Viking Therapeutics among potential buyout candidates: Oppenheimer

Ahead of the 2025 J.P. Morgan Healthcare Conference scheduled to take place in a few days, Oppenheimer named five potential buyout candidates in biotech on Friday, naming obesity drug developer Viking Therapeutics (NASDAQ:VKTX) in the list.

In addition to VKTX, Biegler included Blueprint Medicines (NASDAQ:BPMC), Janux Therapeutics (NASDAQ:JANX), Arcellx (NASDAQ:ACLX), and Nuvalent (NUVL) in the group.

"The second week of January tends to be a bellwether for biotech M&A and a broader gauge of sector sentiment," analyst Matthew Biegler wrote, as the JPM conference is expected to get underway in San Francisco, California, on January 13-16.

"We need more M&A, and not the garden variety we've gotten since COVID," he added, noting that the biotech sentiment has fallen short of expectations this year.

The analyst said all five stocks are "large enough to make headlines," and an M&A deal or two for them could reverse the current biotech sentiment.

"We think a takeout or two (below) could catalyze a reversal of the XBI's fortunes," Biegler wrote, referring to the industry benchmark, SPDR S&P Biotech ETF (XBI).

With an Outperform recommendation on Viking (NASDAQ:VKTX), the analyst named the company one of the few investable stocks in obesity outside Eli Lilly (LLY), Novo Nordisk (NVO), and Amgen (AMGN).

The San Diego, California-based biotech, which is advancing a promising obesity pill called VK2735, is a leader in the development of oral obesity drugs, Biegler argued, adding that "a takeout would show us that big pharma is willing to pay for a leadership position."

According to Oppenheimer, a large pharma company with operations in immunology and inflammation (I&I) could pursue Blueprint Medicines (NASDAQ:BPMC), which markets Ayvakit, the only FDA-approved treatment for a rare disorder called systemic mastocytosis.

"If SM market is worth $2B, we're not sure why a large pharma hasn't pounced," the analyst wrote with an outperform recommendation on BPMC.

While noting that Janux Therapeutics (JNAX) can be expensive in valuation, the analyst highlighted the potential in its bispecific platform, which he said "can readily be adapted to other targets/cancers—and wouldn't it be nice if big pharma agreed?"

Additionally, the analyst said Arcellx (NASDAQ:ACLX) has what many analysts consider a best-in-class CAR-T therapy for multiple myeloma. According to Biegler, the company has witnessed its valuation peaking as Gilead (GILD) shares ownership for its anito-cel MM therapy. "While a takeout by Gilead would be nice, we think a takeout by someone else would be even better."

On Nuvalent (NUVL), the analyst said the company owns a best-in-class ALK inhibitor, according to Wall Street analysts. "A takeout at current valuations would essentially imply patients staying on drug for years at a time."