Eli Lilly’s obesity drugs drove 38% revenue growth in Q2, but its oral GLP-1 candidate fell short with only 12.4% weight loss. Viking Therapeutics’ dual-formulation obesity program aims for the most profitable patient segment by 2027. Lilly stock’s high valuation assumes flawless execution without room for competition.

Lilly’s revenue surged 38% to $15.56 billion in Q2, Mounjaro generated $5.2 billion and Zepbound $3.38 billion. Full-year guidance increased to $60-$62 billion in revenue with earnings per share between $21.75 and $23. The oral GLP-1 pill’s disappointing weight loss results caused a 14% stock drop. Novo Nordisk’s Wegovy achieves 14%-15% weight loss, posing competition.

Viking Therapeutics presents a significant threat to Lilly with its dual GLP-1/GIP agonist targeting the obesity market from two angles. VK-2735’s subcutaneous formulation could launch in 2027, with an oral version in 2028. The Phase 2 trial showed promising weight loss results and a cleaner tolerability profile compared to current options.

Viking’s VK-2735 could capture the BMI 30-38 patient segment that Lilly’s treatments might struggle with due to tolerability issues. Timing is crucial, as VK-2735 could launch when Lilly’s offerings face challenges. Lilly’s market cap reflects expectations of uninterrupted dominance, but VK-2735’s potential entry could disrupt this sooner than expected.

Investors may consider taking profits on Lilly’s stock and monitoring Viking’s Phase 2 oral results in late 2025 from the sidelines. The competition in the obesity treatment market is intensifying, with Viking’s innovative approach posing a potential threat to Lilly’s dominant position.

Read more at Yahoo Finance: Is Eli Lilly Stock a Buy? Here’s What the Market Isn’t Pricing in Yet.