Viking Therapeutics secures supply for obesity drug

SAN DIEGO - Viking Therapeutics, Inc. (NASDAQ: VKTX), currently valued at $3.14 billion, has entered into a strategic manufacturing agreement with CordenPharma to ensure a steady supply of its VK2735 obesity treatment, the company announced today. The deal covers the production of the active pharmaceutical ingredient (API) and final product forms for the potential multi-billion-dollar annual market opportunity. According to InvestingPro data, Viking maintains a strong financial position with more cash than debt on its balance sheet, positioning it well for this strategic expansion.

The agreement grants Viking dedicated manufacturing lines for multiple metric tons of VK2735 API annually. Additionally, CordenPharma will provide capacity for 100 million autoinjectors and another 100 million vial and syringe units for subcutaneous administration, as well as over one billion oral tablets of VK2735 each year. Viking has the option to further expand these capacities.

In exchange for securing these dedicated production capabilities, Viking will prepay $150 million between 2025 and 2028, which will be credited against future supply orders. The company retains all global rights to VK2735 and anticipates maintaining standard pharmaceutical product margins. InvestingPro analysis shows Viking’s liquid assets significantly exceed its short-term obligations, with a current ratio of 33.09, suggesting strong financial flexibility to support this investment. For deeper insights into Viking’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

VK2735 is a dual agonist targeting the glucagon-like peptide 1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors, currently in Phase 2 trials for oral dosing and expected to enter Phase 3 trials for subcutaneous administration in the second quarter of 2025.

Brian Lian, Ph.D., CEO of Viking Therapeutics, expressed confidence in CordenPharma’s ability to meet the anticipated significant commercial demand for VK2735 due to their established presence in peptide manufacturing.

This manufacturing agreement is crucial for Viking as it prepares for the potential market launch of VK2735, designed to treat metabolic disorders such as obesity. The company’s ongoing clinical trials aim to demonstrate the safety and efficacy of both the oral and subcutaneous formulations of the drug.

The information for this article is based on a press release statement from Viking Therapeutics. With analyst price targets ranging from $38 to $164, significantly above the current trading price of $27.96, investors seeking detailed analysis can explore additional metrics and insights through InvestingPro, which offers exclusive access to over 10 more ProTips and comprehensive financial data for informed decision-making.

In other recent news, Viking Therapeutics reported its fourth-quarter and full-year 2024 financial results, revealing a fourth-quarter EPS of ($0.32) and a full-year EPS of ($1.01), both falling short of analyst estimates. The company concluded the year with a strong cash position of $903 million, which is expected to support ongoing programs through their completion. Viking has outlined key milestones for 2025, including the initiation of Phase 3 trials for its obesity drug candidate, VK2735, in the second quarter. These trials will focus on weight change as the primary endpoint and involve both obese individuals and those with type 2 diabetes.

Truist Securities adjusted its outlook for Viking Therapeutics, lowering the price target from $120.00 to $95.00 while maintaining a Buy rating. Analysts at Truist highlighted significant upcoming milestones and noted that the firm’s cash reserves are sufficient to support ongoing programs. Meanwhile, H.C. Wainwright reaffirmed its Buy rating and $102.00 price target, following Viking’s financial results announcement, despite the earnings miss.

Citi analysts began coverage of Viking Therapeutics with a Neutral rating and a $38.00 price target, reflecting a cautious stance towards the company’s prospects in the competitive obesity treatment market. The analysts emphasized the potential of Viking’s VK2735 but noted the need for more comprehensive safety data from larger trials. These developments highlight the ongoing interest and varied perspectives from different analyst firms regarding Viking Therapeutics’ future in the market.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.