Welcome to the Viking Therapeutics’ 2021 Fourth Quarter and Year End 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. As a reminder, this conference call is being recorded today, February 9, 2022. 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, February 9, 2022, 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 fourth quarter and full year 2021 financial results and provide an update on recent developments and progress with our pipeline programs and operations. 2021 was a very productive year for Viking. During the year, we continued to make progress with our lead program VK2809, currently in a Phase IIb study for patients with biopsy confirmed NASH and fibrosis, opening additional clinical trial sites and continuing enrollment of new patients. We expect to complete enrollment of this trial and report top line data by year end. In 2021, we also reported data from the first in-human study of VK0214, our second thyroid receptor beta program, demonstrating the compound’s impressive safety, tolerability, and preliminary lipid lowering effects. Following completion of the first in-human study, we initiated a Phase Ib study in patients with X-linked adrenoleukodystrophy, a rare neurodegenerative disease for which there is no cure. We were recently informed that the FDA has placed this study on clinical hold, pending completion of an additional preclinical study, and we expect to submit the results of this study in the second quarter. Finally, in recent months, we expanded our clinical pipeline with the addition of a new internally developed program targeting the GLP-1 and GIP receptors for metabolic disorders. We reported two posters from this program at ObesityWeek in November, and last month announced the initiation of a first in-human study of our lead compounds VK2735. I’ll have more say about these programs in a few minutes but I’d like to highlight, as we reflect on the past 12 to 18 months, that Viking has transformed over the past several quarters from a company with one clinical program to a company with three active clinical programs across a diverse range of indications, with important data inflections for each expected in the next 12 to 18 months. The breadth and depth of our clinical and preclinical pipeline represents an important progression from a single program story into a diversified biopharmaceutical company, with programs advancing in multiple important indications. We are proud of the progress we’ve made in the last 12 months, as providing an important base from which we will advance multiple programs into late stage development. I’ll provide further detail on our operations and development activities after we review our fourth quarter and year-end 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 Vikings Form 10-K filing with the Securities and Exchange Commission, which we expect to file this week. I’ll now go over our financial results for the fourth quarter and full year ended December 31, 2021 beginning with the results for the quarter. Our research and development expenses for the three months ended December 31, 2021 were 9.8 million, compared to 9 million for the same period in 2020. The increase was primarily due to increased expenses related to manufacturing for the company’s drug candidates, preclinical studies, stock-based compensation, salaries and benefits, and services provided by third-party consultants, partially offset by decreased expenses related to clinical studies. Our general and administrative expenses for the three months ended December 31, 2021 were 2.7 million compared to 2.2 million for the same period in 2020. The increase was primarily due to increased expenses related to salaries and benefits, stock-based compensation and insurance, partially offset by decreased expenses related to legal services. For the three months ended December 31, 2021, Viking reported a net loss of 12.4 million or $0.16 per share compared to a net loss of 10.9 million or $0.15 per share in the corresponding period in 2020. The increase in net loss and net loss per share for the three months ended December 31, 2021 was primarily due to the increase in research and development expenses, and general and administrative expenses noted previously, as well as decreased interest income, primarily due to the decline in interest rates available throughout the fourth quarter of 2021 as compared to prevailing interest rates available during the same period of 2020. I’ll now go over the results for the full year 2021. Our research and development expenses for the full…

Thanks, Greg. As I mentioned in the opening comments, Viking has recently expanded its clinical pipeline and, in doing so, we have strengthened our commitment to the development of novel therapeutics for the treatment of metabolic diseases. Since the company’s founding, we have advanced into clinical development to metabolic drug candidates that we believe represent best-in-class status in the case of our lead candidate VK2809 and first-in-class status in the case of our second clinical candidate VK0214. We believe that these programs together with our expertise in metabolic diseases places us in a leadership position in the development of next generation therapies for a range of metabolic disorders. This is exemplified by a recent introduction of VK2735, an exciting new program with the potential to advance in multiple indications. I will now provide an update on each of these 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. A prior 12 week Phase IIa a 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. In addition, patients treated with VK2809 in this study experienced durable reductions in liver fat, with the majority of patients remaining responders four weeks after completion of dosing This study also demonstrated the promising safety and tolerability profile of VK2809. Patients treated…

Our first question comes from Steve Seedhouse with Raymond James. Please go ahead.

Oh, great. Thanks so much for taking the question. Brian, I was just hoping if you can clarify on the 0214 study, given the whole -- how far along are you into patient enrollment and treatment? And are you able to -- as you resolve that with the assay that the FDA is requiring, are you able to continue to screen patients and sort of keep sites online such that you won’t have too much of a disruption?

Hi, Steve. Thanks for the question. So we will keep sites online that we’re not shutting any sites down but the hold does not allow us to continue screening or enrolling patients. I think one thing that will mitigate a potential delay is that we’re also moving to open sites in Europe and we expect those sites to come online around midyear. And so if that aligns with the potential reopening of the study, we think that that would help mitigate some of the slowdown here but there’s no shutting down of any sites at this time.

Okay, thanks. And just separately, and I know, obviously, the hold isn’t related to the emerging data from Phase I. But I just had a question because it got me thinking about just the safety margin for this drug. When you think about it in the context of legacy TR beta agonists that weren’t liver directed and the doses that you’re using in the study, how confident are you -- that you’ve seen impact on very long chain fatty acids already, how confident are you that you’re going to have a wider safety margin than some of those legacy drugs that had problems?

Yes, it’s a good question. So when we look at the Phase I data, we didn’t see any effect on any cardiovascular measures, and so no change to heart rate or blood pressure, or anything like that. And so that would be one sign of potential thyroid alpha activation. And as far as like the dose level, we don’t think we have to go all the way up as high as we went to the -- in the single or the multiple sending dose portion, we think when you look at the lipid sort of plateauing around 20 to 50 milligrams, we think that the X-ALD study won’t have to push as high as we did in the multiple ascending dose study, which should help as well. And then finally, when we look at the data so far from the tox studies, we don’t see any significant effects on the target tissues that you want to watch out for and that’s bone and cardiovascular system. So, so far, so good but it’s still relatively early in development.

All right. Thanks for the thoughts, Brian. Appreciate the questions.

Okay. Thanks, Steve.

The next question comes from Joon Lee with Truist Securities. Please go ahead.

Good afternoon. This is Les on for Joon. Congratulations on the progress and thank you for taking my questions. First on the NASH program, can you just kind of provide an update on the enrollment? And has the enrollment improved and catching up to your internal timing targets? And what is the earliest we could expect to see that 12-week data?

Yeah, thanks, Les. So we haven’t really given patient by patient enrollment updates, historically but I would say, in the first part of the year enrollment has picked up a little bit relative to the end of 2021 and I’ll caveat that by saying, you typically see a lag in the screening pipeline to patients actually enrolled, so any effect on the trial from Omicron probably won’t be felt right away but enrollment has picked up slightly in the first part of the year. And we’ve not given a lot of granularity; we just guided to completion of enrollments and the initial 12-week data by the end of the year.

Got it. That is helpful. And then my follow up regarding the dual agonist program and congrats on the selection. I just wanted to see if you have any supporting endpoints that you’d be looking for in determining indications selection. And if it is a large indication, and at what stage of the program would you consider partnering discussions, if you do decide to partner on that? Thank you.

Yeah, sure. So the multiple ascending dose portion of that study is going to be four weeks long and so it’s a little short to get a good handle on efficacy and first in-human study anyway, but we will be looking at plasma glucose, we’ll look at insulin, we’ll look at body weight, we’ll look at liver fat content. So a lot of different metrics that would help direct the program in future studies. But it is pretty short, so all those reads will be preliminary.

Thank you.

Thanks, Les.

The next question comes from Joe Pantginis with HC Wainwright. Please go ahead.

Hi, everybody. Good afternoon. Thanks for taking the question. Brian, I guess, when you have all these programs going and you’re still enrolling VOYAGE, I want to talk about the overall running of Viking. And I guess, overall, the industry is facing a lot of headwinds right now and, I guess, want to ask how agile or if how agile you’ve been with regard to dealing with supply chain constraints, preparing for manufacturing above and beyond what you usually might have. Anything that you might have been able to go above and beyond that you usually would not have?

Yeah, thanks, Joe. It’s an interesting question. The pandemic has affected a lot of things in a lot of different ways and what we’ve noticed, in particular is, with clinical sites and with CROs is staffing issues are consistent problem that we hear about when we never heard about prior to the pandemic. And so, maintaining staff, a lot of turnover at CROs more than you would anticipate. And what we’ve done is tried to -- to the extent possible, tried to plan ahead a little bit better. We have noticed some of the queues for manufacturing, for preclinical studies, for in-vivo studies, the queues are longer than they were prior to the pandemic, so it makes you have to decide a little earlier and try to get in queues earlier. Hopefully, all of this will normalize but it is -- these little ripple effects are – they are challenge.

No, I understood. Thanks a lot.

Thanks, Joe.

The next question comes from Jay Olson with Oppenheimer. Please go ahead.

Oh, hey, Brian, thanks for the update and thanks for taking the question. Can you talk about what level of MRI- PDFF liver fat reduction at 12 weeks you’ll be looking for in the VOYAGE study? And what’s sort of your benchmark there and what would be clinically meaningful? And then maybe related to that, are there any competitive dynamics in NASH that you’ve been watching and new data that you’re interested in and also any new mechanisms on the horizon that you’re excited about, especially anything that could be used in combination with to 2809? Thank you.

Yeah. Thanks, Jay. So I think the hurdle that we’re most focused on is that responder hurdle of 30% fat reduction, relative reduction in liver fat content, because that’s really the only hurdle that has been talked about or established with respect to improving the odds of histologic benefits. So if we can see most of our patients being characterized as responders, we think that would improve the odds of NASH resolution, and we think also improved the odds of seeing some improvement in fibrosis. Anything above that would be great but that’s what we’re hoping for initially. We saw quite a bit better than that in the 12-week study. As far as the competitive landscape, it’s, I mean, a rich competitive landscape. We’re comfortable with the competitive profile with the safety and tolerability and efficacy that we’ve seen so far. I think the molecule is great and the effect on lipids is a clear differentiator versus other mechanisms. So reducing atherogenic proteins, as I said in that prepared comments, it’s a real benefit that you don’t see necessarily with other mechanisms. I think that the mechanisms that are most kind of intriguing to us are the ones that improve insulin sensitivity and also have direct impacts on body weight and liver fat, and that’s those things on the increase in access to GLP-1 and GIP, where we’re also involved with the dual agonists. So we really like that access and, as far as combinations, that might be an attractive way to position a combination therapy with a thyroid agonist.

Super helpful. Thanks, Brian.

Thanks, Jay.

The next question comes from Alex Ramsey with William Blair. Please go ahead.

Hi, Brian. This is Alex on for Andy. I got a couple of questions related to Prader-Willi syndrome, as you mentioned being potentially interesting indication for VK2735. So the questions that I have are first, if you could give us a sense of the overall market size of the indication and how much of it like you might be able to capture. And then second, what kind of results or benchmarks that you’d be looking at in the earlier stages of the clinical trials to give confidence that Prader-Willi might be an interesting indication to pursue. And then finally, I was wondering what kind of defined developmental or regulatory pathways there are for this indication?

Yeah, thanks, Alex. Appreciate the questions. So we’re still pretty early in the learning curve for Prader-Willi syndrome. We think the mechanism to the extent these patients have this hyperphagia, uncontrolled appetite, the dual activity of GLP-1 and GIP in the hypothalamus might be really, really beneficial for this population in mitigating appetite. And to the extent that we can control insulin sensitivity, plasma glucose, that sort of thing, which many of these patients suffer from, I think that’s an added benefit and something that we think could really help this population. When we look at case studies, the GLP-1 agonists seem to have some benefits in some of these patients, so the addition of the GIP receptor should be helpful as well. As far as the market size, it’s probably under 10,000 in the US and similarly in Europe, but again, we’re pretty early in the in the learning curve here. So those numbers may be different, but that’s the way we’re thinking about the market size there.

Okay, awesome. That’s very helpful. Thank you so much.

Thanks, Alex.

The next question comes from Yale Jen - Laidlaw & Co. Please go ahead.

Good afternoon, and thanks for taking the questions. I just got two quick ones. The first one is that Madrigal recently reported their – one of the Phase III study and I know a number of analysts have comments on that. I’m just curious what’s your thoughts in terms of that data readout? And then I have a follow up.

Yeah, thanks, Yale. Yeah, I think the data looked good there. It is APL study and the effect on liver fat was really impressive. And I think it’s the port’s -- the mechanism that further confirmatory data, that activation of thyroid beta receptor is a really potent means of reducing liver fat content and plasma lipids. So we thought the data were positive.

Okay, great. And the follow up question is that we believe that the tirzepatide may also have a Phase III readout sometime in the second half of this year. Just curious, what’s your thoughts? If that read out is positive, what kind of sort of impact on the development of 2735? And thanks.

Yeah, I think there will be obesity data later this year for tirzepatide and in the mechanism, at least in diabetics has shown to be very potent at reducing body weight. So if you’re looking at the overall obesity, population, with or without diabetes, it might be even more effective in the non-diabetic patients. That would be really exciting for us, because we think the profile is similar, maybe in some ways, slightly better with VK2735 relative to tirzepatide, but the mechanism very attractive and really potent there. And I think if they have positive data, it bodes well for the potential efficacy of VK2735.

Okay, great. Thanks and again, congrats on the excellent results.

Thank you, Yale.

The next question comes from Scott Henry from Roth Capital. Please go ahead.

Thank you and good afternoon. Just a couple questions. The first one is kind of a tough question but I’m just curious with your thoughts. With regards to data by year end, for 2809, just want to get a sense of your confidence level? Let me know, would you be surprised if it wasn’t in there or is that a stretch target, just any kind of color you can give of how confident you are of that target?

Well, Scott, we’re as confident as we can be but having said that, we’ve missed every estimate so far, so we’re going to try and do the best we can and that’s where we think the models point right now. But again, the pandemic is really throwing a wrench into all projections that we’ve ever thought about. So we’ll do the best we can and that’s what we think right now.

Okay. Fair enough. And then, with regards to X-ALD, assuming the -- you get the genotoxicity study data in 2Q, should we be thinking about that data perhaps first half of ‘23, just trying to get a sense of how much time we should bake in for the turnaround of that and getting the trial back up and running?

Yeah. You mean the top line data from the study available in the first part of ‘23?

Yeah.

Yeah. well, the way we looked at that is really, it’s probably a six month delay in the study. So if we were previously expecting data by the end of the year, 2022, probably would imply the data first half of ‘23, mid ‘23, something like that.

Okay, perfect. Thank you. And then with regards to 2735, are you going to file an IND for that product? I assume the Phase I is outside the US, just trying to get a sense of that?

Yeah, that’s right. We will file an IND later this year or early next year, but yeah, the Phase I study is not In the US, that’s correct.

Okay. And then, I guess, kind of the final question on 2735. That Phase I data, how should we think about what we might learn as far as the obesity endpoint? Granted, those are healthy subjects, so we wouldn’t -- I would imagine, we would expect to see a smaller difference. Just want to get your sense of how much insight we may learn from that early obesity data?

Yeah, it’s a fair question and it’s a difficult question. We would look for weight loss at the higher doses but you’re right, it is a healthy volunteer study. So it’s a little more difficult to show an effect. But when we look at diabetes, for example, and other indications, when you see weight loss, it happens in both the, so called, normal to heavier patients. You just don’t see it as much in the normals, so it’ll be an interesting dataset. Certainly, when we look at body weights at baseline, we’d want to pay attention to the ones that are a little heavier, and see how they respond relative to the ones that are leaner but, again, hard to extrapolate since they are healthy.

Okay. As a little final question, spending for 2020, any pattern to how we should think about R&D?

Hey, Scott. This is Greg. Yeah, I think, we spent about 46 million in 2021, about three quarters of that was direct costs, essentially, for development programs, our three development programs. Looking at 2022, I think you could think about that increasing by about 25% to 30% on the cash usage standpoint. But we’re funded well through major catalysts in all three programs at this point from our overall run rate standpoint.

Okay. Would you expect that to increase throughout the year or relatively consistent?

I think pretty consistent throughout the year.

Okay, great. Thank you for taking all the questions.

Thanks, Scott.

The next question comes from Thomas Smith with SVB Leerink. Please go ahead.

Hi, everyone. This is Mike Kratky on for Tom. Thanks for taking our question. Assuming you achieve statistical significance on the primary endpoint at three months of VOYAGE, would you plan on waiting for the full 12 month histology results before moving to Phase III study? And then as a follow up to that, how quickly do you think you could initiate a pivotal Phase III?

Hey, Mike. Good question. So the guidance, as it exists now requires the histology data from 12 months or whatever the endpoint is in your Phase IIb study. So we can start preparing for Phase III and we can hopefully determine the doses that we would -- or get a little better focus on the doses that would likely proceed in Phase III based on the 12 week data. But we won’t be able to really file the final protocol and really start the study until, I’d say, a minimum six months after completion of the study.

Got it. That’s helpful. And then just separately, you’ve mentioned that Madrigal is going to have their pivotal data expected as early as the third quarter of this year. Do you anticipate to see some increase interest from potential partners ahead of that or on that, in the event that they’re successful?

Sure. I’m not sure I mentioned that but I understand their data will be later this year. And yeah, if the study is successful, I think that there will be interest from multiple parties in both datasets, that is their data as well as our data. So yeah, I would think so, yeah.

Understood. Thanks for taking our questions.

Thanks, Mike.

The next question comes from Justin Zelin with BTIG. Please go ahead.

Hi, thanks for taking the question. Brian, just wanted to follow up on Yale’s question earlier regarding the competitive landscape. So from my perspective, the safety profile of 2809 appears to be fairly clean. Just wanted to ask if you’d expect the safety to be pretty consistent in VOYAGE or whether potentially you could see some higher event of GI adverse events, given patients may also be on GLP-1s or other concomitant medications?

Yeah, it’s an interesting question. I don’t know. I mean, they are probably a little sicker and it is a gastrointestinal disease, the NASH, so maybe there’s a little higher baseline. But we’ve not seen any GI impact, really, with either compound in Phase I or Phase II with VK2809. So it’s possible once you get into a larger study like this in a more disease population, but there’s no indication that that’s likely to happen.

Great. That’s helpful. Thanks for taking the question.

Thanks, Justin.

This concludes our question and answer session. I would like to turn the conference back over to Stephanie Diaz for any closing remarks.

Thank you again for your participation today 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.