Viking Secures 1B Provide of Weight problems Capsule Candidate With $150M Prepayment Deal

Viking Therapeutics is placing $150 million all the way down to safe future provide of “a number of metric tons” of its investigational weight problems treatment VK2735. The deal will arrange an annual capability of greater than 1 billion capsules, 100 million autoinjectors and 100 million vial and syringe merchandise.

William Blair analysts are “enthusiastic” concerning the manufacturing deal, which was signed with contract growth and manufacturing group CordenPharma. The analysts mentioned in an investor notice Tuesday that the pre-payment plan protects Viking from future provide chain danger “which had been an overhang on the inventory.”

Viking will make $150 million in prepayments over three years, which shall be utilized to future orders. Corden will present devoted capability to fabricate “a number of metric tons” of VK2735 yearly, based on Viking’s Tuesday morning press launch. The deal consists of injectable and oral formulations of the drugs, each of that are being examined in medical trials proper now. The businesses have lengthy labored collectively, based on Viking CEO Brian Lian.

The biotech has risen to prominence as one of many main smaller firms tackling weight problems, behind market leaders Novo Nordisk and Eli Lilly. Analysts and buyers have lengthy speculated that Viking is a prime takeout goal. Wiliam Blair acknowledged that this long-term cope with Corden could disappoint some hoping for that high-profile exit.

Certainly, Viking’s shares declined 10% because the markets opened Tuesday to $25.16, representing a low level for the inventory, which started the 12 months round $40 apiece.

“We acknowledge that buyers may view the deal as a destructive growth with respect to Viking’s takeout prospects; nonetheless, we don’t share this view. Given the significance of procuring API and the related gadgets and equipment, we argue it could be imprudent to delay such discussions even when Viking was theoretically in late-stage discussions with an acquirer,” William Blair wrote.

The analysts additionally took a shot at quantifying the potential gross sales that would outcome from the Corden deal. The injectable portion quantities to about 3.8 million affected person doses a 12 months, whereas the 1 billion tablets equal about 2.7 million affected person doses, for a complete of 6.5 million doses. Utilizing pricing much like what Lilly has supplied by its LillyDirect program for Zepbound—about $500 monthly or $6,000 per 12 months—William Blair predicted that Viking has set itself up for about $39 billion in income.

Zepbound introduced in $4.9 billion in 2024, whereas Novo’s Wegovy clocked about $8.5 billion. The latter had generated 200,000 prescriptions as of the top of the 12 months.

“Taken collectively, we’re bullish on the deal and imagine it removes one of many main uncertainties, based mostly on our dialogue with buyers,” William Blair mentioned of the Viking manufacturing deal.

Viking is testing two formulations of VK2735. The Section II VENTURE trial is at the moment underway testing the oral model dosed twice day by day for 13 weeks. The biotech can also be engaged on kick beginning a Section III check of the subcutaneous formulation within the second quarter of 2025.

In an earlier Section I trial, the capsule model of VK2735 achieved 8.2% weight reduction after simply 28 days, exceeding analyst expectations.