Hello and welcome to the Viking Therapeutics' 2021 Third Quarter Financial Results Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a Q&A session. [Operator instructions] As a reminder, this conference call is being recorded today, November 3, 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 CFO. Before we begin, I'd like to caution that comments made during this conference call today, November 3, 2021, will contain forward-looking statements under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995, including statements about Viking's expectations regarding its development activities, 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 Lian for his initial comments.

Thanks Stephanie, and thanks to everyone dialed in by phone or listening on the webcast. Today we'll review our third quarter 2021 financial results and provide an update on recent developments and progress with our pipeline programs and operations. During the third quarter, we continued to enroll patients in our Phase IIb VOYAGE trial evaluating VK2809, our novel thyroid hormone beta receptor agonist, for the treatment of NASH and fibrosis. We also made progress with our second thyroid hormone beta receptor agonist VK0214 for the treatment of X-linked adrenoleukodystrophy or X-ALD. During the quarter, we continued enrollment in a Phase Ib clinical trial evaluating VK0214 in patients with X-ALD. In addition, earlier this week, we presented two posters at ObesityWeek at the annual meeting of the Obesity Society, highlighting promising results from a new internally developed program targeting the GLP-1 and GIP receptors for metabolic disorders. These posters highlighted early results that show promising effects on body weight and metabolic profile in an in vivo model of obesity. I'll provide additional detail on our operations and development activities after we review our third quarter financial results. For that, I'll turn the call over to Greg Zante, Viking's CFO.

Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Viking's Form 10-Q filing with the Securities and Exchange Commission, which we expect to find later today. I'll now go over our financial results for the third quarter and nine months ended September 30, 2021, beginning with the results for the quarter. Our research and development expenses for the three months ended September 30, 2021 were 10.8 million compared to 7.1 million for the same period in 2020. The increase was primarily due to increased expenses related to manufacturing for the company's drug candidates, clinical and preclinical studies and services provided by third party consultants partially offset by decreased expenses related to salaries and benefits and stock based compensation. Our general and administrative expenses for the three months ended September 30, 2021 were 2.6 million, compared to 2.7 million for the same period in 2020. The decrease was primarily due to decreased expenses related to salaries and benefits, partially offset by increased expenses related to stock based compensation, insurance and legal services. For the three months ended September 30, 2021, Viking reported a net loss of 13.2 million or $0.17 per share, compared to a net loss of 9.3 million, or $0.13 per share in the corresponding period in 2020. The increase in net loss and net loss per share for the three months ended September 30, 2021 was primarily due to the increase in research and development expenses, partially offset by a decrease in general and administrative expenses noted previously, as well as decreased interest income, primarily due to the decline in interest rates available throughout the third quarter of 2021 as compared to prevailing interest rates during the same period in 2020. I'll now go over the results for the first nine months.…

Thanks, Greg. I'll now provide an update on progress with our development programs, beginning with our lead program VK2809. As a reminder, VK2809 is an orally available small molecule agonist of the thyroid hormone receptor that is selected for the liver, as well as the beta isoform of the thyroid hormone receptor. In clinical studies, VK2809 has demonstrated the best in class profile for the potential treatment of metabolic and lipid disorders. A prior 12 week Phase IIa study evaluating VK2809 in patients with non-alcoholic fatty liver disease, and hypercholesterolemia successfully achieved both its primary and secondary endpoints. Patients receiving VK2809 at doses as low as five milligrams daily, demonstrated highly statistically significant reductions in liver fat content, as well as improvements in LDL cholesterol. VK2809 also performed well on secondary measures in this study, demonstrating significant reductions in other plasma lipids, such as triglycerides, apolipoprotein B and lipoprotein A. Follow up data presented at the 2020 EASL conference showed that treatment with VK2809 resulted in durable reductions in liver fat, with the majority of patients remaining responders four weeks after completion of the study. Importantly, no serious adverse events were reported in this trial among patients receiving VK2809 or placebo. We believe that VK2809s exceptional low dose potency and reducing liver fat and plasma lipids, its durable effect and its safety and tolerability profile to date, establish it as a best in class compound for the potential treatment of patients with NASH and fibrosis. Notably, VK2809s lipid lowering effects may lead to improved cardiovascular benefits in treated patients. This is a critical advantage in a field where multiple competitive mechanisms in development are associated with elevations in lipids that are known to increase cardiovascular risk. Following the promising results, results observed in our 12 week Phase IIa study, we…

Yes, thank you. At this time, we will be in the question-and-answer session. [Operator Instructions] And today's first question comes from Joon Lee with Truist Securities.

Hi, thanks for the update and for taking our questions. The first question is, are you able to disclose where you are in the enrollment of VOYAGE? And can we expect it at the end the first half or second half of '22? And I have a follow up.

Hey, Joon, thanks for the question. We aren't in a position to really disclose the enrollment numbers. And I think that's consistent with what we've done in the past. Right now, I would say middle of the year would be probably on the early edge of when we would have the initial data available.

Got it. And regarding your dual agonist just really curious if that 27% weight loss you saw in mice could be translated into maybe 10% or greater weight loss in humans, me asking because that seems to be the bar set by another dual agonist that reported recently.

Yeah it's always hard to extrapolate. But we had tirzepatide in the studies, or the second poster anyway, as a control. And we seem to be, essentially, right in line with the tirzepatide efficacy level, which I think generally is in that 10% to 12% range, maybe a little larger, depending on the population. But I think it's - again, this is mice, but it looks competitive at this point.

Right. And just actually the job I was referring to is ALT-801 from Altimmune, theirs is oral. I mean, how important is it that drugs like these are oral verses Sub Q, any read throughs from experience from the oral versus sub Q semaglutide? Thank you.

Sure. I think orals generally would be preferred by patients especially as you get a little older, but given the efficacy and the therapeutic benefits, it's hard to say if you have something that's maybe dosed less frequently that might be preferable. But really, you look at the size of this - the markets that this mechanism could apply in and I think you'll see multiple modalities and multiple different compounds really being able to be successful.

Thanks Brian.

Thanks, Joon.

Thank you. And the next question comes from Matt Luchini with BMO Capital.

Hi, good afternoon. Thanks for taking the questions and for the nice update. First, I guess on VOYAGE again, just thinking about your expectations from where we were versus last quarter if there's anything different in your thinking. In other words, is patient recruitment environment at this point, better or worse, or in line with your expectations? And then on the dual agonists, just like to get some thoughts on how you're thinking about indication selection here. Obviously not afraid of markets with big development programs. But as you look at the therapeutic and competitive landscape where do you think a product like this could have the greatest impact? Thank you.

Yeah, thanks, Matt. With the VOYAGE enrollment, I think it's been continually challenging. It's been pretty steady since the summer and we've continued to expect an uptick enrollment as the COVID pandemic sort of winds down, at least in the US and we haven't really seen that. We think there's - there are a lot of unexpected challenges with COVID. I think there are staff shortages at sites, staff shortages that CROs. We have also surprisingly, the impact of COVID studies on site operations has been larger than I think we would have ever expected. But it's been consistent. I mean, we've been enrolling steadily and it's not as fast as we'd like or anybody would like, but it's moving forward. With the profile of the dual agonists, I think what generally you see with the dual agonist is efficacy that looks to be a little bit better than the single GLP-1 agonist even if you dose up with the GLP-1 agonist. So, I think the therapeutic profile will be really attractive, if any of these are ultimately approved. And that would hold really in any indication in obesity or diabetes or NASH.

Okay, I guess. Well, okay. And I guess maybe the last question then would be it looks like spending is down pretty decently sequentially. Just wondering in the past is when you talk about 50% to 70%, step up in OpEx this year that obviously implies a hefty lift in the fourth quarter, just wondering how we should be thinking about that going into your out?

Hey, there, Matt. I think that this spend and expenses for the fourth quarter will be pretty similar to what we've seen here in the third quarter. So I think our pickup we might see a bit into next year, but for now I'd say for the upcoming quarter, you can think of it similar to the third quarter.

Great, thanks for taking all the questions.

Thanks Matt.

Thank you. And the next question comes from Steve Seedhouse with Raymond James.

Thank you, good afternoon. It seems that the FDA - just with respect to NASH and what the FDA is looking for from histology assessment protocol. There seems to be some clarity coming there. These three pathologist panels are being used now by Intercept and others. I'm just curious if this is something that you've heard from the FDA directly? If there's something that you plan on incorporating into Phase II, or as this only a relevant protocol to consider as you think about Phase III study. Thanks.

Thanks, Steve. Yeah, I think it's probably more applicable to Phase III than Phase II. We are using multiple pathologist's reads, in cases where we have close calls. I mean, sometimes, if someone's got clear NASH and ballooning and steatosis and inflammation and fibrosis, I mean, there's no need for a second opinion there. But in the close calls, it's very helpful. And we're doing that. And I think moving into Phase III, we and everybody else would probably skew toward that multi reader approach, because it just reduces the variability. And at least you have to get to consensus as well.

Okay. And just the only other question I had is, if you think about this dual agonists and the nice data that you presented preclinically and your plans to move this into the clinic in the coming months, would it be safe to say that this sort of takes priority as the next pipeline asset over like the DGAT-1 inhibitor and the FBPase inhibitor and other things in your pipeline?

Yeah, that's a great question. Yeah, I think, right now it is. The data were probably a little better than we expected. And so we prioritize it, and we're moving toward the clinic as quickly as we can. But that doesn't mean the other programs are unimportant. This has just bumped ahead of them based on what we've seen so far.

Great, thanks Brian. Thank you.

Yeah. Thanks Steve.

Thank you. And the question comes from Jay Olson with Oppenheimer.

Hi. Thanks for taking the question. For VA, sorry, VK2809, are there any competitor dynamics that you're looking out for in the near term that you think could provide important read across? And then I had a question on your GLP-1/GIP as a follow up?

Yeah, sure. I think the big data set for the thyroid beta mechanisms is expected sometime in the second half of next year. So that's what we would certainly be looking for. And I think most people will be looking for that validation of the mechanism and a way to gauge the impact on fibrosis and NASH resolution in a larger population. So I think everybody's interested in that dataset next year.

Okay, great. Thank you. And then I think you said that you were looking forward to initiating clinical development for your GLP-1/GIP program. Does that mean that you have nominated a candidate and can you just talk about the IND filing timeline?

Yeah, it does mean we've nominated a candidate. We're not in a position right now to identify it, but we do have a candidates in mind. And we've said we start the study hopefully in the next few months. So I don't want to give any timing on an IND filing or anything like that. But that I think guidance within the next few months is safe to save for initiation of a study.

Okay, great. Thank you, and congrats on the progress.

Thanks a lot, Jay.

Thank you. And the next question comes from Andy Hsieh with William Blair.

Thanks for taking my questions. And congratulations on really extending your pipeline. So maybe a high level question, Brian, maybe highlight your R&D capability, this could be that we just haven't heard a lot about maybe a hit to lead optimization, screening regarding basic plays or something like that just kind of educated on where you are in terms of your R&D infrastructure?

Yeah, thanks Andy. That's a good question. So just to reiterate, the vast majority of our efforts are on the clinical side with VK2809 and VK0214. But we do spend a fair amount of time in the literature and watching the competitive landscape. And the company's always been sort of modelled on this virtual outsourcing approach. So when we find an interesting targets, or an interesting area to look at, we contact the appropriate vendors and get really targeted on the specific studies that would be the most useful for us in order to avoid a huge incremental uptick and spend. And it seems to work and we've dabbled in a lot of areas, not everything seems to stick, but this one seemed to look pretty nice. And the more we learned about it, it seemed to rise to the top of some of the other things we've been looking at. So that's why we've decided to put a little more effort into this. But it really is compound and project specific regarding how we approach the development path.

That's very helpful. And just, again, probably a longer term question, just regarding the strategy here, obviously, if you look at the tirzepatide program, five large Phase III programs, so maybe kind of provide us with your longer term vision? Are you going to combine with 2809 in NASH, just to have basically an in house combinatorial optionality and then partner out the larger ones, to a big pharma that kind of stuff?

Yeah, it's a good question. So I think this fits within the way we've always thought about VK2809 as well, and that is these big markets are probably best addressed with a partner. And so whether that's before Phase III or after Phase III, these large markets that require large infrastructure would - first choice would always be to partner. We've always been open to partnering discussions. Where these programs could work internally, most feasibly is on the orphan side. So we think for rare diseases, we could launch and commercialize a product there without a massive uptick in infrastructure. But the GLP/GIP program would fit more along the lines of the way we think about our VK2809 asset we're partnered for the much larger expensive programs or clinical development programs.

Got it. Okay. That sounds good. Thank you so much for answering my question.

Thanks a lot, Andy.

Thank you. And the next question comes from Yale Jen with Laidlaw & Company.

Good afternoon, and thanks for taking the questions. Just want to confirm in terms of the 0214, in terms of the potential sort of data readout from the Phase Ib, would that be in the second half of this year - next year or that could be pushed out to 2023?

Yeah. Thanks Yale. No, we would hope to have it next year, probably in the second half of next year, but the plan is to hopefully have the top line available by the end of the year in 2022.

Okay, great. And one more question in terms of the dual agonist. You indicated that the study will start in a couple of months. Is that referring that - or suggesting that the GLP talks all those study has been done or is still ongoing?

It's great question Yale. And I don't want to get into that level of detail. But obviously, we have to do some talks before we go into humans. And so it would be reasonable to assume that that's underway or enough has been completed to allow us to consider moving into humans. But good question. We're just not going to get that level of detail right now.

We try and thanks for the comments.

Thanks Yale.

Thank you. And the next question comes from Justin Zelin with BTIG.

Hi, Brian and team. Congrats on the progress this quarter and thanks for taking my question. So first, on the dual agonist, I was just curious on the PKPD front whether we should expect the frequency of administration of the drug to be comparable to tirzepatide? Or do you think there's potential to potentially push the duration back to more than a once weekly dose?

Yeah, this is a - it's a good question. We'll have more insight on that after we get some human data. But I would say it's not a daily, it would be a longer acting agent. But just how long that is, we really won't have a good handle on until we start looking at some of the human data.

Great. Okay. That makes a lot of sense to me. And you mentioned that you're also looking at the competitive landscape and are scouting new mechanisms. Is there anything of interest at the upcoming Liver meeting that particularly stands out to you?

Not with regard to new mechanisms we're looking at, but I think the semaglutide data will be interesting, the FGF21 data will be interesting. So, those would be the areas we'd probably be most focused on with respect to the AASLD meeting.

Great. Well, congrats again on the progress and thanks for taking the questions.

Thanks a lot, Justin.

Thank you. And the next question comes from Thomas Smith with SVB Leerink.

Hi, everyone. This is Mike on for Tom. With respect to the dual acting program. How are you thinking about the potential anti-fibrotic benefit for the mechanism? And then separately, do you have an initial sense of what that early study design could look like and if we might be getting some type of efficacy results?

Yeah, good question, Mike. So what we've seen with the studies of semaglutide is that you see a really terrific effect on NASH resolution. And what looked to be trends in fibrosis improvement that might become clearer with longer exposures. So all of the arrows sort of point to the right direction on fibrosis, but the effect seems to be at least early, most pronounced on NASH resolution. With respect to Phase I study, I think the template would probably look like the SAD/MAD study that we did with VK0214, so you're able to parallel track both of those and you could probably look at some early pharmacodynamic signals from that sort of a study.

Great, thanks very much.

Thanks a lot.

Thank you. And this concludes the question-and-answer session. And I would like to turn the call to Stephanie Diaz for any closing comments.

Thank you again for your participation and continued support of Viking Therapeutics. We look forward to updating you again in the coming months. Have a great afternoon.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.