Viking Therapeutics Inc (VKTX) 2022 Q3 法說會逐字稿

Welcome to the Viking Therapeutics 2022 Third Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, October 26, 2022.

I would now like to turn the conference over to Viking's Manager of Investor Relations, Stephanie Diaz. Please go ahead, Stephanie.

Hello, and thank you all for participating in today's call. Joining me today is Brian Lian, Viking's President and CEO; and Greg Zante, Viking's CFO.

Before we begin, I'd like to caution that comments made during this conference call today, October 26, 2022, will contain forward-looking statements under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements about Viking's expectations regarding its development activities, time lines and milestones. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely, and reported results should not be considered as an indication of future performance. These forward-looking statements speak only as of today's date, and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters.

I'll now turn the call over to Brian Lian for his initial comments.

Thanks, Stephanie. And thank you to everyone dialed in by phone or listening on the webcast. Today we'll review our financial results for the third quarter of 2022 and provide an update on recent progress with our pipeline programs and operations.

Through the first 3 quarters of 2022, we made solid progress with each of our clinical programs. With respect to our lead candidate, VK2809 for the treatment of NASH and fibrosis, in the third quarter, we continued enrolling patients in the Phase IIb VOYAGE study and expect to complete enrollment in this trial by year end. With respect to our newest clinical program, the dual GLP-1 and GIP receptor agonist, VK2735 for the potential treatment of various metabolic disorders, during the quarter we made good progress with our ongoing Phase I trial in healthy volunteers, and we expect to report the initial data from this trial in early 2023. And with our rare disease program, VK0214 for the treatment of X-linked adrenoleukodystrophy, our Phase Ib trial continued to move forward during the quarter, and we remain on track to report initial results from this study in the first half of 2023.

I'll provide further detail on our operations and development activities after we review our third quarter financial results. For that, I'll turn the call over to Greg Zante, Viking's Chief Financial Officer.

Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Viking's Form 10-Q filing with the Securities and Exchange Commission, which we expect to file today. I'll now go over the financial results for the third quarter and first 9 months ended September 30, 2022, beginning with the results for the quarter.

Our research and development expenses for the 3 months ended September 30, 2022, were $12 million compared to $10.8 million for the same period in 2021. The increase was primarily due to increased expenses related to manufacturing for the company's drug candidates, salaries and benefits, preclinical studies and stock-based compensation, partially offset by decreased expenses related to the company's clinical studies and third-party consultants.

Our general and administrative expenses for the 3 months ended September 30, 2022, were $4.2 million compared to $2.6 million for the same period in 2021. The increase was primarily due to increased expenses related to legal services, stock-based compensation and salaries and benefits.

For the 3 months ended September 30, 2022, Viking reported a net loss of $15.8 million, or $0.21 per share, compared to a net loss of $13.2 million, or $0.17 per share, in the corresponding period in 2021. The increase in net loss and net loss per share for the 3 months ended September 30, 2022, was primarily due to the increase in research and development expenses and general and administrative expenses noted previously compared to the same period of 2021.

I'll now go over the results for the first 9 months of the year. Our research and development expenses for the first 9 months ended September 30, 2022, were $38.1 million compared to $35.1 million for the same period in 2021. The increase was primarily due to increased expenses related to manufacturing for the company's drug candidates, salaries and benefits, and stock-based compensation, partially offset by decreased expenses related to the company's clinical studies, preclinical studies and third-party consultants.

Our general and administrative expenses for the 9 months ending September 30, 2022, were $12 million compared to $8 million for the same period in 2021. The increase was primarily due to increased expenses related to legal services, stock-based compensation and salaries and benefits.

For the 9 months ending September 30, 2022, Viking reported a net loss of $49.3 million, or $0.64 per share, compared to a net loss of $42.6 million, or $0.55 per share, in the corresponding period of 2021. The increase in net loss and net loss per share for the 9 months ended September 30, 2022, was primarily due to the increase in research and development expenses and general and administrative expenses noted previously.

Turning to the balance sheet. At September 30, 2022, Viking held cash, cash equivalents and short-term investments totaling $155 million compared to $202 million as of December 31, 2021.

This concludes my financial review, and I'll now turn the call back over to Brian.

Thanks, Greg. The third quarter of 2022 was a productive time at Viking as we continued to advance each of our clinical programs. Based on the progress made through the first 3 quarters of the year, we expect to report data from each of these programs over the next several quarters. I'll begin with an update on our lead compound, VK2809, for NASH and fibrosis.

VK2809 is an orally available, small molecule agonist of the thyroid hormone receptor that is selective for liver tissue as well as the beta isoform of the receptor. To date, this program has generated exceptional data. And despite the number of programs that remain in development for NASH, we believe VK2809 is a highly competitive, best-in-class program for the treatment of patients with this disease.

Our prior 12-week Phase IIa trial of VK2809 in patients with hypercholesterolemia and nonalcoholic fatty liver disease successfully achieved both its primary and secondary endpoints and demonstrated significant reductions in liver fat and plasma lipids. Most notably, the trial demonstrated that cohorts treated with VK2809 experienced up to 60% mean relative reductions in liver fat content and that 88% of patients receiving VK2809 experienced at least a 30% reduction in liver fat content. This outcome was consistent even among patients receiving 5 milligrams per day, the lowest dose evaluated in the study. The reductions in liver fat were also durable with the majority of patients remaining responders 4 weeks after completion of dosing.

This study also demonstrated the promising safety and tolerability profile of VK2809. No serious adverse events were reported, and the rate of GI disturbances such as nausea and diarrhea was lower among VK2809-treated patients when compared to patients treated with placebo.

Further enhancing VK2809's competitive position is the compound's effect on plasma lipids. Patients in the 12-week Phase IIa study experienced robust reductions in plasma lipids, including LDL cholesterol, triglycerides and atherogenic proteins, all of which have been correlated with cardiovascular risk. This is notable as multiple studies evaluating other drugs and mechanisms for the treatment of NASH have demonstrated an increase in these lipids following treatment. We believe VK2809's broad lipid lowering properties, combined with its safety, significant liver fat reduction and oral route of administration distinguish it from other drugs in development for the treatment of NASH.

Following the encouraging Phase IIa results, Viking initiated the VOYAGE study, which is a Phase IIb trial designed to evaluate VK2809 in patients with biopsy-confirmed NASH and fibrosis. VOYAGE is a randomized, double-blind, placebo-controlled multicenter trial designed to assess the efficacy, safety and tolerability of VK2809 in patients with biopsy-confirmed NASH and fibrosis. The target population includes patients with at least 8% liver fat content as measured by magnetic resonance imaging proton density fat fraction as well as F2 and F3 fibrosis. Up to 25% of patients may have F1 fibrosis provided that they also possess at least one additional risk factor.

The primary endpoint of the VOYAGE study will evaluate the change in liver fat content from baseline to Week 12 in patients treated with VK2809 as compared to patients receiving placebo. Secondary objectives include the evaluation of histologic changes assessed by hepatic biopsy after 52 weeks of treatment. During the third quarter, enrollment in VOYAGE continued, and we remain on track to complete enrollment by year end.

Moving to our second metabolic disease program. Earlier this year, we announced the initiation of a Phase I trial of our newest clinical stage compound, VK2735. VK2735 is a dual agonist of the glucagon-like peptide 1, or GLP-1 receptor, and the glucose-dependent insulinotropic polypeptide, or GIP receptor. This compound was developed internally at Viking, and based on the data to date, we are excited about its potential for the treatment of various metabolic disorders such as obesity, NASH and certain rare diseases.

Initial data from our dual agonist program were presented last November in 2 posters at the Annual Meeting of the Obesity Society. The data demonstrated that GIP receptor activity improved upon the metabolic effects achieved through activation of the GLP-1 receptor alone. For example, these posters highlighted significant improvements observed in weight loss, glucose control and insulin sensitivity among diet-induced obese mice following treatment with our compounds as compared to a GLP-1 mono-agonist when administered at the same dose for the same period of time. In addition, the observed reductions in liver fat content were generally larger among animals treated with our compounds relative to the liver fat reductions observed among animals treated with the GLP-1 mono-agonist.

Based on these promising preclinical data, earlier this year, we announced the initiation of a Phase I clinical trial of VK2735. This trial is a randomized, double-blind, placebo-controlled, single ascending and multiple ascending dose study. The single ascending dose portion of the study is designed to enroll healthy adults, while the multiple ascending dose portion of the study is designed to enroll healthy adults with a minimum body mass index of 30 kilograms per meter squared.

The primary objectives of the study include an evaluation of the safety and tolerability of single and multiple doses of VK2735 delivered subcutaneously as well as the identification of doses suitable for further clinical development. The trial will also evaluate the pharmacokinetics of VK2735 following single and multiple doses. Exploratory pharmacodynamic assessments include evaluations of changes in body weight and liver fat content after 4 weeks of once weekly administration. During the third quarter, enrollment in this study continued, and we expect to report the initial results from the study early next year.

I'll now provide an update on VK0214, Viking's second orally available small molecule thyroid receptor beta agonist in clinical development. This program is currently being evaluated in a Phase Ib clinical trial in patients with X-linked adrenoleukodystrophy, or X-ALD. X-ALD is a rare and often fatal metabolic disorder caused by genetic mutations that impact the function of a peroxisomal transporter of very long chain fatty acids. As a result of the mutations, transporter function is impaired and patients are unable to efficiently metabolize very long chain fatty acids. The resulting accumulation of these compounds is believed to contribute to the onset and progression of clinical signs and symptoms in patients with X-ALD.

Early data from preclinical studies have demonstrated that VK0214 has the ability to stimulate the expression of a compensatory transporter of very long chain fatty acids. Preclinical studies have shown that treatment with VK0214 can reduce the levels of very long chain fatty acids in plasma and tissue. These data provide the support for our decision to advance VK0214 into clinical development, and we believe this compound has the potential to be a first-in-class treatment for X-ALD.

In 2021, Viking announced the results from the initial clinical evaluation of VK0214, which was a randomized, double-blind, placebo-controlled, single ascending and multiple ascending dose Phase I study in healthy volunteers. In this study, VK0214 demonstrated dose-dependent exposures, no evidence of accumulation, and a half-life consistent with anticipated once-daily dosing. After 14 days of treatment, subjects who received VK0214 experienced reductions in LDL cholesterol, triglycerides, apolipoprotein B and lipoprotein A. Many of these lipid reductions achieved statistical significance, though the study was not powered to demonstrate statistical significance on lipid assessments.

Importantly, in this study, VK0214 demonstrated encouraging safety and tolerability. Among the more than 100 subjects enrolled, no serious adverse events were reported, and no treatment or dose-related signals were observed for vital signs or cardiovascular measures. Based on these findings, we initiated the Phase Ib study of VK0214 in patients with the adrenomyeloneuropathy, or AMN form of X-ALD. AMN is the most common form of X-ALD, affecting approximately 50% of those with the disease.

The Phase Ib trial is a randomized, double-blind, placebo-controlled multicenter study in adult male patients with AMN. The primary objectives of the study are to evaluate the safety and tolerability of VK0214 administered orally once daily for 28 days. The study also includes an evaluation of the pharmacokinetics of VK0214 in AMN patients as well as an exploratory assessment of changes in plasma levels of very long chain fatty acids. Pending a blinded review of preliminary data, additional dosing cohorts may be pursued. During the third quarter, we continued to make progress with this study, and we expect to report the initial results in the first half of 2023.

While each of our clinical programs is advancing, it's important to note that we have maintained a strong balance sheet and continue to carefully manage our financial resources. To this end, we completed the third quarter with approximately $155 million in cash, which we believe provides the runway to advance each of our clinical programs into later-stage development.

In conclusion, the first 3 quarters of 2022 have been highly productive, and as a result, we expect to announce data from each of our ongoing clinical programs within the next 9 months. With respect to our lead compound, VK2809 for the treatment of NASH and fibrosis, we expect to complete enrollment in our Phase IIb VOYAGE trial by the end of the year and report initial data in the first half of 2023. In addition, the Phase I study evaluating our dual agonist compound, VK2735, continue to enroll, and we expect to report the initial data from this study early next year. And finally, our Phase Ib trial evaluating VK0214 in X-ALD patients is continuing, and as with VK2809 and VK2735, we expect to report data from this trial in the first half of 2023.

The anticipated data announcements from these 3 clinical programs serve to highlight the fact that over the past several quarters, Viking has transformed from a company with a single clinical program to a diversified biopharmaceutical company with a pipeline of programs across multiple therapeutic areas. We look forward to reporting the data from each of these programs in the upcoming quarters.

This concludes our prepared comments for today. Thanks again for joining us, and we'll now open the call for questions. Operator?

(Operator Instructions) And our first question here will come from Steve Seedhouse with Raymond James.

First, just I was wondering on VK2735 clinical trial, if you could share what CRO you're working with. I think some folks are interested specifically if it's the same CRO or trial site as Altimmune's Phase I for its GLP-1 glucagon. It looks like, to me, the site is different, but I'm wondering if you can provide what the CRO is. And then also curious if you're enrolling any patients that may have had prior treatment with GLP-1 drugs for obesity previously.

Steve, thanks for the questions. We generally don't disclose the CROs and vendors we work with. And I'm not sure who other companies use, so I don't have any information on that. With regard to -- I don't know if the same site's being used either. With regard to prior exposure to GLP-1s, I don't know that that's an exclusion criterion. I know you cannot have been treated with one in a certain window before enrolling. But we're excluding subjects with type 2 diabetes, so I'm not sure the likelihood of somebody being previously exposed with that exclusion criterion.

Yes. Okay. Maybe just on NASH. I mean, it seems like we're approaching completion of enrollment there by year end. So I'm curious if you have a sense on how trial enrollment is breaking out geographically, like just in terms of roughly bracketing what proportion of the study will be from the U.S. sites versus ex-U.S. sites?

Yes. It looks like it's going to be very heavily slanted to the U.S. We do have some from Mexico and Europe, but it's really going to be highly concentrated in the U.S. Just because the COVID starts and stops seem to be more severe in Europe, things took a little longer to resolve there than in the U.S.

Our next question will come from Joon Lee with Truist.

In the ongoing VOYAGE, you're enrolling up to 25% F1s. Is that also going to be the case for the registration trial, or is there a different cap for F1s for the purposes of registration? And I have a follow-up.

Yes. Thanks. No, for the registration study, we'll just target F2 and F3.

If that's the case, when you top line the data, would you -- for the VOYAGE, would you separate the data between F2s and 3s versus F1s?

That is one of the analyses that we'll be doing. So depending on the length of time it takes to cut that out, may or may not be in the top line, but we certainly plan to present it at some point.

Great. And then looking at the poster for the preclinical data of VK2735, you had several candidates that had similar or maybe even a slightly better weight reduction. What led you to select 2735 over other similar candidates? And what did you see in some of the other candidates that you didn't like?

Yes. That's a great question. We have a bunch. And it's a pretty, I'd say, active effort today at the company, looking at various single, dual and triple agonists, actually. 2735 just seemed to have -- I think in the past, we said it's kind of had a Goldilocks profile where it maybe wasn't the best in any specific category, but it seemed to be pretty good in most categories. And an important determinant for all these compounds when we prioritize them was the PK profile. And it has very nice exposures and a nice half-life, and that wasn't true necessarily of all of the others. Despite them showing pretty good efficacy, not all of them had an ideal PK profile.

Was your attempt to try to find the one that best mimicked tirzepatide in terms of EC50 and PK/PD profile? Or were you looking for something a little bit more differentiated and possibly better?

Well, we had tirzepatide as a control always, but I think the goal was just to look at the compound that had the best profile among the ones we were -- and continue to work on. And just we had semaglutide also as a control generally. So I don't know if it was really geared toward mirroring tirzepatide. More of just what's the best compound of the group that we've been working on.

Our next question will come from Andy Hsieh with William Blair.

Two quick ones for me. I think, Brian, you mentioned about the 13-week tox study that could potentially govern the study duration for 2735. Just curious about the status of that. I think you mentioned last time that that might be available around this time. The other question I have, which is related to a potential indication selection for 2735. I noticed that for Prader-Willi syndrome, some of the patients might have weak muscle tone. So I'm just curious if you thought about dusting off the 5211 compound potentially as a combination strategy.

That's a great question. With the tox question first, yes, we've completed the 13-week tox in 2 species, and the evaluation of the data is ongoing. We don't anticipate any issues there, but it takes a while to prepare a study for submission with an IND. And then early next year, we'll start the chronic tox in 2 species. With the muscle deterioration in patients with Prader-Willi syndrome, we haven't considered using VK5211 as an adjunct there, but a really interesting idea. Haven't considered it before, though, but thanks for the idea.

Our next question will come from Thomas Smith with SVB Securities.

Just maybe a quick one on VOYAGE. If you can just give us a little bit more color, I guess, on recent enrollment trends and what's driving your confidence that you're going to be able to complete enrollment there by year end?

Yes. The recent enrollment's been a little better this fall than it was through the summer. So maybe that's just the continuing working through the COVID overhang, I don't know, but it has been a little better. And we feel confident that we'll be able to complete enrollment by the end of the year.

Okay. Got it. And then just on 2735. Maybe, Brian, can you just remind us how many dose levels you're planning to explore in the Phase I? And can you talk a little bit about the criteria you're using to guide dose escalation and I guess the decision on whether or not to add in any additional dose cohorts there?

Yes. We have amended the protocol to allow additional cohorts in both the SAD and the MAD portion. And it's a pretty standard SAD/MAD study. I think each portion had 5 or 6 cohorts. The real decision on whether and when to escalate or not escalate is based on a review by the data safety monitoring committee as we hold a dose level review team. And it's based on tolerability and really any other safety issues that might arise. So far we're continuing, though.

Okay. Got it. And just to clarify, are those cohorts that you've added since the last update? And is there any potential, I guess, to continue to add cohorts and explore higher doses?

Well, we amended the protocol, maybe it was before the last call, and we just allowed the flexibility to add further cohorts, and we haven't amended it since then. So if it turns out that we can -- we feel like we can go higher, we may amend it again, but I think we're covered right now. So I wouldn't anticipate that to be an issue.

(Operator Instructions) Our next question here will come from Yale Jen with Laidlaw.

Just two quick questions here. First one is similar to the one asked before but in a different way, which is that although there's 2 months to complete to the end of the year, do you anticipate the F1 portion of the patient in this study close to 25 -- up to 25% as you expected, or you see it differently?

Yes. Thanks, Yale. The -- early on in the study, we were overweight on the F2 and F3. But since then, it has been pretty much we're tracking right about 25% for the F1 and 75% for the F2 and F3.

Okay. Great. Maybe one more keeping question here, which is that in third quarter, the R&D expenses reduced versus the prior quarters. Do you anticipate this to be probably the trend for the next quarter or the current quarter?

Yale, Greg here. I think it did go down a bit, but I think our trend will kind of be an average of really the first 3 quarters so far. There's just timing issues, frankly, on that decrease.

Okay. Great. I appreciate it, and look forward to the data readout next year.

Our next question will come from Scott Henry with ROTH Capital.

Brian, I guess just kind of a bigger picture question. You've got 3 programs that we're going to get readouts in the first half of 2023 for. Can you talk about the next steps for these programs? I know you don't like to give a lot of specifics, but just in terms of generally, I guess the next steps and the timing to reach the market, but also when you may consider partnering some programs versus other programs.

Yes. Thanks, Scott. Well, what we've I think consistently said is we're always open to partnering any of the programs. Our feeling is that most of the opportunities would arise following some form of an efficacy study, whether that's a 12-week study or a longer study. And so with the 2809 program in NASH, our plan is to complete the biopsy study, the VOYAGE study, and be open to partnering discussions, and proceed apace into a registration study with or without a partner. Preference would be to have a partner involved, though, with that program.

With the VK2735 program, we haven't disclosed what the indication is that we would pursue. What we said, though, is that we probably don't want to have 2 NASH studies ongoing, and diabetes is a pretty well serviced market. So we're leaning toward the weight indications. And so -- but we want to be able to detail that with data that supports it once the Phase I is completed. So it's a little early to come out and say we're going into obesity. Let's see what the Phase I data look like.

And then with the X-ALD program, we'll get this study done and then talk to the FDA about the effect on the biomarkers that we see, if we do see an effect, and we expect to see an effect, and then decide what endpoints would be most relevant for a registration study with that program. But with all of them, we're open to partnering. It's just likely to be a higher probability of a meaningful conversation once we have some efficacy data.

Okay. That's helpful. And I guess just to pick one of the programs to dig a little deeper. In terms of the X-ALD program, how should we think about the duration of a registrational trial relative to the Phase Ib? Should it be considerably longer? Just trying to get some thoughts of how we should think about timing there.

Yes. We've -- first, we'll complete the study and talk to the FDA about what they think might be an appropriate window. We felt that if you look at a 52-week treatment window and look at function, 6-minute walk or 30-meter walk, that might be an appropriate duration and structure of the trial with a functional endpoint like that. We certainly wouldn't expect it to be a biomarker driven registration endpoint. But we'll have a lot better indication after we talk to the FDA with the data we have in hand.

Our next question will come from Justin Zelin with BTIG.

So Brian, we're expecting data from a competitor compound in the class upcoming. Could you just remind us on some of the differentiation to highlight for the 2 compounds and whether you'd expect a readthrough of the data from this competitor program as positive?

Yes. Well, one of the differences with our compound relative to other thyroid agonists is that we are truly liver-targeted. It's a prodrug that is administered when you take the capsule or tablet. And the prodrug is cleaved in hepatocytes by an enzyme that is predominantly expressed in the liver. So you get a truly liver-targeted delivery of the active therapeutic into the tissue of greatest interest. And what we see in the data are evidence that this is a very effective means of administering the drug because we are able to see at very low doses, a very potent efficacy profile with doses down as low as 5 milligrams. And I think another important differentiator with our compound relative to others is the tolerability profile. We don't have any tolerability profile or tolerability challenges really with this compound. There's no GI issue that we've ever observed. So we think the low-dose efficacy, the true liver targeting, the characteristics and then the tolerability would be important differentiators for this compound.

Great. Looking forward to the data.

Our next question is a follow-up from Andy Hsieh with William Blair.

Pretty similar question as Justin, actually. I'm curious about your thoughts on the sex hormone binding globulin. I think a lot of other companies working with the thyroid hormone receptor class are looking at that as an interesting biomarker. Have you seen any sort of association with your compound? And whether during the disclosure of the VOYAGE study, are you going to announce biomarker results of that, and whether that's going to be incorporated into something that you'll look at in a Phase III program?

Yes. Thanks, Andy. It is something with the mechanism that you just monitor as part of the mechanism, and you generally see an elevation in sex hormone binding globulin with increasing dose. They kind of correlate there. And I do recall we looked at this in the 12-week study, but I don't recall that there was a great correlation between efficacy and sex hormone binding globulin levels. There was just kind of a noisy association. Generally, higher doses gave you a better boost on that, but I don't think you could really correlate liver fat efficacy with sex hormone binding globulin, really well anyway. So it's just a marker that moves along with LDL going down as well. I mean, it's just another marker to use. I wouldn't put a huge amount of predictive power on it.

Got it. Okay. That's very helpful.

And our next question will come from Naz Rahman with Maxim Group.

Just a few questions on VK0214 for X-ALD. I was curious, could you comment on how the trial enrollment is going since you reinitiated the study? And potentially comment on how much of the study has enrolled thus far?

Yes. Thanks, Naz. We generally don't give a sort of blow-by-blow like that when the trials are ongoing. But we do have fully up and running again, following the release of the clinical hold, and we've been pretty active in the community with the patient advocacy groups. And so I think there's a high awareness and a lot of enthusiasm for the study. But we haven't -- we typically don't give this patient-by-patient enrollment update.

Got it. And in regards to the data collection statistical analysis, seeing how the trial had to be halted, were there any impacts on the data collection, or were the previous patients' data still sufficient?

Yes. We got really lucky in that regard because we had patients who had just rolled off study and then patients who were coming in for randomization when we received the -- with the scheduled -- been scheduled to come in for randomization when we received the hold letter. So fortunately, we didn't have anybody who had to have a dose interruption mid-study. Just luck there. So no impact on the statistical analysis or anything.

This concludes our question-and-answer session. I would like to turn the conference back over to Stephanie Diaz for any closing remarks.

Thank you again for your participation and continued support of Viking. We look forward to updating you again in the coming months. Thank you.

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.