Viking Therapeutics, Inc. Q4 FY2021 Earnings Call

Welcome to the Viking Therapeutics' 2021 Fourth Quarter and Year End Financial Results Conference Call. At this time, all participants are in 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, February 9, 2022. 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, February 9, 2022, 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 dialed in by phone or listening on the webcast. Today, we'll review our fourth quarter and full year 2021 financial results and provide an update on recent developments and progress with our pipeline programs and operations. 2021 was a very productive year for Viking. During the year, we continued to make progress with our lead program VK2809, currently in a Phase IIb study for patients with biopsy-confirmed NASH and fibrosis, opening additional clinical trial sites and continuing enrollment of new patients. We expect to complete enrollment of this trial and report top-line data by year-end. In 2021, we also reported data from the first in-human study of VK0214, our second thyroid receptor beta program, demonstrating the compound's impressive safety, tolerability, and preliminary lipid-lowering effects. Following completion of the first in-human study, we initiated a Phase Ib study in patients with X-linked adrenoleukodystrophy, a rare neurodegenerative disease for which there is no cure. We were recently informed that the FDA has placed this study on clinical hold, pending completion of an additional preclinical study, and we expect to submit the results of this study in the second quarter. Finally, in recent months, we expanded our clinical pipeline with the addition of a new internally developed program targeting the GLP-1 and GIP receptors for metabolic disorders. We reported two posters from this program at ObesityWeek in November, and last month announced the initiation of a first in-human study of our lead compounds VK2735. I'll elaborate on these programs in a few minutes but I’d like to highlight, as we reflect on the past 12 to 18 months, that Viking has transformed over the past several quarters from a company with one clinical program to a company with three active clinical programs across a diverse range of indications, with important data inflections for each expected in the next 12 to 18 months. The breadth and depth of our clinical and preclinical pipeline represent an important progression from a single program story into a diversified biopharmaceutical company, with programs advancing in multiple important indications. We are proud of the progress we've made in the last 12 months as providing an important base from which we will advance multiple programs into late-stage development. I'll provide further detail on our operations and development activities after we review our fourth quarter and year-end 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-K filing with the Securities and Exchange Commission, which we expect to file this week. I'll now go over our financial results for the fourth quarter and full year ended December 31, 2021, beginning with the results for the quarter. Our research and development expenses for the three months ended December 31, 2021, were $9.8 million, compared to $9 million for the same period in 2020. The increase was primarily due to increased expenses related to manufacturing for the company's drug candidates, preclinical studies, stock-based compensation, salaries and benefits, and services provided by third-party consultants, partially offset by decreased expenses related to clinical studies. Our general and administrative expenses for the three months ended December 31, 2021, were $2.7 million compared to $2.2 million for the same period in 2020. The increase was primarily due to increased expenses related to salaries and benefits, stock-based compensation, and insurance, partially offset by decreased expenses related to legal services. For the three months ended December 31, 2021, Viking reported a net loss of $12.4 million or $0.16 per share compared to a net loss of $10.9 million or $0.15 per share in the corresponding period in 2020. The increase in net loss and net loss per share for the three months ended December 31, 2021, was primarily due to the increase in research and development expenses and general and administrative expenses noted previously, as well as decreased interest income, primarily due to the decline in interest rates available throughout the fourth quarter of 2021 compared to prevailing interest rates available during the same period of 2020. I'll now go over the results for the full year 2021. Our research and development expenses for the full year ended December 31, 2021, were $45 million compared to $31.9 million for the same period in 2020. The increase was primarily due to increased expenses related to clinical and preclinical studies, manufacturing for the company's drug candidates, services provided by third-party consultants, and stock-based compensation, partially offset by decreased expenses related to salaries and benefits. Our general and administrative expenses for the full year ended December 31, 2021, were $10.7 million, compared to $10.7 million for the same period in 2020. This was primarily due to decreased expenses related to salaries and benefits and legal services, offset by increased expenses related to insurance, professional fees, services provided by third-party consultants, and stock-based compensation. For the full year ended December 31, 2021, Viking reported a net loss of $55 million or $0.71 per share, compared to a net loss of $39.5 million or $0.54 per share in the corresponding period in 2020. The increase in net loss and net loss per share for the year ended December 31, 2021, was primarily due to the increase in research and development expenses noted previously, as well as decreased interest income, primarily due to the decline in interest rates available throughout the year ended December 31, 2021, compared to prevailing interest rates available during the year ended December 31, 2020. Turning to the balance sheet; at December 31, 2021, Viking held cash, cash equivalents, and short-term investments totaling $202.1 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. As I mentioned in the opening comments, Viking has recently expanded its clinical pipeline and, in doing so, we have strengthened our commitment to the development of novel therapeutics for the treatment of metabolic diseases. Since the company's founding, we have advanced into clinical development two metabolic drug candidates that we believe represent best-in-class status in the case of our lead candidate VK2809 and first-in-class status in the case of our second clinical candidate VK0214. We believe that these programs, together with our expertise in metabolic diseases, place us in a leadership position in the development of next-generation therapies for a range of metabolic disorders. This is exemplified by a recent introduction of VK2735, an exciting new program with the potential to advance in multiple indications. I will now provide an update on each of these programs starting with our lead program VK2809. As a reminder, VK2809 is an orally available small molecule agonist of the thyroid hormone receptor that is selective for the liver as well as the beta isoform of the thyroid hormone receptor. A prior 12-week Phase IIa study evaluating VK2809 in patients with non-alcoholic fatty liver disease and hypercholesterolemia successfully achieved both its primary and secondary endpoints. Patients receiving VK2809, at doses as low as five milligrams daily, demonstrated 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. In addition, patients treated with VK2809 in this study experienced durable reductions in liver fat, with the majority of patients remaining responders four weeks after completion of dosing. This study also demonstrated the promising safety and tolerability profile of VK2809. Patients treated with VK2809 reported lower rates of GI disturbances such as diarrhea or nausea, compared with patients receiving placebo. In addition, no serious adverse events were reported among patients receiving VK2809 or placebo. Combined, we believe these features establish VK2809 as a best-in-class compound for the potential treatment of patients with NASH and fibrosis. It is also important to note that the compound's lipid-lowering effects may lead to improved cardiovascular benefits, a significant advantage when compared to other drugs and competitive mechanisms in development that have been shown to increase plasma lipids. Based on the promising findings from our Phase IIa study, we initiated a Phase IIb study to evaluate VK2809 in patients with NASH. 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 enrolling patients across five treatment arms, and the target population includes patients with at least 8% liver fat by MRI-PDFF as well as F2 and F3 fibrosis. Up to 25% of enrolled patients may have F1 fibrosis, so long as they possess at least one additional risk factor. 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 evaluation of histologic changes assessed by hepatic biopsy after 52 weeks of treatment. During the fourth quarter, enrollment in VOYAGE continued at sites in the US and abroad. We expect to complete enrollment and report the initial data from this study by the end of 2022. I’ll now provide an update on the VK0214 program, our second orally available small molecule thyroid hormone receptor beta agonist in clinical development. VK0214 is currently in development for the treatment of X-linked adrenoleukodystrophy or X-ALD. X-ALD is a rare and often fatal metabolic disorder characterized by a breakdown in the protective barriers surrounding brain and nerve cells. The disease for which there is no FDA-approved therapeutic is caused by mutations in a gene known as ABCD1, which encodes a peroxisomal transporter of very long-chain fatty acids. As a result of these mutations, transporter function is impaired and patients are unable to efficiently metabolize very long-chain fatty acids. The resulting accumulation of these compounds is believed to contribute to the onset and progression of clinical signs and symptoms in patients with X-ALD. Interestingly, the thyroid hormone beta receptor has been shown to stimulate the expression of an alternative very long-chain fatty acid transporter encoded by a gene known as ABCD2. Multiple preclinical models have demonstrated that increased ABCD2 expression can lead to improved and potentially normalized very long-chain fatty acid metabolism. As VK0214 has demonstrated potent activation of the thyroid hormone beta receptor, we believe that it may also represent a potential approach to the treatment of X-ALD. Last summer, we reported the results of a randomized double-blind placebo-controlled, single ascending and multiple ascending dose study of VK0214 in healthy volunteers. The objectives of the study were to evaluate the safety, tolerability, and pharmacokinetics of VK0214 administered orally once daily for up to 14 days. This study successfully achieved its primary and secondary objectives, with VK0214 shown to be safe and well-tolerated at all doses evaluated. Among the more than 100 subjects enrolled in this study, no serious adverse events were reported, and no treatment or dose-related trends were observed for vital signs or cardiovascular measures. No gastrointestinal disturbances such as diarrhea or nausea were reported at doses up to and including the top dose of 125 milligrams. Treatment with VK0214 demonstrated dose-dependent exposures, no evidence of accumulation, and a half-life consistent with anticipated once-daily oral dosing. Subjects who received VK0214 experienced reductions in LDL cholesterol, triglycerides, apolipoprotein B, and lipoprotein A following 14 days of treatment. Many of the observed lipid reductions achieved statistical significance, though the study was not powered to demonstrate statistical significance on laboratory assessments. As a result of these findings, we initiated the Phase Ib study of VK0214 in patients with the adrenomyeloneuropathy or AMN form of X-ALD. AMN is the most common form of X-ALD affecting approximately 50% of those with the disease. Clinical manifestations include progressive leg weakness, incontinence, and sexual dysfunction. Our Phase Ib study is a multicenter, randomized double-blind, placebo-controlled study in adult male patients with AMN. The study is initially targeting enrollment across three cohorts, placebo, VK0214 dosed at 20 milligrams daily, and VK0214 dosed at 40 milligrams daily. Pending a blinded review of preliminary safety, tolerability, and pharmacokinetic data, additional dosing cohorts may be pursued. The primary objectives of the study are to evaluate the safety and tolerability of VK0214, administered once daily over a 28-day dosing period. In addition, the study includes an exploratory assessment of the impact of VK0214 on plasma levels of very long-chain fatty acids, as well as an evaluation of the pharmacokinetics of VK0214 in these patients. Last month, we were informed that this trial has been placed on clinical hold by the FDA. The agency has requested completion of an additional preclinical study prior to continuation. This request is not due to any findings from ongoing or previously completed studies. Rather, the FDA informed us that it considers the ongoing trial to be a Phase II trial rather than a Phase Ib. As a Phase II trial, FDA guidance requires that a rodent genotoxicity study is completed prior to initiation. We expect to complete the study and submit the requested information in the second quarter with a goal of resuming dosing in the study later this year. We are confident in the overall safety and potential efficacy profile of VK0214 to date, and while a short-term delay is anticipated, we do not expect the long-term development timeline for VK0214 to be significantly impacted. I’ll now provide an overview of the newest addition to our clinical pipeline, an internally-developed program targeting dual agonist of the glucagon-like peptide-1 or GLP-1 and the glucose-dependent insulinotropic peptide or GIP receptors. We believe these compounds represent an exciting therapeutic opportunity. In recent years, multiple GLP-1 receptor agonists have been approved for the treatment of both diabetes and obesity, due to their ability to improve insulin sensitivity, lower plasma glucose, and reduce overall body weight. More recently, research has focused on developing combination therapeutics designed to maintain potent activation of the GLP-1 receptor while also activating other important receptors related to metabolic control. The benefits of simultaneous activation of the GLP-1 and GIP receptors are of particular interest to Viking. The GIP receptor is known to regulate insulin secretion and to provide modest activation of the glucagon receptor. A single molecule with combined activity of both the GLP-1 and GIP receptors may therefore provide improved metabolic benefit relative to activation of either receptor alone. Recent clinical data have borne this out, demonstrating that dual GLP-1, GIP agonists not only provide excellent glucose control but also potent reductions in body weight. Some time ago, we initiated an exploratory program targeting novel dual agonists to the GLP-1 and GIP receptors. We are pleased with our early findings from this program, which we shared for the first time last November at ObesityWeek, the annual meeting of the Obesity Society. At this meeting, we presented two posters highlighting the improvements in metabolic profile observed among diet-induced obese mice treated with our compounds compared to control cohorts. Weight loss, glucose control, and insulin sensitivity were enhanced following treatment with our dual agonists compared to the effects observed with the GLP-1 mono-agonist, semaglutide, when administered at the same dose for the same time period. These results suggest that the addition of GIP receptor activity improves upon the effects achieved with activation of the GLP-1 receptor alone. Reductions in liver fat were generally numerically larger among animals treated with our compounds relative to liver fat reductions observed among animals treated with semaglutide. Based on the results of these and other preclinical studies, we selected VK2735 as the lead candidate from our dual agonist program, and we announced last month the initiation of a Phase I trial evaluating VK2735 in healthy volunteers. The Phase I trial is a randomized, double-blind, placebo-controlled, single ascending, and multiple ascending dose study in healthy adults. The primary objectives of the study include evaluation of the safety and tolerability of single and multiple ascending doses of VK2735 delivered subcutaneously as well as the identification of doses suitable for further clinical development. Study investigators will also evaluate the pharmacokinetics of VK2735 following single and multiple doses. Exploratory pharmacodynamic assessments include evaluations of changes in body weight and liver fat content after four weeks of once weekly administration. We are encouraged by the preclinical data from this program and excited to be moving forward with clinical development of this important compound. Finally, to support our expanded pipeline, we continue to carefully manage our cash. As Greg noted earlier, we ended the year with over $200 million in cash. We believe this provides us with the resources to complete our ongoing clinical studies and also advance our programs well into later stage development. I’ll conclude by reiterating some of my opening comments, highlighting that the past 12 to 18 months have been especially productive at Viking. The company has transformed from having a single compound in active clinical development to a company that now has three active clinical programs, as well as additional preclinical programs underway. Our near-term focus remains on our most important program, VK2809 for NASH, where we expect to complete enrollment in the Phase IIb VOYAGE study and report initial data by year-end. Our longer-term focus has expanded to include the development of VK0214, where we expect to resume clinical development later this year for the treatment of X-ALD. In addition, our newest program, VK2735, is now in a first-in-human study with data expected by year-end. We believe this new program creates multiple opportunities for future development, and we look forward to sharing those plans as the program matures. As with the rest of our pipeline, the early data from VK2735 indicates the potential for a best-in-class compound addressing metabolic indications. Our pipeline is more diverse than ever, and our expanding platform allows us to focus on programs targeting large indications such as NASH, as well as orphan indications such as X-ALD. And we have now advanced an internal preclinical asset into a clinical development program with significant potential. We look forward to advancing each of these programs, as well as continuing to evaluate novel early-stage opportunities targeting metabolic diseases. This concludes our prepared comments for today. Thanks again for joining us, and we’ll now open the call for questions.

Our first question comes from Steve Seedhouse with Raymond James. Please go ahead.

Thank you for taking the question. Brian, could you clarify the status of the VK0214 study? Specifically, how far along are you with patient enrollment and treatment? Additionally, as you address the assay requirements from the FDA, will you be able to continue screening patients and keep the sites operational to minimize disruption?

Hi, Steve. Thanks for the question. So we will keep sites online; we're not shutting any sites down, but the hold does not allow us to continue screening or enrolling patients. I think one thing that will mitigate a potential delay is that we’re also moving to open sites in Europe, and we expect those sites to come online around mid-year. If that aligns with the potential reopening of the study, we think that would help mitigate some of the slowdown here, but there’s no shutting down of any sites at this time.

Thank you. I have a separate question. Although the hold isn’t related to the new data from Phase I, it got me thinking about the safety margin for this drug. Considering the legacy TR beta agonists that weren't directed at the liver and the doses being used in our study, how confident are you about having a wider safety margin compared to those legacy drugs that encountered issues, especially since you've already seen an impact on very long-chain fatty acids?

Yes, it’s a good question. When we look at the Phase I data, we didn’t see any effect on any cardiovascular measures, so no change to heart rate or blood pressure, or anything like that. And so that would be one sign of potential thyroid alpha activation. As for the dose level, we don’t think we have to go as high as we did in the single or the multiple ascending dose portion; we think when you look at the lipids plateauing around 20 to 50 milligrams, we think that the X-ALD study won’t have to push as high as we did in the multiple ascending dose study, which should help as well. And then finally, looking at the data so far from the toxicity studies, we don’t see any significant effects on the target tissues that you want to monitor for, such as bone and the cardiovascular system. So, so far, so good, but it’s still relatively early in development.

All right. Thanks for the thoughts, Brian. Appreciate the questions.

Okay. Thanks, Steve.

The next question comes from Joon Lee with Truist Securities. Please go ahead.

Good afternoon. This is Les on for Joon. Congratulations on the progress and thank you for taking my questions. First on the NASH program, can you just kind of provide an update on the enrollment? And has the enrollment improved and caught up to your internal timing targets? And what is the earliest we could expect to see that 12-week data?

Yeah, thanks, Les. We haven’t really given patient by patient enrollment updates historically, but I would say, in the first part of the year, enrollment has picked up a little bit relative to the end of 2021, and I’ll caveat that by saying you typically see a lag in the screening pipeline to patients actually enrolled, so any effect on the trial from Omicron probably won’t be felt right away, but enrollment has picked up slightly in the first part of the year. We’ve not given a lot of granularity; we just guided to completion of enrollments and the initial 12-week data by the end of the year.

Got it. That is helpful. And then my follow-up regarding the dual agonist program, and congratulations on the selection. I just wanted to see if you have any supporting endpoints that you’d be looking for in determining indications selection. And if it is a large indication, at what stage of the program would you consider partnering discussions if you decide to partner on that? Thank you.

Yeah, sure. The multiple ascending dose portion of that study is going to be four weeks long, and so it’s a little short to get a good handle on efficacy in a first-in-human study anyway, but we will be looking at plasma glucose, insulin levels, body weight, and liver fat content. So a lot of different metrics that would help direct the program in future studies. But it is pretty short, so all those reads will be preliminary.

Thank you.

Thanks, Les.

The next question comes from Joe Pantginis with HC Wainwright. Please go ahead.

Hi, everybody. Good afternoon. Thanks for taking the question. Brian, I guess, when you have all these programs going and you’re still enrolling VOYAGE, I want to talk about the overall running of Viking. And I guess, overall, the industry is facing a lot of headwinds right now, and I guess, want to ask how agile or if how agile you’ve been with regard to dealing with supply chain constraints, preparing for manufacturing above and beyond what you usually might have. Anything that you might have been able to go above and beyond that you usually would not have?

Yeah, thanks, Joe. It’s an interesting question. The pandemic has affected many things in many different ways, and what we’ve noticed, in particular, is that with clinical sites and CROs, staffing issues are a consistent problem that we hear about, which we never heard about before the pandemic. And so, maintaining staff with a lot of turnover at CROs is more than you would anticipate. What we've done is try to plan ahead as much as possible. We have noticed some of the queues for manufacturing, for preclinical studies, and for in-vivo studies are longer than they were prior to the pandemic, so it makes you have to decide a little earlier and try to get into queues earlier. Hopefully, all of this will normalize, but these little ripple effects are indeed a challenge.

No, I understood. Thanks a lot.

Thanks, Joe.

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

Oh, hey, Brian, thanks for the update and thanks for taking the question. Can you talk about what level of MRI-PDFF liver fat reduction at 12 weeks you’ll be looking for in the VOYAGE study? And what’s sort of your benchmark there and what would be clinically meaningful? And then maybe related to that, are there any competitive dynamics in NASH that you’ve been watching and new data that you’re interested in, especially anything that could be used in combination with VK2809?

Yeah. Thanks, Jay. I think the hurdle that we’re most focused on is that responder hurdle of a 30% fat reduction, relative reduction in liver fat content, because that’s really the only hurdle that has been talked about or established with respect to improving the odds of histologic benefits. So if we can see most of our patients being characterized as responders, we think that would improve the odds of NASH resolution, and we think also improve the odds of seeing some improvement in fibrosis. Anything above that would be great, but that’s what we’re hoping for initially. We saw quite a bit better than that in the 12-week study. As for the competitive landscape, it’s, I mean, a rich competitive landscape. We’re comfortable with the competitive profile with safety, tolerability, and efficacy that we’ve seen so far. I think the molecule is great, and the effect on lipids is a clear differentiator versus other mechanisms. So reducing atherogenic proteins, as I said in those prepared comments, is a real benefit that you don’t see necessarily with other mechanisms. I think that the mechanisms that are most intriguing to us are the ones that improve insulin sensitivity and also have direct impacts on body weight and liver fat, like the increase in access to GLP-1 and GIP, where we’re also involved with the dual agonists. So we really like that access, and as for combinations, that might be an attractive way to position combination therapy with a thyroid agonist.

Super helpful. Thanks, Brian.

Thanks, Jay.

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

Hi, Brian. This is Alex on for Andy. I got a couple of questions related to Prader-Willi syndrome, as you mentioned being a potentially interesting indication for VK2735. So the questions that I have are first, if you could give us a sense of the overall market size of the indication and how much of it you might be able to capture. And then second, what kind of results or benchmarks that you’d be looking at in the earlier stages of the clinical trials to give confidence that Prader-Willi might be an interesting indication to pursue. And then finally, I was wondering what kind of defined developmental or regulatory pathways there are for this indication?

Yeah, thanks, Alex. Appreciate the questions. So we're still pretty early in the learning curve for Prader-Willi syndrome. We think the mechanism to the extent these patients have this hyperphagia, uncontrolled appetite, the dual activity of GLP-1 and GIP in the hypothalamus might be really beneficial for this population in mitigating appetite. To the extent that we can control insulin sensitivity and plasma glucose levels, that sort of thing, which many of these patients suffer from, I think that’s an added benefit and something that we think could really help this population. When we look at case studies, the GLP-1 agonists seem to have some benefits in some of these patients, so the addition of the GIP receptor should be helpful as well. As for the market size, it’s probably under 10,000 in the US and similarly in Europe, but again, we’re pretty early in the learning curve here. So those numbers may be different, but that’s the way we’re thinking about the market size there.

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

Thanks, Alex.

The next question comes from Yale Jen - Laidlaw & Co. Please go ahead.

Good afternoon, and thanks for taking the questions. I just got two quick ones. The first one is that Madrigal recently reported their one of the Phase III study, and I know a number of analysts have comments on that. I'm just curious what your thoughts are in terms of that data readout? And then I have a follow-up.

Yeah, thanks, Yale. Yeah, I think the data looked good there. It is an APL study, and the effect on liver fat was really impressive. I think it further confirms that activation of the thyroid beta receptor is a really potent means of reducing liver fat content and plasma lipids. So we thought the data were positive.

Okay, great. And the follow-up question is that we believe that tirzepatide may also have a Phase III readout sometime in the second half of this year. Just curious, what’s your thoughts? If that readout is positive, what kind of impact on the development of VK2735 do you anticipate?

Yeah, I think there will be obesity data later this year for tirzepatide, and in the mechanism, at least in diabetics, has shown to be very potent at reducing body weight. If you’re looking at the overall obesity population, whether with or without diabetes, it might be even more effective in non-diabetic patients. That would be really exciting for us, because we think the profile is similar, maybe in some ways, slightly better with VK2735 relative to tirzepatide, but the mechanism is very attractive and really potent there. I think if they have positive data, it bodes well for the potential efficacy of VK2735.

Okay, great. Thanks, and again, congrats on the excellent results.

Thank you, Yale.

The next question comes from Scott Henry from Roth Capital. Please go ahead.

Thank you and good afternoon. Just a couple questions. The first one is kind of a tough question, but I’m just curious about your thoughts. With regards to data by year-end for VK2809, just want to get a sense of your confidence level? Let me know, would you be surprised if it wasn’t in there, or is that a stretch target, just any kind of color you can give of how confident you are of that target?

Well, Scott, we’re as confident as we can be, but having said that, we’ve missed every estimate so far, so we’re going to try and do the best we can, and that’s where we think the models point right now. But again, the pandemic has really thrown a wrench into all projections that we’ve ever thought about. So we’ll do the best we can, and that’s what we think right now.

Okay, fair enough. And then, with regards to X-ALD, assuming you get the genotoxicity study data in Q2, should we be thinking about that data perhaps first half of ‘23, just trying to get a sense of how much time we should bake in for the turnaround of that and getting the trial back up and running?

Yeah. You mean the top line data from the study available in the first part of ‘23?

Yeah.

Yeah, well, the way we looked at that is really, it’s probably a six-month delay in the study. So if we were previously expecting data by the end of the year 2022, that would probably imply the data first half of ‘23, mid-‘23, something like that.

Okay, perfect. Thank you. And then with regards to VK2735, are you going to file an IND for that product? I assume the Phase I is outside the US; just trying to get a sense of that?

Yeah, that’s right. We will file an IND later this year or early next year, but yeah, the Phase I study is not in the US; that’s correct.

Okay. And then, I guess, kind of the final question on VK2735. That Phase I data, how should we think about what we might learn as far as the obesity endpoint? Granted, those are healthy subjects, so I would imagine we wouldn’t expect to see a smaller difference. Just want to get your sense of how much insight we may learn from that early obesity data?

Yeah, it’s a fair question, and it’s a difficult question. We would look for weight loss at the higher doses, but you’re right; it is a healthy volunteer study. So it’s a little more difficult to show an effect. But when we look at diabetes, for example, and other indications, when you see weight loss, it happens in both the, so-called, normal to heavier patients. You just don’t see it as much in the normals, so it’ll be an interesting dataset. Certainly, when we look at body weights at baseline, we’d want to pay attention to the ones that are a little heavier and see how they respond relative to the ones that are leaner, but, again, it’s hard to extrapolate since they are healthy.

Okay. A little final question on spending for 2022, any pattern to how we should think about R&D?

Hey, Scott. This is Greg. Yeah, I think we spent about $46 million in 2021; about three quarters of that was direct costs, essentially for development programs, our three development programs. Looking at 2022, I think you could think about that increasing by about 25% to 30% on the cash usage standpoint. But we’re funded well through major catalysts in all three programs at this point from our overall run rate standpoint.

Okay. Would you expect that to increase throughout the year or remain relatively consistent?

I think it will be pretty consistent throughout the year.

Okay, great. Thank you for taking all the questions.

Thanks, Scott.

The next question comes from Thomas Smith with SVB Leerink. Please go ahead.

Hi, everyone. This is Mike Kratky on for Tom. Thanks for taking our question. Assuming you achieve statistical significance on the primary endpoint at three months of VOYAGE, would you plan on waiting for the full 12-month histology results before moving to Phase III study? And then as a follow-up to that, how quickly do you think you could initiate a pivotal Phase III?

Hey, Mike. Good question. So the guidance, as it exists now, requires the histology data from 12 months or whatever the endpoint is in your Phase IIb study. So we can start preparing for Phase III, and we can hopefully determine the doses that we would or get a little better focus on the doses that would likely proceed in Phase III based on the 12-week data. But we won’t be able to file the final protocol and really start the study until, I’d say, a minimum of six months after completion of the study.

Got it. That’s helpful. And then just separately, you’ve mentioned that Madrigal is going to have their pivotal data expected as early as the third quarter of this year. Do you anticipate to see some increased interest from potential partners ahead of that, or on that, in the event that they’re successful?

Sure. I’m not sure I mentioned that, but I understand their data will be later this year. And yeah, if the study is successful, I think there will be interest from multiple parties in both datasets, that is their data as well as our data. So yeah, I would think so.

Understood. Thanks for taking our questions.

Thanks, Mike.

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

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