Why Viking Therapeutics Stock Popped Nearly 4% Today

Key Points

• It's becoming increasingly apparent that the current crop of obesity drugs can treat other conditions, too.

• A team of French medical researchers has been somewhat successful in treating a particular skin condition.

• 10 stocks we like better than Viking Therapeutics ›

Numerous companies in the healthcare sector are feverishly busy developing obesity drugs, as these products have taken the medical world by storm. One of the more prominent developers, clinical-stage biotech Viking Therapeutics (NASDAQ: VKTX), saw its share price rise by almost 4% on Thursday on the back of encouraging research about a certain property of such treatments.

The stock's rise was more than good enough to convincingly beat the 0.3% bump higher of the benchmark S&P 500 index on the day.

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Unexpected benefits

Not only are obesity drugs effective in reducing body weight, it seems they have knock-on effects on certain health conditions, too -- which is one of the major reasons investors have been hot on companies selling or developing them.

Image source: Getty Images.

Thursday morning, a report published on Fox News's website detailed a new study indicating that GLP-1 agonists (substances that mimic a hormone that produces a feeling of satiety after eating) can have a positive effect on a particularly bothersome skin condition. This is hidradenitis suppurativa, which is characterized by small lumps that develop under the skin.

Citing research conducted by a group of French doctors and published in the JAMA Dermatology medical journal, the media outlet wrote that GLP-1 agonists appear to have general anti-inflammatory properties. At the very least it seems they might help in the treatment of hidradenitis suppurativa; the researchers found that administration of GLP-1s were "beneficial" to the condition.

Double barreled

Viking's VK2735 is actually a dual agonist, as it targets not only the GLP-1 receptor but also a receptor known as glucose-dependent insulinotropic polypeptide (GIP).

Regardless, since it's partially a GLP-1 agonist, it's likely, if this research is accurate, to benefit those with hidradenitis suppurativa. That would add significantly to its value if Viking manages to fully develop and ultimately commercialize the very promising drug.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.