Welcome to the Viking Therapeutics’ 2021 First 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, April 28, 2021. 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, April 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 Lian for his initial comments.

Thanks, Stephanie, and thanks to everyone listening on the webcast or by phone. Today we'll provide an overview of our first quarter 2021 financial results as well as an update on recent progress and developments with our pipeline programs and operations. During the first quarter, we continued to build on the progress made over the past year with both of our thyroid hormone beta receptor agonist programs. With our lead program VK2809 for the treatment of nonalcoholic steatohepatitis and fibrosis, we continued enrolling patients in our Phase 2b VOYAGE study and added new clinical sites in both the US and outside the US. During the first quarter, we also continued enrollment in a Phase 1 trial evaluating our second thyroid hormone beta receptor agonist VK0214 for the treatment of X-linked adrenoleukodystrophy or X-ALD. This trial is advancing well and we are nearing completion of this study's initial phase evaluating VK0214 in healthy volunteers. I'll provide additional detail on our development activities after we review our first quarter financial results. For that, I'll turn the call over to Greg Zante, Viking's CFO.

Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Viking's Form 10-Q filing with the Securities and Exchange Commission, which we expect to file later today for additional details. I'll now go over our financial results for the quarter. Our research and development expenses for the three months ended March 31, 2021, were $11.5 million, compared to $8.0 million for the same period in 2020. The increase was primarily due to increased expenses related to clinical studies, manufacturing for the company's drug candidates, salaries and benefits, and stock-based compensation, partially offset by decreased expenses related to preclinical studies. Our general and administrative expenses for the three months ended March 31, 2021, were $2.7 million, compared to $3 million for the same period in 2020. The decrease was primarily due to decreased expenses related to stock-based compensation, legal and patent services, salaries and benefits, and travel, partially offset by increased expenses related to professional fees and insurance. For the three months ended March 31, 2021, Viking reported a net loss of $14 million or $0.19 per share, compared to a net loss of $9.7 million or $0.13 per share in the corresponding period in 2020. The increase in net loss and net loss per share for the three months ended March 31, 2021, was primarily due to an increase in research and development expenses, partially offset by a decrease in general and administrative expenses as noted previously, as well as decreased interest income primarily due to the decline in interest rates available throughout the first quarter of 2021 compared to the prevailing rates during the first quarter of 2020. Turning to the balance sheet, at March 31, 2021, Viking held cash, cash equivalents, and short-term investments totaling $241.7 million, compared to $248.4 million as of December 31, 2020. This concludes my financial review, and I'll now turn the call back over to Brian.

Thanks, Greg. I'll now provide an update on the progress with our development programs beginning with our lead program VK2809. 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. To date, the clinical studies have demonstrated compelling evidence supporting the potential of VK2809 in the treatment of multiple metabolic disorders, including NASH and fibrosis. Phase 1 studies in healthy volunteers, as well as in subjects with mild hypercholesterolemia, have shown that treatment with VK2809 produces significant reductions in plasma lipids, including LDL cholesterol, triglycerides, and atherogenic proteins. In addition, we previously completed a 12-week Phase 2 study in patients with non-alcoholic fatty liver disease and hypercholesterolemia. This study successfully achieved its primary and secondary endpoint, with patients receiving VK2809 demonstrating highly statistically significant reductions in liver fat content, as well as improvements in LDL cholesterol. VK2809 also performed well on secondary measures 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. Initial data from this study, as well as follow-up data, have been highlighted in multiple oral presentations at key scientific meetings. Most recent among these was an oral presentation at the 2020 International Liver Congress or EASL, where follow-up results from the study were presented. This presentation highlighted VK2809's durable benefit, 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. Additionally, 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 the lowest evaluated dose of five milligrams of VK2809 daily maintained a response at week 16. In addition to these data, new analyses of week 12 study results demonstrated significant reductions in liver fat among patients receiving VK2809 compared to placebo, regardless of the presence of common NASH risk factors, including elevated baseline levels of ALT, a body mass index greater than 30, hypertension, or Hispanic ethnicity. The totality of data from our Phase 2 study demonstrate VK2809's exceptional low dose potency on liver fat and plasma lipids, as well as its durable effect and encouraging safety and tolerability profile. We believe that the observed reductions in other lipids may be an important indicator of cardiometabolic benefits for patients. This is an important distinction, which we believe represents an advantage when contrasted with mechanisms that have been associated with elevations in lipids known to increase cardiovascular risk. Overall, we believe the data to date position VK2809 as a best-in-class compound for the treatment of patients with NASH and fibrosis. In late 2019, we advanced this program into a Phase 2b clinical trial. This trial called VOYAGE is a randomized, double-blind, placebo-controlled, multicenter trial designed to assess the efficacy, safety, and tolerability of VK2809 in patients with biopsy-confirmed NASH and fibrosis. The study is targeting enrollment of approximately 340 patients across five treatment arms. The target population includes patients with F2 and F3 fibrosis, as well as up to 25% with F1 fibrosis. The primary endpoint of the study will evaluate the change in liver fat content, as assessed by magnetic resonance imaging proton density fat fraction from baseline to week 12 in patients treated with VK2809 as compared to patients receiving placebo. Secondary objectives include the evaluations of histologic changes assessed by hepatic biopsy after 52 weeks of treatment. During the first quarter, patient enrollment for this study continued at sites both within and outside the US. We continue to navigate a challenging enrollment environment due to the COVID-19 pandemic. That said, our US sites remained open through the first quarter, with none close due to pandemic-related issues. Outside the US, the environment is also challenging with many sites experiencing local lockdown restrictions that impact screening flow. Despite these hurdles, we have remained active in our site engagement efforts and continue to add sites both in the US and outside the US. We currently remain on track to complete enrollment in this trial in the second half of 2021. In parallel with our VOYAGE study efforts, we are also taking steps to prepare for the anticipated Phase 3 development of VK2809. As discussed on our last update call, we recently completed the formulation study evaluating tablet and soft gel formulations of VK2809 with potentially improved commercial profiles. In addition, we also completed the study of VK2809 in patients with varying degrees of hepatic impairment. Both studies generated useful data for further planning and development activities and we look forward to continued progress on the clinical and regulatory fronts in the months ahead. I'll now provide an update on our second clinical program VK0214. VK0214 is an orally available small molecule thyroid hormone receptor agonist with selectivity for the beta receptor subtype that we're developing as a potential treatment for the rare neurodegenerative disease called X-linked adrenoleukodystrophy. Last year we initiated a Phase 1 first-in-human study of VK0214. This trial is a randomized, double-blind, placebo-controlled single ascending and multiple ascending dose study in healthy volunteers. The primary objectives of the study include the evaluation of the safety and tolerability of VK0214 as well as the pharmacokinetics of VK0214 following single and multiple oral doses. We continue to make excellent progress with this study and expect to complete dosing in healthy volunteers in the near term. Pending an evaluation of the data, we plan to initiate a Phase 1b study of VK0214 in patients with X-ALD. We currently expect to initiate this trial around the middle of the year. With two programs advancing through clinical developments, it is important to note that our balance sheet remains strong. As Greg stated, we ended the quarter with approximately $242 million in cash which gives us ample runway to complete multiple clinical milestones that will drive future value for the company. In conclusion, we continue to make progress in the first quarter with both of our ongoing clinical trials. With VK2809, we expect to complete enrollment in the 52-week Phase 2b VOYAGE study in patients with NASH and fibrosis in the second half of 2021. Based on data to-date, we continue to believe that VK2809 represents a best-in-class compound for the treatment of NASH and fibrosis. With VK0214, we are nearing completion of a Phase 1 single and multiple ascending dose study in healthy volunteers. Pending a successful outcome, we plan to initiate a Phase 1b study in X-ALD patients. We believe VK0214 represents a novel approach to treating this debilitating disease and we look forward to evaluating its effect on key biomarkers. Finally, we ended the quarter with a strong balance sheet providing the runway to complete our ongoing clinical studies as well as other important milestones. This concludes our prepared comments for today. Thanks again for joining us and we'll now open the call for questions.

We will now begin the question-and-answer session. The first question will come from Steve Seedhouse of Raymond James.

Hi, there. This is Ryan Deschner on for Steve Seedhouse. It might be a little early for this question, but in light of the recent FGF21 data in cirrhotic NASH. To what extent are you considering an F4 cirrhotic NASH study post Phase 2b data? And what data from the Phase 2b study would you be focusing on to aid in making that decision?

Hi, Ryan, thanks for the question. At this point, we're not planning a cirrhotic NASH study. That would change, of course, depending on what the Phase 2b data look like. But it's not something that we're considering right now. I think we would base that decision on what the histology data look like on fibrosis after the 52-week treatment period. But at this point, it's not in the works.

Okay. Thank you. And one more quick question. I was wondering if you could give us any more detail on the structure and the size of the proof-of-concept study in X-ALD.

Yes. We haven't disclosed really the structure there. We will once the trial is initiated, but it will be a limited number of doses with a handful of patients in each dose, and we'll get more detail when we initiate the study.

Excellent. Thank you very much, Brian.

Thanks, Ryan.

The next question is from Michael Morabito of Chardan Capital Markets.

Hi team, thank you for taking my questions. I would like to know about the other studies conducted on 2809, specifically regarding the formulation in patients with hepatic impairment. Can we expect to see this information at upcoming medical meetings this year, such as EASL or AASLD? Additionally, do you anticipate that the study on hepatic impairment may lead to further clinical trials aimed at broadening the potential label for 2809?

Hi, Michael, thanks for the question. No we're not planning to present those data at any upcoming conferences. It was really with the formulation studies, they were really intended to develop a more commercial-friendly form, and we now have great options with the soft gel and the tablet. With the hepatic impairment study, that was just a requirement from the FDA for everybody in NASH, looking at trying to see if there are any safety risks or pharmacokinetic changes in patients with more severe hepatic impairment, and we didn't see any. So we don't expect to have any limitations depending on hepatic impairment. But we wouldn't be planning to present those at any of the upcoming conferences.

Okay. And just out of curiosity, you've mentioned the cash runway allows you to complete all of your planned studies. Does that runway include any additional studies that have not been mentioned or to move to initial studies. What would be necessary from a capital perspective to say move into Phase 3 or advance X-ALD into a Phase 2/3?

Yeah, I can take that. I think we've got enough runway to get through certainly a Phase 3 trial with X-ALD and well into, if not fully through, the biopsy endpoint in a Phase 3 trial with VK2809.

Okay. Great. Excellent. Thank you very much.

Thanks, Michael.

The next question comes from Matthew Luchini of BMO.

This is Jin on for Matthew. Congrats on the progress, and thanks for taking our questions. Two for me. So assuming that you guys choose to use a different formulation, following the formulation work, like if you guys were to use a different formulation than what was used in the VOYAGE trial? Is there any gating step before moving on to Phase 3? And for VOYAGE data, what do you think you need to achieve to remain competitive in NASH? And I have a follow-up after that.

Sure. Thanks, Jin. The reason we did the study looking at different formulations is that was the study that we would plan to do sort of a bridging study to look at bioavailability differences, that sort of thing. And so I think we've checked that box. Whatever gating step would be required with the formulation, we think the data that we've seen to date are pretty competitive. We think it's among the best, if not the best liver fat reduction from any oral agent. And so I think we're competitive. And if the Phase 2b data look remotely similar to the Phase 2a, I think we would be competitive as an oral agent, particularly when you consider the profile with the broad effects on cardiovascular metrics, LDL reduction, triglyceride reduction, atherogenic protein improvements. All of those I think are very, very important in this population. And we don't have any pervasions in the negative direction on lipids that might cause polypharmacy to be considered right off the bat. So I think we're really, really competitive overall with the profile.

Okay. That's helpful. And my second question is, can we still expect data from the Phase 1 SAD/MAD trial for 0214 in the first half of this year? And for the PoC, Phase 1b trial, if that were to start mid-year, when can we expect the data?

Yes. On prior calls, we've talked about having some announcement describing the data in the first half. And I think we're still on track for that. With completion and announcement of data from the Phase 1b study, it depends on how quickly that enrolls. It's difficult to project right now, but we'll report the data as soon as it's available. I would anticipate that that's probably a 2022 event. But if we can do it sooner, we'll report the data sooner.

Got you. Thank you. I'll hop back into the queue.

Thanks, Jin.

The next question is from Derek Archila of Stifel.

Hey. Thanks guys. This is Ben on for Derek. Thanks for taking my call. Two from us. Just building off that last question. Just on 214 in the Phase 1 study, have you thought any more about how to present these data, whether it's at your conference or just a PR of some sort? And then the second one from a modeling perspective, are there any qualitative comments you can share about kind of the OpEx ramp in 2021? Just in light of the 214 and 2809 studies picking up? Thanks.

You want to take that, Greg?

Sure. From an OpEx standpoint, we'll probably be in the 50% to 70% increase range from last year. Just to give you some perspective on that.

Okay.

And with the data presentation, we'll have to see the data first before we make that decision. So, I think minimally, we would plan for a press release and potentially then present more detailed data at a conference in the future. But I think a press release is the first step there.

Okay, that’s it for us. Thanks guys.

Thanks, Ben.

The next question is from Andy Hsieh of William Blair.

Thank you for your question. Looking at the new slide deck, Brian, I'm interested in the gene expression analysis on 2809. Could you explain the findings? Also, is this a new study or a presentation of an earlier preclinical study?

Yes. Hi Andy, that was updated data from a study that we presented at EASL, I believe in 2017 or 2018, one of those EASL conferences, the gene expression, the RNA sequencing data. And we thought it was interesting because generally you see improvement in genes associated with insulin sensitivity and lipid metabolism and a suppression of gene expression for those genes associated with fibrotic signaling. So, I think by themselves maybe they wouldn't be as exciting. But when you look at the histology from the same study, we see a 70% reduction in liver fat content and we saw a 50% reduction in fibrosis in that study. So, really nicely corroborates what was observed on the histologic assessments there.

Got it, okay. That's helpful. Thanks Brian. Another thing is about kind of the vaccine rollout more and more percentage of the population are getting the vaccine. So, just curious about both the X-ALD healthy volunteer study and also the VOYAGE study. Is there any sort of washout period that the participants have to go through? And also from a behavioral perspective, are you seeing kind of an increase of patients being more open to participating in clinical trials just given the fact that they are more fully vaccinated?

Yes. And it's an interesting question. I am not aware of any restrictions on vaccine timing and screening or enrollment. So, you have to assume that many of the patients in the studies, both the healthy volunteer and the VOYAGE study, have received their vaccinations. We've heard no comments or problems. And with regard to the second question, I think that we are seeing maybe a little bit better environment now than in the November through February timeframe, but still very, very challenging when you think about the general hesitancy given that we're right coming off the back of the pandemic now, and I think people are generally still pretty cautious about everything.

Okay. Yes, that's helpful. Thank you very much and thank you for answering all my questions.

Thanks, Andy.

The next question is from Jay Olson of Oppenheimer.

Hey, thanks for taking my question. Now that you've identified the second half of 2021 as the target timeframe for completing enrollment of the VOYAGE study. Does that mean that we should expect to see the 12-week interim analysis of MRI-PDFF in the first part of 2022?

Yes. Hey, Jay. So we've always said that once we announce completion of enrollment that we would probably have the data on that primary endpoint ready for announcement 16 to 20 weeks later. So it's hard to give a specific timeframe to it, but once we announce completion, that's what I would think about. You treat the last patient for 12 weeks. It's another four to eight weeks for data cleanup and get things ready to announce. And I think that adds up to 16 to 20 weeks, four to five months, something like that, but that's about as specific as we've been so far.

Okay. Thank you. And then I was just curious about any read across you expect from the MAESTRO-NAFLD-1 study that's going to read out by the end of the year. And if you could share your thoughts with us on the potential to follow a similar registration strategy?

Well, I think both agents are following a similar strategy for NASH, which is the only indication I think that's out there right now for fatty liver disease with a registration pathway. And as far as the read across, I think the overall compounds look fairly similar on liver fat. So, at least from what we've seen with the early data from that compound. So, I wouldn't necessarily expect much difference from what we've seen thus far.

Would you consider conducting a study with a similar design to MAESTRO-NAFLD-1?

At this moment, no, but that may change. We understand from our Phase 2a study that the drug is highly effective in that population. Therefore, it's uncertain at this time what new insights a Phase 3 trial could provide us.

Okay. Got it. Thank you, Brian.

Thanks, Jay.

Next question comes from Scott Henry of ROTH Capital.

Thank you and good afternoon. First for clarification, I just want to make sure I heard this correctly. Do you expect operating expenses to be up 50% to 70% in 2021 from 2020?

Hey, there. I think, Scott, it's probably 50% closer to that range. I mean, we were at about 43% last year and I had expected to go up, and it's really all driven by our external spending related to our trials here.

Okay. Perfect. Thank you for clarifying that. And then perhaps on a big picture type of question. When we think about VK2809 and potential partnership interest. Would you expect that to increase perhaps just after the 12-week data or do you think partners would be interested in also seeing the 12-month dosing data as you start to prepare for a Phase 3 program?

Hi, Scott. Yes, it's a great question, and it's unclear. I mean, we know that some are very interested in the histology endpoints and confirmation that the mechanism is effective in this disease. But we also know that there is a lot of interest in our 12-week data from the ongoing study ahead of the second biopsy read. So I don't know; it's always hard to predict partnering activities. But we do think there's a fair amount of interest in both of those time points.

Okay, great. Thank you for the color.

Thanks, Scott.

The next question comes from Mayank Mamtani of B. Riley FBR.

Hi, good afternoon. This is Sahil Kazmi on for Mayank. Congrats on the progress and thanks for taking our questions. Maybe starting first on 2809. Just a quick one on enrollment dynamics, could you talk to how you see it shaking out by the end of the year in terms of US versus EU site split and then also F1 to F3 patients? And then just regarding the secondary endpoint of change in histology at 12 months, can you talk to some of the underlying assumptions? Is this something that's powered to show statistical significance?

Yes. So we haven't disclosed the statistical assumptions there as far as the histology changes. We think we're adequately powered to show a benefit on NASH resolution. And as far as the enrollment contributions right now, we feel that likely it's going to be a US-heavy enrollment distribution relative to ex-US, but that could change. It just seems like Europe is a little bit behind the US with the emergence from the pandemic. As far as the breakout of fibrosis enrolled thus far, we really haven't talked about what we've seen on the demographics at this point. But we've said we can allow up to 25% F1s as long as they have another risk factor like diabetes, obesity, hypertension, something like that that predisposes them to metabolic syndrome. But we haven't given breakouts on what we're seeing live.

Got it. That's helpful. And maybe as a brief follow-up could you provide any color on how you think the placebo effect or rather the effect size may be modulated in the context of the ongoing pandemic?

The placebo effects we have traditionally understood regarding NASH resolution and fibrosis appear to be consistently in the mid-teens to low 20% range across most histology readouts. I don’t believe the pandemic will significantly affect those histology results, so I do not anticipate any impact from COVID in that regard.

Okay, great. And then maybe just a brief one on 0214. I appreciate that you're going to disclose a bit more of the study details once we get closer to that Phase 1b. But if you could provide some qualitative color on is there going to be any background treatment allowed for these patients? And how you might use the study to enrich the patient population in the future? And then what you anticipate might be sort of the treatment window required to see a meaningful clinical benefit? Thank you.

Sure. Well there's nothing approved right now for these individuals. So we don't really think that there's much need to control on the background therapies. We would expect the registration endpoints to be a little bit longer-term, 12 to 24 months focused on function. But that's based on prior Phase 2 and 2/3 studies that have been completed probably going to be focused on gate. But as far as enriching the population, we'll have to see what the Phase 1b data look like before we discuss what the ideal target population is for Phase 3.

Great. Thanks a lot for taking our questions. Congratulations on the project.

Thanks a lot.

And this concludes our question-and-answer session. I would now 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.

Thank you. The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines. Have a great day.