Welcome to the Viking Therapeutics Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, February 7, 2024. I would now like to turn the conference over to Viking's Manager of Investor Relations, Stephanie Diaz. Please go ahead.

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 7, 2024, 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'll 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'll review our financial results for the fourth quarter and full year ended December 31, 2023, and provide an update on recent progress with our clinical programs and operations. 2023 was an exciting year for Viking, highlighted by important data releases from 2 of our 4 clinical programs. With respect to our obesity program, during the year, we announced positive results from a first-in-human Phase I clinical trial of VK2735, a dual agonist of the GLP-1 and GIP receptors. In this study, subjects dosed with VK2735 demonstrated statistically significant weight loss with favorable safety and tolerability. Following these results, we initiated the Phase II trial called VENTURE to further evaluate VK2735 in patients with obesity. We expect to report top line results from this study later this quarter. During the year, we also initiated a Phase I clinical trial, evaluating an oral formulation of VK2735. We expect to report results from this study later this quarter. Viking made good progress with other pipeline programs during the year as well. In May, we announced positive top line results from the Phase IIb VOYAGE study of our thyroid hormone receptor beta agonist, VK2809 in patients with biopsy-confirmed nonalcoholic steatohepatitis and fibrosis. This trial met its primary endpoint with patients receiving VK2809 demonstrating statistically significant reductions in liver fat as well as other important measures compared with patients treated with placebo. We look forward to reporting the 52-week biopsy data from this study in the first half of 2024. On the financial side, we completed 2023 with a strong balance sheet, thanks to our continued diligence in managing expenses, along with a successful public offering of common stock, which resulted in gross proceeds of approximately $288 million. These funds will be used to support the continued advancement of our pipeline programs through multiple clinical milestones. I'll provide further details on our operations and development activities after we review our financial results for the fourth quarter and full year 2023. With 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-K filing with the Securities and Exchange Commission, which we expect to file today. I'll now go over our results for the fourth quarter and full year ended December 31, 2023, beginning with the results for the quarter. Our research and development expenses for the 3 months ended December 31, 2023, were $20.5 million compared to $16.2 million for the same period in 2022. The increase was primarily due to increased expenses related to clinical studies, preclinical studies, manufacturing for our drug candidates, stock-based compensation, salaries and benefits and third-party consultants. Our general and administrative expenses for the 3 months ended December 31, 2023, were $8.8 million compared to $4.1 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 third-party consultants, partially offset by decreased expenses related to salaries and benefits. For the 3 months ended December 31, 2023, Viking reported a net loss of $24.6 million or $0.25 per share compared to a net loss of $19.6 million or $0.20 -- $0.26 per share in the corresponding period in 2022. The increase in net loss for the 3 months ended December 31, 2023, was primarily due to the increase in research and development expenses and general and administrative expenses noted previously, partially offset by increase in research and development expenses and general and administrative expenses noted previously, partially offset by increased interest income compared to the same period in 2022. I'll now go over the results for the 12 months ended December 31, 2023. Our research and development expenses for the year ended December 31, 2023 were $63.8 million compared to $54.2 million for the same period…

Thanks, Greg. As I mentioned in my opening comments, in 2023, Viking made significant progress with each of our 4 clinical programs, positioning the company for an exciting year ahead. I'll now briefly review our 2023 accomplishments and preview key objectives for 2024. I'll begin with an update on our VK2735 program for obesity. VK2735 is Viking's newest clinical stage compound and is a dual agonist of the glucagon-like peptide-1, or GLP-1 receptor and the glucose-dependent insulinotropic polypeptide, or GIP receptor. In the first quarter of 2023, we announced positive results from a Phase I single ascending dose and multiple ascending dose study of VK2735. This study was designed to evaluate the compound's initial safety, tolerability and pharmacokinetic profile as well as its potential impact on exploratory metabolic measures, including body weight and liver fat. The single ascending dose portion of the study enrolled healthy men and women and demonstrated that single subcutaneous doses of VK2735 were safe and well tolerated and displayed favorable pharmacokinetics. VK2735 demonstrated a half-life of approximately 170 hours to 250 hours and excellent therapeutic exposures. The multiple ascending dose portion of this study enrolled healthy men and women with a minimum body mass index of 30 kilograms per meter squared. These subjects received subcutaneous doses of VK2735 once weekly for 28 days. As in the single ascending dose study, the multiple ascending dose study demonstrated encouraging safety and tolerability and positive signs of clinical activity. All cohorts receiving VK2735 demonstrated reductions in mean body weight from baseline ranging up to 7.8%. Cohorts receiving VK2735 also demonstrated reductions in body weight relative to placebo, ranging up to 6%. Statistically significant differences in body weight compared to placebo were also maintained or improved at the day 43 follow-up time point, 21 days after the last dose of…

[Operator Instructions] And our first question comes from Joon Lee of Truist.

Regarding the subcutaneous VK2735, you reminded us that in Phase I, you saw 6% placebo-adjusted weight loss in just 4 weeks. So with longer dosing of up to 13 weeks using up to 50% higher dose, what's a reasonable expectation of rate loss in the upcoming VENTURE trial?

Yes. Joon, thanks for the questions. So we're really using around an 8% hurdle for the VENTURE study. I think if we showed that, that would be sufficient for us to move forward. I think it could be competitive at 13 weeks.

And just a quick follow-up. What other safety and efficacy measures are you tracking that we should be looking out for in the VENTURE trial?

I'm sorry, what other safety and what?

Efficacy measures.

Efficacy. Yes. We're looking at, obviously, plasma lipids. We're looking at plasma glucose, insulin, a standard battery of lab assessments and clinical chemistry. Cardiovascular safety as well. But it's pretty standard, nothing unusual or exotic in the safety analysis.

Great. And then 1 last quick one. For the oral VK2735, are you able to disclose whether you've dosed higher than 20 milligrams in the [indiscernible]?

No, we're not going to get into the details of the cohorts. We'll disclose all of those details when we disclose the data.

The next question comes from Steven Seedhouse of Raymond James.

Sorry about that, guys. Can you hear me now?

Yes, we can.

Sorry, my apologies. I wanted to first ask about VENTURE. For the higher dose arms, particularly the 15-milligram cohort, if you were just following the tirzepatide titration schema like 2.5 milligrams titrated, in this case, every 3 weeks, you still wouldn't get to the high dose. So curious if you can just clarify like what are the dose increments and sort of schema for the titration in that study?

Yes. We use a 3-week blocks. The lowest dose is 2.5 mg for 13 weeks. The second dose is for 3 weeks and then 5 mgs for 10 weeks. The 10-milligram dose is 2.5 for 3 weeks, 5 for 3 weeks. And then 10 for 7 weeks. And then the 15-milligram dose starts at 5 -- so it's 5 milligrams for 3 weeks, 7.5 milligrams for 3 weeks. 10 milligrams for 3 weeks and then 15 milligrams for 4 weeks.

Perfect. Appreciate that detail. And then just want to ask also is there's a 4-week follow-up period in the study off drug, and I'm curious if that's -- are we waiting for that 4-week off-drug follow-up to conclude before analyzing the top line data? Or would the release just include the 13 weeks on drug?

Well, yes, it's a good question. It's a 6-week follow-up period. I might have earlier said 4 weeks mistakenly, but we have a 6-week follow-up window. And I believe we'll be through that when we report the top line data.

Okay. And I mean might as well be the first to ask, but what is the sequencing of the subcu and the oral data, which comes first? Or would they be announced together?

Yes. Thanks, Steve. No, not going to be announced together, and they'll both be this quarter. I think that's about all the granularity we're going to give. The quarter is not very long.

The next question comes from Jay Olson of Oppenheimer.

Congrats on the progress and thanks for the update. Can you just talk about for the oral Phase I data since you have the option to add cohorts, how many cohorts of data should we expect?

Jay, yes, thanks for the question. I mentioned to Joon, we're not going to get into the details of numbers of cohorts until we actually release the data. The trial was recently designed to enroll 4 cohorts, but we maintain flexibility to add cohorts. But we'll have all the details on that when we release the data.

And then I guess since Novo is planning to acquire Catalent, can you just talk about your manufacturing plans and any impact you might expect if that acquisition goes through?

Yes. Thanks. Good question. It shouldn't impact us at all, at least -- definitely not in the near term, and I don't believe as far as future plans as well. I think we're all set to supply all of the clinical studies that would be required to receive approval.

Okay. Great. And can you just talk big picture about the current landscape for oral weight loss drugs and where you think oral drugs will fit in the grand scheme of the obesity landscape?

Yes. That's a big question, Jay. But we're 20 years into the GLP-1 era, and there's 1 approved oral agent. That's a very, very difficult challenge that the industry faces. So we're working on a program we're excited about, but it's very, very difficult. I think orals have multiple different commercial positions, 1 would be as a lead in to a subcu therapeutic for someone who doesn't want to maybe start with an injection. Second one would be in the maintenance setting. And we think that's a really important setting because if you come off a large amount of weight loss and you don't want to continue to take the subcu, transitioning to an oral would be a potentially really attractive option. And in that sense, you maybe wouldn't require the same level of efficacy as a subcu to maintain a certain target body weight. We think the other potential opportunity would be in the temporary use, you have an event coming up in 6 months or whatever, and you want to lose some weight ahead of that. And so you wouldn't necessarily need the magnitude of weight loss that could be provided by a subcu dosage form and oral would be suitable there. So a lot of different opportunities. We see the subcu as the meat of the market, but we see the oral opportunity is a really important incremental opportunity.

Next question comes from Naz Rahman of Maxim Group.

Congrats on the progress. And just a couple of questions for me. So obviously, you have a very, very busy first half with the Phase IIb voyage and the venture results. If both studies were to succeed in DC, what you want to see, could you provide some color or context around how much it would cost or what do we take to advance these programs into the next clinical trial?

Yes. They're obviously very large and expensive studies, more than -- easily more than $100 million per study. Probably not going to give detailed guidance on the precise expenses of those studies. But suffice to say, I think everybody is aware, these are very expensive Phase III programs.

Got you. And now on your injectable. Could you talk a little bit about the current, I guess, delivery mechanism? Is it just patients use a vial and syringe. Do you have like an auto-injector or plans for like an auto-injector device for your injectable. Is any of that in the works?

Yes, it is. The Phase II venture study is using a vial and syringe, but we will be using a different device in future studies.

Is that something we might get an update on this year? Or was that something we might get an update on more than like 25?

We'll probably provide an update on that when we start the next study and the timing of that is TBD.

The next question comes from Andy [indiscernible] of William Blair.

Congratulations on all the progress in 2023 and look forward to a very productive 2024. A question about the oral administration. If you look at the Rybelsus label, there are some restrictions about timing of the food, volume of water. I'm just curious about the gastric absorption technology baked into the oral formulation, do you think that there is a potential that you can engineer away these restrictions?

Yes. Thanks, Andy. We haven't disclosed the technology or anything regarding patient behavior in their subject behavior in the study. We will discuss that when we just lose the data. But I'll just say now per many Phase I trials, these people are fasted as they -- when they take their doses in the morning, but we haven't disclosed any additional requirements or suggestions.

Got it. Okay. And then staying in the same OBC field, obviously, there is an increase in interest and perhaps the valuation of clinical assets that could boost lean body mass, looking at the Versonis deal recently. So in your pipeline, 5211, obviously, that has demonstrated potential for that. So I am curious about potentially any change in prioritization or perhaps increased external inbounds on that asset that you can share with us?

Yes. Thanks, Andy. It's an interesting question. And you're right, the VK5211 is the most potent oral agent, I believe that we've ever seen. I mean, certainly, to our knowledge, there's nothing more potent on the oral side. In the hip fracture study, we saw very significant increases in lean body asset at all doses and a beautiful dose response. We reported those data in 2017 and '18. And it's -- to the extent a loss of muscle from these agents is clinically relevant, then maybe adding muscle building agents could be a reasonable approach. It's not clear that it is clinically relevant, the change in lean body mass. I know it sounds great, and it's an easy clean story to tell. But we do have some experience in muscle drugs, and we have experience with what the FDA considers important, and it's not just increase in muscle mass. So it is an interesting area. We have got a very potent compound, but the medical necessity is a little bit murky to us.

That's fair. And maybe last quick one in terms of R&D, a little uptick this quarter. Just thinking about how do you foresee that trend going forward?

Andy, I think our R&D yields will go up a bit this year versus last year, not radically, but it will be up a bit focused on advancing all of our programs and assuming success. So I think you could think about it increasing a bit, but not way, way up, for sure.

The next question comes from Thomas Smith of Leerink Partners.

Maybe one, just a picture. We've seen obviously a very active environment, and it seems like there's a lot of strategic interest in the obesity space. Can you just comment on what you're seeing on the business development front in terms of partnership interest on your programs, both obesity and NASH. And just remind us how you're thinking about next steps of development across both programs.

Thanks, Tom. We can't comment too much on that. I would just say, you're correct in saying that it's an active area and an area of high awareness, but I'd say, across the industry, based on the magnitude of the success that we're seeing and the clinical benefit that these therapies provide. So it makes sense that there would be interest from potential partners, and we would be happy to engage in those discussions.

Got it. That's helpful. And then maybe just one on Voyage. You mentioned having just completed the last patient biopsies recently. Maybe you could just remind us how you're thinking about evaluating those biopsies in voyage, whether you're using a single pathologist or multipath review? And just kind of walk us through the gating factors there to reporting the top line data set.

Yes. Thanks. So the biopsies are the slower element there. It is a single reader that we're using and the single reader goes to a second reader when there's a patient whose biopsy is right on the cusp of something like F2 or F3 fibrosis or an Apple activity score for things like that go to a second reader. And then the first and second reader must reach a consensus before the final assessment of the slide is made. So I think we started the study really before the 3 reader approach had become more widely used. And so that's why we have the single reader.

The next question comes from Yale Jen of [indiscernible] Company.

Just about 2 quick ones here. The first is that, given the reason Lilly reporting about the synergy, NASH data, and you guys actually mentioned earlier that in terms of 2735 have impact on the liver fat. I wonder whether there's additional thoughts or any other things you guys were thinking of in your overall strategic planning or thinking.

Thanks. Not really. We have a NASH program already and not interested at this point and really pursuing NASH with the VK2735 program. I do think it's encouraging to see that the dual agonist mechanism appears to be effective at NASH resolution. I think that's exciting. But we're going to stick with obesity for the time being with that program.

Okay. Maybe one more follow-up here, which is that Amgen recently published their MG133 Phase I data was -- is there any comment and thoughts that will get referred for your programs as well.

Yes. No, good question. We haven't had a chance to really get into the evaluation of those data is pretty fresh. But yes, I guess we'll evaluate those data moving forward, but a good question for Amgen.

Well, congrats on the progress and look forward for all the data this half of the year.

The next question comes from Joe Pagantis of H.C. Wainright.

So Brian, first, I just wanted to start at the back end of your question-and-answer commentary, maybe push the envelope a little bit on business development. You said you'd be happy to engage in discussions, and I was just curious if I may. Are you able to discuss the levels of maturities of any potential discussions that may be ongoing?

Yes, Joe, I wouldn't want to mischaracterize that statement or mislead or anything. We've always been open to partner discussions since day 1. So we're always opportunistically evaluating whatever is presented to us. So I can't really characterize any discussions.

Got it. Got it. And then to the earlier question, a very earlier question was asked about Venture. I'll ask the same regarding the oral study, and that is what do you consider the benchmark to success?

For the oral study, yes, we've always considered if it could look on -- well, obviously, it's a safety and PK and tolerability study. So we'll look for safety, tolerability and a clean, predictable PK profile. On body weight, if we could look like an injectable GLP-1 after a month, that would be, I think, encouraging. And so what's the magnitude there? It's a little bit variable, but we look at 1% to 2% as being something that would probably warrant further development.

Okay. Very fair. And then my last question, obviously, this goes into later 2024 and beyond. Are you willing to take any first passes now with regard to pivotal study plans or even designs?

For obesity?

For obesity, for NASH in general for the company Yes.

Yes, yes, yes. Yes, with both of these programs, we plan to speak with the FDA following the data analysis. So we'd like to have a Type C meeting with the FDA on the VK2735 program and outlined potential next steps there. And then with the NASH program, have an end of Phase II meeting. And we know what the guidance is for both indications, but it would be nice to talk with the FDA to learn any recommendations or new comments that they have regarding the trial design. But we do have a pretty good idea on what those trials will look like.

The next question comes from Jack Padovano of Stifel.

This is Jack Padovano, calling in for Annabel Samimy. So again, I just wanted to touch briefly on the NASH resolution data from trozepatide synergy NASH trial. Just curious if those results change where you view THR-beta receptor agonist kind of fitting into the treatment paradigm given the more similar upstream liver fat impacts that both mechanisms have.

Yes. Thanks, Jack. It doesn't really change our view of the role of a targeted agent. We do think there's going to be a lot of different therapies used in this population. The population is very heterogeneous to begin with and different patients will be better suited for different therapies. So we do see the targeted agents is remaining relevant for sure. That said, I think it would be naive to think that GLP-1 type therapeutics won't be important in the treatment paradigm, potentially as a sort of a backbone in the overweight or the diabetic patient. But we still see there's a nice opportunity for a targeted agent.

The next question comes from Justin Zelin of BTIG.

Congrats on the progress. Brian, I wanted to ask to the earlier guidance for cue formulation of 2735 here being released ahead of guidance into a level of interest or demand on behalf of patients for a subcu rather than oral or just how we should be thinking about that?

No. It's just -- thanks, Justin. It was just -- the trial was enrolled more quickly than expected and were no hiccups during the course of the study. And so we think we should have the data this quarter. Going to the demand. I mean it was just -- the demand was reflected in the speed and size of the trial. It was really pretty easy to enroll.

That makes sense to me. And is it possible we could get the oral and the subcu data on the same time on the same date.

No, probably not. And we haven't disclosed the sequence just other than to say both will be this quarter.

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

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.