Q1 2021 Viking Therapeutics Inc Earnings Call
Welcome.
To the Viking Therapeutics 2021 of course first quarter financial results Conference call. At this time all participants are in a listen only mode. Following management's prepared remarks, we will hold a Q&A session.
To ask a question at that time. Please press the star key followed by one on your Touchtone phone.
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As a reminder of this conference call is being recorded today April 28, 2021, I would now like to turn the conference over to Viking's manager of Investor Relations. Stephanie Diaz. Please go ahead Stephanie.
Hello, and thank you all for participating in today's call. Joining me today is Brian Lian, Viking's, President and CEO and Greg Zante Viking's C F N b.
Before we begin I'd like to caution that comments made during this conference call today April 'twenty eight 2021 will contain forward looking statements under the stay of Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995, including statements about Viking expectations regarding its development activities.
The timelines and milestones.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely and reported results should not be considered as an indication of future performance. These forward looking statements speak only as of today's date and the company undertakes no obligation to revise or update any statement made.
Today I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters.
I'll now turn the call over to Brian Lee on for the initial comments.
Thanks, Stephanie and thanks to everyone listening on the webcast or by phone.
Today, we'll provide an overview of our force first quarter of 2021 financial results as well as an update on recent progress and developments with our pipeline programs and operations.
During the first quarter, we continued to build on the progress made over the past year with both of our thyroid hormone beta receptor agonist programs.
With our lead program VK, two eight and nine for the treatment of non alcoholic hepatitis and fibrosis. We continue the rolling patients and our phase <unk> voyage study and added new clinical sites in both the U S and outside the U S.
During the first quarter. We also continued enrollment in the phase one trial evaluating our second thyroid hormone beta receptor agonist VK owed to one four for the treatment of X linked adrenoleukodystrophy or ex L. D.
This trial is advancing well and we are nearing completion of the studies initial phase evaluating <unk> 214 and healthy volunteers.
I'll provide additional detail on our development activities. After we review our first quarter financial results for that I'll turn the call over to Greg Zante Viking's CFO.
Thanks, Brian and conjunction with my comments I'd like to recommend the participants refer to viking's form 10-Q filing with the Securities and Exchange Commission, which we expect to file later today for additional details.
I'll now go over our financial results for the quarter.
Our research and development expenses for the three months ended March 31, 2021 were $11 5 million compared to eight point O of millions of the same period in 2020.
The increase was primarily due to increased expenses related to clinical studies manufacturing for the company's drug candidates salaries and benefits and stock based compensation, partially offset by decreased expenses related of preclinical studies.
Our general and administrative expenses for the three months ended March 31, and 2021 were $2 7 million compared to $3 million for the same period and 2020.
The decrease was primarily due to decreased expenses related to stock based compensation legal and patent services salaries and benefits and travel and partially offset by increased expenses related to professional fees and insurance.
For the three months ended March 31, 2021, Viking reported a net loss of $14 million or <unk> 19 per share compared to a net loss of $9 7 million or <unk> 13 per share and the corresponding periods in 2020.
The increase of net loss and net loss per share for the three months ended March 31, 2021 was primarily due to an increase and research and development expenses, partially offset by a decrease and general and administrative expenses of notice as noted previously as well as decreased interest income primarily due to the decline and.
And the interest rates available throughout the first quarter of 2021 as compared to prevailing interest rates during the first quarter of 2020.
Turning to the balance sheet at March 31, 2021, Viking held cash cash equivalents and short term investments totaling $241 7 million compared to $248 4 million as of December 31, 2020.
This concludes my financial review and I'll now turn the call back over to Brian.
Thanks, Greg and I'll now provide and update on the progress with our development programs beginning with our lead program VK, two eight and nine <unk>.
The K two eight and nine is an orally available small molecule agonist of the thyroid hormone receptor that possesses selectivity for liver tissue as well as the beta receptor subtype to.
To date clinical studies have demonstrated compelling evidence supporting the potential of VK twin of nine and the treatment of multiple multiple metabolic disorders, including Nash and fibrosis.
Phase one studies in healthy volunteers as well as in subjects with mild hypercholesterolemia have shown that treatment with the VK two eight and nine produces significant reductions in plasma lipids, including LDL cholesterol triglycerides and atherogenic proteins.
In addition, we previously completed a 12 week phase II study and patients with non alcoholic fatty liver disease and hypercholesterolemia.
This study successfully achieved its primary and secondary endpoints with patients receiving of VK, Twitter and I and demonstrating highly statistically significant reductions in liver fat content as well as improvements and LDL cholesterol.
The U K Twitter and I'd also performed well on secondary measures demonstrating significant reductions in other plasma lipids, such as triglycerides April life of protein B and life of protein a.
Importantly, no serious adverse events were reported in this trial among patients receiving of VK two eight on iron ore placebo.
Initial data from this study as well as follow up data had been highlighted and multiple oral presentations at key scientific meetings.
Most recent among these was an oral presentation at the 2020 international liver Congress or easel, where follow up results from the study were presented.
This presentation highlighted VK, two airlines durable benefit, including among patients with T Nash risk factors.
At week 16, four weeks after completion of the 12 week treatment period, and the study VK two eight of nine treated patients maintained the statistically significant and 45% median reduction in liver fat content compared to a 19% reduction among patients receiving placebo.
Additionally, the week 16, 70% of VK, two eight and nine treated patients maintained the response defined as experiencing a greater than or equal to 30% relative reduction in liver fat content from baseline.
Notably all patients receiving the lowest evaluated doses of five milligrams of VK two out of nine daily maintained the response at week 16.
In addition to the these data new analyses of week 12 study results demonstrated significant reductions in liver fat among patients receiving VK tweet on on <unk>.
Compared to placebo, regardless of the presence of common Nash risk factors, including elevated baseline levels of ALC.
A body mass index greater than 30 hypertension or Hispanic ethnicity.
The totality of data from our phase II study demonstrate the gateways on items exceptional low dose potency on liver fat and the plasma lipids as well as its durable effect and encouraging safety and Tolerability profile.
We believe that the observed reductions and other lipids, maybe an important indicator of cardio metabolic benefits for patients. This is an important distinction, which we believe represents and advantage when contrasts with mechanisms that have been associated with the elevations and lipids known to increased cardiovascular risk.
Overall, we believe the data to date position VK, two eight or nine as the best in class compound for the treatment of patients with Nash and fibrosis.
And late 2019, we advance this program into a phase <unk> clinical trial.
This trial called the voyage is a randomized double blind placebo controlled multicenter trial designed to assess the efficacy safety and Tolerability of VK, two eight and nine in patients with biopsy confirmed Nash and fibrosis and.
The study is targeting enrollment of approximately 340 patients across five treatment arms and the target population includes patients with F. Two and of three fibrosis as well as up to 25% with F. One fibrosis.
The primary endpoint of the study will evaluate the change and liver fat content as assessed by magnetic resonance imaging proton density fat fraction from baseline to week 12, and patients treated with VK, two eight and nine as compared to patients receiving placebo.
Secondary objectives include the evaluation of histologic changes assessed by hepatic biopsy after 52 weeks of treatment.
During the first quarter and patient enrollment for this study continue that sites, both within and outside the U S.
We continue to navigate a challenging enrollment environment due to the COVID-19 pandemic.
That said our U S sites remained open through the first quarter with non closed for pandemic related issues.
Outside the U S. The environment is also challenging with many sites experiencing local lockdown restrictions that impact screening flow.
Despite these hurdles we have remained active and our site engagement efforts and continued to add sites. Both in the U S and outside the U S. We currently remain on track to complete enrollment in this trial and the second half of 2021.
In parallel with the voyage study efforts. We are also taking steps to prepare for the anticipated phase III development of VK two eight on not.
As discussed on our last update call. We recently completed the formulation study evaluating tablet and soft gel formulations of the gateway it on with potentially improved commercial profiles in.
In addition, we also completed the study of VK, two eight of nine and patients with varying degrees of hepatic impairment.
Both studies generated useful data for further planning and development activities and we look forward to continued progress on the clinical and regulatory fronts and the months ahead.
I'll now provide and update on our second clinical program VK O 214.
V. K O 214 is an orally available small molecule thyroid hormone receptor agonist with selectivity for the beta receptor subtype that we're developing as the potential treatment for the rare neuro degenerative disease called X linked adrenoleukodystrophy.
Last year, we initiated the phase one first and human study of VK of 214.
This trial is a randomized double blind placebo controlled single ascending and multiple ascending dose study in healthy volunteers.
The primary objectives of the study include the evaluation of the safety and Tolerability of VK of 214 as well as the pharmacokinetics of <unk> 214, following single and multiple oral doses.
We continue to make excellent progress with this study and expect to complete dosing in healthy volunteers and the near term.
Pending and evaluation of the data we plan to initiate the phase <unk> study of VK owed to one four and patients with ex L. D.
We currently expect to initiate this trial around the middle of the year.
With two programs advancing through clinical development is important to note that our balance sheet remains strong as Greg stated we ended the quarter with approximately 242 million and cash which gives us ample runway to complete multiple clinical milestones that will drive future value for the company.
In conclusion, we continue to make progress on the first quarter with both of our ongoing clinical trials.
With VK two eight of nine we expect to complete enrollment in the 52 week phase II of the voyage study and patients with Nash and fibrosis and the second half of 2021.
Based on data to date, we continue to believe that VK two eight and nine may represent the best in class compound for the treatment of Nash and fibrosis.
With V. K O. Two on four we are nearing completion of the phase one single and multiple ascending dose study in healthy volunteers.
Pending a successful outcome, we plan to initiate a phase <unk> study and ex L. D patients. We believe VK O. Two one and four represents a novel approach to treating this debilitating disease and we look forward to evaluating its effect on key biomarkers.
Finally, we ended the quarter with a strong balance sheet, providing the runway to complete our ongoing clinical studies as well as other important milestones.
This concludes our prepared comments for today, thanks again for joining us and we'll now open the call for questions operator.
We will now begin the question and answer session to asking the question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
The first question will come from Steve seed House of Raymond James.
Hi, there this is Ryan Deschner on for Steve seed House.
Might be the early from this question, but in light of the recent F. G F 'twenty, one data and cirrhotic Nash what ex.
And are you considering and F. Four cirrhotic Nash study post phase <unk> data and what data from the phase two b.
Eddie would you be focusing on to aid and making that decision.
Hey, Ryan Thanks for the question.
At this point, we're not planning on Cirrhotic Nash study.
That would change of course the.
Depending on what the phase II B data look like but.
It's not something that we're considering right now I think we would.
Based on the decision on on what the histology data look like on fibrosis. After the 52 week treatment periods, but at this point, it's not in the works.
Okay. Thank you and one more quick question I was wondering if you could give us any more detail on the structure and the size of the POC study the proof of concept study and ex E. L D.
Yeah. We are we haven't disclosed really the the structure. There we will once the trial is initiated but it will be a limited number of doses with a handful of patients and each dose and we'll get more detail when we initiate the study.
Excellent. Thank you very much Brian.
Thanks Ryan.
The next question is from Michael Morabito of Chardan capital markets.
Hi team thanks for taking the call.
The other questions. So I wanted to note the.
Other studies that you've done for $28 nine you know with the.
And the formulation and the other.
Kind of containment, particularly should we expect to see that at medical meetings this year either at a.
Diesel or anything of Celgene and.
As a follow on to the previous question you know the study and the hepatic impairment do you think of that will lead to any additional clinical trials to expand the potential label of $28 nine.
And Michael Thanks for the question.
No we're not planning to.
Present, those data and any upcoming conferences.
It was really with the formulation studies they were really intended to.
To develop the.
The more commercial friendly form and we have now great options with the soft gel and the tablet with the hepatic impairment study that was just a requirement from FDA for everybody and Nash looking at.
I'm trying I'm trying to see if there are any safety risks or PK changes in patients with more severe hepatic impairment and we didn't see any so we don't expect to have any limitations depending on the pending.
Hepatic impairment, but we wouldnt be planning to present those.
And at any of the upcoming conferences.
Okay.
And just Oh the.
Trust and you know you've mentioned the cash runway allows you to complete all of your planned studies.
Does that runway include any additional studies that have not been mentioned or the ones that.
The move to initial studies.
What would be necessary from the cabinet perspective.
So you move into stage, three or advanced functionality and total sales to slash day.
Yes, I can take that the.
I think we've got enough runway to get through certainly of phase III trial with the ex L D and well into if not fully through a of the biopsy endpoint in the phase III trial with the VK two it on on.
Yeah.
Okay, great excellent. Thank you very much.
Thanks, Michael.
The next question comes from Matthew Luchini of BMO.
Hey, this is Dan on for Matthew.
And the progress and thanks for taking a question on two from me.
Assuming that you guys choose to use a different formulation.
Following the formulation of words like.
And you guys were to use of different formulations and while we can use and for this trial is there any gating steps before moving on to phase three and four of Voya. It stayed out what is your like what do you think you need to achieve two main competitive and Nash and I have a follow up after that.
Sure. Thanks, Ken So the reason we did the the study looking at different formulations, and it's kind of the that was the study that we.
We would plan to do sort of a bridging study to look at the bioavailability differences and that sort of thing and so I think we've we've checked that box.
With the what was the second question.
Oh is there a gating step before moving on to phase three regarding formulation and what eight and what do you think you need to achieve.
And voyage trial and to remain competitive and Nash.
Yeah, No. We think we've accomplished the whatever gating step would be required with the formulation.
We think the data that we've seen to date are pretty competitive, but we think that's a.
Among the best if not the best of liver fat reduction from any oral agent.
And so.
I think where we're competitive and if the phase to be day to look.
Remotely similar to the phase two way I think we would.
The competitive as an oral agent, particularly when you consider the profile with the broad effects on the cardiovascular.
Metrics LDL reduction triglyceride reduction atherogenic protein improvements all of those I think are very very important in this population.
And we don't have any perturbations in the negative direction on lipids that might cause polypharmacy to be considered right off the bat. So I think we're really really competitive overall with the profile.
Okay. That's helpful and my second question is can we still like the data from phase, one sad and Mad trial of four zero.
The one four.
On the first half this year and.
For the POC phase one of the POC trial, if that were to start net year when can we expect the data.
Yeah, we've on the on prior calls we've talked about having some and I.
<unk> describing the data.
And the first half and I think we're still on track for that with the completion and announcement of data from the phase <unk> study.
And it depends on how quickly that enrolls of its difficult to project right now.
But we'll report the data as soon as it's available I would I would anticipate that that's probably a.
2022 event, but if we can do it sooner and we'll report the data sooner.
Got you. Thank you I'll hop back into the queue. Thanks, Jim.
The next question is from Derek <unk> of Stifel.
Hey, Thanks, guys and some debt on for Derek.
Thanks for taking my call.
Two from Us and starting up the last question is on two and for the Phase one study.
Have you thought anymore about how do you present these data whether it's at the conference or just a hey.
Hey, PR of some sort and then the second one from.
On a modeling perspective.
Are there any qualitative comments you can share about kind of be up ex ramp in 2020 one.
Just in light of the two and four and two eight or nine studies.
Oh on picking up thanks.
You know, what's exactly I'm sure of the second part of it.
From an opex standpoint, we're probably going to be and the 50% to 70% increase range from last year.
Just to give you some perspective on that.
Okay.
And with the the data presentation will have to see the data first before we make that decision. So what I think minimally we would plan for press release and the potentially than the.
Present, a more detailed data and at a conference and the future, but I think.
Press releases the first step there.
Okay.
Thanks, guys.
Thanks, Dan.
The next question is from Andy Shay of William Blair.
Well, Greg Thanks for taking my question. So one looking at the new flight deck, Brian and I think he has more information about the gene expression analysis on 28 of nine just curious.
Maybe you can describe for us the findings and just curious is that like a new study that you've done or basically kind of a.
The presentation of the previous study.
The preclinical study before.
Yeah, Hi, Andy Yeah that was.
Updated data from the study that we presented at easel I believe in 2017 or 18, one of those usual conferences the gene expression of the RNA sequencing data.
And.
And we thought it was interesting because generally.
Generally you see improvement and genes associated with the insulin sensitivity and lipid metabolism and a suppression of gene expression.
Four of those genes associated with the fibrotic signaling so.
And by themselves and maybe they wouldn't be as exciting, but when you look at the histology from the same study we see the you know of 70% reduction and liver fat content, and we saw a 50% reduction and fibrosis and that study so.
Really nicely cooperates what was observed on the histologic assessments there.
Got it okay. That's that's helpful. Thanks, Brian.
Another thing is about kind of of the vaccine rollout.
And more and more.
<unk> of the population.
On our getting the vaccine. So just curious about both of the ex the healthy volunteer study and also the voyage study is there any sort of wash out period debt.
Debt.
Yes.
The participants have to go through and also from a behavioral perspective are you seeing kind of of the increase of patients being more open to participating in and clinical trials just given the fact that these are there more of the.
The fully vaccinated.
Yeah, and it's interesting question.
I I am not aware of any restrictions on the vaccine timing and.
And the screening or enrollment.
So.
You'd have to assume that the many of the patients and the studies both the healthy volunteer and the voyage study have received their vaccinations.
No comments or problems.
And with regard to the second question and I think that.
We are seeing maybe a little bit better environment now than in the November through February time frame.
But the.
Still very very challenging.
When you think about the.
General hesitancy, given the right coming off the the.
On the back of the pandemic now and I think people are generally still pretty cautious about everything.
Okay.
Yeah. That's helpful. Thank you very much and thank you for answering all my questions.
Thanks, Andy.
The next question is from Jay Olson of Oppenheimer.
Oh, Hey, thanks for taking the question.
Now the.
You've identified the second half of 2021 and that's it.
Target timeframe for completing enrollment of the voyage study does that mean that we should expect to see the 12 week interim analysis of MRI of P. D F F and the <unk>.
Part of of 'twenty 'twenty two.
Yeah, Hey, Jay so.
We've always said the once we announced completion of enrollment that we would.
Probably have the data on that primary endpoint ready for announcement of 16 to 20 weeks later so.
It's hard to give a specific timeframe to it but once we announced completion of that that's what I would think about heat treat the last patients for 12 weeks it's up.
Another four to eight weeks for a day to clean up and get things ready to announce and you know.
That adds up to 16 to 20 weeks four to five months something like that but that's about as specific as we've been so far.
Okay. Thank you and then.
I was just curious about any read across you expect from magical of Maestro and Apple. The one study that's going to read out by the end of the year and you.
Could you share your thoughts with us on the potential to follow a similar registration strategy.
Yeah.
Well I think both of the agents are or are following a similar strategy for for Nash, which is the only indication I think.
And that's out there right now for four of fatty liver disease with the registration pathway.
And.
As far as the read through I think the the overall of the compounds look fairly similar on the on liver fat so.
From what we've seen with the early data from from that compound. So I wouldn't necessarily expect a much different from what we've seen thus far.
Would you consider conducting the studies was similar designs and mice June Apple day one.
At this point.
No, but and that could change, but not at this point, we know from our phase Iia study of the drug is a profoundly active and that population. So.
It's not clear.
At this point and what a what a phase III trial with my my what new information of that phase III trial might.
Generate for us.
Okay got it thank you Brian.
Thanks Jay.
The next question comes from Scott Henry of Roth Capital.
Thank you and good afternoon first for clarification and I just wanted to make sure I heard this correctly do you expect the operating expenses to be up 50% to 70% and in 2020 one from 2020.
Hey, there are I think Scott, it's probably in the 50% of closer to range of them and we were at about 43 last year and I.
I'd expect it to go up and it's really all driven by our external spending related to our trials here.
Okay perfect. Thank you for clarifying that and then perhaps on a big picture type of question. When we think about V. K 28 of nine and potential partnership interest.
And would you expect that to increase perhaps just after the 12 week data or do you think partners would be interested and also seeing the the 12 month dosing data as you start to prepare for a phase III program.
Hey, Scott Yeah, it's a it's a great question and it's.
It's unclear I mean, we we know that are some are.
And are very interested in the histology endpoints.
And the confirmation that the mechanism as the effective in this disease, but.
We also know that there is a lot of interest and our 12 week data.
From the ongoing study are ahead of the the second biopsy read so I don't know, it's always hard to predict.
Partnering activities, but we do think there's a fair amount of interest and and both of those time points.
Okay, great. Thank you for the color and thank you for taking the questions.
Thanks Scott.
Once again, if you have a question you can press Star then one the next question comes from my and my Tani of B Riley FBR.
Hi, Good afternoon, it's the Thornhill Kazmi on from my Congrats on the progress and thanks for taking our question maybe starting first on 28 O nine I'll just a quick one on the enrollment dynamics could you talk to how you see it sort of shaking out by the end of the year in terms of U S versus EU side, and then also F. One day of three patients.
And then just regarding the secondary endpoint of the change of histology at 12 months can you talk to some of the underlying assumptions is this something that you know powered to show the scoping it yet.
Yeah, So we haven't disclosed the statistical assumptions there.
As far as the histology changes, we think we're adequately powered to show a benefit on the on Nash resolution.
And as far as the and.
Enrolment contributions right now, we feel that likely and it's gonna be of U S. Heavy.
The enrollment.
Distribution relative to the ex U S.
But that could change it just seems like Europe's a little bit behind the U S with the emergence from the from the pandemic as far as the breakout of fibrosis enrolled thus far we really haven't talked about.
What we've seen.
On the.
The demographics at this point, but we've said we can allow up to 25% F ones as long as they have another.
Risk factor like diabetes, and obesity hypertension, something like that that predisposes them to metabolic syndrome, but we haven't given the breakout on what we're seeing live.
Got it that's helpful and maybe as the brief follow up.
Could you talk provide any color on how you think the placebo effect. So are the rather the effect size may be you know modulate it and the context of the ongoing pandemic.
Well the placebo effects of the way.
We've always thought about it is on both NAV.
Cash resolution and fibrosis, it seems to be and the you know the the mid teens to low 20% range and that's been fairly consistent across the most of these the histology.
Histology of.
Readouts I don't I wouldn't expect the pandemic to really impact that significantly one way or another there.
And their histology Reed, so I wouldn't expect anything from COVID-19 and really have an impact there.
Okay, Great and then maybe just a brief one on O 214.
I appreciate that you're going to disclose the bit more of the study details once we get closer to that phase one b, but if you could provide some qualitative color on is there going to be any background treatment allowed for these patients and how you might use the study to enrich the patient population and the future and then what you anticipate might be sort of the treated.
And window required just the meaningful clinical benefit.
Thank you.
Sure sure well, there's nothing approved right now for four of these individuals.
We don't.
Really think that there's much need to control on the background.
Therapies.
We would expect the of the registration endpoints to be a little bit longer term you know 12 to two of 24 months focused on function, but that's that's based on.
Prior phase two and two three studies did a complete had been completed I'm, probably going to be focused on the on gate.
But.
As far as enriching the population well, we'll have to see you know what the the the phase one B day to look like before we discuss what the ideal target population is for phase three.
And three.
Great. Thanks, so much for taking our questions congratulations on the progress.
Thanks, a lot.
And this concludes our question and answer session I would now like to turn the conference back over to Stephanie Diaz for any closing remarks.
Thank you again for your participation and continued support of Viking Therapeutics, and we look forward to updating you again in the coming months.
Thank you.
Thank you. The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines have a great day.
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