Investing.com — Viking shares fell 5.5% following the announcement of a licensing deal between Hansoh Pharma and Merck. Under the terms of the agreement, Merck will obtain an exclusive global license to develop, manufacture and commercialize HS-10535, a candidate for the treatment of metabolic disorders.
The agreement, disclosed today, includes an upfront payment of $112 million from Merck to Hansoh Pharma, with potential milestone payments of up to $1.9 billion. These payments are tied to the development, regulatory approval and commercialization phases of HS-10535. Additionally, Hansoh Pharma will receive royalties on sales and retains the option to co-promote or exclusively market the product in China under certain conditions.
Viking’s candidate for metabolic disorders, VK2735, has shown promising results in early clinical trials, with a favorable safety profile and indications of clinical benefit. However, the deal between Hansoh Pharma and Merck introduces a potential competitor to Viking’s product, which could explain the market’s reaction to the news.
Eliza Sun, Executive Director of the Board of Directors of Hansoh Pharma, expressed confidence in the partnership, highlighting Merck’s established presence in the field of cardiometabolic diseases and the potential to accelerate the global development of HS-10535. Merck expects to include the prepayment as a pre-tax charge in its fourth quarter 2024 results, which will impact both GAAP and non-GAAP earnings by $0.04 per share.
Investors appear to be weighing the implications of this new partnership on Viking’s position in the market for treatments for metabolic disorders. The market response appears to be driven by the details of the Hansoh Pharma-Merck deal and its perceived impact on Viking’s future prospects in the competitive landscape of therapeutics for metabolic disorders.
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