In a significant move to secure manufacturing capacity for its experimental weight loss treatment, Viking Therapeutics announced Tuesday a $150 million agreement with contract manufacturer
CordenPharma. The deal will enable production of up to 200 million injectable doses and 1 billion oral doses annually of Viking’s obesity drug candidate VK2735.
The announcement comes as Viking prepares to initiate Phase 3 clinical trials of the injectable formulation by the end of June 2025. The company confirmed in February that it has sufficient supply to complete its late-stage testing program.
The manufacturing agreement represents Viking’s strategic effort to avoid the supply challenges that initially plagued industry leaders Novo Nordisk and Eli Lilly with their obesity medications. However, the news triggered a decline in Viking’s share price during Tuesday morning trading, with William Blair analyst Andy Hsieh noting that investors might interpret the deal as diminishing Viking’s prospects for acquisition.
VK2735, which targets the GLP-1 and GIP gut hormones similar to Eli Lilly’s Zepbound, has shown promising results in Phase 2 studies. Trial participants experienced approximately 15% weight loss over a three-month period, suggesting potential competitiveness with existing treatments. An oral version of the drug has also demonstrated early positive results.
Viking CEO Brian Lian expressed confidence in the partnership, citing CordenPharma’s established expertise in commercial peptide
manufacturing as crucial for meeting anticipated market demand. The agreement allows for production of 100 million autotinjector pens and an additional 100 million vial and syringe products for the injectable version of VK2735.
The financial structure of the deal involves Viking making prepayments over four years, which will be credited against future orders. Importantly, Viking maintains all rights to its drug candidate. The company reported having $2.5 billion in cash and cash equivalents at the end of 2024.
While some investors view the manufacturing agreement as potentially negative for Viking’s acquisition prospects, analysts like Stifel’s Annabel Samimy see it as a positive development. Samimy suggests the deal provides Viking with the flexibility to independently develop VK2735 and meet demand in the competitive obesity market.
The company’s stock performance has reflected shifting market sentiments, with shares reaching record highs last year amid speculation about potential acquisition but subsequently declining nearly 40% in 2025. Despite this volatility, analyst Hsieh maintains an optimistic outlook, arguing that the manufacturing agreement addresses one of the major uncertainties facing Viking.
The obesity drug market has become increasingly competitive, with established players like Novo Nordisk and Eli Lilly dominating the space. Viking’s manufacturing agreement positions the company to potentially compete effectively in this growing market, assuming successful completion of clinical trials and regulatory approval.
The deal’s structure ensures Viking can produce substantial quantities of both injectable and oral formulations, addressing potential future demand while maintaining control over its intellectual property. The combination of manufacturing capacity and significant cash reserves suggests Viking is preparing for potential commercial success while keeping its options open for future strategic decisions.