their weight loss. Every-other-week dosing preserved up to 97% of the weight loss, while monthly dosing maintained up to 90% after three months.

VK2735 is a dual GLP-1/GIP receptor agonist being developed as a potential obesity treatment as the company looks to take on much larger rivals including Eli Lilly (LLY) and Novo Nordisk (NVO).

Viking’s two Phase 3 trials of injectable VK2735 are fully enrolled, with results expected in 2027, while Phase 3 studies of its oral version are expected to begin in the fourth quarter.

Retail Split On VKTX’s Offering

Despite the crash, retail sentiment surrounding VKTX on Stocktwits remained in the ‘extremely bullish’ territory over the past 24 hours, while comments around the fundraising were mixed.

One user explained why the timing of the fundraise made sense.

View this Stocktwits post

Another user sounded skeptical.

View this Stocktwits post

The stock has gained around 4% so far this year.

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