Viking Therapeutics Secures Game-Changing Manufacturing Agreement
Viking Therapeutics Inc. (VKTX) has recently made headlines with the announcement of a significant manufacturing partnership that has the potential to propel the company forward, unlocking considerable financial prospects. Following the news, Viking’s stock surged by 8% on Wednesday, reflecting investor optimism that the removal of a key overhang could pave the way for future growth.
Manufacturing Agreement with CordenPharma
The San Diego-based biotechnology firm has struck a broad manufacturing agreement with CordenPharma, a reputable contract development and manufacturing organization (CDMO) based in Switzerland. This contract is crucial as it addresses the need for a manufacturing partner to produce VK2735, Viking’s oral obesity drug, thereby easing long-standing concerns from analysts and investors about the company’s ability to scale production once regulatory approval is obtained.
Under the terms of the agreement, CordenPharma will be responsible for providing both the **active pharmaceutical ingredient (API)** and the final finished product. The deal encompasses the production and supply of more than 1 billion oral tablets, with additional capacity for injectable formulations, which reflects the company’s comprehensive plan for commercialization.
Clinical Developments and Market Potential
Viking is currently immersed in a Phase 2a dosing trial for VK2735, with results anticipated in the latter half of this year. Furthermore, the firm is poised to initiate a Phase 3 trial for an injectable version of VK2735 in the first half of the year. As many patients prefer pills over injections, VK2735 has the potential to become a transformative product in the obesity market, which has largely been dominated by injectable therapies from industry giants like Eli Lilly (LLY) and Novo Nordisk (NVO).
According to early trial results, VK2735 has demonstrated promising efficacy, leading 16 out of 17 analysts who cover Viking to assign a “buy” rating to the stock. Furthermore, analysts attribute a substantial total addressable market (TAM) to the drug, underpinning its strong clinical differentiation.
Analyst Insights and Future Projections
The bullish outlook from analysts has been reinforced by the deal with CordenPharma. Analysts at Truist called the news a “material positive,” indicating that Viking is on track to become the third company to launch a branded GLP-1 drug in the burgeoning obesity treatment space. Notably, analysts led by Joon Lee emphasized CordenPharma’s extensive experience in peptide production and foresaw a significant increase in demand for GLP-1 drugs in the future.
Investment firm William Blair predicts that the manufacturing agreement could yield around 3.8 million patient doses annually for the injectable formulation and 2.7 million for the oral version, leading to a combined total of 6.5 million doses. Based on pricing models from Eli Lilly’s Zepbound, this translates into a staggering revenue potential of approximately **$39 billion**.
Furthermore, William Blair analysts reiterated their “outperform” rating for Viking Therapeutics, labeling it as their top pick for 2025. The agreement is seen as a pivotal step in securing the manufacturing capabilities necessary for sustained supply and scalability, particularly in light of current shortages faced by the industry regarding GLP-1 drugs.
Investor Sentiments and Strategic Considerations
While concerns linger that this manufacturing deal might preclude a full acquisition of Viking, analysts from William Blair contest that such discussions are still prudent and vital as the company navigates pre-commercialization challenges. Recognizing the importance of securing a reliable API and associated devices for VK2735 is essential for the company’s long-term strategy.
In agreement, analysts from Raymond James highlighted that the partnership not only positions Viking more favorably in the competitive landscape but also safeguards against potential supply disruptions, which have significantly impacted the sales of obesity therapeutics in the current market environment.
Conclusion
The recent partnership between Viking Therapeutics and CordenPharma marks a decisive moment for the biotechnology firm, alleviating manufacturing concerns while simultaneously laying a robust foundation for commercialization. With optimistic clinical outcomes anticipated and a significant market opportunity ahead, VKTX looks well-positioned for future success. As regulatory data continues to unfold, stakeholders will closely monitor Viking’s progress as it strives to reshape the treatment landscape for obesity.
