Viking Therapeutics saw its shares surge by more than 15% on Tuesday following promising results from a small study on its experimental weight loss pill. The company announced that it plans to advance to the next stage of development later this year.

These results have fueled optimism surrounding Viking’s potential in the burgeoning weight loss drug market. Alongside Novo Nordisk and Eli Lilly, Viking is among the small biotech firms vying for a slice of what analysts project could become a $100 billion market by the decade’s end. Some analysts even view Viking as a particularly strong contender or a potential acquisition target for larger players.

Building on the positive outcome from Tuesday’s results, Viking intends to commence a phase two trial for its weight loss pill, which is an oral version of its previously successful experimental weight loss injection.

Viking’s stock has already surged by a remarkable 345% this year, reflecting the market’s growing confidence in the company’s prospects.

The phase one trial involved over 40 obese patients over approximately a month, with participants receiving various doses of the drug or a placebo. Those who took the pill once daily experienced an average weight loss of up to 5.3%, surpassing the placebo group by up to 3.3% after 28 days. Notably, a significant portion of patients receiving Viking’s pill achieved a weight loss of at least 5%, contrasting with those on the placebo.

Patients on higher doses also showed promising trends in maintaining or even increasing their weight loss six days after the last dose, indicating potential durability of the treatment effect.

CEO Brian Lian highlighted the encouraging aspect of sustained weight loss even with occasional missed doses, suggesting potential flexibility in the pill’s dosing regimen.

Viking believes that extending treatment beyond 28 days could lead to further reductions in body weight, while affirming the safety and tolerability of the pill based on trial results. Most side effects reported were mild, with gastrointestinal events being the most common, aligning with typical observations in weight loss and diabetes treatments.

Analysts have drawn comparisons between Viking’s weight loss injection and Eli Lilly’s Zepbound, as both mimic naturally occurring gut hormones GLP-1 and GIP, known to reduce appetite and improve metabolic functions. This distinguishes them from Novo Nordisk’s Wegovy, which exclusively targets GLP-1.