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

All right. Good morning, everyone. Thanks for joining us here at the Leerink Partners Global Healthcare Conference. My name is Tom Smith. I'm one of the SME-cap biotech analyst here at Leerink. And it's my pleasure to welcome our next company to the stage, Viking Therapeutics. I'm really happy to be joined by President and CEO, Brian Lian. Brian, thanks for joining us.

Thanks, Tom. Great to be here, and thanks to Leerink for the invitation to participate.

Great. And Brian, I feel like many people in the audience are quite familiar with the Viking story. But maybe if you could just kick us off with a little bit of introductory remarks for some of those who may be less familiar and kind of like a state of the state of where Viking is today?

Yes. Sure. Viking. I founded Viking in 2012, and we did an IPO in 2015. And since then, we've raised about a little over $1 billion in follow-on financing. We have a portfolio of programs focused on metabolic and endocrine disorders. The program that is, I guess, most interesting to people right now is an obesity program. We have a compound called VK2735, it's a peptide dual agonist of the GLP-1 and GIP receptors that is -- it's been through a Phase II study, which showed around 15% weight loss over 13 weeks, and we're set to bring it into Phase III development in the second quarter. It's a subcu formulation. We also have an oral formulation of the same compound that is currently in a Phase II study, a 13-week Phase II study, and we expect to report data from that study in the second half of the year. Those are the main active focus programs today. We also have a MASH program, VK2809. It's a small molecule thyroid receptor beta agonist, it's been through a Phase IIb study, a 52-week study and showed a very nice improvement in fibrosis and NASH resolution rate compared with placebo and currently, we're seeking a licensing partner for that program. And then finally, we have an orphan disease program, rare disease program, another thyroid receptor agonist. It's been through a Phase Ib study in patients with the rare disease called X-linked adrenoleukodystrophy, and it showed a really promising improvement in a key biomarker for the disease called very long chain fatty acids. Like the VK2809 program, that's also available for licensing. Our focus today is on the obesity franchise.

Yes. Great. Thanks, Brian. And yes, I want to start with the important manufacturing and supply agreement you announced earlier this morning. This has been an increasing focus for investors over the last kind of 6 to 9 months. As you've consistently, I think, talked about having secured enough API and supply to get you through the clinical studies, I think an outstanding question has been, how would you look to tackle supply and capacity as we think about potential commercialization. The agreement you announced this morning is with CordenPharma. Maybe you could just start with kind of the key terms? What have you locked in? And a little bit of like why Corden? Talk a little bit about, I guess, their expertise and the process of selecting Corden over, I'm sure what was a pretty competitive process?

Thanks we announced that this morning, it's a large-scale, long-term supply agreement with CordenPharma to supply the full supply chain. So multiyear, multi-ton annual supply of API for VK2735 and then large scale supply of the auto-injector finished product as well as a large scale supply of the vial and a syringe form of the product. And then finally, multibillion tablet supply for the oral formulation. So we would see those as the 3 major product forms that auto-injector, vial and syringe and the tablet. And Corden was really one of the few companies that could address the entire supply chain and a long history of peptide manufacturing, global footprints. We've worked with them on multiple other programs. So we've got a long history of working with them, and a great relationship. So we think it's a really excellent partner to bring this program forward.

That's great. And just bigger picture. Because I think you've talked historically about potentially locking in multiple suppliers. Like how are you thinking about -- how confident are you that this agreement supplies you sufficiently for commercialization? And then how actively are you out there seeking other partnerships and other suppliers?

Yes. It's very important to have backups. And one thing that was really unique about Corden is that they actually do have redundancy internally for all elements of the supply chain. So API can be produced in 2 different sites. But nonetheless, we are likely to add additional backup suppliers over time. Right now, this supply agreement provides more than we would anticipate in the initial couple of years of launch on all fronts. So -- but what -- it's a good practice to have a backup supply on all elements.

Got it. That makes sense. And on the financial terms of it, it seems like you're retaining all. There's no royalty associated with VK2735. I know there are prepayments. Can you just talk about sort of the financial commitment that you've made to Corden in the near term and kind of long term, what are you locked into?

Yes. We make a certain preorder payments based on Corden achieving various milestones along the API production as well as fill and finish production. And all of those are fully refunded to Viking through credits on future orders. So we think it's a very attractive financial transaction for Viking.

Got it. Okay. And then you -- you mentioned having secured kind of those 3 pillars of form of administration. On the auto-injectors specifically, can you just talk about, I guess, Corden's experience with auto-injector products, do they manufacture auto-injectors for other commercially approved products or what was the selection on the auto-injector side?

Yes, on the auto-injector side, I don't know what other products they are supplying today. Those vendors typically don't share their other client information with us. We know they have the line that can produce the auto-injectors. We also know they have lines to produce vial and syringe and tablets. So for us, they met all of the criteria that we were seeking.

Got it. That makes sense. And can you just remind us on the auto-injector front, I guess, the current plans to implement the auto-injector into your clinical studies? What are we using? what did we use in venture for the subcu? What are we using -- plan on using in the Phase III? And I guess when are we introducing the auto-injector?

Yes. So the -- in the Phase II study, the venture study, that was a vial and a syringe administered in the clinic. People didn't have to stay in the clinic, they just got the drug administered in the clinic. For the Phase III, the first part of the study will use the same mechanism, so people will be receiving the product through the vial and a syringe form and then we will later transition people to the auto-injector. And that will probably happen late this year or early next year, that transition.

Okay. And that will -- that transition will all take place in the context of the Phase III or...

Yes, yes. In the Phase III, yes.

Got it. And then running the supply around the oral and the $1 billion tablet capacity I mean, how should we think about, I guess, your ability to manufacture oral 2735 even at some of those higher doses in the Phase II venture oral study, you're now looking up to 120 milligrams daily. I guess, what kind of supply have we locked in? And do you feel like it would be sufficient if you did move forward with the 120 milligrams oral to therefore, be able to manufacture that on a commercial scale effectively?

Yes. We've always planned on really focusing on the oral as more of a maintenance therapy at a lower dose level than that. We are going up to 120 milligrams in the Phase II. I think commercially, the lower doses is where we would focus. And keep in mind that oral is a good 12 to 18 months behind the subcu. So the supply is more than enough to address many times over the subcu requirements that we've modeled and sufficient to supply a very large oral product as well. But the oral is a little bit further behind. We don't -- I mean, we can add to all elements of the agreement if we think we're going to need more.

Got it. That makes sense. Okay. Well, let's shift gears and talk about some of the clinical data you generated in the Phase II venture study with the subcu form of 2735. Maybe just talk a little bit about some of the differentiated aspects of that data set. We've got a number of questions over the last few days. There's a CagriSema readout that showed -- you're talking about 13% weight loss. I think they showed modestly more, but with a much longer duration of dosing. And so I guess, help frame, I guess, what you saw in Phase II VENTURE versus some of these other competitor readouts that we've seen recently?

Yes. That was an interesting study was in diabetics. So diabetics are typically a little more resistant to the weight loss benefit. We saw in 13 weeks, 14.7% weight loss at our top dose and the curves were still fairly negative at the 13-week data point. So we would anticipate those to extend with extended dosing. We think it's hard to know where that plateau would happen, but it certainly looks competitive versus the CagriSema program. I think it looks competitive versus pretty much anything we've seen thus far. A lot of data cards get turned over last year, and we're always interested in seeing the data cards get turned over and I think we feel pretty good about the overall profile today on the efficacy and the tolerability relative to what we've seen thus far.

Got it. And yes. I guess specifically, you mentioned the tolerability profile I know in VENTURE up to 15 milligrams dose levels, mild-to-moderate GI side effects, relatively low discontinuation rate. What is your sense -- I mean, the way we look at that data, we think that looks differentiated versus basically any other increase that we've seen to date. What do you attribute that differentiation or potential differentiation to? And how do you expect that to manifest as you're thinking through kind of Phase III plans and expectations?

Yes, it was certainly very well tolerated in the 13-week study, probably better than we had expected. And a really interesting thing about the way the adverse events or tolerability profile emerged was it was typically very early and then within the -- really the first dose. And then we have a couple of plots like that in our presentation and our posters from Obesity Week shows the rapid waning of GI-related tolerability signal. So it seems to be - there's that first dose that I don't know, there's some accommodation on that first dose causes a little bit nausea, sometimes there's some vomiting, but it resolves very, very quickly despite increasing dose level through titration. What do we attribute that to? It's hard to say, that the PK profile is very unique, a very late onset for TMAX relative to what some of the other programs out there. And it could be that, that slow late TMAX help serve as its own sort of mini titration as the accumulation increases, but we don't really have a great explanation for it. We're happy with the profile, but no clear explanation for that.

Got it. That makes sense. I want to talk about your Phase III plans. You've had an end of Phase II meeting. You got some FDA feedback, I guess, reaffirming this idea that you can move directly into Phase III. In proximity to that feedback, we have the issuance of updated obesity guidelines from FDA. Can you just maybe provide us an update or your latest thoughts on the plans for Phase III? And then how closely your end of Phase II feedback aligned with those recently issued obesity guidelines?

Yes. Yes. We had -- when we finished the VENTURE study last year, we scheduled the Type C meeting with the FDA because the prior guidance, just like the newer guidance, prior guidance had comment about understanding the overall weight loss profile in Phase II prior to going to Phase III. So our question of the FDA in the Type C meeting last year was based on the data that we have in hand, can we go to Phase III and FDA agreed that we could proceed to Phase III. We scheduled an end of Phase II meeting then in the fourth quarter, submitted the entire data package as well as the proposed protocols and received great feedback, no major modifications requested, just feedback on sizes, things like ambulatory blood pressure assessing bone through DexaScan that's common for all of the Phase III programs. And really didn't have any significant adjustments. And what we saw from the feedback we received, we saw a lot of that verbiage reflected in the updated guidance. So we're really, really happy with the feedback and we've been preparing ever since to go into Phase III in the second quarter.

Got it. That makes sense. I think you've talked historically planning for 2 Phase III trials, roughly 4,500 patients. Maybe you could talk a little bit about are there plans for subsequent studies? You also talked about potentially exploring a monthly maintenance dosing regimen, perhaps in a separate program. Yes, maybe if you could talk about I guess, finalizing the design of the Phase III, when we'll get visibility into the dosing with the Phase III and then how you're thinking about exploring some of these other aspects of 2735?

Yes. We're pretty final on the designs. I'd say we are final on the designs. It will be 2 studies, 1 large study in a larger study in obese subjects and then a smaller study in obese diabetic subjects. The guidance requires 4,500 people in the registration program for weight loss with at least 1,500 on placebo. We'll probably go above that, just to be safe. guidance also requires 52 weeks post-titration treatment window. So we'll certainly implement that. And we haven't disclosed the doses or the titration scheme or any of those details, but we will when we announce the initiation of the study. As far as studies -- and we would hope to start them pretty much concurrently without much lag. We do want to explore a monthly regimen and when we look at the PK profile, it does suggest that a monthly cadence should be feasible. When we look at the plasma levels 28 days after the last dose, you're certainly still within that therapeutic range. So it seems to make sense that you could dose less frequently and still achieve plasma levels sufficient to prevent weight regain. And we'll explore that in a study later this year; in the second half, we would plan to do that study. So the idea would be titrate up on the weekly cadence and then transition people -- once you reach some higher dose transition people to a monthly regimen. In that same study, we would ideally plan to transition a certain portion to a low-dose oral as well to look at the PK and weight change effects after a transition to a low dose oral.

Interesting. Okay. And we've received some questions from investors over the last month or so. Just in terms of like dosing frequency of the oral as well, like is there a potential to look at potentially less frequent dosing than daily?

Yes, there is. And that would be possibly something that we would put into the -- that maintenance study that we're planning to begin. So if you could do a once-weekly oral, I mean, that could be interesting. My own feeling is that's probably low probability, but worth exploring anyway.

Okay. That's great. And yes, let's, I guess, double-click on the oral. You have the Phase I experience, I think, showed compelling rate loss along with, again, I feel like a differentiated safety tolerability profile. You just talk about some of the highlights from that and how that informed the Phase II venture oral study that you have ongoing currently?

Yes. We -- in the Phase I study, we read that data out in November at Obesity Week. We had gone from 2.5 milligrams daily up to 100 milligrams daily. And really encouraging tolerability profile, very mild side effects, low rates of nausea, always mild low rates of vomiting. And we've gone up to 100 milligrams, and it was well tolerated. So we thought that we could probably bump the dose up a little bit in the Phase II. And so that's what we did. We went to 120 milligrams in the ongoing VENTURE Phase II study. So we go from 15 milligrams up to 120 milligrams in the Phase II VENTURE oral study. But we were satisfied with the weight change there at 28 days, we saw 8.2% at the top dose. And what was interesting to us is that we looked then 4 weeks after the last dose and the top dose had maintained an 8.3% weight loss. So that was a surprise to us to see that durability but likely related to the half-life. So overall, I think an encouraging data set, and we're interested in seeing the Phase II data later this year.

Got it. And then in that Phase II study, you also included an exploratory arm where you're dosing 90 milligrams daily for up to 8 weeks and then you're going to have a 30 milligram maintenance dose for 5 weeks. I guess just sort of talk through expectations for that arm, what you're hoping on there?

Yes, really interesting. And when you look at the 28-day data, in that 20-milligram range from 15 to 30, you could see what look like a gradual weight loss. And so the concept is if you achieve some level of weight loss with a higher dose, can you transition to a lower dose and either see continued weight loss just at a lower rate or prevent weight gain. And so with that exploratory arm in the Phase II, we'll dose up to 90 milligram, keep people at 90 milligram for 4 weeks and then transition them down to 30 milligram for 5 weeks. And really, the goal would be to prevent weight gain, but we'll see possibly you just change the slope of weight loss. Hard to know. That would be interesting.

Got it. Yes, a very unique aspect of that program -- and just you've talked about data likely in the second half of the year. Can you help frame expectations? What should we be looking for on sort of an absolute and placebo-adjusted weight loss basis at 13 weeks?

Yes, that's hard to know really. We saw 8%, we would like to see more than 8% in this study, but the thing with relying too much on Phase I is those are small cohorts and it's a short window, and it's Phase I. So if we could beat that 8%, that would be great. If we can see the retention of a really good tolerability profile, also, that would be very encouraging. So those are kind of the, I guess, the hurdles we're looking at.

Okay. And just I guess, higher level strategically, how are you thinking about sort of the split between subcutaneous and oral longer term? And I guess how are you planning for that? I guess, how much of the considerations went into the supply agreement you announced with Corden?

Yes. We consider the subcu product to really be the meat of the franchise. That's what people will likely start on. Now that we've seen the tremendous success of the tirzepatide and semaglutide injectable franchises, and then you see the compounders selling the vial and syringe, where people self-administer. And those sold really well. We do think that there is a pretty low resistance to the injectable products. They work. They work quickly. They're well tolerated. So we would anticipate that to maintain its dominant position despite the introduction of orals over the next couple of years. And so we see the oral for us as being an important part of an entire franchise. So you start on the weekly injectable; when you reach your target rate range, you transition perhaps to a monthly maintenance dose or to a low-dose oral tablet. And I think we're the only program that has all of those options available with the same molecule. So it gives patients just more choice and more flexibility, and we think that's a good thing.

Yes. That makes sense to me. I want to ask you, we get this question all the time. What is it about 2735 or Viking specifically, where you're able to take this dual agonist peptide and formulate it orally, driving, i think, impressive weight loss, but also good safety tolerability where it seems like others have run into a lot of stumbling blocks. Like what's sort of the secret sauce behind all of that?

Well, it's been a lot of trial and error, especially on the oral side. When the first oral experiment we did was in dogs and it was just a disaster, it didn't show anything. But you look at the data, you come through it and you can see little glimmers of, O that's an interesting piece of data. Let's try to experiment again, making this modification. And I think maybe at a bigger company, that initial work would have been a turn off and shut down the program. But we decided to keep plugging away and keep trying different iterations, and we finally got to a formulation that gave us pretty good exposures. And then ultimately, in humans is well tolerated and gave us good overall preliminary profile.

Got it. Okay. Shift gears a little bit and talk about your preclinical dual amylin calcitonin receptor agonist, your DACRA program. Can you talk a little bit about the rationale for that program. And I guess where you think it fits into the broader emerging Amylin landscape?

Yes. Interesting program. We've spent a lot of time on it now, and we're moving forward with that. We hope to file an IND this year for the amylin agonist and the way we've looked at amylin, I think there's a lot of different views of amylin, but we look at it as an interesting add-on to the backbone incretin-type therapy. And so when you add the amylin on top of a GLP-1, you see a bump in efficacy. I think when you add it on to a dual agonist, it'd be reasonable to expect a bump on weight loss as well. So that's the way we see it. We'll start the single-agent study this year, but I think the overall goal is to move as quickly as we can forward with a combination agent.

Got it into a so-called quad I guess.

I guess so yes.

Okay. And what -- just kind of playing that forward a little bit, what would a prospective time line look like for getting a quad type product into the clinic, do you think?

So that would most likely be a 2026 event. We'd like to understand the initial profile of the amylin program by itself first.

Understood. Okay quite unique there. Okay. I want to shift gears and just quickly talk about the NASH program in 2809. And you have the peri-biopsy data from the Phase IIb VOYAGE study. I guess what is the latest on that program? You've talked about perhaps seeking out partnerships to go ahead and advance it into Phase III, but how are we thinking about that program today?

Yes. Really, we think strong data from the Phase IIb study, the VOYAGE study, we saw nice NASH resolution rates, nice fibrosis improvement and then the combination of NASH resolution and fibrosis improvement. When we think about the path forward into Phase III requiring -- we had an end of Phase II meeting at the end of the year last year and received really useful feedback from the FDA. The FDA is really requiring biopsy in every randomized patient. So for us, that would represent long-term exercise and something that we think would be best handled in conjunction with a partner. So prior to Phase III, we would like to be able to partner the program and bring it forward. Most of the focus externally from investors has been on the obesity program. So we think that's where the capital is best allocated right now.

Yes. That makes sense to me. And just maybe coming back on 2735. And you talked about the potential to sort of co-formulate with the DACRA. I guess maybe just talk through high level; the challenges and complexities associated with some of that co-formulation. Is that -- is there something unique, I guess in the 2735 and the compound or the structure that would make it easier to potentially co-formulate with another compound?

Yes, all of that's sort of in process now. I mean I think you could either do the CagriSema approach where sort of a dual chamber pen would be the mechanism of administration or co-formulate. And I think it's too early to know right now if the co-formulation is -- provides long-term stability.

Well understood. That makes sense. And Brian, maybe just in the last 30 seconds or so, if you could talk through -- I know you mentioned the capital that you have available. Just walk us through, I guess, what's funded within the scope of your current cash runway.

Yes, we ended the year with just over $900 million in cash. That's sufficient to get us well through the subcu Phase III program with 2735 and well into Phase III with the oral. Depending on the decisions we make, we could potentially get through a Phase III program with the oral. But we think the runway with the end of the year balance sheet is certainly sufficient to get us through registration with the subcu. So a good multiyear runway at this point.

Great. All right. Well, unfortunately, we're up against time, but I want to thank Brian for joining us and for the update and congrats on the supply agreement. And certainly, a lot of data on the horizon here. We'll stay tuned at the Viking story.

Thanks a lot.

Thanks, Brian.