Welcome to the Viking Therapeutics Third Quarter 2024 Financial Results Conference Call. At this time, all parties are in a listen-only mode. Following management’s prepared remarks, there will be question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded today, October 23, 2024. 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, October 23, 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 listening in by phone or on the webcast. Today, we'll review our financial results for the three and nine months ended September 30, 2024, and provide an update on recent progress with our clinical programs and operations. The first three quarters of 2024 have been data-rich for Viking, with the company delivering positive data from four clinical programs as well as promising in vivo data from a new preclinical program. Beginning in the first quarter, we announced positive results from the Phase 2 VENTURE trial evaluating subcutaneous VK2735 for the treatment of obesity. This trial demonstrated impressive reductions in body weight after 13 weeks of treatment. We also announced the initial results from a 28-day Phase 1 trial, evaluating a novel oral formulation of this compound, showing excellent tolerability and encouraging reductions in body weight. During the second quarter, the company announced histology results from the Phase 2b VOYAGE study evaluating VK2809 for the treatment of NASH and fibrosis. This study successfully achieved its primary, secondary and exploratory endpoints, showing reductions in liver fat at 12 weeks, an improvement in NASH resolution rate and fibrosis after 52 weeks. Also during the second quarter, Viking announced in vivo results from a series of internally developed dual agonist of the amylin and calcitonin receptors. These compounds demonstrated body weight reductions, decreased food intake and improved metabolic profile in animal models. Finally, subsequent to the end of the third quarter, we announced positive results from a 28-day Phase 1b trial of VK0214 in patients with X-linked adrenoleukodystrophy or X-ALD. Results from this study showed VK0214 to be safe and well tolerated following once-daily oral dosing over the 28-day treatment period. In addition, significant reductions were observed in plasma levels of very long chain fatty acids and other lipids as compared to placebo. We are proud of the clinical progress we've made this year and look forward to further advancement of our pipeline programs in the quarters ahead. I'll have additional comments on our operations and development activities after we review our financial results for the third quarter and nine months ending September 30. 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 later today. I'll now go over our results for the third quarter and nine months ended September 30, 2024, beginning with the results for the quarter. Research and development expenses were $22.8 million for the three months ended September 30, 2024, compared to $18.4 million for the same period in 2023. The increase was primarily due to increased expenses related to manufacturing for the company's drug candidates, stock-based compensation, salaries and benefits and regulatory services, partially offset by decreased expenses related to preclinical studies and clinical studies. General and administrative expenses were $13.8 million for the three months ended September 30, 2024, compared to $8.9 million for the same period in 2023. The increase was primarily due to increased expenses related to stock-based compensation, legal and patent services, services provided by third-party consultants and insurance. For the three months ended September 30, 2024, Viking reported a net loss of $24.9 million or $0.22 per share compared to a net loss of $22.5 million or $0.23 per share in the corresponding period in 2023. The increase in net loss for the three months ended September 30, 2024, was primarily due to the 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 2023. I'll now go over our results for the nine months ended September 30, 2024. Our research and development expenses for the nine months ended September 30, 2024, were $70.7 million compared to $43.3 million for the same period in 2023. The increase was primarily due to increased expenses related to manufacturing for our drug candidates, clinical studies, stock-based compensation, preclinical studies and salaries and benefits. Our general and administrative expenses for the nine months ended September 30, 2024, were $34 million compared to $28.2 million for the same period in 2023. The increase was primarily due to increased expenses related to stock-based compensation, salaries and benefits, services provided by third-party consultants and insurance, partially offset by decreased expenses related to legal and patent services. For the nine months ended September 30, 2024, Viking reported a net loss of $74.5 million or $0.69 per share compared to a net loss of $61.3 million or $0.66 per share in the corresponding period in 2023. The increase in net loss for the nine months ended September 30, 2024, was primarily due to the 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 2023. Turning to the balance sheet. At September 30, 2024, Viking held cash, cash equivalents and short-term investments of $930 million compared to $362 million as of December 31, 2023. This concludes my financial review, and I'll now turn the call back over to Brian.

Thanks, Greg. I'll now provide a summary of recent clinical highlights and outline next steps with our pipeline programs. I'll begin with Viking's lead obesity program, VK2735, a dual agonist of the glucagon-like peptide 1, or GLP-1 receptor and the glucose-dependent insulinotropic polypeptide, or GIP receptor. The company's initial Phase 1 single and multiple ascending dose trial for this compound demonstrated the promising safety, tolerability and pharmacokinetics of VK2735 when administered as a weekly subcutaneous injection for up to four weeks. Subjects in the study demonstrated up to approximately 8% weight loss from baseline after 28 days with no signs of plateau. Following these results, the company initiated a Phase 2 study of VK2735, known as the VENTURE trial. This trial was a randomized, double-blind, placebo-controlled multicenter study that evaluated the safety, tolerability, pharmacokinetics and weight loss efficacy of VK2735, administered subcutaneously once weekly for 13 weeks. In the first quarter of this year, Viking announced positive top line results from the VENTURE study. With respect to the study's primary endpoint, patients receiving VK2735 demonstrated statistically significant reductions in mean body weight from baseline, ranging up to 14.7%. Statistically significant differences compared to placebo were also observed for all VK2735 doses starting at week 1 and maintained throughout the course of the study. Weight loss in all treated cohorts was progressive through 13 weeks and did not show evidence of plateauing, suggesting that further weight loss could potentially be achieved through extended dosing beyond the 13-week period of this study. Regarding safety and tolerability, VK2735 was shown to be safe and well tolerated over the 13-week trial with the majority of treatment-emergent adverse events being characterized as mild or moderate, generally occurring early in the course of treatment, and primarily related to expected GI effects resulting from activation of the…

[Operator Instructions] The first question comes from Joon Lee with Truist. Please go ahead.

Thanks for the updates and for taking our questions. Regarding the end of Phase 2 meeting for the subcu VK2735 in this quarter, what are some things you'd like to iron out with the FDA? And how quickly would you be able to start Phase 3 after that? And also as a quick follow-up, is your amylin agonist a DACRA? Or is it just semantics, what you call it? And how are you benchmarking your agonist vis-à-vis what's out there, whether it's called amylin agonist or DACRA? Thank you.

Yes. Thanks, Joon. With the amylin agonist, it is also hitting calcitonin. So it's a dual amylin and calcitonin receptor agonist. And we generally benchmark against known amylin agonists. We use pramlintide, we use cagrilintide. So we generally use compounds that are sort of the bellwethers as far as mechanism. With respect to the end of Phase 2 meeting with FDA, it's – we will review the proposed protocol, the proposed doses, the proposed trial size, all of those things. And then try and understand if there's anything that we overlooked or anything that the FDA recommends to include in the study. So just a little feedback on the proposed trial designs.

All right. Well, looking forward to the updates of the ObesityWeek. Thank you.

Thanks a lot, Joon.

The next question comes from Annabel Samimy with Stifel. Please go ahead.

Hi, thanks for taking my question. You've talked about the potential for monthly dosing in the past. Will we be seeing that PK data? And will you be incorporating that into the Phase 3 program? Or is it a separate trial? And I guess the same question for oral dosing, you're exploring additional – are you exploring additional dosing regimens and – given its continued activity post dosing? Thanks.

Yes. With the monthly dose, we will have some PK data in the VENTURE poster. And we think that the PK data do support monthly dosing. Not going to disclose too much of what's in the poster, but we think that monthly dosing is very feasible. As far as the inclusion of a monthly regimen in the Phase 3 program, we'll probably do a stand-alone there not included in the Phase 3, the statistical treatment gets more challenging when you transition mid-study to monthly. So we would probably target a stand-alone there to start as soon as we can.

Okay. And for the oral, are you looking at different dosing regimens given its activity post-dosing that you saw in the four-week study?

We may. We'll disclose the 13-week study design once we get closer to the actual study initiation.

Okay. Great. And just if I could have another question. Can you talk about the, I guess the infrastructure and capacity build that you have to do to run these next trials? Or have you committed to increasing your personnel at this stage? What are your expectations for how that expands your infrastructure base? Thanks.

Yes. Thanks, Annabel. We've typically relied heavily on external vendors. I think that's been – it works very well for us, and it's been an efficient model for us. That said, we've been pretty aggressively adding to the staff now. We've added in regulatory affairs, clinical development, manufacturing, formulation, clinical operations, market access, quality biostatistics. So it's a pretty broad-based increase in staff here. And we've continued to grow and we're continuing to add. So the Phase 3 trial is a lot different than the Phase 2 trial, and we're going to be prepared for it.

Okay. Great. Thank you.

Thanks, Annabel.

The next question comes from Steve Seedhouse with Raymond James. Please go ahead.

Yes. Thank you so much for taking the question. A couple of protocol questions. Just for the Phase 3 study. I'm wondering how you think about the pros and cons of whether it will be necessary or advisable to have like an active control arm in this study with one of the commercially available mechanisms and if that's a conversation that you anticipate having with the FDA.

Yes. Thanks, Steve. Right now, we're planning to do a placebo-controlled study. I think an active comparator study would be of interest in a future study. But in these first two studies, it will be placebo-controlled.

Okay. Sounds good. And then on amylin, clinical development strategy question as well. Just how early in the development program or how are you thinking in general about testing that combination with, in this case, VK2735 or I guess you could use another GLP? But how are you thinking about when it's appropriate and best to start looking at the combinations?

Yes. Thanks. In our view, the amylin – the greatest value with that mechanism is in conjunction with another mechanism. And typically, what you see is a real nice improvement in efficacy when you add it on top of another mechanism. With a GLP-1, you see a 50% bump or so. So if you were to add it on to a dual agonist, and it showed a similar improvement, that would likely be the best in the industry efficacy profile. And so that's something that we think is really a high-value exercise to proceed with. So we'll be hopefully bringing a compound into the clinic in 2025. And we would look at a single agent but rapidly follow that with potential combinations.

And just a follow-up on that, is that something that using the same approach you've used with VK2735, you could formulate orally and co-formulate with your oral in future studies?

We think so, yes.

Okay. And just lastly, I just want to clarify, it's sort of an obvious statement that you made in the press release, but I was hoping you could elaborate that you think further benefits from the oral dosing might be anticipated with longer dosing periods. But the press release does say based on observations in the Phase 1 study. So anything you can elaborate on or say about like just what observations you're referring to there, what specific data points led you to conclude there?

Yes. When you look at the trajectory at those – what's been reported so far, the 20 milligram and the 40 milligram cohorts, the slopes were still negative. And 20 days is such a short window to look at. So we think extending the dosing window would likely extend the trajectory further. That's really what we're referring to there.

Okay. Thanks. And so that's a reference to the already disclosed 40 mg data essentially, not...

That's right. That's right, yes. We haven't disclosed anything with the subsequent cohorts.

Okay. Thanks so much.

Thanks, Steve.

The next question comes from Roger Song with Jefferies. Please go ahead.

Great. Thanks for taking the question. So maybe start with a clarification, Brian. So can you confirm that you already completed the dose escalation for your oral 2735 up to 100 mg. And if that’s the case, could you qualitatively comment on the dose response on the weight loss and the GI rates for the higher dose?

Yes, Roger. We did dose up to 100 mg. And I think we’ll leave the further disclosure of the results to the poster. It’s only about 10 days. So we’re probably going to limit further communication there. We – the Phase 1 study was intended to provide sufficient information to plan and execute a Phase 2 study, and we think that it was successful in that regard, and we look forward to getting the Phase 2 underway as soon as possible.

Got it. Yes. Thank you. That makes sense. And then in terms of the capacity, maybe focusing on the manufacturing, understanding you probably already have the capacity for the clinical trial for Sub-Q Phase 3 [ph] and then for the oral Phase 2. Just curious for the past couple of months, what have you done to further increase the manufacturing capacity for those candidates? Can we – have you started to think about the potential commercial capacity? Thank you.

Yes. Thanks, Roger. Yes, you’re right. We do currently have on hand sufficient drug supplies to support our planned development activities for both the formulations, the Sub-Q and the oral. And in the meantime, as we proceed forward, we continue to have dialogue with the key global peptide suppliers and are working towards long-term supply agreements, and we are confident that we will be in a position to supply a blockbuster size product at the appropriate time.

Excellent. Thank you, Brian. That's off on that.

Thanks, Roger.

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

Oh, hey, thanks for this update, and congrats on all the progress. Can you comment on what level of safety and tolerability you would like to see for the 100 mg dose that might enable testing higher oral doses in the Phase 2 study?

Yes. We leave the tolerability decisions up to the dose level review team that means after completion of every cohort. And there was never a recommendation from that team to discontinue escalation. So we feel very comfortable with the tolerability profile.

Okay. Great. Thank you. And then recognizing that commercial launch is years away, you recently indicated that a synthetic manufacturing route with an external supplier could be outlined by the end of the year. Could you please comment on how those discussions are going? And any other updates on the manufacturing front?

Yes. Yes. Thanks, Jay. So as I’ve mentioned a minute ago, we do continue to have dialogue with global peptide suppliers who can scale up. And some of that discussion is focused on various synthetic routes. So all of that is in progress and under active development. So when we make a decision for the route that will be utilized for scale up, we’ll talk more about it, but all of that is still in process as we speak.

Okay. Great. And maybe one big picture question. As you think about the total value for VK2735, can you just talk about how that value is split between the Sub-Q and oral forms?

Yes. It’s an interesting question. And oftentimes, it depends on who you ask. We view the really anchor piece to the franchise is the subcutaneous formulation with the oral being a very nice add-on, but unlikely to be the major modality. And when you look at the utilization right now, we’re probably going to exceed $40 billion in total revenue from the current obesity drugs. And so those are rapidly expanding, and we’ll continue to do so in the absence of an oral, which is some time off. So to think an oral would come in and dominate, I don’t know how likely that is. We see the oral is probably a 20% opportunity and the injectable is probably an 80% opportunity.

Great. Super helpful. Thanks for taking all the questions.

Thanks, Jay.

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

Thanks for taking our questions and congrats on the progress. Brian, on the Sub-Q injectable with the Phase 3 coming up, would you look to use an auto-injector format for that study? Or could you talk to us about, if you’re looking to transition to an auto-injector, what that might entail, whether you need a separate study for that? And I have a follow-up. Thanks.

Yes. Thanks, Justin. So we haven’t talked much about the trial design, but we will be using an auto-injector in that study. If it’s available soon enough, we would utilize that from the onset of the study. If not, we would seek to transition people from a vial and a syringe to the auto-injector.

Okay. Great. So it sounds like you might be in discussions with securing some of the auto-injector materials in order to prepare for that.

Oh, yes, yes. That’s right.

Okay. Excellent. And then just a question on the X-ALD. Remembering correctly, the FDA considered the recent study to be a Phase 2 study. Would that mean that if you’re looking to progress that into clinical development, the next step would be like a registrational study?

Yes, good question. That’s what we think. Typically, you look at these biomarker studies initially in this indication anyway and then proceed to a registration study, whether it’s Phase 2/3 or a Phase 3. So that would be our expectation here as well, likely focused on more of a functional or a quality of life endpoint, not just the very long chain fatty assets. That’s been the historical path forward in X-ALD.

Great. Well, thanks for taking my questions.

Thanks, Justin.

[Operator Instructions] The next question comes from Thomas Smith with Leerink Partners. Please go ahead.

Hey, guys. Good afternoon. Thanks for the updates and for taking the questions. First on oral 2735, looking forward to seeing the data at ObesityWeek. Brian, I just wanted to follow up on an earlier question. And I know you commented back in September that the dose level review committee hasn’t met yet to review the data from the 100 mg cohort. So wondering if you could just comment on whether they met at this point and clarify whether there’s still any potential or desire to explore a higher dose level here in the Phase 1 setting, or is this is something you may consider doing in the Phase 2?

Yes. It’s – so getting to the root of the question, would we dose higher. I think it’s certainly possible to dose higher, and I guess we would really disclose that when we start the Phase 2 study. There was nothing in the initial read of the data that would indicate we’d be precluded from dosing up. But we’d rather refrain any further comment until we present the actual data at the ObesityWeek conference.

Got it. Okay. That makes sense. And then for maybe a quick question on 2809 in NASH and looking forward to the late-breaking data there at AASLD. Can you maybe tease some of the additional data and analysis we can look forward to seeing at the Liver Meeting and then, any update on how you’re thinking strategically about the next steps with that program perhaps with respect to engaging partners?

Yes. Thanks, Tom. We’ll certainly look at the histologic changes, I think that’s the thing most people are interested in changes in fibrosis, any differences in response among the various severities of fibrosis, any differences in response depending on baseline characteristics with liver fat as well. So that would be sort of, I think, of interest to look at. Next steps here, we’ve always felt that the NASH program would be best handled in conjunction with a larger pharma collaborator. And that's the way we still feel about it. So we'll review the responses we received from the FDA and proceed from there.

Got it. All right, thanks for taking the questions, guys. Appreciate it.

Yes. Thanks, Tom.

The next question comes from Yale Jen with Laidlaw & Company. Please go ahead.

Thanks for taking the questions and [Technical Difficulty] congrats on the progress.

Yes, thanks, Yale. No, good question. We just received those responses within the last 48 hours and we're reviewing them. No real surprises or unexpected comments in them thus far, but still in process of looking at them.

Okay. Great. And maybe just one follow-up here, which is that in the recent EASD meeting, there's a lot of talk about the amylin as well as the design. Once the readout could be available in the fourth quarter or year-end of this year, what do you think the potential readout or impact you might have on your program or you're thinking about the design or not? So any colors on there and thanks.

Well, yes, we think the mechanism is really exciting. And when you think about the effect on appetite and feeding behavior, it seems to act via a different mechanism than GLP-1 and GIP. So you should see a nice add-on effect. So I would expect to see exciting data when it's reported later this year. And I think that would bode well for our own program if we're able to combine it successfully with VK2735 or other things in the pipeline. So far, what we've seen from Amylin looks really promising, and that's one of the reasons we're excited about it.

Okay, great. Thanks a lot and congrats.

Thanks, Yale.

The next question comes from Hardik Parikh with JPMorgan. Please go ahead.

Hey, Brian. I just wanted to ask you – first question is just a clarification. I just want to make sure, in the Phase 1 trial, you have or you have not tested doses above 100 milligrams in the oral format? And then the second one is just more of a high-level question. I think we saw a number of kind of competitive readouts in obesity, for example, at EASD. I just wanted to get your overall thoughts on what you learned out of those data readouts from Novo and Roche and so forth. Thank you.

Yes. Thanks, Hardik. We went up in the oral – the subsequent cohorts were 60 milligrams, 80 milligrams and 100 milligrams. And like I said earlier, we'll have the data in about a week and half. With respect to EASD, a lot of really interesting programs in the space is really, really hot right now. So – but I guess what was I think comforting to us is that we do feel like we have two of the best programs with respect to mode of delivery, the injectable and the oral. And so there was nothing at the conference that would lead us to believe otherwise. Everything is still pretty early right now. But I think we feel good coming out of both ADA and EASD about the value of the pipeline today, and we're looking forward to the subsequent studies with both the formulations of VK2735 and with the amylin program.

Thank you.

Thanks, Hardik.

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

Hi, Brian, thanks so much for taking our questions. So I have two questions, if you don't mind, and I could ask them one at a time. So our first question is about the maintenance opportunity for VK2735, and specifically, we're curious about how you think about the dosing and the setting and really more from a philosophical standpoint. So just to provide a little more context, the question is driven on my observation that the weight loss setting, the goal is to stimulate caloric deficit, but that dynamic will differ in the maintenance setting where the goal is more about sustaining equilibrium. So we're just wondering, how you think about the dosing in that setting? And what are some key questions that you're asking and how are you designing experiments to address those questions around dosing?

Yes. Thanks, Alex. With the monthly regimen, we view it as really more of a maintenance regimen than a weight-loss regimen. And so it would be an option for someone who has reached their target range and weight to transition from the weekly to a monthly and really keep their weight sustained, possibly to continue further downward. But really, our thought would be the most likely use would be in the maintenance setting. So just furthers the convenience aspect of the compound or the mechanism. I forgot, was there a second part to that question?

Yes. No, that makes sense. So you're kind of just looking like longer dosing intervals as kind of the nature and mechanism for driving that difference between equilibrium versus stimulating continuous caloric deficit?

Yes. It's kind of a little bit of both. You're re-equilibrating maybe at a lower caloric intake, that's what the hope would be anyway.

Okay. Thank you. That makes sense. Perfect. And then our second question is in regard to the amylin asset. So when you’re looking across the various investigational therapies with this mechanism, most companies seem to be gravitating towards that calcitonin component that you mentioned earlier. So we're just curious about your views on calcitonin. And do you think there's an optimal ratio in terms of agonism and if the agonism is balanced? And then also, we're wondering how you work with VK2735, which is also dual agonist and informs agonism bias for the amylin program.

Yes. So historically, I think the first compound was very heavily active on the amylin receptor and less so on the calcitonin receptor pramlintide was that compound. And more recently, the – most programs are targeting both. I don't know if that's intentional, or it's just very difficult to tease away amylin from calcitonin. We have worked on compounds that target both and it seems like the ones that have more of a balance on both receptors just show a slightly better weight loss profile than ones that skew one way or another. And so that's what has led us to the more balanced mechanism. But I don't know that it's really well understood, at least it isn't by me, what is the ideal ratio. It just seems like the closer you get to one, the better the profile seems to look overall.

I see. Okay. Very interesting. Great. Thanks for taking our questions.

Thanks, Alex.

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. Thank you.

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