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

All right. Welcome, everyone, and thanks for joining us for the Viking Therapeutics presentation. We have Brian Lian here, CEO of Viking. And it's a very hot development-stage company in the obesity space, of course, and everyone is focused on 2735, which you have as both an oral and injectable form of GLP/GIP.

So maybe we can first look big picture before we get into all the data. What is your vision of how you see these two products working together and where you see the most value for Viking?

Yes. Thanks, and thanks for the invitation. It's great to be here at the Stifel conference. We have a great schedule. We see the kind of the bulk of the value in our view is with the injectable. We think that's going to be the centerpiece of therapy for the foreseeable future. So the injectable formulation is a weekly formulation. And so we envision people using that for the sort of induction of weight loss, use it weekly for 6 months, 9 months or however long it takes you to reach your target weight range and then transition potentially to a different formulation, either a monthly formulation or the oral formulation or continue on with the weekly. So it's an option -- the product has optionality in that you can transition to a more convenient regimen once you get into some target range. And you don't have to worry about any new side effects since it's the same molecule. So it offers some advantages in that respect.

Is it molecule-based? Or is it the administration of the molecule, like the amount, the dosing, the Cmax? What is it that you think -- because your molecule has obviously had very good tolerability. So what is it do you think that creates the tolerability there?

Yes, it's not real obvious to us. The Tmax is a little bit later with the subcu. And it's possible that, that sort of slow onset leads to a little bit of mitigation of the GI tolerability signal that you often see with GLP-1 agonist. With the oral, probably that gradual absorption over time gives you the same effect. We don't know. But that could be leading to an improvement in tolerability. And something else that we've mentioned that I think is missed a lot of times when people are trying to compare tolerabilities, this is the only oral agent that has both the GLP-1 and GIP mechanism. So there's often a comparison to the GLP-1 mono-agonist. And it's just a different mechanism that we're very potent on the GIP receptor, which is known to mitigate some of the GI, particularly the nausea that's induced by GLP-1 activation.

Okay, great. So with that context, obviously, the most recent data was the data that was released at ObesityWeek. So what we thought was interesting was again the good tolerability, even when you pushed the dose, there was durability, which you showed. And now you -- it looks like you've got some flexibility. So maybe we can talk about the data and what you think the takeaways were from ObesityWeek that may have been missed by the community. I think everyone sort of focused on 100 milligrams, but maybe talk about the whole data for the context.

Yes. We had two posters. One was an update of the VENTURE study, which was the 13-week study of the injectable formulation. And a lot of the data there had previously been reported. But we did show the PK profile showing the long exposure time and the durability of the effect, showing you had over 80% of the weight loss maintained 7 weeks after the last dose, so there's not this immediate rebound. We also, in the press release anyway, showed sort of the regression from prediabetic to nondiabetic state, which was very interesting, and it heavily favored the treatment arms versus placebo. So those were kind of the new pieces of data in the VENTURE release. With the oral formulation, yes, we showed that it was a 28-day study with daily dosing, titration up to each final dose in each cohort. And we showed, up to 100 milligrams, a little over 8% from baseline body weight reduction. And then as you look out beyond that day 28 time point out to day 57, a pretty good maintenance effect. Even at the low doses, the rebound was fairly muted. And then we did another cohort in that study, where people were titrated up to 80 milligrams, so 60 mg per week, 80 mg per week and then they transition to an 80 mg every other day. And that was just one kind of crude way to see what happens when you reduce the exposures. Do you still maintain weight loss? Do you rebound? What happens? And if you look at the curve for that cohort versus the straight-up 80-milligram cohort, they're pretty parallel. They separate a little bit in the first 2 weeks, but it's the same dose in the first 2 weeks. And then once you transition to 80 mg every other day, they were pretty parallel and they continued weight loss. So it suggests to us that you don't necessarily need this high dose to maintain or even continue weight loss. So you might think of somebody starting at a high dose transitioning to a lower dose for a longer period of time.

Okay. And so what are some of the things that you envision with this type of dosing scheme? Do you want to do it less frequently? Do you want to just do lower dose? Are you looking at different administration schedules? So what can we do with this information?

Yes, I probably wouldn't or we probably wouldn't pursue the every-other-day regimen. But it supports this notion of once you reach some target range with the subcu, maybe you could transition on to 15, 20, 30 milligrams, a lower dose of the oral and really prevent weight regain. And that supply question is different than if you assume everybody has got to take 100 milligrams every day forever. It's just a different level of demand. So you could think of transitioning from the subcu onto the lower-dose oral. You could think of transitioning from a high-dose oral onto a lower-dose oral. But I think at the end of the day, you would see people using the low dose much more frequently than the higher doses.

Okay. So the 100 milligrams was something a lot of people focused on, essentially saying this is commercially not viable because of the supply issues. So do you think that oral will be a formulation that people ever start with just right off the bat? Or will it always be subcu first, oral? Or do you just want that optionality?

I think it's important to have the optionality. We haven't launched the product. There's a lot of learnings to do to understand scalability in manufacturing. I guess I'm not as pessimistic as some would be on the scalability there. And we've got, I think, multiple global vendors offering to work with us to scale up to supply an oral product. So I think we're going to get there.

Yes, we're going to talk -- I can promise you we're going to talk about manufacturing in a second. I just want to finish up with some of the data. There was one question that was brought up that there seemed to be a lack of dose response between the 40-milligram, the 60-milligram and the 80-milligram was generally around the same area and maybe even a little bit not quite the perfect dose response that you want to see. So how should we think about that?

Yes, I guess I would think about it as it's a Phase I safety and tolerability study. And there's a, I guess -- with this sector or this segment of the market, there's this over-tendency to treat these Phase I studies like Phase III studies. Everybody is comparing a day 28 dataset in healthy overweight people. So I don't know. I would consider that an n of 9 or whatever, 7, whatever it was in that cohort.

Okay, I see. And then one other thing, aside from the weight loss, obviously, the tolerability was very good, even at the 100 milligrams. And we spoke to the tolerability at the very beginning. But what was the response to that tolerability data? It seems that some of the shortcomings of weight loss treatments right now is that they need better tolerability. They need maintenance dosing. So you're addressing the maintenance dosing. It seems like you're addressing the tolerability. Are these the shortcomings that you're trying to address? Are there other things that people have pointed to that they want to see?

No, tolerability was surprisingly good there. We -- really, I think the tolerability was probably overstated the nausea and vomiting in that -- in the experience in the Phase I because people were titrated so aggressively that it wouldn't titrate like that in real life. So I think the tolerability profile probably is not representative of what it would be in a future study. So we expect to be better-tolerated. But it looks competitive with what's out there. Low rates of vomiting, probably because there's a pretty slow onset of activity, but -- or onset of exposure, but also likely tied to GIP activation, that's what we think the reasons are.

And the titration actually, can you talk about the titration because the tolerability should probably be taken in context with the titration that you had?

Yes, each cohort was started at the final dose from the prior cohort. So like the 40 mg started at 20 for a week and then went to 40 for 3 weeks. The 60 started at 40 for a week and went to 60 for 3 weeks. So the 100 started at 80 for a week and went to 100. You wouldn't start somebody at an 80 mg dose, but we wanted to push just to see where we would get overall, when you'd start to see any signal on tolerability and understand what the exposure curves look like.

Okay, got it. So before we get too far into this conversation we run out of time for it, maybe we can talk about manufacturing a little bit. That is a big concern that everybody has for obvious reasons. And right now, you've stated multiple times that you're covered for clinical trials. But how -- what should we think about it afterwards? And is this fear that there's going to be a capacity shortage or API shortage, is that unfounded? Or is that real?

Well, certainly, it's going to be a challenge to supply as you've seen now with the supply issues that the current obesity products are facing. But we have now a good 3-plus years to work on this, and we're spending a lot of time on it today. So don't know what the supply situation will look like in 3 years from now, but we do have multiple ongoing conversations with the global suppliers. So I think we'll be in a -- we won't be flat-footed, I don't think, when the products are available.

And I think in the past, we've heard you say that you are trying to finalize a third-party arrangement before the end of the year? Is that still the expectation?

Yes, as soon as possible. Yes, that's certainly the plan, yes. And we'd like to have at least one long-term multi-ton supplier, yes.

Okay. And is this just for API? Or is it also the injector? Because that's the -- that was obviously what hung up Lilly in terms of capacity.

Yes, the API is our first focus. The injectors, the lead times for those lines are a little bit shorter than the reactors. So the current focus is getting the API in place, API agreements in place and then transitioning to getting the auto-injector lines put in place. And those may or may not be the same suppliers. But ideally, they'd all be in-house, one place.

And one of the questions that we often get is the Novo acquisition of Catalent and what that means for the players in the industry, if they were one of your leading suppliers, if that causes even more constraints in the marketplace.

Yes. I don't know, I'm not an antitrust expert. So I don't know -- I don't really have a comment on that. It would take away a supplier for the fill/finish product, but I don't know how the antitrust process will go with that product -- or with that acquisition.

And did you have an arrangement with Catalent for any of this?

We have arrangements with Catalent for other things but not for the auto-injectors.

Okay, so it was never something -- someone that you depended on for manufacturing?

Well, we kind of took them out of consideration when that was announced.

Okay. All right. Got it. So just going back to some of the considerations that you have for Phase III for the injectable, you've -- have you -- number one, when is your end of Phase II meeting? What are the possible trial designs or expectations for Phase III? And have you worked in different dosing profiles for the injectable?

Yes, so it's going to be later this quarter, so -- and then we have submitted protocol synopses to them for an obesity study and an obese diabetic study. And once we get feedback, then we'll be able to provide a little more color from it. But it's premature maybe to talk about the specifics of the trial design. We would really focus broadly on guidance. So the guidance stipulates 4,500 people for at least 52 weeks, at least 1,500 on placebo. So that would be the kind of the guardrails we kind of stay within.

And obviously, something that your -- the leading competitors are doing, they're doing a tremendous amount of outcomes studies. Do you have any anticipation of doing anything like that in parallel, given that -- well, I mean, first talk about that and I'll...

Yes, possibly a little later. I think the focus right now is getting the registration studies in place and started and fully enrolled. I do think there's going to be a fair amount of read-across from other studies with the same mechanism or even the GLP-1 mono-agonist mechanism. So I think it takes a little bit of pressure off of us to get those studies up and running. But anyway, first focus is just going to be the registration studies.

Okay. And just big picture on those outcome studies, if you're thinking about the obesity marketplace and how it's evolving, obviously, there's a lack of reimbursement right now. And I think, hopefully, it's going to be depending on continuation of seeing the benefits going forward. So when you think about that as possibly the impetus or maybe pricing going forward, more competitors coming into the space, how do you see this whole landscape playing out in terms of pricing and access and maybe even semaglutide going generic in '29, '30 because there's a settlement out there? So how do you see this whole landscape playing out as far as pricing and access?

Well, I think that the more the benefits are established with the weight loss agents, the more -- better position we'll be in for receiving reimbursement, but -- and what we see now is cardiovascular outcomes improve, renal function improves. Was it osteoarthritis, that data a couple of weeks ago? Next year, I believe we'll see the Alzheimer's data, although it's low-dose oral semaglutide, that would be pretty interesting as well. So the more of these studies that read out, the more, I guess, rationale there is to offer coverage because long term, it should reduce health care costs. The challenge, I think, is keeping someone on for a long period of time and not having somebody drop off once they get to their target dose. And that's where, I think, with our monthly and the oral, we'll be in a good position to keep people compliant because it gives them potentially a more convenient regimen or a more acceptable dosage form for long-term use.

Do you think that compliance is primarily because of dosing or administration? Or is it because of lack of access?

I don't know. That's a hard one. It could be, for some people, long-term tolerability. But yes, it's hard to say.

Okay. So going back to the monthly dose now, how do you tease that out? Are you going to tease it out as part of the Phase III? Or are you going to tease it out separate in a separate study?

Yes, we thought about putting it in the Phase III program, but the statistics got to be much more cumbersome in trying to put it into the registration study. So what we'll probably do is a kind of a two-step approach, where you do an initial PK study with multiple doses, transition people to a monthly cadence after they reach some high dose and then follow that with a study that would be preferably added to the registration package when the Phase IIIs are done.

Okay. And as we think about the landscape, I think some investors are concerned now that the competitive landscape, as we know, your stock is very sensitive to everything that the competitors are doing. So how do we -- how should we think about your program in light of MariTide coming down the pike as well as CagriSema? And maybe we can talk a little bit about how you're positioning yourself within the broader competitive landscape with some of these other mechanisms.

Yes, I mean, I just -- you have to assume there's going to be competition with such an attractive market opportunity. It reminds me a little bit in 2018, 2019, when we had -- when NASH was really hot and we had a -- we still have a really, really exciting NASH program. We get these competitive landscape charts that just had, I don't know, 100 competitors on there and get the same questions. What are you going to do about all this? Well, we just want to focus ahead. You can't worry too much about what's coming behind you. Focus on your own portfolio, the next steps, generating value with what you have, and I think we should be okay. When we look at the efficacy, the tolerability, the potential convenience advantages of being able to transition from the same molecule to a different either cadence or formulation, no one else has that, that we're aware of right now. So I think we should be in a strong position competitively.

Okay. Some of the KOLs that we speak to not always just looking for a better GLP or a better GLP/GIP but really are looking for something different, a different mechanism, a different, I don't know, something to treat a patient who won't respond to, say, a dual agonist or a GLP. So how are you planning going forward in offering maybe what -- where the KOLs -- or sorry, rather the medical community is going as far as what they want to see as the next-generation drug?

Yes, it's a tough question. I mean, people have been looking for weight loss drugs forever. So I worked at Amgen 20 years ago and weight loss was a huge focus at that time. So everybody talks about new mechanisms like they're really easy to find. It's pretty tough. And so we look at amylin as an interesting mechanism. It seems to be complementary to the incretin axis, hits a different set of receptors but has the same sort of appetite modulation profile. So we think of that as potentially a single agent but more likely as a combo agent with a GLP-1 or a dual agonist.

Okay. So I guess maybe we can talk about the DACRA program. Tell us about a little bit what you've seen.

Yes, we have a dual, what is it, calcitonin and amylin. We just call it the amylin program because they're pretty much all DACRAs. But we have been working on that for quite a while. We have a family of compounds that looks extraordinarily potent, looks probably more potent than VK2735 in the primate setting but haven't yet moved it into the clinic. We hope to do that in 2025. It looks interesting. We plan to go forward with just a single agent, single ascending, multiple ascending dose study and then try to follow that as quickly as possible with a combination study with 2735.

Is that on the backbone of GLP or it's just by itself?

Well, we'd want to first develop it through the initial studies as a single agent, just to understand its profile in humans. But long term, it's probably going to be added on to the back. We view amylin really as a combo type of agent.

Okay. And so when you think about some of the amylin programs, the data that's coming out, CagriSema, obviously, what are some of the things that we should be looking for -- out for in terms of what you want to get out of the amylin compound?

Well, I bet those data are great and coming imminently. So it'd be very interesting to see what the curve looks like toward the end of the treatment window, if it's still pretty negative or if it's starting to plateau. But I would say the over 20% range wouldn't be unreasonable there. When you add amylin typically, what we've seen anyways in literature, about a 50% bump on whatever you added on to. So if you were to take a GLP-1/GIP agonist, which you can see maybe as a 20% as the efficacy hurdle for that mechanism, adding an amylin onto it, if you see the same type of bump you would see in the high 20s, I would expect.

And amylin, is it expected -- outside of the bump in weight loss, are you looking for more tolerability from the amylin, the addition of amylin? Is there anything regarding muscle loss that you're avoiding? Are there any other characteristics about amylin that we should be looking out for?

I guess for me, personally, I would look for tolerability, GI tolerability and then any potential hypoglycemia signal. Because amylin, what's different about amylin versus incretins, the incretins are glucose-sensitive. So when your glucose is normal, they don't touch glucose. It's not necessarily true with amylin. So it might be something to just keep an eye on. Not that there's a big risk, but it's something to keep an eye on. The muscle, I don't know. I guess I'm not fully onboard with the whole muscle story, but that remains to be further elucidated, I think.

Okay. So as we think about all these different mechanisms, I think some are starting to talk about personalized medicine for weight loss. Obviously, it's a very homogeneous -- sorry, heterogeneous population. So where do you see these different compounds fitting in for different populations maybe?

Yes, yes, it's a good question.

And do you address each of these different populations with your possible molecules in the library?

Yes. When you look at the future, how these big buckets are kind of segmented, and they're all big, they're not like niches, there probably will be some segmenting by mechanism. And when you think of like adding amylin onto a GLP-1 or a dual agonist, that might be best for the obese diabetic population because then the glucose control is improved with amylin and the risk of hypoglycemia might be reduced a little bit as well. When you look at just obese, maybe then a straight-up dual agonist or like the GGG compound might be preferred because you have less concern about glucagon agonism increasing plasma glucose versus the diabetic population. So there can be some bigger buckets, I guess, of preference on some of these compounds' mechanisms.

And there's -- obviously, there's a lot of discussion about the muscle loss aspect. Are you doing any analysis or have you done any analysis on your dual agonist and the ratio of fat loss versus muscle loss? Obviously, when you lose fat very quickly or when you lose weight very quickly, a lot of it is coming from both lean and -- muscle and fat loss.

Yes, yes. We've looked a little bit at this in animals. But I think you really have to look in humans to understand. I mean, in animals, we don't see any delta on muscle versus fat, I mean, any reduction in muscle. We really see in rodents anyway just fat loss is the primary weight loss for 2735. When it comes to humans, we have a great muscle agent with our VK5211. It's a selective androgen receptor modulator. So we have what we think is the best oral agent ever reported for muscle gain. But the utility and the need is what's unclear. When you lose weight, you do -- like you said, you lose muscle and fat. And what we think is you probably will need to show some benefit either in quality of life or function or survival. And when you lose weight, your quality of life and your function increase. So muscle agent is probably going to have to incrementally improve on top of that. And I think that's going to be a challenge.

Okay. I'm going to leave some time for talk about strategics, your favorite topic, I'm sure. So what is the appetite that you're seeing from strategics right now? Obviously, health care is going through a bit of a tumultuous period because we're not quite sure what the landscape is going to be looking like at HHS, NIH, CDC, FDA and all the agencies down. So do you think -- first, before this, what has the appetite been for strategics? And do you have any sense of what it might look like in the coming months?

For the second question, not really. I think I'd just be cautious of knee-jerk reactions in general. But I do think most companies are really trying to figure out how to participate in the obesity market. There's a lot of sort of envy of the success that we've seen with the two players so far. And there's a desire to somehow get involved. And it's been a surprise to me to see the sort of the gradual nature of that appreciation. Whereas with investors, everybody immediately sees this massive opportunity. With larger pharma companies, it's been a little slower and a little bit of -- a little more work on how would this fit into our investment horizon, our pipeline moving forward. If we participate in obesity, what would need to be set aside or deprioritized? Do we have the manufacturing in-house? Would we have to outsource all of that? So those are all questions, I think, that are being evaluated in the larger pharma space.

And have strategics come back to the table after you've turned your cards? I mean, at this point, the cards have been turned for a lot of these companies. A lot of the competitors that we would think, maybe not the privates but certainly the publics. So what's the holdup? People have come and gone out of the conversations, just the general view there.

Yes. We generally don't give a lot of color on strategic conversations. But I think the -- yes, yes, the oral data, I think, was noticed. And I mean, most people at ObesityWeek were positively inclined. And I mean, most people at ObesityWeek were positively inclined toward the data, and I think that's probably true across the pharma space as well.

Okay. All right, we'll leave it there. We ran out of time. So thank you very much.

Okay, thanks.

Appreciate it.