Viking Therapeutics, Inc. ($VKTX)

All right. Welcome, everyone, to Jefferies' 2026 Global Healthcare Conference. My name is Roger Song, senior analyst covering SMID cap biotech. It is my pleasure to have the fireside chat with our next company, Viking Therapeutics. We have the full group here, but welcome, gentlemen, and then Brian. And yes, maybe, Brian, why don't you start with some company overview and the state of hour for Viking? You have a lot going on in the coming months and years. So let's start with that.

Yes, yes, sure. Sure. Thanks, Roger. Thanks to Jefferies for the invitation. Really appreciate it. We've got a great schedule. And I'm joined here by Greg Zante, our Chief Financial Officer; and Neil Aubuchon, our Chief Commercial Officer, as well. A lot going on at Viking, it's a busy year. We have -- our obesity program is in Phase III development. We have 2 Phase III trials ongoing called VANQUISH-1 and VANQUISH-2. VANQUISH-1 is in obese patients, VANQUISH-2 is in obese patients with type 2 diabetes, both studies fully enrolled. And moving forward, we're expecting to read out the data -- right now, second half '27 seems like the time frame for those studies. We also have an oral formulation of the same compound in Phase II. It showed a very nice weight loss trajectory, and we will be moving into 2 Phase III trials later this year with the oral tablet formulation. And that would represent, we think, the first -- if it's successful, the first oral formulation of a GLP-1/GIP co-agonist molecule. We have another clinical study ongoing that will read out data in the third quarter that's looking at a transition from a weekly injection to every other week or a monthly injection, and that's intended to explore the potential maintenance effect of less frequent dosing. We think the half-life should support that sort of injection frequency. And so that will be an important data point. So we'll have those data available hopefully in the third quarter. And then finally, earlier this quarter, we announced that we had filed an IND with an amylin agonist, a novel amylin agonist. And we're going to be starting a single ascending dose study with that molecule later this quarter, so this month. And the single ascending dose study would probably read out data, just really PK tolerability data sometime late this year or in the first part of next year.

Excellent. All right, Brian. One thing, I think it's a very positive development. You're -- you've got the alignment with the FDA to go right into the Phase III for your oral GIP. So what leads into that? And then on outside world, the investor side, that was the upside case you can convince FDA to do that? And then how should we think about the confidence you can go right into Phase III? Two is what will be the gating factor before you can start the Phase III in terms of any other CMC or any bridging or PK you need to complete before you can start the Phase III?

Yes. Yes. So for the first question, we had actually with the subcutaneous injection formulation after our 13-week Phase II study, we had a Type C meeting to ask if it would be okay to go into Phase III, and then we had an end of Phase II meeting as well, which supported our decision to go into Phase III directly with the subcu formulation. And our thinking was with the oral formulation, since the subcu formulation is going to be generating so much safety data in such a large population of patients, probably close to 6,000 people all in, can we leverage those human safety data for the oral program? And if so, it would suggest that maybe we could abbreviate some of the development of the oral formulation and go from Phase II to Phase III using a smaller Phase III trial program and overall, much less expensive trial approach there. And the FDA -- we had an end of Phase II meeting in the fourth quarter last year, and the FDA was -- they pointed out risks going from Phase II to Phase III, but they were okay with it. And so we planned and have been designing the studies and we're finalizing the protocols, and we'll be going into Phase III in the fourth quarter. What's gating there, nothing really. We're going as fast as we can, just manufacturing the doses and getting the -- all of the titration doses prepared as well. So things are going okay there, but it's -- we've only got 65 people. So it's a heavy lift for a company our size to go into 4 different Phase III trials. But nothing is gating. Everything is kind of moving as fast as it can go.

Got it. And then I think you alluded already, this oral Phase III will be smaller than the injectable. And then maybe tie those two together, is that possible the readout from both sides of the Phase III will be in the relatively kind of similar kind of time frame?

Yes. So with the subcu, we think the Phase III data, we're looking at rough estimate here, second half '27. The oral, I think of that as always about 12 to 18 months behind the subcu. So the cadence of the subcu data, we would expect the VANQUISH-1 study to read out first since that was enrolled first, and then VANQUISH-2 to read out second. And then with the oral, I don't know, if they enroll at the exact same rate, they'd read out at the same time. But I expect there may be disparity in enrollment rates there, too. But overall, we look at the oral being about 12 to 18 months behind the subcu.

Okay. Got it. How about the duration of the Phase III for oral versus subcu? Because subcu, you do have the titration all the way to the top dose, and then for oral, maybe less so. And then I understand all the obesity trial need to be 1 year on the maintenance at the top dose.

Yes, yes. So the titration, we haven't disclosed the doses yet for the oral, but the titration period will be shorter with the oral formulation. There will be fewer titration steps. So that means fewer weeks to get to that 52-week steady treatment phase of the study. So overall, the subcu trials are 78 weeks. The oral studies will be shorter than that. And they're also smaller, but probably 75% smaller overall for the oral. So that should help to tighten the time line between the oral and the subcu, but still going to be probably 18 months -- 12, 18 months behind the subcu.

Got it. Okay. All right. And then you will have the maintenance study in third quarter. And then you recently announced you want to prioritize from subcu to subcu, weekly to every other week and then monthly. First of all, why did you make that decision? And then would that be even more favorable to incorporate that into the Phase III, it's already ongoing for the Phase III?

Yes. We designed this study -- so the compound has a pretty long half-life. It's 8 to 10 days or so half-life. And if you think of a dosing regimen being preferably every 4 to 5 half-lives, it raised the possibility early on that maybe we could dose monthly and reduce the frequency of injections. So we decided then to design this maintenance study where people titrate up to a high weekly dose and then transition to a less frequent dose, every other week or monthly. And that study was initiated in the fourth quarter of last year. And when we -- as the trial evolved and the Phase IIIs evolved, it looked like the maintenance data was going to read out in a time frame that would allow us to use those maintenance arms, if they look good, in the VANQUISH 1-year extension. So the Phase III VANQUISH trials will have a 1-year extension that allows people to continue on therapy for a year after the trial stops. With the maintenance data reading out third quarter of this year, if everything works well, we could take anything that looks attractive from the maintenance study and then implement 2 or 3 arms into the 1-year extension of the VANQUISH studies. And so that wasn't the way we planned it, but that's just the way the time lines seem to be converging. So we decided then if we're going to do something like that, let's get a better view of what the reasonable doses would look like. So the trial originally had 3 oral dosing arms. So we decided to defer those arms and incorporate more -- we put 2 more every other week arms, and we put 3 more subcu arms, and they're looking at every other week and monthly. So we just expanded the subcu. No one -- when we made that decision, no one had yet moved into the maintenance phase, so it didn't really interrupt anything. And what we'll do with the maintenance then is basically do a Part 2 to the study where you do the same thing, initiate on weekly and then transition to an oral for a maintenance phase. But the oral wasn't as time sensitive as the every other week and monthly injection. So it just seemed to work out well that way. It seemed to be in our best interest to look at a wider range of doses for the 1-year extension.

Got it. On one hand, it's good that you explore many different regimen. On the other hand, it is a task for you to be able to discern the difference among all the regimen and how you're going to decide which one you want to put into the long-term extension for the Phase III. So tell us, what's the profile you're looking at, how to differentiate among all the regimen and then how many regimen you want to put into the Phase III?

Yes. We would look to bring in 2 to 3 -- if 2 or 3 look good, 2 to 3, we'd like to bring in. And what do we think of the trial outcomes and how does that drive our decision on which arms? Well, we kind of look at the trial outcomes there as 3 potential possibilities. One is when you transition to monthly, you continue losing weight, just the slope changes a little bit. So you're still kind of negative slope, but the slope is different. Second possibility is that people flatline. They don't bounce. They just kind of stay within 5% of where that transition weight was. And the third possibility is people rebound after they transition. So we're hoping for a flatlining or maybe a slower rate of weight loss. And then we would just look at the overall picture. There's kind of a mosaic. What is the tolerability profile? Are there any injection site reactions? What's the efficacy look like? What's the slopes -- what do the slopes look like? And we would just choose the 3 most attractive then.

Got it. And then the 5% is your internal bar in terms of you consider as a flat?

Yes, that's kind of what -- when you think of maintenance, I don't know if that's what people think of as a 5% delta. Either way, it means you've been maintained. If you bounce more than 5%, it's not so much.

Got it. Okay. Yes. Okay. And then in terms of the tolerability, which arm you think you may have some risk? Or you don't -- at least from the PK perspective, you don't expect to that GI will be worsening?

Yes, it's a complicated question because what we've seen in all the prior studies is those GI side effects tend to occur early, and they're transient. They just kind of go away. And when you look over time then like a histogram of GI adverse events, they just asymptotically approach 0. So the question in this study is if you reduce the dose frequency to every 28 days but you're using a high dose, do you reintroduce some of those GI side effects? We don't know. I suspect the risk is low because you have drug on board through the month. So it's not like you're going from 0 to 60, so to speak. You've got slow decay of plasma levels. And then you bump it up a little bit, but you're still within a therapeutic range when you take the next dose. So -- and you've gone through that initial sensitive period where you're just getting the drug on board and you see some nausea and things like that associated with GLP-1 activation. So I hope that there is good tolerability there, but that's one of the key questions with the maintenance study.

And then what will be considered as comparable tolerability into the rates? Or any numbers in your mind?

Yes. I mean, we look -- it seems like nausea is not as important to people. People expect it, clinicians expect it. You wouldn't want to see 75% nausea, but we're really sensitive to vomiting rates. We'd want to have a pretty low vomiting rate once you transition to the less frequent regimen. And I think that's fairly low risk that we would see a reintroduction of vomiting, but we'll see what the data show.

Because this is like a reintroduced new regimen -- because a normal trial, we know over whatever the time period, they get to 40%, 20% nausea and vomiting, 20% considered to be pretty good. And then when you give them a new regimen, are you considered as an incidence, another 20%? Or that's the -- maybe that's the bar, a bit too high?

We would -- I don't know, but I think that seems high because people are not getting it for the first time. They're on therapy for many weeks ahead of time. And again, once you transition to that monthly, you're taking a high dose. And so it's slowly decaying through the course of the month, but it's always, we think, therapeutic. So you're always going to be modulating the receptors. So you're just going to bump up to a higher concentration. So I would think that risk is low.

Yes. It's kind of like a titration. You just give them a little bit longer for the initial dosing, and then you are a little bit different in terms of the dosing regimen?

That's right.

Okay. Good. All right. So one thing I want to highlight is that you are one of the leading companies having the same API with different formulation in both injectable and then oral, with both of them moving to the Phase III or if not already in Phase III. How important that is in the commercial setting? Maybe, Neil, you can comment on that? And then based on your current kind of understanding of the market, payer, patient, physician and then how this will play in favor too. Because we know the current market, you have 2 basically incumbent and then 1 have a both formulation, but kind of profile is not necessarily the winning profile. The other one is they have injectable very good, but the oral is not the same API or not even the same kind of modality. So how do you think this will play in favor of you? Anything you want to comment on that?

Yes, I'll take the first part. I think having the same molecule in multiple formulations and multiple dosing frequencies we think reduces the risk of seeing a new side effect appear once you transition from subcu to oral. It's the same compound. If you go to oral, the exposure is probably going to be lower. It just seems to be a pretty clean transition. Should be, anyway. And I think we've seen that now with the comfort of people transitioning from subcu or Wegovy to oral Wegovy to the extent people do that, it's a different risk profile from transitioning to a totally different molecule. But Neil, do you want to talk about the commercial opportunity there?

Yes, sure. Well, first of all, it helps when you have, I think, a really good product. So we are seeing that the GLP-1/GIP dual agonist class seems to be the most efficacious class, and we would be the second injectable, but we'd be the first oral to launch. So that gives us the opportunity to be a first-in-class and potentially best-in-class oral. And so you have to kind of separate the markets a little bit, the oral market and the injectable market. What we're seeing now is that the oral market uptake is really very good overall. And it's not cannibalizing the injectable market, hardly at all. So it does seem to be incremental growth. So for us to be able to come in and potentially have a first-in-class, best-in-class oral is very encouraging. In terms of commercial synergy, the fact that we can have the same brand name, I think, is actually a big deal for us because being a smaller company, we're looking to have as much commercial efficiency as possible. And we see with the first entrant, it's the same brand name, to your point. And so that allows you to not have to build that brand awareness among consumers and physicians, et cetera. So that will be the same situation that we'll be in. The injectable will launch first, and the oral will launch second under the same brand name. And so that only makes our job easier.

Got it. Okay. And then I think, Brian, you've been talking about the potential partnership strategy, but you're ready to launch the drug by yourself if you don't want to partner. And then what would be the sensible commercial strategy if you want to do that on your own? I think you're targeting 5% to 10% market share, which I think -- single digit, high single digit is reasonable. But on the other side, it is a massive undertaking for a company and then how you're going to -- I know you're going to help you. But on the other side is how are you going to make that achievable as a company?

Yes. Yes. To your point about partnering, we're always receptive to inbound interest. And I'd say there's very high awareness across the industry in our program and I think high interest in participating in obesity by a number of larger players. So we're always open to that. And we've always felt that having the muscle of a larger party involved would be beneficial to the product because there's probably greater reach and greater depth of resources. But we need to run the business, and we need to be prepared to launch successfully as a stand-alone. And that's what we're doing, putting in place all of the pieces that will allow us to be successful. What we've seen with obesity which is somewhat unusual is this rapid evolution of direct-to-consumer channels that really hasn't been there historically. And it allows a company like Viking to credibly enter a market the size of the obesity market and capture market share. When you look at the compounders, for example, really no infrastructure there, but they took 15% of the market. We think these unique distribution channels would allow a company like us with maybe fewer resources than some of the large caps to launch a product that would be really, really successful for our size footprint. But Neil's got a much more detailed view of it [ because he's in it ] every day.

Sure. I'll just add a few comments. I think Brian characterized it well. But I would just say that really can't overstate how much the ecosystem has evolved in the last year or 2. And there's the direct-to-consumer channel. And these companies, frankly, do direct-to-consumer marketing better than big pharma does. And you have to think of these as almost like supermarkets. They don't want -- they want to sell both Coke and Pepsi, right? So they don't want to do exclusive deals. And we talked about our clinical profile a few minutes ago. Any situation where we're competing just purely on our clinical profile, I like our chances. And so to be able to partner with direct-to-consumer companies -- and we're talking to just about all of them now -- gives us a really good opportunity. And some of the larger companies have stated recently that 50% of their business is cash pay. So this segment is continuing to grow. The other segment that is growing -- well, about to grow really a lot in the next 6 months is direct-to-employer. So employers are carving this benefit out and they're treating it like a gym membership, where they're subsidizing the cost of GLP-1s to their employees. And then the employees are paying the incremental difference with out of their HSA, for example. So the affordability is actually increasing for commercial employees. And again, the great thing about this is that it's not through PBM, so there's no rebate wall that we have to worry about. And then finally, Medicare is going to be covering these drugs as of July 1. Now there's still a lot to be understood about exactly how that's going to work. But I do believe that this will not be a duopoly. And if you match the price, the U.S. government is going to be, hey, the more competition, the better. So I think that, that channel is going to be open to us as well. So if we think about kind of the commercial constraints we have, usually, it's around access. And usually, it's via the PBMs and the rebate wall. And what I'm saying is that the channels are evolving to such a degree that, that is going to become less and less of an issue for us.

Agree. Yes. Okay. Good. I think we'll spend most of the time on the GLP-1 and GIP side, which is understandable. But you do have the amylin, which is another major class for future obesity, either as a monotherapy, alternative therapy or as a combination. And how differentiated do you think the amylin DC is looking like? And then what's the target profile you want to achieve?

Yes. Well, it's very potent. So when we look at sort of head-to-head studies in monkeys versus the 2735, the GLP/GIP co-agonist, it seems to be more potent at the same dose level. So that, I think, is really encouraging. We won't know the tolerability and PK profile until we get into our Phase I program, but the early data look pretty impressive. And we think it's at least competitive with the efficacy that we've seen from other agents in the market. It's pretty balanced on the amylin-3 and calcitonin receptor, almost 1:1 ratio there. The PK profile, again, we don't have in humans, but in monkeys would suggest that a weekly regimen is feasible. So if the potency holds up and that PK profile holds up, we think it would be maybe a reasonable single agent to look at. When we conceived the program, we thought adding amylin onto the dual agonist would be the best approach because it would kick the efficacy up to be best in industry level. But as we've seen the market evolve, amylin agonists have a pretty attractive place in their own right as an option for somebody who maybe doesn't need to lose 100 pounds. Somebody starts at a BMI 32, 34, or somebody who can't tolerate a GLP-1. And that's a small percentage of the population. But when you're looking at the size of this population, it's a very large market opportunity. So both of those will be opportunities for the single agent in addition to the combo.

Yes. I think amylin field is still in the early innings compared to the GLP-1, right, or the [ incretin ] side because you have so many companies working on it. Not necessarily all in the latest like you guys, but a lot of people are working on it. But amylin side is still figuring out what's the right profile, what's the ratio. I think from preclinical, you like your compound. So moving to the clinical. So what we're going to see for the initial data readout, and then what the profile you think you'll be happy to move into the Phase II?

Yes. Well, with the Phase I, we would hope the PK supports a weekly regimen. We think it should, but we don't have the data yet. And then tolerability, we'd like to see good tolerability. And that can be a challenge with the amylin activation. So the first single ascending dose stage is just 1 dose. You take 1 dose and then look at PK and look at tolerability. The test of what's the weight loss program look like or the weight loss efficacy look like, you just need to dose over a 4-week window in the first multiple ascending dose setting. So -- and that will depend what do the curves look like, what's the shape -- the slope of the curves look like and what's tolerability look like as you step up. So that will be an important data set. Hard to gauge the magnitude of the weight loss in the MAD setting because you want to look at everything, the slope and the tolerability and the exposures. But that will be a next year data set.

Got it. And then you will combine the SAD and the MAD together? Or so what's the timing of the data readout?

Well, we'll probably have them -- because there will be a time line difference there, if there's something interesting to say about the SAD, we release that first.

Okay. And then the MAD probably will be late next year or something?

Yes, probably a '27 event for the MAD, yes.

Yes. If you release SAD it will be this year?

End of the year, beginning of the year, something like beginning of next year or something like that, yes.

Got it. Okay. Great. I think we went through everything related to your pipeline and upcoming events. Anything else we missed and that you want to discuss?

Well, we can talk about the balance sheet.

Yes. Okay. Yes.

Thanks, Roger. So we ended the first quarter with over $600 million. We're funded nicely to get through our top line data for our subcu program, which we anticipate data in the second half of '27. We also -- I think the cash would carry us through our oral -- what we see as our oral Phase III program, which will be quite a bit smaller than our subcu, as Brian mentioned. So that will allow us -- so we have cash into the early portion of '28. A very high percentage of our spend at the company, of course, because we're so small is on direct expenses for our clinical trials. So we have a very efficient cash spend footprint at the company.

Got it. And then maybe as you go into the first half of 2028, how much pre-commercial you will be prepared? And now how much is baked in the current runway?

Yes, there's a lot of spend also on additional amylin work that we're doing and some other programs that we haven't disclosed. But there is some other spend there in the pre-clinical side.

On the commercial...

And the commercial side, yes, Greg and I have sat down pretty closely. And as I started, I wanted to make sure I had enough cash to be able to commercialize. And we feel -- we still need to fine-tune it, et cetera, but we feel pretty good about where we're at. Yes.

Okay. Good. All right. I think that's it from my side. Any closing comments, Brian?

No. exciting year for us with the Phase IIIs ongoing, and the oral Phase III is about to start. The maintenance data in the third quarter, I think, will be a really interesting data set to digest. And then hopefully apply into the Phase III extension studies, and then look forward to '27 with the registration data.

Excellent. Thank you, gentlemen. Thank you, everyone.