Welcome to the Viking Therapeutics First Quarter 2023 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. [Operator Instructions] As a reminder, this conference call is being recorded today, April 26, 2023. 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 would like to caution that comments made during this conference call today, April 26, 2023, will contain Forward-Looking Statements under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements about Viking’s expectations regarding its development activities, time lines 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 will now turn the call over to Brian Lian for his initial comments.

Thanks, Stephanie, and good afternoon to everyone dialed in by phone or listening on the webcast. Today, we will review our financial results for the first quarter of 2023 and provide an update on recent progress with our clinical programs and operations. The first quarter of 2023 was an exciting time at Viking with important progress announced across multiple clinical programs. With respect to VK2809, our lead thyroid hormone receptor beta agonist for the treatment of NASH and fibrosis, early in the quarter, we announced completion of enrollment in our Phase 2b VOYAGE trial and we expect to announce top line data from the primary endpoint in this study in the second quarter of 2023. With respect to our newest clinical program, the dual GLP-1 and GIP receptor agonist, VK2735 for the potential treatment of metabolic disorders, last month, we announced data from our first clinical study of this compound, a Phase 1 single ascending dose and multiple ascending dose study in healthy volunteers. As we’ll discuss in a few minutes, the results were encouraging with mean weight loss of up to 18 pounds observed following 28 days of treatment. We plan to initiate a Phase II study of VK2735 in patients with obesity in mid-2023. In addition, we announced the initiation of a new clinical study to evaluate a novel oral formulation of this compound. With respect to our third on-going clinical program, the novel thyroid hormone beta receptor agonist, VK0214, our Phase 1b trial evaluating this compound for the treatment of X-linked adrenoleukodystrophy continues to enroll and we expect to report the results from this study in the second half of the year. Late in the quarter, we also completed the successful public offering of common stock, raising gross proceeds of approximately $288 million that we plan to use for the continued advancement of each of our programs through key clinical milestones. I’ll provide further details on our operations and development activities after we review our first quarter 2023 financial results. For that, I’ll turn the call over to Greg Zante, Viking’s Chief Financial Officer.

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 file today. I’ll now go over our financial results for the first quarter ended March 31, 2023. Our research and development expenses for the 3 months ended March 31, 2023, were $11 million compared to $12.6 million for the same period in 2022. The decrease was primarily due to decreased expenses related to clinical studies, preclinical studies and third-party consultants, partially offset by increased expenses related to salaries and benefits, stock-based compensation and regulatory services. Our general and administrative expenses for the 3 months ended March 31, 2023 were $9.5 million compared to $3.7 million for the same period in 2022. The increase was primarily due to increased expenses related to legal and patent services, stock-based compensation, and salaries and benefits. For the 3 months ended March 31, 2023, Viking reported a net loss of $19.5 million, or $0.25 per share compared to a net loss of $16.1 million, or $0.21 per share in the corresponding period of 2022. The increase in net loss and net loss per share for the 3 months ended March 31, 2023, was primarily due to the increased general and administrative expenses noted previously, partially offset by increased interest income compared to the same period of 2022. Turning to the balance sheet. At March 31, 2023, Viking held cash, cash equivalents and short-term investments totaling $135.7 million compared to $155.5 million as of December 31, 2022. The company’s Q1 2023 cash balance does not account for the completion of a public offering of common stock, resulting in gross proceeds of approximately $288 million that was completed at the end of the first quarter and closed on April 3, 2023. Pro forma, including this offering, our end of quarter cash, cash equivalents and short-term investments were approximately $406 million. This concludes my financial review, and I’ll now turn the call back over to Brian.

Thanks, Greg. As mentioned in my opening comments, the first quarter of 2023 was an exciting time at Viking. In recent weeks, we announced positive data from a Phase 1 study in healthy volunteers with our newest clinical program, the dual incretin receptor agonist, VK2735. These results, which I will discuss in more detail shortly, have served to broaden our presence in metabolic diseases and diversify our pipeline, further increasing the value of the company. We are very pleased to begin the second quarter from a position of clinical momentum, financial strength, and optimism for upcoming data. I’ll now provide an overview of progress with our clinical programs, beginning with our lead compound, VK2809 for NASH and fibrosis. VK2809 is an orally available small molecule agonist of the thyroid hormone receptor that is selected for liver tissue as well as the beta isoform of the receptor. A prior 12-week Phase 2a trial evaluating VK2809 in patients with hypercholesterolemia and nonalcoholic fatty liver disease, successfully achieved both its primary and secondary end points demonstrating significant reductions in liver fat and plasma lipids. Cohorts treated with VK2809 experienced up to 60% mean relative reduction in liver fat content and 88% of patients receiving VK2809 experienced at least a 30% relative reduction in liver fat content. Importantly, the reductions in liver fat were durable with the majority of patients remaining responders 4 weeks after completion of dosing. This study also demonstrated the promising safety and tolerability of VK2809. No serious adverse events were reported and the rate of GI disturbances such as nausea and diarrhoea was lower among VK2809-treated patients when compared to patients treated with placebo. We believe VK2809’s activation of the thyroid hormone beta receptor provides unique therapeutic benefits for patients with NASH. Perhaps one of the most important additional benefits…

[Operator Instructions] Today’s first question comes from Steven Seedhouse with Raymond James. Please go ahead.

Great. Thanks so much for taking the questions. I had a few on the oral formulation of the GLP-1, GIP. First, just you haven’t shared any preclinical data. So I wanted to ask, in general, if the expectation would be you could get to sort of exposure and ultimately efficacy levels that would be equivalent to the injectable or what specifically would be the expectations in terms of potency of what you could achieve at peak in humans? And then also with that compound, is this something that would lend itself to like a titration schema as well? Or are you essentially looking at flat doses in the Phase I?

Hey Steve, thanks for the questions. With the exposures, yes I don’t think we expect the exposures to achieve the same level that are observed with the subcu formulation. Maybe I’ll be proven wrong, but I don’t think we’ll get there. It’s almost a different product. I would consider the oral formulation, maybe for someone who first doesn’t want to start with an injectable or for someone who maybe has a BMI 32 to 34 or something that might be adequately addressed with an oral formulation or potentially in a maintenance setting where you start with the subcu and then transition on oral. So there’s a lot of different ways that it could be used. But my own guess is that we probably won’t see the same exposures with the oral. What’s the second question? Titration, yes. So yes, we will titrate in the upcoming study. So the first cohorts, flat dosing and subsequent cohorts will titrate up.

Okay. So it’s just 1 dose of -- 1 tablet dose that you just give multiple pills, I guess, in that case?

That’s right. Yes. The first cohort is 2.5 mg and that’s flat. And then from there, they dose up. I mean first week will be 2.5 and then the remaining 3 weeks would be a higher dose. And then as you go on through the cohorts, you kind of titrate up per week.

Okay. A couple more just because it’s a really interesting program. Obviously, you mentioned maintenance dosing is one option. That’s just given how many people in the next decade are likely to be gravitating towards using incretin. I imagine there’d be some enormous group of patients coming on or having been on injectables. I’m curious if you’re going to gather that type of maintenance data in the Phase 1, can you take patients that you already treated with the injectable and start them on oral and see how they do? And then I just have one more on the program after if I could. Thanks.

Yes. No, thanks. In this study, we’re really just trying to see if the formulation will provide exposures and what levels compared to subcu. So I think in the future, those transition type studies would be really important and really interesting, but this is just the first one, and we’re just going to see how the exposures turn out.

Okay. And then the Phase 1, I think you guys were re-injectable at least you were collecting MRI-PDFF data, and there are maybe some other biomarkers in there that weren’t ready for the initial top line. So can you just comment on -- you have the guidance in place with the oral data. Should there -- is there any other data either from the clinical injectable study beyond the top line that you’ve already announced that would be coming here in near term that we should keep an eye out for? Thanks.

Yes. Thanks, Steve. We’ll probably be reporting more data a little bit later in the year, potentially at Obesity Week, but we don’t have any near-term, nothing imminent there. But you’re right, we did have a number of biomarkers in liver fat in the study.

Alright, thanks Brian.

Thanks Steve.

Thank you. And our next question today comes from Joon Lee with Truist Securities. Please go ahead.

Hey thanks for taking our question and congrats on the progress. What really stood out from the healthy volunteer study of VK2735 was how key the tolerability profile was. So is that -- is that just a function of the study being a small Phase 1 study? Or is there some mechanistic hypotheses as to why 2735 may be better tolerated and with possibly better weight loss? And I have a follow-up.

Thanks Joon, thanks Yes. So I don’t really know. It was a small study, so you could argue that maybe we’re just looking at small numbers. What was interesting with the tolerability was that there wasn’t really a dose-related change in tolerability as you went up. I think the highest dose cohort actually had really, really good tolerability, better than some of the earlier cohorts. So mechanistically, I know people have talked about arrest in recruitment being one thing that might lead to improved tolerability if you can have a sustained effect on GLP-1 without arrest in recruitment. You could see maybe an increase in efficacy without necessarily issues with nausea. But I don’t know -- otherwise, I don’t know that mechanistically it was anything obvious that would explain it.

Fair enough. And both Lee and Novo have historically done heat to head trials of their GLPs, at least for diabetes. Do you have any plans to do a head to trial of VK2735 against other obesity drugs?

Yes, great question. I think it’s a really good idea as we move further through the program, but this upcoming Phase 2 will not have an active comparator in it. It’s just placebo. But I do think that’s something important for the future just to see how they compare.

Okay. Thanks for taking the question.

Thanks Joon.

Thank you. And our next question today comes from Annabel Samimy with Stifel. Please go ahead.

Hi, thanks for taking my question. So I want to ask about the titration period that you’re considering for Phase 2. I mean, already, it looked like you had some good tolerability. It looks like you have some very good weight loss already within 28 weeks. So I guess I’m wondering why you would want to push that further and what kind of titration schedule might we be looking at? So I guess that’s the first question. And is this the same exact molecule as 2735, are you changing the balance between GLP-1 or GIP in any way as you go into the oral if you don’t have the same, I guess, target exposure? And then I have one more follow-up.

Yes. It’s the same molecule, Annabel, in the oral and the subcu. And we’re titrating in the 28-day study really because we’ve not dosed with this compound before, so we don’t know if there are any differences in tolerability, and we’re doing fewer cohorts. So in the subcu, we did have the first 2 cohorts were flat dosing, and then we titrated and here the first cohort is going to be flat and then we titrate. But nothing obvious that suggests we have to titrate. And to your point, I think the tolerability was really, really promising in the subcu, but it’s just first study. And we know that GLP-1 agonism is tied to nausea and GI side effects. So we just want to try to control for that as best as possible.

I guess, to be more specific, why do you feel like you need to go higher on the dosing if you’ve sort of attained some pretty competitive results as it is with good tolerability?

In the oral are you talking about?

No, in the injectable for Phase 2.

In the injectable, yes, we’re going to go up to 15 milligrams because the 10-milligram was very well tolerated and maybe the 15 will work better. We won’t know until we get there. But that was the reason we were considering adding that 15-milligram cohort to the 28-day study, but we decided to just stop the study here and put that into the Phase 2, and we’ll titrate up to it. But I don’t think there’s anything -- I don’t think we’re necessarily pushing anything with increasing the dose to 15.

Okay. And then if I can ask on VK2809. I mean, you have some pretty good validation from a competing program. But I guess, some of the KOLs we spoke to, one of the things that they brought up that they were a little bit surprised that there was not just NASH reduction, but they also were able to show fibrotic improvement as early as year one. So how do you really think about this? And would you expect the same for yourself if your seemingly superior liver fat reduction holds up in voyage? Were you surprised with the fibrotic effect within 52 weeks, given that it’s more of a downstream process from the fat reduction?

Well, I don’t know. I think the -- yes and no, I guess. I mean the fibrosis improvement endpoint is traditionally a more difficult end point to show improvement on, but we know that the mechanism demonstrates in animal models, reduction in collagen load and improvement in fibrosis. And whether or not that’s secondary to fat reduction, I don’t think we know and haven’t seen that published anywhere. So we weren’t totally surprised. I guess you could argue that it’s too short a window and this is more a metabolic targeting mechanism. But everything we’ve seen in animals suggests that it should actually do both. It should help with NASH resolution and improve fibrosis.

Okay. Great. If I can squeeze in one more. Any thoughts about how long this $406 million will take you out to?

Yes. Hi Annabel, certainly, we’re covered, as Brian mentioned earlier, well beyond all the catalysts in our 3 development programs. We wouldn’t point to an exact year, but certainly well beyond 2 years out and well beyond.

Okay. Great, thank you.

Thanks Annabel.

Thank you. And our next question today comes from Jay Olson at Oppenheimer. Please go ahead.

Congrats on all the progress, and thank you for the update. Maybe just a follow-up on VK2809. Can you just talk about what we should expect to see in the top line results besides MRI, PDFF? Will we see change in LDL cholesterol levels? And then I guess, can you just talk about sort of the GI tolerability of VK2809? It seems like that’s potentially an important feature for your molecule. And then I had a follow-up, if I could, please.

Sure. Thanks, Jay. The -- with the initial data, we would plan to have the liver fat by MRI PDFF and then a Lipid panel, so likely LDL, trigs and if we get the atherogenic proteins, Lp(a) and ApoB, we’ll report those as well as well as safety and tolerability. The GI profile to date has been excellent. We haven’t really seen anything different from placebo. And there’s no reason to think that we would see differences in the VOYAGE population, but we don’t have the data, so I can’t for sure yet. But there’s nothing that would lead us to believe that there would be any sort of a GI signal with the compound. It’s exceptionally well tolerated.

Okay. Great. That’s super helpful. And then if you could maybe help us frame for investors what a best case scenario might look like with r egards to MRI-PDFF and any other endpoints that we should be watching, including safety and tolerability? And then what you would see as the most important differentiating points from resmetirom? That would be great. Thank you.

Yes. Thanks, Jay. Well, I think the internal hurdle that we’re using is a 30% mean reduction in liver fat. If we can see treatment groups showing a 30% mean reduction that would be our success hurdle. Obviously, higher is better. We saw really nice reductions in the Phase 2a study. I’m not sure I would expect that level of efficacy in this study just because it’s a larger study and you often see a penalty into larger populations. But if we see 30%, I think there’s a lot of precedent that suggests that translates to a higher probability of histologic benefit. I think there’s plenty of room for multiple of the same mechanism to coexist in NASH. I think there will be differentiation among products and they’re probably switching. I think our tolerability profile is outstanding, and our efficacy has been exceptionally strong so far. So I think we’re comfortable with where we would be competitively.

Excellent. Thank you so much for taking the questions and we’ll look forward to seeing the results.

Thanks very much Jay.

Thank you. And our next question today comes from Andy Hsieh with William Blair. Please go ahead.

Thanks for taking the question and congratulations on all the achievements this quarter. So Brian, you mentioned a couple of times about the activities in liver fat at least in the preclinical model from these dual agonist candidates, including 2735. So I’m curious if that was by design or it’s an observation that you just observe as you advance these candidates from preclinical to clinical settings?

Yes. It’s -- thanks, Andy. It’s -- I think the liver fat change from this mechanism, because there are no receptors in the liver, is probably most tied to weight loss and insulin sensitivity -- improving insulin sensitivity. So I don’t think there’s necessarily a direct effect on liver fat. It’s more tied to weight loss. But in animals, we did see really interesting data, typically generally always better than a GLP-1 monoagonist and comparable to better than another dual agonist. So we’re really excited about the potential there. I think that the models we looked at were generally the diet-induced obese mouse. So if you’re skinnier or your body weight is lower, liver fat’s lower, you probably wouldn’t see as large an effect since the effect is driven by weight loss, but pretty interesting characteristic.

Got it. We’ve gotten some questions from investors about relative contribution of weight loss from either fat or lean body mass. Do you have a good handle from the Phase 1 study about the proportion that’s the observed weight loss is coming from?

We don’t. We didn’t do any DEXA scans in this study. So we don’t have the relative change in weight. We do from the animals, we saw predominantly a reduction in fat and not muscle, but I think it’s been shown in other studies that when you lose a certain amount of weight, you do start to cut into muscle. But we didn’t see that in any of the animal studies that we conducted. And we unfortunately just didn’t look at it in this study.

Great. Is that something that you look at in the Phase 2 study?

Not currently, no. It’s a 13-week study. So we don’t have a plan to do DEXA scans in the upcoming study. It might be something we’d look at in a longer-term study.

Got it. Got it. That’s helpful. And then maybe lastly, for the oral formulation versus subcu, could you kind of help us think about the amount in terms of dosing from these 2 formulations on a relative sense?

Yes. The oral will push up a little bit higher. We’re going -- I think the plan is to go to 20 milligrams with the oral. So not a huge amount higher than the planned dose to phase -- for the Phase 2 and the subcu.

Got it. Okay, awesome. Well thanks for answering all our questions.

Thanks a lot Andy.

[Operator Instructions] Our next question comes from Yale Jen of Laidlaw & Co. Please go ahead.

Good afternoon and thanks for taking the question and congrats on the profit so far. Just a few quick questions. The first one probably is housing. In terms of SG&A in the first quarter, that seems significantly higher than prior quarters. Should we anticipate that to be a normal or this is generally a onetime situation?

Yes. Thanks,. That’s primarily due to -- it is not something you should expect to see moving forward. That’s really due to timing of some legal expenses and those should be reduced moving forward, and you wouldn’t expect that to be the run rate moving forward.

Okay. Great. And a follow-up question here again about the 2735 Phase 2 study. Could you give us a sort of overall view about what you anticipate to do for that study? Anything you can review in terms of the study design?

Yes. The study design is a 13-week study with flat dosing in the lowest dose cohort and then titrated dosing in the higher dose cohorts. The top dose right now is targeting 15 milligrams, and we’ll do a stepwise titration up there. It’s 13 weeks in duration. So you’d be at the top dose for, I think, 3 to 4 weeks at the end there. The primary endpoint will be change in body weight.

And how big the study might be in terms of size?

Yes, we haven’t disclosed that, but I would say 150 or so or 100 to 150 would be the target there.

Great. That’s very helpful. Maybe the last question here is that you mentioned that about -- with the cash in hand, you might also contemplate some additional pipeline expansions. I know you want to be focused, but nevertheless, was there anything in your mind that could be explored going forward?

Yes, we have a lot of things we’re working on, but we haven’t disclosed, but we typically spend time in an area as little money as possible on some of these nascent programs and the ones that show promise, we bring forward. I think 2735 is a good example of that. And as things mature appropriately, we’ll have more to say about them.

Okay, great. Thanks a lot and again congrats.

Thanks a lot, Yale.

Thank you. And our next question today comes from Justin Zelin with BTIG. Please go ahead.

Hi, thanks for taking the question and congrats on all the progress. Maybe just a follow-up on the Phase 2 for the dual agonist here. You mentioned 13 weeks of active dosing. Will you continue to follow up the patients past the 13 weeks and for further longer-term data? Would we have to look towards another study here? And I have some follow-ups.

Yes. To answer the second question, yes, I think longer data would come from a subsequent study of 26 weeks or longer, not that that’s the next study, but we plan to get through this study first. The follow-up period in this study, I believe, is 4 weeks. So you come back, I think -- well, multiple times you come back after the 13-week treatment period, but I think the last follow-up is at week 17 and Marianne is nodding in agreement here. Marianne, our COO. So anyway, that’s the duration.

Great. And from the Phase 1 data, did you notice anything in the PK/PD profile that suggests that might be different from what we’ve seen with the tirzepatide compound. I’m just curious if there was anything that appeared in that data set yet? Or is it too early to tell?

Yes. It’s really hard to make those comparisons because the -- obviously, they weren’t head-to-head in the population that we’ve seen published for the tirzepatide compound is just a different population than we looked at. We do see, I think, a later T-max, longer half life, and I think our exposures are improved. But again, very difficult to make those sorts of comparisons in the absence of a head-to-head data set.

Great. And I’ll ask one last question. Further down the road, do you see any potential to run a combination with the 2809 and the dual agonist potentially in a NASH study?

Yes, it’s not something we’ve talked much about. But if we were to do something like that, I think we talk about it if and when we have data on it.

Great. Thanks for taking the questions.

Thanks Justin.

Thank you. And our next question today comes from Naz Rahman with Maxim Group. Please go ahead.

Hi guys, thanks for taking my question. Just really quickly on the oral. What gives you confidence on the timing of the initial data for second half of 2023? Like are you guys seeing any potential competition or any issues recruiting patients with all the, I guess, various GLP-1 studies on-going?

Yes. We think we can get the data in the second half. We feel confident about that. Luckily, obesity is the largest market ever. So we shouldn’t have problems with recruiting, but I don’t know, we haven’t had many competitive issues at this point.

Right. How many sites are there? And for this study are all the sites also in Australia?

Yes. It’s actually an extension of the earlier study, the single ascending dose and multiple ascending dose study, it’s the same site. It’s a single site in Australia. The Phase 2 study will be here in the United States.

Got it. Are you seeing, like, I guess, like faster rates enrollment or I guess, like higher rates of interest versus when you initially started your injectable studies?

I think it’s maybe too early to say there. I don’t know the answer to that question.

Alright, got it. Thanks for taking my questions.

Thanks Naz.

Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I’d 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. We look forward to updating you again in the coming months. Have a good afternoon.

Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.