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

All right. Good afternoon, everyone. Thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, one of the biotech analyst here. And it's my pleasure to introduce Brian Lian, CEO of Viking Therapeutics. Just a reminder, the format for today is a fireside chat. If anyone has any questions, feel free to raise your hand, and we'll address your question. But before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, thanks, Brian, for joining us this morning -- or this afternoon, rather. We appreciate your time. And maybe I'll just hand it over to you to make some introductory comments.

Yes. Thanks for the invitation, and I had a great schedule -- we have a great schedule here, so we really appreciate the opportunity to participate. So my name is Brian Lian. I'm the Founder and CEO of Viking Therapeutics. We're based in San Diego. I founded the company in 2012. We did an IPO in 2015. And we've always been focused on metabolic and endocrine disorders. I think we have an exciting pipeline of therapeutics, 4 clinical programs. We've got an obesity program looking at 2 formulations of a dual agonist of GLP-1 and GIP subcu formulation and oral formulation. We have -- and that's in Phase II and Phase I, respectively, hoping to go into Phase III probably early next year. And then we have a MASH program. It's a thyroid receptor agonist that recently completed a successful Phase IIb study, and we'll talk to the FDA later this year about what the registration program would look like with that compound. And then we've got another small molecule thyroid agonist that's in an orphan indication called X-linked adrenoleukodystrophy. And that program probably read out data before the end of the year now. So it's an exciting time for Viking. We've got 2 end of Phase II meetings coming up this year and hoping to move the obesity program forward as aggressively as possible.

You definitely have a lot going on and have shared a lot of exciting data this year. And maybe we could start obesity, VK2735. That's your subcu formulation. You shared some promising Phase II data from the VENTURE study at 13 weeks. Maybe just highlight what made that data set so compelling.

Yes, it was weekly dosing up to 15 milligrams. We saw up to right around 14% weight loss from baseline in the top dose. I think it was around 8% in the lowest dose, which was 2.5 milligrams. All of the curves appeared to be still downward at the 13-week endpoint. So it suggests that longer dosing windows could achieve greater weight loss. And we saw, I think, really encouraging tolerability. You see the expected GI adverse events with some nausea and other GI observations. But really, they seem to happen early. They don't seem to be sustained. And they typically resolve without any interruption of dosing. So it was really, I think, encouraging in -- at least in that short study.

Yes, makes sense. On the recent earnings call, you also announced plans to move directly into a Phase III as opposed to a Phase IIb. Maybe just talk about your interactions with the FDA during your Type C meeting and kind of what you learned that gave you confidence that, that path is viable.

Yes. We -- after the phase -- the 13-week Phase II data, we were curious if it would be possible to go into Phase III. The normal path is to conduct a second Phase II, a longer Phase II, 6 to 9 months and see the curves evolve a little bit more. We weren't sure that, that would give us any really new information, but we weren't sure. So we asked the FDA if it would be okay to go to Phase III with the existing data. And the feedback we received indicates that it seems to be okay to go directly into a Phase III study.

And just in terms of the thought process on the Phase III design, if you can share the current thinking so far. And I think you have a meeting potentially scheduled with the FDA to kind of discuss some of that. Is there anything in particular you're trying to learn from that meeting?

Yes. Well, we would like to propose -- so the Type C meeting is really to understand can we go into Phase III or do we -- or is it recommended to do a Phase IIb. We feel comfortable going into Phase III now. So the end of Phase II would really focus on the trial design, what are the doses, how long is the study, what are the some of the enrollment criteria, what are the endpoints, that kind of thing. So much more Phase III design-specific rather than the Type C, which was this is okay.

Any thoughts on number of patients you might need to enroll or number of studies and duration?

Yes, yes. We're looking probably initially at 2 studies, a study in obese patients, so BMI of 30 or greater or 27 plus 1 weight-related comorbidity. And the guidance calls for 4,500 patients to be in your Phase III data set with 1,500 -- at least 1,500 in the placebo. So we would probably target somewhere above that 4,500 across both studies, 52 weeks of treatment. We'd kind of be right down the center of the fairway on the trial design with both studies.

And can you talk about which dose you're planning to take forward? Or could you look into a couple of doses there?

We would probably look at multiple doses, and we haven't disclosed the dose levels. We have good tox coverage above the doses we looked at in the Phase IIa study. So -- but we haven't disclosed what doses. We'd like to wait until after the end of Phase II, really.

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Total, total. Yes, yes.

And when do you plan to have sort of clarity on the design? And when can you sort of move forward there?

Yes, we would hope to understand what -- well, we get the feedback from the FDA at the end of Phase II meeting. And then as soon as possible, we would like to implement the design to move forward. When we would announce that, unclear yet. It depends on if there's any information requests or things like that from the FDA and how long those might take to answer. But -- so would it be right away, would it be sometime in the first quarter, unclear at this point. We have to get through the meeting first.

Makes sense. You've been talking about weekly dosing, but you've also indicated there's potential for monthly dosing. Maybe talk about what data you have there and what gives you confidence. And then how are you thinking about moving that forward? Or what are some of the potential ways you can do that?

Yes, yes. The monthly regimen, I think, is a potentially attractive option in the maintenance setting. Once you've reached some target range, weight range, maybe transitioning to a monthly regimen would be attractive to some patients. And based on the half-life of the molecule, it's generally 170 to 200 hours. It seems like if you were to think about dosing every 4 or 5 half lives, monthly is a possibility. So still trying to understand what would be the right dose for a monthly regimen, but the molecules' behavior would indicate monthly is definitely feasible. You want to have, we think, a therapeutic level of drug in the plasma for the whole month or the majority of the month, and I think we can do that, but it would primarily be in the maintenance setting.

When you say maintenance, are you thinking potential GLP-1 and then convert or you're thinking maybe even your own subcu and then you do a maintenance sort of with that? Or...

Yes. Well, I guess we're thinking about it is for the own -- our own program. You probably induce weight loss with the weekly regimen. And once you reach some target range, transition then to a monthly for a longer maintenance window. Monthly might work for weight loss initially, but it's just going to take forever to get to that dose because if you dose monthly, it's going to take a higher dose. And so it will take you forever to get there on a monthly cadence.

In terms of the timing, and -- is this a high priority for you to sort of start moving that forward? Or what's the thought process there?

Yes, it's a high priority. And the question is, would you bake it into the Phase III? Or do a dedicated Phase IIb? And we're thinking about both of those. So I think it's an important option, but a dedicated Phase IIb might make sense. We're not sure yet.

Got you. Okay. Maybe we can switch to the oral formulation. You shared some very promising early Phase I data dose escalation. Maybe talk about the doses you had in the initial update and kind of what gave you confidence to continue to dose escalate.

Yes, yes. We did the 28-day study with doses up to 40 milligrams. I think we had 2.5 mg, 5 mg, 10 mg, 20 mg and 40 mg daily. And once you get to the 20 and the 40 mg levels, that's when we started to see weight loss. And at the 40 mg at 28 days, we saw 5.3% from baseline, I believe, in the placebo's 2.1% to 3% delta there. The AE profile was really attractive. So we decided to dose escalate from there, and we're still in that portion of the study. We recently completed the 100-milligram cohort and hope to report the data at the upcoming ObesityWeek conference in San Antonio.

Got you. Maybe you can talk about what specific data we might get at ObesityWeek. You'll definitely have it through 100 milligrams. Is that fair?

Yes, yes. And we haven't received the data from that cohort yet, but we would plan to have all of the cohort data from the completed cohorts. And if we were to do another cohort, if it were to enroll quickly, maybe we could have an additional cohort of data as well. But we would have the 40 and the 60, 80, 100. It would be, I think, minimally what we'd report there. And we -- it's a Phase I study, so we look at tolerability, safety and PK. And then everybody's interested in body weight change, so we would look at body weight change as well or look to report that.

And you mentioned very favorable tolerability through the 40-milligram dose. Maybe just talk about what's the driver behind that or the mechanism. I think most people had expected to see more maybe GI tox or something like that.

Yes. We certainly expect to see more GI-related adverse events. When we first saw the data, we thought, oh, nothing happened. It didn't work. There were no side effects. And -- but then when you started to look at weight changes any number of ways. And clearly, there was a weight loss signal. Really mild side effects, no vomiting, more diarrhea and the treated -- or the placebo versus treated. So surprisingly well tolerated. Why is that? I don't know. We just -- it just surprised us. It could be that when you dose orally with a dual mechanism that maybe the GIP feeds in a little bit more strongly relative to subcu, but I don't know. We don't have a good answer for that.

And as you dose escalate up to 100, is it fair to assume you'll start to see some of those expected toxicities emerge? Or is it not a good assumption?

I would expect it. We're being a little aggressive. Every cohort as we dose up, since it was so well tolerated, every cohort has kind of started at the prior high dose. So the 40 mg dose started the 20 per week and then went to 40 for 3 weeks. Subsequent 60 mg cohort started at 40 for a week and then went to 60 for 3 weeks. So I would expect that -- maybe not, I would expect some AEs to start to materialize as you go up. And then that allows you to then think about the Phase II design and titration scheme to impose there. But it would be a surprise if there weren't any AEs. But it was a surprise at 40, there weren't any.

Yes. And you talked about the decision to continue to dose escalate beyond 100 and just some -- what are the factors that go into that? And when might we hear about that?

Yes, yes. We -- there's a dose level review team that reviews the data after each cohort is completed. They have not yet met to discuss the 100-milligram cohort. So they primarily look at tolerability and safety, and they don't care about weight change. And then they make a recommendation or okay to go to the next dose and then suggest a dose level. So it's a balance. We want to be able to start the Phase II study this year. And we've got a kind of an idea on the doses that we would use in the Phase II study. If we were to go higher than the doses now, we have some precedent for that. We did the multiple ascending dose study with the subcu formulation, went up to 10 milligrams. We decided to stop there and put a 15 into the Phase II, and we had good tox coverage. So we were able to do that. Maybe we could do something like that with the oral if that would make sense.

And how high might you go on the oral? I think at some point in the past, you mentioned maybe it doesn't make sense to continue dose escalating. What's the threshold?

Yes, that's an unknown. Probably, you don't want to go too high. It becomes not a feasible commercial product. But -- so that's a hard question to answer. I think we may be able to go above 100. But how much further, unknown just yet before we get some of the data from this 100-milligram cohort.

Maybe just a follow-up on one of your earlier comments. As you think about selecting the dose for the Phase II, maybe talk about how you go about selecting the dose. And you mentioned sort of aggressive titration, so maybe if you're seeing more tox at a higher dose, maybe you slow down the titration. Is that sort of...

Sure, sure. We probably want to start at a dose that's low or minimally effective and then scale it up from there. And if the 100 is well tolerated, maybe push above that a little bit in the Phase II, if we don't do another Phase I cohort. So you want to spread them. We'd probably look at 4 or 5 doses in the Phase II study. And depending on what the tolerability profile looks like in the higher dose cohorts, we would then adjust the titration regimen to accommodate where AEs begin to show up and how you would titrate into those dose levels.

Yes. Maybe just talk about the potential duration of a Phase II.

Yes. This would parallel the subcu study, which was a 13-week study, the VENTURE study. So just 13 weeks of higher doses would titrate, and the lower doses might be flat.

And just to get that study ongoing, you mentioned start by the end of the year. What has to happen from now until then to kind of hit that time frame?

Well, we'd like to get the data from the 100-milligram cohort, and whether or not we'd add another cohort is an open question. But making the dose forms that we would use in the Phase II and getting it packaged and everything like that, all that needs to start pretty quickly if the study is going to initiate this year, and we do expect it to initiate this year. So the gating factor is really getting the data from the -- from this 100-milligram cohort and then having the product manufactured.

And is there a particular bar in terms of weight loss you're looking for? We get that question quite a bit.

Yes. So really hard to know. The 28-day studies are not a useful metric, really. I know everybody looks at them. I do, too. But with the -- it's such an early part of that longer-term treatment window that it's hard to make comparisons. We know the accumulation is kind of gradual with the oral formulation. So unlikely we're really at the therapeutic levels in as short as 28 days. So I don't know what the hurdle. We are happy to see 5% in 28 days. I would expect that to continue as you dose longer with a higher dose.

Yes. Makes sense. How do you see the sort of oral fitting in, right? You mentioned monthly could be sort of a maintenance dose. How does the oral fit in?

Yes. We kind of see the oral in the same way that it would be most attractive in the maintenance setting. You reach a target weight range and then you transition from your subcu weekly, either do a subcu monthly or 2, an oral formulation daily. And this just gives people more options, I guess, for treatment. And the one attractive feature is the same molecule. So it's -- you don't have to worry about maybe inducing new side effects with a different molecule or anything like that if you would transition. And that -- if you were to go from the subcu to the oral -- on the maintenance that the oral dose there probably doesn't need to be as high as the dose required for weight loss. So the amount of drug required to prevent weight gain is likely to be lower than the amount of drug required to induce weight loss. So it reduces that sort of API demand in the -- for the maintenance product. That's where we see the biggest bucket in the oral with the maintenance setting.

Maybe just talk about the market opportunity here in obesity. I think expectations are fairly large. And where do you see your programs fitting in? And then how do you sort of compete with these larger pharma companies?

Yes. It's a large market.

Yes, a little ways off to you.

Yes, there's a little ways off. But I think on efficacy, the molecule looks pretty potent. And if we have some differentiation on tolerability or convenience, I think that would help drive the uptake. It would be something we'd prefer to be engage with a larger party as far as commercialization. So that would be kind of plan A to be -- have another larger company involved. But we'll have to see how that evolves.

Yes. Just for the oral to sort of be competitive, what do you kind of see as the profile that you need to sort of hit there? And maybe not necessarily in the -- in this Phase I study, maybe in the Phase IIb, but...

Yes. Well, we would hope in the Phase II, if the curves were to continue, that we would see greater than 5% weight loss over 13 weeks. And if the tolerability profile is what it looked like in the 28-day study, I think that would be a really competitive profile versus what we've seen. So -- but we'll have to do the study to really see.

Yes. Another question that's sort of been a focus is just manufacturing. There's obviously been some capacity issues currently, and there's efforts to sort of expand that. But how does that impact you? Or how do you think about preparing for that in the future?

Yes. Today, it doesn't impact us at all. We have clinical supplies for Phase III for the subcu, for Phase II with the oral, and there is -- there are multiple batches kind of being made as well. So we're okay as far as the clinical trial supply. Where it becomes an important question is in commercial launch, where the amounts will be much, much greater. And we're working with multiple suppliers, looking at various synthetic routes. And ably would hope to, by the end of the year, choose one of the routes, as one of our goals this year is choose one of the routes that we would like to scale up on a commercial scale. And so a lot of focus on that right now. I hope to enter an agreement by the end of the year.

Okay. You think multiple agreements or one agreement initially.

Preferably one, yes, and preferably be one for both the API and the tablet and the fill and finish. So you've got everything in one house.

Yes. Makes sense. So we've been talking about 2735, but I know you have other opportunities in the clinic for obesity, one being amylin, so maybe we could start there. And if you could maybe touch on that program and where you're at.

Yes, yes. We've been working on that program for a little while now. Really interesting mechanism in some of the in vivo work, it probably looks a little more effective than the 2735 compound. So really attractive mechanism. We would see the amylin program more of -- as more of an add-on to another mechanism. So to the extent you could combine with a dual agonist on GLP and GIP, it'd be a nice triple agonist. And that's kind of what we're thinking longer term. So we hope to bring a compound into the clinic next year and then follow it with the combo, so they would be kind of -- we'd like to understand the single-agent profile first and then look at how it plays with the GLP/GIP dual agonist as well.

When you say advance in the clinic next year, is it possible we might see some data maybe towards the end of the year? Or is that too aggressive?

That's possible. Hard to predict. That's possible, yes.

Okay. Maybe other pipeline assets in obesity. I know you haven't said too much about it, but I think there's others. So maybe just make comments there and sort of how you think about advancing those or not advancing those.

Yes. Well, we have other programs that we haven't publicly disclosed. And we typically have been pretty quiet about programs until we're pretty sure we're going into the clinic. With the amylin, we're pretty sure we're going to the clinic. So that's why we disclosed those data at the American Diabetes Association Conference. With others, probably -- we'll probably continue to be quiet until we get closer to a decision on filing IND.

We touched on this a little bit earlier, but just commercial type strategy or thinking in terms of trying to go on your own or partnering. And I know it's early, but is there a preference for the type of partner? Is it geographic? Is it worldwide, those types of things?

Yes. If there were partnering opportunity, I think a global partner would be the ideal partnership. And I guess, the second preference would be sort of regional, Asia, Europe, North America. We probably wouldn't be interested in the country-specific partnerships.

Obviously, partnering is one way, but another option is potential sort of acquisition. I don't know if you can make much comments there, but just any kind of comments because that's one of the most common questions we're getting.

Yes, yes. Me, too. No real comment there, yes.

Anything about obesity, your program that you think as underappreciated by investors? Or do you think that the story there is well appreciated given your sort of multiple options with a subcu, oral?

Yes. I think the compound presents a portfolio of options with the -- if the monthly were to succeed, that gives you a nice maintenance regimen that might help with the retaining patients on therapy. The oral, I think, also gives you the same molecule in a different dosage form, which might be attractive to both clinicians and patients. And so I think it gives you a variety of products from the same molecule, which is differentiated. And next generation would be if you were to combine with the amylin agonist, typically, you see a 40% to 50% improvement in efficacy when you add amylin on top of, say, a GLP-1 agonist. So if you were to add it on top of a dual agonist, you'd see the same. If you saw the same bump, it would represent a really meaningful weight loss signal.

Yes. Maybe last question on obesity. Obviously, you have a lot of things moving forward. Just how do you think broadly about the key priorities as you move forward into next year?

I think the key priority is to get through the end of Phase II and understand how the Phase III will look design-wise, how long it's going to be, the doses to use, whether or not the monthly would fold into the registration program or not. Those are all important, all the design elements around Phase III, really important focuses for us for the next 3 to 6 months, and then getting that study up and running and execute as quickly as possible. With the oral, big focus on getting the study up and running by the end of the year. And then if it followed the same trajectory as the subcu, hopefully, we would have data toward the second half of next year with that program. So both of them progressing pretty quickly. And then the amylin program moving to the clinic hopefully next year as well.

Yes. Makes sense. We've got about 5 minutes, so maybe just touch on 2809 and kind of the current thinking there or next steps.

Yes. 2809 is our small molecule thyroid receptor beta agonist. We completed a Phase IIb study called the VOYAGE study. Earlier this year, we showed a really nice reduction in fibrosis, and we saw a nice NASH resolution rates as well as the combination reduction in fibrosis and NASH resolution. The plan with the program is to have an end of Phase II meeting likely in the fourth quarter to understand the current thinking around registration trial designs. And really, in particular, does everybody need a biopsy or can you biopsy a subset, I think that's an important question for us to understand. With the program, I think we're looking at -- likely partnering would be the path forward there, but we want to see what the FDA says at the end of Phase II meeting.

And previously, you sort of mentioned 214, that's your X-ALD program. You're going to have some data, I think, by the end of the year. Maybe just give a little quick background there and maybe the size of the opportunity and what...

Yes, yes. About 8,000 patients in the U.S. have X-linked adrenoleukodystrophy. We would be looking at a subset of that X-linked adrenoleukodystrophy population called the adrenomyeloneuropathy. It's about half of the patients, somewhere in 40% to 60% of that. So 4,000 to 5,000, you would consider in the U.S. and a similar number in Europe. Thyroid beta agonist regulate the expression of a receptor peroxisomal transporter that shuttles very long-chain fatty acids into the peroxisome, where they get metabolized and discarded. So the thinking is you treat -- and these patients, one of the drivers for onset and progression of the disease is an accumulation of very long-chain fatty acids, which causes axonal damage. So if you can treat with a thyroid beta agonist, induce the expression of these peroxisomal transporters and reduce very long-chain fatty acid levels, maybe you could mitigate -- slow the onset and mitigate some of the symptoms that these patients experience. So right now, we're doing a 28-day study in adult men with adrenomyeloneuropathy. And we're looking at the change in very long-chain fatty acid. It's Phase I, so it's mainly safety, tolerability, PK, but we're looking at the changes in very long-chain fatty acid levels as well. And I think we would seek a partner with a specialization in orphan diseases following that study.

Okay. Makes sense. And maybe just last question, if you can comment on your current cash position, what that covers and then kind of what the runway looks like from here.

Yes. With the current cash, I think we ended the second quarter with $940 million in cash. And that would get us through a Phase III program with the subcu formulation and a Phase III program with the oral formulation, and I think a little ways beyond that as well. So I guess, safe to say, minimum of 2 years of cash where we sit today.

And can you maybe talk about the cost for each of those Phase III studies?

For the Phase III programs together, we're kind of assuming around a $300 million range. So for each one would be about -- our assumption is around $300 million.

Yes. Makes sense. Okay. Great. Looks like we're out of time, so why don't we end it there. Thanks so much, Brian. Appreciate your time.

Thanks, Mike. Yes, thanks.