Viking Therapeutics, Inc.
Q2 2021 Earnings Call Transcript

Published: 28 Jul 2021

[Operator:]

Welcome to the Viking Therapeutics’ 2021 Second Quarter 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. As a reminder, this conference call is being recorded today, July 28, 2021. I would now like to turn the conference over to Viking’s Manager of Investor Relations, Stephanie Diaz. Please go ahead, Stephanie.

[Stephanie Diaz:]

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, July 28, 2021, will contain forward-looking statements under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995, including statements about Viking's expectations regarding its development activities, timelines and milestones. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely and reported results should not be considered as an indication of future performance. These forward-looking statements speak only as of today's date and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters. I'll now turn the call over to Brian for his initial comments.

[Brian Lian:]

Thanks, Stephanie, and thanks to everyone listening on the webcast or by phone. Today we'll provide an overview of our second quarter 2021 financial results, as well as an update on recent progress and developments with our pipeline programs and operations. During the second quarter, we made steady progress with our two lead programs. With respect to VK2809, our novel thyroid hormone beta receptor agonist in development for nonalcoholic steatohepatitis, we continued enrollment of patients into our Phase 2b VOYAGE study evaluating VK2809 in the setting of NASH and fibrosis. The rate of new patient enrollments over the first half of 2021 has continued at a steady pace. During the quarter, we also made great progress with our second thyroid hormones beta receptor agonist VK0214, which is in development for the treatment of X-linked adrenoleukodystrophy or XALD. We recently completed the Phase 1 trial for VK0214 in healthy volunteers and last month announced encouraging initial data. Based on these results, we initiated a Phase 1b clinical trial to evaluate VK0214 in patients with XALD and we are excited to be moving forward with this important program. I’ll provide additional detail on the development activities after we review our second quarter financial results. For that, I’ll turn the call over to Greg Zante, Viking’s Chief Financial Officer.

[Greg Zante:]

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 for additional details.

[Brian Lian:]

Thanks Greg. I'll now provide an update on the progress with our development programs beginning with our lead program VK2809. As a reminder, VK2809 is an orally available, small molecule agonist of the thyroid hormone receptor that possesses selectivity for liver tissue, as well as the beta receptor subtype. Throughout this developments, VK2809 has demonstrated a consistent and compelling profile for the treatment of metabolic and lipid disorders. In Phase 1 studies in subjects with mild hypercholesterolemia, treatment with VK2809 produced significant reductions in plasma lipids, including LDL cholesterol, triglycerides and atherogenic proteins. Our Phase 2a study in patients with non-alcoholic fatty liver disease, and hypercholesterolemia successfully achieved both its primary and secondary endpoints, with treated patients demonstrating 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. Importantly, no serious adverse events were reported in this trial among patients receiving VK2809 or placebo. The initial and follow-up data from this Phase 2a study have been the subject of presentations at key scientific meetings including AASLD and the International Liver Congress or EASL. The most recent of these oral presentations was made at the 2020 EASL conference, and highlighted follow-up data demonstrating VK2809's durable benefits, including among patients with key NASH risk factors. At week 16, four weeks after completion of the 12-week treatment period in the study, VK2809 treated patients maintained a statistically significant 45% median reduction in liver fat content, compared to a 19% reduction among patients receiving placebo. In addition, at week 16, 70% of VK2809 treated patients maintained a response defined as experiencing a greater than or equal to 30% relative reduction in liver fat content from baseline. Notably, all patients receiving five milligrams of VK2809 daily which was the lowest dose evaluated in the study maintained a response at week 16.

[Operator:]

Our first question comes from Joon Lee with Truist Securities. Please go ahead.

[Joon Lee:]

Hi. Thanks for taking our questions and for the updates. Brian could you comment on where you are in terms of enrollment? I know that you expect data in 2022, but are you still on track to complete enrollments by the end of the year? And then the second question is, the expected subsidy of 0214, is it – so, how specific is it for ABCD2 over ABCD1? We are just trying to understand how much of what you showed in the healthy volunteers is due to the enhancing the effect of ABCD1 which is defected in the XALD patients versus enhancing the effect of ABCD2, which is still functional in these patients and through which 0214 you talked about. Just wanted to understand that specific. Thank you.

[Brian Lian:]

Yes. Sure. Thanks, Joon for the questions. So, with respect to the 2809 VOYAGE study, I will give a little more color on that. We have been, throughout the first half of the year modeling an uptick in enrolments really kind of coming on in the later part of the spring and through the summer. And we have not yet seen that. Enrollment has remained pretty steady through the first half of the year. Now, it could still pick up the enrollment window six to 12 weeks from screening to randomization. And most of these restrictions started to lift, sort of in that May, June timeframe. So, we could see an uptick, but it feels at this point more likely that enrollment is going to push into 2022 rather than at the end of 2021.

[Joon Lee:]

Okay.

[Brian Lian:]

With respect to VK0214, so, I think some of the data that we saw in that Phase 1 study were just related to the thyroid beta activation mechanism. So you see reduction in LDL cholesterol triglycerides apo B really because of improvement in gene expression for proteins associated with their metabolism. ABCD2 is a little more specific for transport of very long-chain fatty acids. And so, we think – and we just said in the release that we saw some reduction in very long-chain fatty acids. So, we do think those were probably due to an increase in the ABCD2, but it’s really hard to tell because they have normal ABCD1 function and so it’s really hard to understand what’s really driving the efficacy there. But we’re encouraged nonetheless that we see a really nice pan lipid lowering effect and we do see changes in C26, which is the important very long-chain fatty acid for X-linked adrenoleukodystrophy.

[Joon Lee:]

And Brian, if I could squeeze in one more question, you saw – I guess, it’s hard – it was in healthy volunteers, so the baselines were not high at all. You saw 20% reduction, which is encouraging, but how much reduction would you need to show to just have a clinical effect in the Phase 1b study in patients?

[Brian Lian:]

Yes. That’s the question I don’t think anybody has an answer to. We’ve heard varying estimates from some of the experts, but no one knows at what level of reduction you’ll see a translation to clinical benefit. So, we don’t know the answer to that.

[Joon Lee:]

Thank you.

[Brian Lian:]

Thanks, Joon.

[Operator:]

The next question is from Matthew Luchini with BMO Capital. Please go ahead.

[Matthew Luchini:]

Hi. Good afternoon, guys. Thanks for taking the questions and for the update. So, a couple from me. First, a little bit more on VOYAGE, if you could. So, since it sounds like the issue is, you are not seeing an acceleration rather than say, seeing a drop. How much of this is about new sites or ex-U.S. sites still needing to come on versus existing sites getting more productive and is it sort of a broad based effect or is it more having trouble enrolling certain subtypes of patients or higher than expected failure. And then on 0214, just wanted to obviously a little more about dose selection rational for the Phase 1b, given that the healthy data look like you had to claim safety up to 100 mg . So, if you could just talk a little bit about how you settled on the – I think 20 and 40 to get started please.

[Brian Lian:]

Yes. Sure. Thanks, Matt. So, with the sites coming onboard in the VOYAGE Study, we’ve been, I think, pretty good about adding sites and then there is a little bit of churn there. These sites are really underperforming. They get shutdown, but we’ve been adding sites through the first half of the year. And we see some growth in the screening queue for sure. But we have not yet seen that translate into an uptick in enrollment and it’s getting increasingly difficult to project with this sort of more recent flash pandemic that we are seeing with the Delta variant. And that might weigh on things toward the end of the year or at the end of the summer. So, the air bars are getting wider on enrollment modeling. With VK0214, when we look at the exposures and the lipid reductions, we seem to see a plateau effect on lipid reductions when we get up into that 75 mg – 50 mg, 75 mg and 100 mg dose range. And we see the onset of improvements in lipids right around 25 mg, 10 mg sometimes, 25 mg. So we thought that that would be a nice initial dose and then the 40 mg should be a pretty good dose. We are going to be looking – the dose level review team will look at some of these data in a blinded fashion. And we have the ability to add higher doses. But that’s the reason for the dose selection there. There was a plateau on lipids at the higher doses.

[Matthew Luchini:]

Okay. Great. Thanks. And if I could just squeeze in one more for Greg actually? So, given sort of the changing – revolving VOYAGE enrollment timelines, do you want to give us any – do you want to give any change to the 50% to 70% OpEx guidance that you’ve previously discussed or any directional color you want to stand on – you want to share on spending for the back half of the year?

[Greg Zante:]

It’s probably a little early to make any changes to anything we’ve said at this point. I think, as Brian said that air bars are pretty wide on the modeling for enrollments. So, I think, we thought it’d be radically different than we’ve talked about at this point. I think that’s what I would say at this point. No major changes at this point anyway.

[Matthew Luchini:]

Okay. Thanks for taking all the questions.

[Greg Zante:]

Sure.

[Brian Lian:]

Thanks, Matt.

[Operator:]

The next question is from Steven Seedhouse with Raymond James. Please go ahead.

[Steven Seedhouse:]

Hey, good afternoon. Brian I am curious in the XALD study in the blinded analysis. Will it be more efficacy or safety that’s going to determine whether you go to additional doses or something like the VLCFAs are more on the safety side? And then I am also curious if you are measuring ABCD2 expression in this study or the prior one?

[Brian Lian:]

That’s a good question. We are not measuring ABCD2 expression. But as far as the dose level review team, that when they look at everything, we feel pretty good about the tolerability and safety profile. So, I would expect this to be driven more on efficacy when if we see is it going to be blinded. But I think with the blinded cohort you can still see where things level off if there is a leveling at some dose.

[Steven Seedhouse:]

Okay. And then, what are you expecting in terms of just elevation of some of the very long-chain fatty acids in the patients in this study? Do you have a sense of where that’s going to check out in the baseline data?

[Brian Lian:]

Yes. The baseline data – the C26 is probably the most important one and that’s about 6x higher than a healthy volunteer and I forgot the units there. So, it’s something like 1.6 micrograms per – I should need to say that. It’s about six times the normal healthy volunteer level.

[Steven Seedhouse:]

Yes. That’s the second part, just a relative amount.

[Brian Lian:]

Yes.

[Steven Seedhouse:]

And then, just last question. On measuring the very long-chain fatty acids in either the healthy volunteers if you did this or in the upcoming study, do you have multiple time points? Are you able to see if it’s continuing to decrease the time like you sort of saw in ABCD1 knock on animal data that you have?

[Brian Lian:]

Yes. There will be multiple draws. I think it’s – is it weekly?

[Marianne Mancini:]

Yes.

[Brian Lian:]

Yes. I mean, with Marianne Mancini, our COO, so, there will be weekly draws on that. It’s 28 days.

[Steven Seedhouse:]

But not, not – that was just a single time point in the…

[Brian Lian:]

No, in the healthy volunteers, I was also, yes periodic, I don’t remember there is every single day. But that was periodic, as well.

[Steven Seedhouse:]

Okay. Pretty able to say if it was decreasing with time or achieve what is…

[Brian Lian:]

Honestly in the healthy, we just compare day 14 to baseline, because I wouldn’t expected a major change after just a few days there. And the baselines were so loaded again with. But when we look at other lipids like LDL, I mean, you see a pretty good drop at day 7 and then a leveling. So, it wouldn’t surprise me for very long-chain fatty acids there. But it was so exploratory that we just looked at day 14 versus baseline. We have the day we can go back and look at it though.

[Steven Seedhouse:]

Sorry. Well, that’s helpful in any event, I appreciate taking the questions. Thanks.

[Brian Lian:]

Thanks, Steve.

[Operator:]

The next question is from Andy Hsieh with William Blair. Please go ahead.

[Andy Hsieh:]

Great. Congratulations on all the progress and thanks for taking my questions. So, Brian, maybe you could share with us your engagement with the XALD patient advocacy groups since they could be a strong ally thinking forward as you kind of think about speaking with the regulators or thinking about late-stage development for VK0214.

[Brian Lian:]

Yes. Thanks, Andy. We’ve had – I think, really good engagements with the patient advocacy groups. We presented at the recent United Leukodystrophy Foundation Meeting. We have met with the ALD Connect organization. We are invited to European Leukodystrophy Foundation or I am probably screwing up the name of that, but European version of the Leukodystrophy Foundation. So, there is high interest on the part of the patient advocacy groups and they are doing a good job getting the word out through their channels and on their websites to generate interest. But we’ve had anyway good interest from patients.

[Andy Hsieh:]

Okay. And so, the other question is, have you engaged with the regulators at this moment regarding the development plan and maybe you could help us think about high level thoughts on potentially to size the duration or endpoints for the real study.

[Brian Lian:]

Yes. We have not. I think, when we have some data from this study, we will. But it looks like, when you consider the past Phase 2, 3 studies in XALD, in primarily looking at the AMN form, they’ve looked at functional endpoints over a one to two year window, primarily looking at GATE. GATE seems to be among the more rapid declining functional metrics. So, we would expect a six minute walk or something like that 30 meter walk test to be in the kind of ballpark for expected registration endpoints. But we’ll get a lot more color on that once we talk to the FDA about that.

[Andy Hsieh:]

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

[Brian Lian:]

Thanks, Andy.

[Operator:]

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

[Jay Olson:]

Hey. Thanks for taking the questions. Brian, can you please talk about what competitor dynamics in NASH you are watching out for in the near-term? And are there any new data or mechanisms on the horizon that you are excited about especially anything that could be promising as a potential combination with 2809?

[Brian Lian:]

Yes. We think the GLP-1 mechanism is really interesting there. It seems to be hitting a lot of the things that are believed to contributed to some of the issues with NASH patients, insulin sensitivity, steatohepatitis, weight, those sorts of things. So, as far as affecting metabolic syndrome, I mean, I think that’s a pretty attractive access. Obviously, anything in the targeting beta receptor is also of interest to us as well. But when we look at the consistent data, it looks like, the GLP-1 access is pretty interesting.

[Jay Olson:]

Okay. And then, separately, are there any potential partnership developments on the horizon for your hip fracture asset 5211?

[Brian Lian:]

Yes. That’s a great question. We’ve had, I think pretty consistent dialogue for the past three years on that with interested parties and those conversations continue. And as I said, previously, most of the hesitation there is related to the regulatory path in hip fracture. Now, we have had some discussions with interested parties in some of the orphan settings, some of the rare muscular dystrophies and that sort of thing. But I probably not going to give anymore color on that on this call.

[Jay Olson:]

Okay. Great. Thanks for taking the questions.

[Brian Lian:]

Thanks, Jay.

[Operator:]

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

[Yale Jen:]

Good afternoon and thanks for taking the questions. Brian, I remember last time, you have mentioned that you interpret a even more U.S. patient versus the European nation patients in the VOYAGE trial. Given the more recent dynamics in terms of COVID and other aspects, do you still think that maybe the case? Or do you have any changes on your thoughts?

[Brian Lian:]

Hi, Yale. No, I think we are still expecting an outsize contribution from the U.S. Over the past few months, we’ve increased the European sites and ex U.S. sites in general, but I still think that most of the contribution is going to come from the U.S.

[Yale Jen:]

Okay. Great. And maybe one more question on 0214, which is in terms of adding another – potentially adding another cohort. Is there a timeline you get to that decision?

[Brian Lian:]

Not at this point. We just are getting the trial underway. So, we will need – it’s a randomized study. We would need to see some of the data first and so, I don’t think – I think certainly to talking about timelines for those decisions.

[Yale Jen:]

Okay. Great. And congrats and keep on the second half.

[Brian Lian:]

Thanks, Yale.

[Operator:]

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

[Justin Zelin:]

Hi team. Thanks for taking the question and congrats on the progress. So, Brian, you mentioned the GLP-1 clause is interesting and I just want to ask given the recent approvals for obesity whether patients would be excluded from VOYAGE if they are currently on a GLP-1 treatment?

[Brian Lian:]

No. They wouldn’t be. They have to be on a stable dose for six months. So, no, they are not excluded. Any of those therapies that may have some benefit in NASH patients require a stable exposure prior to enrollment.

[Justin Zelin:]

Got it. Great. Thanks for taking the question.

[Brian Lian:]

Thanks, Justin.

[Operator:]

The next question is from Mayank Mamtani with B. Riley Securities. Please go ahead.

[Sahil Kazmi:]

Hi. Good afternoon. This is Sahil Kazmi on for Mayank. Maybe just a quick question on 0214. Are you able to comment on which of the lipid reductions were statistically significant? And then, as we look forward to the upcoming readout, what you maybe expect to see across C20 to C26?

[Brian Lian:]

Yes. Well, I think what we said in the press release that we saw numerical improvements in very long-chain fatty acids and we had the P values for the other lipids, LDL triglycerides and apo B in the press release. But generally, we just saw the numerical improvements in the very long-chain fatty acids.

[Sahil Kazmi:]

Got it. Thanks for taking the question. Congrats on the progress.

[Brian Lian:]

Thanks a lot.

[Operator:]

The next question is from Joseph Pantginis with H.C. Wainwright. Please go ahead.

[Emanuela Branchetti:]

Good afternoon guys. This is Emanuela on for Joe. Thank you for taking my question. A couple for me regarding the designs of the Phase 1b study for VK0214. So in healthy volunteers you tested rather for 14 days daily and the current trial will test the 28 days dosing regimen. I was just wondering what’s the rationale behind the 28 days time point. And also maybe, if you can comment like, whether moving forward, what would you envision the regimen could be in patients?

[Brian Lian:]

Yes. Thanks for the question. We think, moving forward the trial is going to have to be longer, because we would expect the functional assessment to be the primary efficacy endpoint. In this case, the Phase 1b study, we are really looking at the proof-of-concept here does activation of some of beta receptor provide reduction in very long-chain fatty acids presumably through up regulation of ABCD2. And we wanted to dose for a long enough time to ensure that that up regulations had occurred. And so, we though about 28 days, we thought about 42 days, but it seems like when we look at other lipids, those reductions happen pretty quick and so we thought that we could evaluate for 28 days and get a good handle on whether or not we are seeing an effect.

[Emanuela Branchetti:]

Got it. Got it. Thank you for that. And regarding the patient recruitment you – I am not sure you mentioned what’s the targeted number of patients you are expecting. And also in terms of the preliminary analysis, how many patients worth of data would you expect to add?

[Brian Lian:]

Yes. I think we said up to nine per cohort. And it’s randomized 3 to 1. And so, we’ll see how enrollment goes and what the dose level review team sees. But we may not go all the way up to nine in each cohort to see a signal. So, the math would be nine per cohort.

[Emanuela Branchetti:]

Got it. And for the preliminary analysis how many patients would you expect to have?

[Brian Lian:]

Well, it’s kind of the same answer. It depends on how many we enroll in each cohort. I would hope that we would have six or eight available to make that evaluation. But that will depend on what the dose level review team sees.

[Emanuela Branchetti:]

Okay. Got it. Thanks.

[Brian Lian:]

Okay. Thanks.

[Operator:]

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

[Stephanie Diaz:]

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 for being here today and you may all now disconnect. Bye-bye.

[Operator:]

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