Viking Therapeutics (VKTX) stock price has silently emerged as one of the best-performing companies in Wall Street this year. It jumped by over 14% on Friday and is up by 1.20% in the pre-market session as investors predict that it could be acquired. The stock has surged by 345% from its lowest point in October and by 94.5% this year.
Why Viking stock is surgingViking Therapeutics has joined the likes of Super Micro Computer (SMCI) and Nvidia in staging a strong rally recently. This surge has taken the biotech company’s market cap to over $3.6 billion.
The main reason for this surge is that the company has received strong results in its GLP drug testing. As a result, there is speculation that there could be a bidding war for the company as the industry sees strong growth.
Some analysts believe that Eli Lilly is in a pole position to make an offer for the company. The other likely contenders are companies like Pfizer and Roche. Pfizer is said to be in a desperate situation to enter into an industry that is making billions for the likes of Novo Nordisk and Eli Lilly. In December, the company ended the trial of a GLP drug after it imploded.
Viking Therapeutics is carrying out a study for its VK2735 drug, which has shown promising results. It now expects to publish top-line results for its phase two in the current quarter. A more positive outcome will likely fuel more takeover speculation.
A buyout would be a win-win situation for Viking and the acquirer. In the case of Viking, the buyout will give it a strong premium and save it time and resources since it would need to work on a large-scale manufacturing. The acquirer would benefit because of the strong growth of the obesity industry.
The most recent results showed that Viking Therapeutics had a net loss of $24.6 million in the fourth quarter. Its net loss jumped after the company boosted its R&D costs, which is understandable. It also has a strong balance sheet with over $362 million in cash.
VKTX stock price forecast
Viking Therapeutics’ share price has been in a strong uptrend in the past few months. It has flipped the important resistance at $25.70 into a support level. This was a notable level because it formed a small double-top in May last year.
Viking shares have also remained above all moving averages. Further, the Relative Strength Index (RSI) has moved to the overbought level. The same is true with the Stochastic Oscillator and the Percentage Price Oscillator (PPO).
Therefore, there is a likelihood that the stock will have a short-term pullback in the coming days. This is a similar thing that we saw with SMCI, which retreated sharply on Friday last week. If this happens, the stock could retest the support at $25.70.
The post What’s going on with the Viking Therapeutics (VKTX) stock price? appeared first on Invezz
