Viking Therapeutics stock falls 18% after Merck's weight-loss drug deal

Viking Therapeutics' stock dropped 18% on December 18 after Merck announced a licensing deal for a new weight-loss drug. Merck's deal, worth $112 million upfront and up to $1.9 billion in milestones, raises concerns for Viking, which has no approved products. Merck's entry into the weight-loss market could challenge Viking's prospects, especially since Viking's oral drug VK2735 is still in early trials. However, Viking has significant cash reserves and its injectable VK2735 is advancing to phase 3 trials. Despite the stock decline, analysts suggest Viking is not in immediate trouble. The market's reaction may be overblown, as Viking's drug could still capture market share before facing competition from Merck's candidate.