Viking Therapeutics, Inc. (VKTX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Viking Therapeutics Phase IIb VOYAGE study top-line data conference call. [Operator Instructions]. As a reminder, this conference call is being recorded today, May 16, 2023. I would now like to turn the floor 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; Marianne Mancini, the company's Chief Operating Officer; and Greg Zante, Viking's Chief Financial Officer. Before we begin, I'd like to caution that comments made during this conference call today, May 16, 2023, 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, 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.

Thanks, Stephanie, and good morning to everyone joining us on the call. Earlier this morning, we issued a press release describing the results for the primary endpoint from Viking's Phase IIb VOYAGE trial evaluating VK2809, our novel liver-selective thyroid hormone receptor beta agonist in patients with biopsy-confirmed non-alcoholic steatohepatitis or NASH. We are pleased to share with you on this call an overview of the initial data and key takeaways from the study at this point. Following my prepared comments, we'll open the line for questions. Before we discuss the results, I'd like to remind everyone that we have only recently received these data. While we believe that we have enough information to report on the study's success on the primary end point, we have not yet had time to rigorously evaluate every lab value, biomarker and line item in the data. As you might imagine, these data sets are large, and we are still in the process of receiving and reviewing what are sure to be additional tables, figures and sub-analysis. We'll provide additional updates moving forward as warranted. We also plan to present the results at a future medical meeting, so we may wish to preserve certain details until those presentations. As a reminder, VK2809 is an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor that possesses selectivity for liver tissue as well as the beta receptor subtype, suggesting promising therapeutic potential in a range of metabolic disorders. In a prior Phase IIa trial in patients with non-alcoholic fatty liver disease, VK2809 successfully achieved both its primary and secondary endpoints, demonstrating significant reductions in liver fat and plasma lipids. In that study, cohorts treated with VK2809 experienced up to 60% median relative reductions in liver fat content. And the majority of patients receiving VK2809 experienced at least a 30% relative reduction in liver fat content. Another important benefit observed in the Phase IIa study was VK2809's ability to reduce plasma lipids, including LDL cholesterol, triglycerides and atherogenic proteins, all of which have been correlated with increased cardiovascular risk. The Phase IIa trial also demonstrated VK2809's promising safety and tolerability profile. No serious adverse events were reported. And the rates of gastrointestinal disturbances, such as nausea and diarrhea were lower among VK2809-treated patients when compared to patients treated with placebo. Based in part on these impressive data, the company believed that VK2809 represented a potentially best-in-class therapeutic for the treatment of NASH. The potential market for this indication is significant. In the U.S., NASH is a leading cause of cirrhosis and liver failure and is estimated to affect over 10 million Americans. Based on our prior clinical data and the high unmet medical need in NASH, we designed a Phase IIb trial called VOYAGE to evaluate VK2809 in this setting. The VOYAGE trial is a randomized, double-blind, placebo-controlled, multicenter international Phase IIb 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, which we are reporting today evaluated 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 an evaluation of histologic changes as assessed by hepatic biopsy after 52 weeks of treatment. The study randomized patients into 5 arms: placebo, 1 milligram every day, 2.5 milligrams every day, 5 milligrams every other day and 10 milligrams every other day. As a reminder, the lowest dose of 1 milligram daily was intended to identify a minimally effective dose level and was therefore designed to enroll only half as many patients as the other arms. In order to accelerate completion of enrollment in the study, we elected last year to suspend enrollment of patients in both the 1 milligram daily dosing cohort as well as a middle dose cohort, which was enrolling patients into the 5-milligram every other day dosing arm. As a result, these 2 cohorts are enrolled at approximately half of their originally targeted levels of 37 for the 1-milligram cohort and 75 for the 5-milligram cohort. The remaining 3 cohorts enrolling placebo, 2.5 milligrams daily and 10 milligrams every other day, proceeded toward their original enrollment targets of up to 75 patients per arm. Based on enrollment levels achieved last year and our powering assumptions for histology, we closed enrollment late last year at approximately 250 patients. This study size and structure allows us to remain well powered on histology endpoints in our 2 most important treatment arms, while also proceeding to the desired endpoint evaluation in a timely manner. Today, we are pleased to report that the study successfully achieved its primary endpoint with patients receiving VK2809 experiencing clinically and statistically significant reductions in liver fat content from baseline to week 12 as compared with placebo. Additionally, VK2809-treated patients demonstrated statistically significant reductions in LDL cholesterol, triglycerides and atherogenic proteins compared with placebo. Specifically, the results demonstrated that patients receiving VK2809 dosed at 10 milligrams every other day experienced a mean reduction in liver fat of 52% from baseline. Patients receiving 5 milligrams every other day experienced a mean reduction of 37% from baseline. Patients receiving 2.5 milligrams every day experienced a mean reduction of 45% from baseline. And patients receiving 1 milligram daily doses experienced a mean reduction of 17% from baseline. By comparison, patients receiving placebo experienced a 4% mean reduction from baseline. We also performed a responder analysis at week 12. As a reminder, in this setting, a responder is defined as a patient who experiences at least a 30% relative reduction in liver fat. Prior studies have shown that patients achieving this degree of liver fat reduction have a higher probability of demonstrating histologic benefit in NASH. In the VOYAGE study, after 12 weeks of treatment, patients receiving VK2809 experienced significantly higher response rates compared to patients receiving placebo. Among patients treated with VK2809 dosed at 10 milligrams every other day, 85% demonstrated at least a 30% relative reduction in liver fat. At 5 milligrams every other day, the response rate was 67%. At 2.5 milligrams daily, the response rate was 78%, and at 1 milligram daily, the response rate was 53%. By comparison, the response rate among patients receiving placebo was 14%. Each of the response rates for VK2809 cohorts was statistically significant compared to placebo. It's interesting to note that when adjusted for placebo, the mean reductions in liver fat observed in this study are essentially the same as those observed in our prior 12-week NAFLD study. The similar efficacy observed in the current study is impressive as the VOYAGE trial is much larger and enrolled a more advanced disease population of biopsy-confirmed NASH patients with fibrosis in the F2 to F3 range. In addition, the doses in the VOYAGE study are generally lower than those used in the prior 12-week study. We believe these data provide further evidence of VK2809's highly targeted delivery into liver tissue, which is an important differentiating characteristic of the molecule and a competitive advantage compared to other agents in development for NASH. It also speaks to the consistency of effect from thyroid receptor beta activation on liver fat across a range of disease stages. The VOYAGE trial also included an analysis of the effect of VK2809 on plasma lipids. These lipids, including LDL cholesterol, triglycerides and atherogenic proteins have been correlated with increased cardiovascular risk. And a number of studies evaluating other NASH development programs have demonstrated elevations in these lipids following treatment. In the VOYAGE study, patients receiving VK2809 demonstrated statistically significant reductions in LDL cholesterol from baseline, ranging from 15% at the 1 milligram dose, to 21% in the 10-milligram every other day cohort. By comparison, patients receiving placebo demonstrated LDL-cholesterol reductions of 1% from baseline. The robust reductions in these lipids are consistent with those observed in our prior Phase IIa study and provide further evidence that VK2809 may offer a cardioprotective benefit. Turning to safety. Consistent with the prior 12-week Phase IIa study, VK2809 was shown to be safe and well tolerated in this study. As of the early March cutoff for safety data, adverse event rates were similar among patients randomized to VK2809 compared with placebo. Discontinuations due to adverse events were also low and well balanced among VK2809-treated patients and placebo patients. Turning to tolerability. As in all prior studies, VK2809 continues to demonstrate an excellent tolerability profile. In particular, there were no clinically or numerically meaningful differences in gastrointestinal-related side effects, such as nausea, diarrhea or stool frequency among VK2809-treated patients compared with placebo. Liver function tests, including ALT, AST, Bilirubin, Direct Bilirubin and Alkaline Phosphatase were similar among VK2809-treated patients and patients receiving placebo. In addition, there were no numerically or clinically meaningful differences in thyroid hormone markers among treated versus placebo patients. On vital signs, VK2809-treated subjects demonstrated no changes to blood pressure, heart rate or body weight relative to placebo. The VOYAGE study also includes an exploratory assessment of biomarkers that may be relevant for predicting histologic changes in NASH. While 12 weeks is likely too early to definitively assess histologic benefit, modest but statistically significant reductions from baseline were observed in certain measures, including the ELF panel, NIS4 and TIMP-1. We'll continue to assess these through the course of the 1-year treatment window. Overall, we believe the impressive efficacy signals observed in this study, combined with the benign safety and excellent tolerability profile, provide meaningful differentiation for VK2809 relative to other development programs for NASH. In summary, I'd like to say that we are happy to report positive results from this study with mean placebo-adjusted liver fat reductions in excess of 40% across relevant treatment arms and response rates ranging up to 85%. We believe these data bode well for potential histologic benefit for these patients. Finally, as just described, we are encouraged by the consistent safety and tolerability profile as reaffirmed in this study. We look forward to sharing the histology data from this study in the first half of 2024. In closing, I'd like to thank the investigators and patients who have participated and continue to participate in the VOYAGE trial, and I'd like to thank our employees here at Viking for their outstanding work in successfully executing the study. I'll stop here and open the line for questions.

[Operator Instructions] And our first question today comes from Joon Lee from Truist Securities.

Congrats on the positive data, impressive efficacy and tolerability. Just one SAE on the drug arm, can you elaborate a little bit more on what the symptoms were that this patient exhibited and in which those dose arm this happened?

Joon, this was a patient with a past history of attempted suicide and suicidal ideation and depression who experienced an episode of suicidal ideation and depression. And that was in the -- I think it was a 10 mg QOD arm, but I'm not positive on that one.

Got it. And then as a go-forward strategy, 2.5 milligrams QD and 10 milligrams QOD looks -- they both look pretty viable. Do you have a preference at this point as to what could be a Phase III dose?

Great question, Joon. We don't yet. I think the best thing to do here is wait for the histology data, which we'll receive next year, and then we'll have a much better view of what's the better arm. But I think we have 2 great choices at this point.

Okay, one last one. Will this be presented at EASL or has that passed the submission for abstract?

We're probably going to present this at AASLD and not EASL.

Our next question comes from Naz Rahman from Maxim Group.

Congrats on the data. Just -- I want to talk with GI AEs and tolerability a little bit. Did you find that the GI AEs were transitory? Or did they generally occur early in the trial? Or...

Actually -- I'm sorry, go ahead.

Yes. Did they like occur early in the trial? Or were they like consistent throughout the course of the trial?

Honestly, they were so low that we didn't do a time course analysis. I mean they're no different from placebo. So I didn't think that exercise was worthwhile.

Did any of the patients have to take any medications to manage in the GI AEs?

Again, they were no different from placebo. So we didn't -- I don't know if anybody received medication for them. They were pretty much 0 across the board.

Got you. And just one more question. Just on the liver fat reduction, did you see a similar magnitude of liver fat reduction in the F2 and the F3 patients? Or you just need different, I guess, rates of efficacy between the 2 groups?

We don't have that stratum -- that level of detail on the data just yet.

And our next question comes from Jay Olson from Oppenheimer.

Congrats on these results. Based on this level of MRI PDFF reduction, can you talk about any thoughts you have about how the biopsy data may turn out? And also the timing of that? And then I had one follow-up, if I could, please.

Yes. Thanks, Jay. So there have been multiple prior studies that do indicate a correlation between increased liver fat reductions and histologic benefits including NASH resolution and fibrosis regression. And these are the largest liver fat reductions that we're aware of from an oral agent at this stage of development. So to the extent that is a good predictor, we feel good about the probability of success on the histology endpoints. We expect to have those data in the first half of next year, and it's a little too early to narrow that further at this time.

Okay. Great. And then now -- sorry, go ahead.

No. I just said thanks.

Okay. Since you have 2 successful and very significant opportunities in front of you now, can you just talk about how you'll prioritize those and especially with regards to capital allocation? And any additions you may need to make to your organization?

Yes, it's a great question. And fortunately, we're very well capitalized now. So it's pedal to the metal on both programs. We will be adding staff in key areas for clinical support and regulatory affairs, but we won't grow too aggressively. We'll just add as needed. I think we've done a lot with an extraordinarily lean organization, and we've demonstrated really consistent high productivity. So I don't think we're planning to grow immensely, but we'll add where we need to add moving forward.

Okay. Great. Congrats again on these results.

Thanks, jay.

Our next question comes from Annabel Samimy from Stifel.

Congratulations on some pretty strong results. So it looks like -- I know that you're just still doing some analysis on the doses and waiting for histological data, but it looks like you have a pretty good range of doses there. Just backtracking a little bit, how did you choose which doses to stop at 50% enrollment and why? And is it possible that you might go with all 3 doses just to give patients different options going forward in terms of dosing?

Yes. We will probably choose 1 or 2 doses to move forward with. And we felt that the 1 milligram, since that was always intended to be simply an exploration of the minimally effective dose, that, that could be trimmed without any meaningful impact on the study. And then we felt that having a daily and an every other day cohort complete the study would be useful for comparison. So we chose the higher dose on the 10 mg QOD and then the 2.5 mg on the daily.

Okay. Got it. And then in terms of the side effect profile, I understand that you barely had any tolerability issues in AE. Was there any kind of dose response related to side effect profiles? Or was it pretty clean across the board?

It was very clean. Actually, it's interesting. The 1 milligram smallest cohort, but that seemed to have more AEs. And I think that's just a function of small numbers, but nothing dose related at all.

Okay. Got it. And then just on the -- in the histological endpoints, I guess, I just wanted to clarify, you said you saw both clinically and statistically significant differences on those histological endpoints or it's still too early to -- just want to draw any conclusions from that. On the margin, not on the biomarkers, I apologize.

Yes. Yes. They are very modest differences. So I think it's a little early to pound the table on those at this point, but they are statistically significant, but pretty modest at this point. It will be interesting to see how those mature.

Our next question comes from Joe Pantginis from H.C. Wainwright.

Congratulations on the data. Brian, I wanted to start with a little historical perspective on two-prongs. So first, I want to offer my congratulations because having covered you from essentially the beginning -- and I don't want to jinx this, but you're essentially 4 for 4 now with your clinical programs, including 2 from 2809. So that big heartfelt congratulations on that. And then secondly, with regard to the AE profile now and what you're seeing from these 2 robust data sets, there has been a very long-term bear case, however you want to call it, regarding cardiovascular events and the potential for cardiovascular events for 2809. Do you feel you'd put this to bed at this point?