Viking Therapeutics, Inc. (NASDAQ:VKTX) Q1 2024 Earnings Call Transcript

Viking Therapeutics, Inc. (NASDAQ:VKTX) Q1 2024 Earnings Call Transcript April 24, 2024

Viking Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.26, expectations were $-0.27. Viking Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Viking Therapeutics First Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a Q&A session. [Operator Instructions] As a reminder, this conference call is being recorded today, April 24, 2024. I would now like to turn the conference over to Vikings Manager of Investor Relations, Stephanie Diaz. Please go ahead, Stephanie.

Stephanie Diaz: Hello and thank you all for participating in today's call. Joining me today is Brian Lian, Vikings President and CEO, and Greg Zante, Vikings CFO. Before we begin, I'd like to caution that comments made during this conference call today, April 24, 2024, will contain forward-looking statements under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements about Vikings' expectations regarding its development activities, timelines, 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.

Brian Lian: Thanks, Stephanie, and good afternoon to everyone listening in by phone or on the webcast. Today we'll review our financial results for the first quarter ended March 31, 2024, and provide an update on recent progress with our clinical programs and operations. During the first quarter Viking announced positive results from two of the company's key pipeline programs. First, our Phase 2 VENTURE study evaluating our dual GLP-1/GIP receptor agonists VK2735, in patients with obesity, successfully achieved its primary endpoint and all secondary endpoints, demonstrating statistically significant reductions in body weight at all doses as compared to placebo. Also during the quarter, the company announced results from a Phase I clinical trial evaluating an oral tablet formulation of VK2735.

This study demonstrated encouraging safety and tolerability, as well as promising weight loss following 28 days of once-daily dosing. The company plans to advance both of these programs into further development later this year. In addition, during the first quarter, the company completed the final biopsies in the Phase 2B VOYAGE Study evaluating the novel thyroid hormone receptor beta agonist VK2809, in patients with NASH and Fibrosis. We expect to report the biopsy results from this study later this quarter. Finally, during the quarter, Viking completed a public offering of common stock, raising gross proceeds of approximately $630 million. These funds substantially strengthen the company's balance sheet and will support our plans to aggressively develop our pipeline.

I'll provide further details on our operations and development activities after we review our financial results for the first quarter of 2024. For that, I'll turn the call over to Greg Zante, Vikings Chief Financial Officer.

Greg Zante: Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Vikings Form 10-Q filing with the Securities and Exchange Commission, which we expect to file later today. I'll now go over the results for the first quarter ended March 31, 2024. Research and development expenses were $24.1 million for the three months ended March 31, 2024, compared to $11 million for the same period in 2023. The increase was primarily due to increased expenses related to manufacturing for our drug candidates, preclinical studies, clinical studies, stock-based compensation, salaries and benefits, and services provided by third-party consultants. General and administrative expenses were $10 million for the three months ended March 31, 2024, compared to $9.5 million for the same period in 2023.

The increase was primarily due to increased expenses related to stock-based compensation, salaries and benefits, and services provided by third-party consultants, partially offset by decreased expenses related to legal and patent services. For the three months ended March 31, 2024, Viking reported a net loss of $27.4 million, or $0.26 per share, compared to a net loss of $19.5 million, or $0.25 per share in the corresponding period in 2023. The increase in net loss for the three months ended March 31, 2024, was primarily due to the increase in research and development expenses and general and administrative expenses noted previously, partially offset by increased interest income, compared to the same period in 2023. Turning to the balance sheet at March 31 2024 Viking held cash, cash equivalents, and short-term investments of $963 million, compared to $362 million as of December 31, 2023.

First quarter balance reflects receipt of gross proceeds of $630 million from the company's public offering, which closed on March 4, 2024. This concludes my financial review, and I'll now turn the call back over to Brian.

Brian Lian: Thanks, Greg. The first quarter of 2024 was an eventful quarter, as we received and reported the results from two key clinical trials, our Phase 2 Venture Trial evaluating subcutaneous VK2735 in patients with obesity, and our Phase 1 Clinical Trial evaluating an oral tablet formulation of VK2735 in healthy volunteers. Both studies were successful, demonstrating promising weight loss and favorable safety and tolerability, and we look forward to advancing both of these programs into further development later this year. As we have recently reviewed the results from each of these studies on separate conference calls. I'll briefly review key takeaways in my prepared comments and refer you to our February 27 and March 26 press releases for more details.

In addition, I'm happy to provide further detail in the Q&A portion of the call. I will first provide an update on our subcutaneous formulation of VK2735 for obesity. VK2735 is a dual agonist of the glucagon like peptide-1 or GLP-1 receptor, and the glucose dependent insulinotropic polypeptide or GIP receptor. In the first quarter of 2023, we announced positive results from a Phase 1 single ascending dose and multiple ascending dose study of VK2735. This study demonstrated the promising safety, tolerability, and pharmacokinetics of VK2735 when administered as a weekly subcutaneous injection for four weeks. In addition, subjects in the study demonstrated up to 7.8% weight loss from baseline after 28 days with no signs of plateau. Based on these positive results, Viking initiated a Phase 2 trial called the Venture Trial to evaluate VK2735 in patients with obesity.

The Venture Trial was a randomized, double-blind, placebo-controlled, multi-center study that evaluated the safety, tolerability, pharmacokinetics, and weight loss efficacy of VK2735, administered subcutaneously once weekly for 13 weeks. In the first quarter, Viking announced positive top-line results from the Venture Study. This trial successfully achieved its primary endpoint and all secondary endpoints, with patients receiving VK2735 demonstrating reductions in body weight at all doses compared with placebo. For the primary endpoint, patients receiving VK2735 demonstrated statistically significant reductions in mean body weight from baseline ranging up to 14.7%, as well as statistically significant reductions in mean body weight relative to placebo, ranging up to 13.1%.

Statistically significant differences, compared to placebo were observed for all VK2735 doses starting at week one and were maintained throughout the course of the study. Weight loss in all treated cohorts was progressive through 13 weeks and did not show evidence of plateauing. We believe this suggests that further weight loss could be achieved through extended dosing beyond the 13-week treatment period of this study. Additionally, the Venture Study showed VK2735 treatment to be safe and well tolerated over the 13-week trial, with the majority of treatment emergent adverse events being characterized as mild or moderate. Based on the Phase 2 Venture results, as well as prior Phase 1 results, Viking plans to meet with the FDA later this quarter to discuss next steps in the development of VK2735.

In addition to the subcutaneous formulation, the company is also developing a novel oral tablet formulation of VK2735. We believe a tablet formulation could represent an attractive treatment option for patients with obesity and we see this as an important potential expansion of the overall opportunity for the program. Last year, we initiated an extension of the previously reported subcutaneous Phase 1 study to incorporate an evaluation of our tablet formulation. The oral portion of this study is a randomized, double-blind, placebo-controlled study in healthy adults with a minimum body mass index of 30 kilograms per meter square. Primary objective is to evaluate the safety and tolerability of VK2735 administered as a tablet once daily for 28 days.

Secondary and exploratory objectives include an evaluation of the pharmacokinetics of orally administered VK2735, as well as various pharmacodynamic measures, including changes in body weight and other metrics. During the first quarter, we reported the initial data from this study. With respect to safety and tolerability oral VK2735 was shown to be safe and well tolerated following once-daily dosing for up to 28 days at doses that were titrated up to 40 milligrams. Among subjects receiving VK2735, all treatment-emergent adverse events were reported as mild or moderate in severity, with the majority 76%, reported as mild. Overall, no clinically meaningful differences were reported for gastrointestinal adverse events among subjects treated with VK2735, compared with placebo.

Importantly to-date, no serious adverse events have been reported in this study. In addition to safety and tolerability, an exploratory assessment of change in body weight was conducted. Subjects receiving oral VK2735 demonstrated dose-dependent reductions in body weight ranging up to 5.3% from baseline. Placebo-adjusted reductions in body weight reached up to 3.3% from baseline. Body weight reductions, compared with baseline and placebo were statistically significant at the highest dose evaluated. In addition, weight loss during the 28 day window of this study was progressive at the 20-milligram and 40-milligram dose levels with no plateau observed. Given the promising weight loss signal observed in this study, along with the excellent tolerability profile thus far, Viking is pursuing further dose escalation.

In addition, based on the encouraging trajectory of weight loss and the lack of a plateau of 28 days for the higher dose cohorts, we believe that further benefits might be anticipated from longer dosing periods. To this end, we are proceeding with plans for a Phase 2 trial in patients with obesity, and we expect to initiate this study later this year. Details on study design will be provided as we get closer to study initiation. I will now turn to our most advanced clinical program VK2809, for the treatment of NASH and Fibrosis. VK2809 is an orally available small molecule agonist of the thyroid hormone receptor that is selected for liver tissue, as well as the beta-ISO form of the receptor. Last May, we announced positive top-line results from the Phase 2b Voyage Study of VK2809.

The Voyage Study is a randomized, double-blind, placebo-controlled, multi-center international trial designed to assess the efficacy, safety, and tolerability of VK2809 in patients with biopsy-confirmed NASH and Fibrosis. Enrollment included patients with at least 8% liver fat as measured by Magnetic Resonance Imaging Proton Density Fat Fraction, as well as F2 and F3 Fibrosis. Last May, we reported that this study had successfully achieved its primary endpoint with patients receiving VK2809 demonstrating statistically significant reductions in liver fat content from baseline to week 12, as compared with placebo. The median relative change from baseline in liver fat among patients treated with VK2809 ranged from 38% to 55% after 12 weeks. In addition, up to 85% of patients receiving VK2809 experienced at least a 30% reduction in liver fat.

This level of efficacy is associated with a greater likelihood of histologic benefit in NASH. As in prior studies, VK2809 treated patients also achieved statistically significant reductions in LDL cholesterol, triglycerides, and atherogenic lipoproteins. We believe these results indicate that VK2809 has the potential to provide longer-term cardioprotective benefits. The initial voyage data also served to further establish VK2809's promising safety and tolerability profile. 94% of treatment-related adverse events among patients receiving VK2809 were reported as mild or moderate. Discontinuations due to adverse events were low and balanced among placebo and treatment arms. In particular, VK2809 demonstrated excellent gastrointestinal tolerability with similar rates of nausea, diarrhea, stool frequency, and vomiting observed among VK2809 treated patients, compared to placebo.

Last November, Viking presented additional data from this study at the annual meeting of the American Association for the Study of Liver Diseases. These new data demonstrated robust liver fat reductions among patients with or without Type 2 diabetes, as well as those having either F2 or F3 Fibrosis. Among patients with Type 2 diabetes, at week 12, reductions from baseline in liver fat ranged from 36% to 54%, which was comparable to the reductions observed among patients without Type 2 diabetes. Treatment with VK2809 also demonstrated potent reductions in liver fat among patients with either F2 or F3 Fibrosis, with liver fat reductions ranging up to approximately 58% from baseline. Thus, these results indicate that neither the presence of Type 2 diabetes nor the presence of F2 or F3 Fibrosis meaningfully impact VK2809's efficacy in reducing liver fat.

During the first quarter, we completed the final biopsies in the Voyage Study and remain on track to report the histology data from this study later this quarter. I'll now provide a brief update on our second thyroid hormone receptor beta agonist VK0214, which is currently being evaluated in a Phase 1b trial in patients with X-linked adrenoleukodystrophy, or X-ALD. Like VK2809, VK0214 is also an orally available small molecule that is selected for the beta-ISO form of the thyroid hormone receptor. X-ALD is a rare and debilitating metabolic disorder that is caused by genetic mutations that disable the function of a paroxysmal transporter of very long chain fatty acids. As a result, patients are unable to efficiently metabolize very long chain fatty acids, and the accumulation of these compounds is believed to contribute to the onset and progression of X-ALD.

In a prior Phase 1 study in healthy volunteers VK0214 demonstrated dose-dependent exposures, no evidence of accumulation, and a half-life consistent with anticipated once-daily dosing. Subjects who received VK0214 experienced reductions in LDL cholesterol, triglycerides, apolipoprotein B, and lipoprotein A. VK0214 also demonstrated an encouraging safety and tolerability profile with no serious adverse events reported and no treatment or dose-related signals observed for GI side effects, vital signs, or cardiovascular measures. The ongoing Phase 1b study of VKO214 is being conducted in patients with the Adrenomyeloneuropathy or AMN form of X-ALD, which is the most common form of the disorder. This trial is a randomized, double-blind, placebo-controlled, multi-center study in adult male patients with AMN.

The primary objectives of the study are to evaluate the safety, tolerability, and pharmacokinetics of VK0214, administered orally once daily for 28 days. The study also includes an exploratory assessment of changes in plasma levels of very long chain fatty acids. The company expects to report the top line results from this trial in mid-2024. Finally, during the first quarter, the company successfully completed an underwritten public offering of common stock. The gross proceeds to Viking from this offering were approximately $630 million. As Greg indicated a few moments ago, these funds have strengthened our balance sheet, which as of the end of the quarter held approximately $963 million in cash, significantly extending our runway. This provides the company with the resources to aggressively develop our programs through important clinical milestones.

In conclusion, during the first quarter, Viking reported positive data from two key clinical trials of our lead obesity program, VK2735. The Phase 2 Venture Study demonstrated up to an approximately 15% reduction in body weight from baseline following 13 weeks of dosing by weekly subcutaneous injection, as well as promising safety and tolerability. The Phase 1 study of the oral tablet formulation of VK2735 demonstrated excellent safety and tolerability and positive signs of clinical activity, with subjects reporting mean weight loss of up to 5.3% from baseline following 28 days of oral dosing. We plan to meet with regulators to discuss the path forward for each of these programs, and we expect to initiate further clinical trials with each later this year.

We also plan to report data from the Phase 2b Voyage Study of our thyroid hormone beta receptor agonist VK2809 in biopsy-confirmed NASH and Fibrosis later this quarter. The initial data from this study successfully achieved the primary endpoint and affirmed VK2809's potent efficacy of reducing liver fat, along with its favorable tolerability and safety profile. We recently completed the final biopsies in the Voyage Study and look forward to reporting data on histologic changes assessed after 52 weeks of treatment later this quarter. Finally, we expect to announce data from our Phase 1B study of VKO214 for the treatment of adrenal myeloneuropathy midyear. To support our maturing pipeline, the company ended the quarter with a strong balance sheet of $963 million.

This concludes our prepared comments for today. Thanks very much for joining us. And we'll now open the call for questions. Operator?

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