Good day, and welcome to the Viking Therapeutic 2020 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 question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded today, April 30, of 2020. 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, Senior Vice President of Finance. Before we begin, I'd like to caution that comments made during this conference call today, April 30, 2020, will contain forward-looking statements within the meaning of the Securities Act of 1933, concerning the current beliefs of the company, which involve a number of assumptions, risks, and uncertainties. Actual results could differ from these statements, 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. Brian?

Thanks, Stephanie. And thanks to everyone listening on the webcast or by phone. Today, we'll provide an overview of our first quarter 2020 financial results, as well as an update on recent progress and developments related to our pipeline of programs and operations. I'll begin by commenting on the status of our Phase 2B Voyage trial within the context of the Coronavirus pandemic. As a reminder, the Voyage trial is evaluating our small molecule thyroid receptor beta agonist, VK2809, for the treatment of patients with biopsy confirmed non-alcoholic steatohepatitis and fibrosis. Patient enrolment in this study has continued through the first four months of the year and remains ongoing. Our participating clinical sites have reported varying degrees of impact from the pandemic, with some sites reporting delays due to shut down related restriction, and others reporting adjustments for recent FDA guidance for the conduct of trials during the pandemic. Others have remained open, and have reported relatively minor impacts on the ability to conduct normal operation. We are continuously evaluating how this evolving landscape impacts our overall planning and timeline, and I'll provide further color in a few minutes. During the first quarter, we also advanced our program evaluating our second small molecule thyroid receptor beta agonist, VK0214, for the treatment of X-linked adrenoleukodystrophy or X-ALD. We remain on track to file an IND and initiate clinical studies for this program in the coming month. I will provide additional detail on our development activities after we review our first quarter financial results. With that, I'll turn the call over to Greg Zante, Viking's Senior Vice President of Finance. Greg?

Thanks, Brian. In connection with my comments, I'd like to recommend the 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 first quarter ended March 31, 2020. Our research and development expenses for the three months ended March 31, 2020 were $8 million, compared to $4.5 million for the same period in 2019. The increase was primarily due to increased expenses related to our clinical studies, with the initiation of the Phase 2B Voyage study in November 2019, preclinical studies and manufacturing for our drug candidates, partially offset by decreased expenses related to services provided by third party consultants. Our general and administrative expenses for the three months ended March 31, 2020 were $3 million compared to $2.3 million for the same period in 2019. The increase was primarily due to increased expenses related to stock based compensation, legal expenses, and salaries and benefits, partially offset by decreased expenses related to services provided by third party consultants and professional fees. For the three months ended March 31, 2020, Viking reported a net loss of $9.7 million or $0.13 per share, compared to a net loss of $4.9 million or $0.07 per share in the corresponding period in 2019. The increase in net loss and net loss per share for three months ended March 31, 2020 was primarily due to the increased research and development and general and administrative expenses noted previously, as well as decreased interest income, due to the decline in interest rates throughout the first quarter of 2020, as compared to the prevailing rates during the first quarter of 2019. Turning to the balance sheet, at March 31, 2020, Viking held cash, cash equivalents, and short-term investments totalling $269.2 million, and had 72,562,863 shares of common stock outstanding. 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 recent progress and activity with our lead program, VK2809, and the ongoing Voyage Phase 2B trial. 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, suggesting promising therapeutic potential in a range of metabolic disorders, including NASH. We previously reported positive data from a 12-week Phase 2 trial of VK2809 in patients with hypercholesterolemia and non-alcoholic fatty liver disease. As we've discussed on prior calls and updates, this trial was successful in reaching both its primary and secondary endpoint, demonstrating potent reductions in liver fat content, as well as improvements in plasma lipid measures. VK2809 has also demonstrated an encouraging safety and tolerability profile thus far. In the 12-week Phase 2 study, no serious adverse events were reported on patients receiving VK2809 or placebo, and the overall numbers of adverse events were relatively evenly distributed across treatment arms. In our view, VK2809's oral route of administration, its impressive potency at doses as low as five milligrams per day, its liver specific effects, and its overall safety, tolerability, and cardiometabolic benefit combine to make it among the most attractive candidates in the NASH development landscape today. Following completion of the 12-week Phase 2 study, we completed several additional clinical and preclinical evaluations of VK2809 to enable us to file a new IND with the FDA's division of gastroenterology and inborn errors product. These included Phase 1 studies to evaluate potential drug, drug interactions with [indiscernible] as well as additional PK and efficacy study. We also completed chronic toxicity studies to support long-term dosing in humans. The results of these studies, as well as the results of prior clinical and non-clinical work, forms the…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Derek Archila with Stifel. Please go ahead.

Great. Thanks, guys, for taking the questions. And congrats on the progress. So just a few from us. I guess first, Brian, I just wanted to make sure we're up to date here in terms of -- has the FDA has fully granted approval for the IND out to 52 weeks from the tox perspective? Just wanted to check on that. And then two other -- just kind of to get your thoughts on in terms of -- we heard from the GENFIT fellows that they're incorporating some metabolic composite endpoint in their study. And I'm just curious to know what your interactions with them, with the FDA, and potentially integrating that into your Phase 2B. And then second, on the MGM data that we've seen from cohort four, how does this kind of inform your thinking in terms of time on therapy and potential fibrosis improvement for a TR beta? Thanks.

Hey, Derek. Thanks for the questions. With respect to the submission of our 12-month tox data, we submitted that shortly after the last update, which was back in -- February, I guess was the last update. And we haven't heard anything from the FDA. We have no reason to think that there will be any pushback on it. But we haven't heard anything back. With respect to adding metabolic endpoints into the Phase 2 study, I'm not sure what endpoints you're referring to with GENFIT. We have a number of lipid related endpoints. We've got the registration endpoints for NASH approval. We have a number of other investments as well. And looking also at some of the markers proceed pre-deployment [ph] and so forth. So that -- we haven't discussed anything further with the FDA regarding additional endpoints to add to the protocol. And I missed the last question on --

Oh, sure. Just the MGM data that recently came out and kind of showing fibrosis improvement in as little as 24 weeks and just kind of understanding the time on therapy and how that could be important for a PR beta in terms of being able to show a fibrosis improvement. Is there anything kind of key learnings from that experience that you've just kind of been in NASH space, and how you might apply it for further development here?

So different mechanism, obviously. So I'm not sure on the reasonable read through there. But I do think that to the extent fat is an important driver, and you can rapidly reduce it, that should have an impact more quickly than something that reduces fat more slowly. We've seen a direct effect on fibrosis in the NASH models. But I don't know that we can translate too much of the MGM data. And certainly, it's great to see the reduction fats and the reduction of fibrosis, but I don't know. It's different mechanisms, so it's hard to make those sorts of translations.

Okay, got it. I'll hop back in queue. Thanks, guys, and congrats on the progress.

Thank you.

Our next question will come from Joon Lee with SunTrust. Please go ahead.

Hi, thanks for taking my question, and congrats on the progress this quarter. And just wanted to get some clarity on the prior question. So you -- it seems like you submitted the full tox data to cover the patients to 12 months of dosing. Is no news good news in this case, when it comes to FDA having to comment on anything? And what's the deadline by which the FDA needs to say anything before you get a green light on dosing to 12 months? And then lastly, when was your first patient dose? Thank you.

Thanks, Joon. So last question is just -- we haven't disclosed when the first patient was dosed. We started opening for screening in November. We haven't given a patient-by-patient sort of timeline there. And the interesting thing about the review of the long-term tox is that there isn't really an established mechanism that we're aware of for kind of like filing an IND, or an NDA, or anything like that, where there's a calendar that you watch. So we submitted the full data set and haven't heard anything back. And I think if the FDA has questions or comments, we would certainly expect to hear something.

Great. And then one more question. And thank you for providing an update on the timing of the study of Voyage, which now expected to be fully enrolled by early next year or mid next year. So what's your mix of academic to private clinical trial sites? Our understanding is that the academic sites are more limited during the pandemic to enrol, whereas private clinics are more free and able to participate in clinical trials. Just curious what your mix is. Thank you.

Actually, I don't know off the top of my head what the actual mix is. We have a lot of academic centers in the study, and it's true, the restrictions at the academic sites have been, I would say more austere than the local clinical sites. But I don't know the exact answer to that. The disruption, I'd say, has been highly variable. We've had several sites that have reported really almost no disruption. But then you have a large academic site that closes down anything that's not COVID related. So it goes -- it runs the gamut from that spectrum.

Great. Thank you.

Our next question will come from Steve Seedhouse with Raymond James. Please go ahead.

Hi, this is Ryan Deschner on for Steve Seedhouse. The question I have is regarding the $50 million stock repurchase. Basically, I'm wondering what ultimately tipped the scales and caused them to authorize that?

Okay, thanks for the question. So we just think that having flexibility is a just a matter of good corporate housekeeping. We have an ATM in place, and we put a share repurchase plan in place. I think it's just a matter of good corporate behavior.

Okay, great. Thank you.

Thanks.

Our next question will come from Jay Olson with Oppenheimer. Please go ahead.

Thanks for taking the questions, and congrats on keeping everything going, despite the COVID-19 pandemic. Can you may be talk about the different pushes and pulls in enrolment, which I think you said varied by geography? And then what assumptions, if any, were baked into your estimated time to complete enrolment as far as removing lockdowns state-by-state?

It's a good question, Jay, and I don't really have a good answer because we don't have clarity on when all the lockdowns will be lifted. But I think generally speaking, the assumption would be that most lockdowns would be eased sometime or early in the third quarter. But again, very, very difficult. If these early states that are lifting lockdown have a surge in COVID cases, that changes the dynamic. But we would anticipate that most of the lockdowns would be lifted by mid-summer. And what was the other part of your question?

That that pretty much covers it. But I did have one follow up. Can you just talk about what percent of your target enrolment of 340 patients is going to come from study X-U.S. study sites?

So we don't know. We do anticipate that we're going to have probably about a quarter of the -- maybe a little less than a quarter of the plan sites will be X-U.S. Some of those may enrol a little more rapidly. So it's kind of a balance. They're coming on a little bit later. There's a lower number of them relative to the U.S.. But some of them might perform better than some of the U.S. sites. So I think maybe a safe guess would be to assume around a quarter. But that's my own guess. I don't really have a good way to prognosticate that.

Great. Thanks, Brian.

Thanks, Jay.

Our next question will come from Joe Pantginis of H.C. Wainwright. Please go ahead.

Hey, everyone. Good afternoon. Thanks for taking the questions. And I hope you're all well. From a higher-level standpoint, if you look at the broader impact of COVID on clinical trials, there may be more impact on earlier stage or newly started studies. So I think it's encouraging that you've not identified -- that you haven't had a need to find plausit [ph] yet; so that's good. So I'm just curious, with that said, do you have any industry insight into the impact for later stage studies in the NASH space and potential competition for patients?

Yes, Joe, this is a great question because it's true. The impact is very different on studies, depending on when they were started. And if you have a study that's ongoing, and all the sites are up and running, and screenings done, that's the type of study that really will have minimal impact. If you have a study that's just getting started in the ramp up process, that's a more significant impact, likely. So, it's a great question. We've been fortunate, we've still been able to add sites and keep enrolment open. Different sites have adapted in different ways. A lot of them have transitioned to Telehealth for the clinic visits. A lot of sites that have paused their own full opening process have been pretty aggressive with identifying patients who would qualify via pre-screening. It is true that the ongoing studies, studies that are more mature are less impacted than the studies that are earlier stage. I think that has-- it holds across Phase 2 and Phase 3, just depends on where you are in that start-up process.

Got it. If I could just shift gears really quickly to the pipeline. Just curious how would you characterize the status of 5211 right now? Is this something that's truly on the back burner? Is it percolating a little bit or do you have occasional calls with potential business development?

We have, I'd say, reasonably regular calls with the interested parties on that. We have said in the past, and as you know, we're not pursuing additional clinical development with it at this time but it is not stuffed away in a closet somewhere. I think the BD dialogue there has been fairly consistent. We've been present at all of the BD meetings. We've had a robust dialogue around that program. The issue has always been, particularly with the hip fracture setting is just that the registration path there is challenging and everybody grapples with that once they get into diligence but it's not a death process. I'll say that.

Sure, no. Appreciate it, Brian. Thanks.

Our next question will come from Jason McCarthy with Maxim Group. Please go ahead.

Hi, everyone. It's Dave on the line for Jason. You mentioned that there were a handful of clinical sites who are experiencing some COVID-19 related disruptions. So that in mind, can we still expect a data read for the VOYAGE study in 4Q 2020?

No, what we indicated in the press release today is we expect enrollment to be completed in the first half of 2021.

Okay. Then regarding the potential partnership for the [indiscernible]. Could you may be shed some color on what sort of synergies you'd be looking into with respect to a potential partner?

Anybody who has an osteoporosis franchise, any company that has a program targeting muscle-related diseases, those would be the obvious collaborators for the VK5211 program.

Okay, great. Then regarding the VK0214, when do you think a proof-of-concept study would be [indiscernible] plan on filing the IND like mid-2020s? I just want to see why you thought the proof of concept study might get…

You're cutting out there a little bit. With the VK0214 program we plan to file the IND around the middle of the year and then the clinical program will proceed as a single ascending dose study followed by multiple studying dose study that we would then follow almost concurrently with a Phase 1B study in patients with X-ALD. That's what and then what the timing is for the proof of concept portion of Phase 1B, we haven't given any timing there. Possibly late this year or early next year but haven't given any guidance on that one yet.

Thanks a lot. Appreciate it.

Our next question will come from David Bautz with Zacks Small Cap Research. Please go ahead.

Hey, Brian. We've recently seen some fairly impressive liver fat reduction data from a once-weekly injectable therapy in NASH patients. I'm curious what clinicians say to you about how they view a once-weekly injectable versus a once-daily oral therapy.

Well, thanks for the question. It probably depends on the clinician you ask. I think the feedback that we've received pretty consistently is that the VK2809 profile is very attractive. Daily oral is a very patient-friendly route of administration and mode administration. The effect on lipids and other atherogenic proteins is favorable, lack of weight gain, those sorts of things. All bode well for us but that said, I think that both the FGF21s and FGF19s the data is spectacular. I think the market is certainly large enough to allow multiple significant products to coexist. Generally, I would expect an oral to sit early on in the treatment paradigm and the injectables further back, but that's just my thinking.

Okay. Real quickly, has the company made any purchases under the stock purchase program?

We filed our Q this afternoon and you can see in there, we didn't make any purchases at this point. We have not used the ATM or made any purchases.

Okay, great. Thanks for taking the questions.

Our next question will come from Yale Jen with Laidlaw & Company. Please go ahead.

Good afternoon, and thanks for taking the questions and congrats on the smooth pace of recruitment and under the current circumstances. I have two quick questions here. The first one just follow with the previous one in terms of wireless internet and data analysis, you indicated that the enrollment may complete in the first half of 2021. I assume depending on the timing of that. The internet analysis data will be out in the end of 2021 or would that be pushed into 2022?

Thanks, Yale. The interim, are you referring to the 12-week endpoint?

Yes.

Yes, that's the primary endpoint. Hard to know. We would certainly expect if things were able to resume that we would be completing enrollment in the earlier part of that window I described earlier, but if there's a second wave of shutdowns or a surge in COVID related issues this fall, that could change things. It's just very difficult to project right now but we do think that the first half of 2021 is not an unreasonable estimate at this point.

Okay, great. That's very helpful. Another follow up. In terms of this presentation, you will have in August or before you provide more details, a general highlight of that presentation.

Well, we're subject to the embargo there but it will be new data from follow up visits from the study as well as potentially some subset analyses that were conducted on the data.

Okay, great. Thanks a lot and congrats for the work.

Our next question will come from Thomas Smith with SVB Leerink. Please go ahead.

Hey guys, thanks for taking my questions. Just wanted to follow up and clarify on some of the earlier questions. Brian, do you need to actively hear back from the FDA regarding the tox data submission to enable 2809 dosing up to 12 months? Or are you free to proceed if you haven't received explicit clearance?

Hey, Tom, thanks for the question. I think it stands to reason that if there is a reason to discuss the data, we would hear about it. We certainly submitted it with plenty of time to review and discuss. As I said earlier, though, there is no structure here for the feedback and process so we submitted it and haven't had subsequent discussions and that's just where we sit today.

Right, got it. I guess just trying to figure out Brian, whether or not hearing feedback from them ends up being a gating factor for you to continue dosing these patients out beyond the six months that you had originally received clearance for?

Yes, well, in other settings, the FDA is not shy about telling you, you need to suspend dosing so I would anticipate that if there's an issue, we would hear about it. If we don't hear anything, we're not going to halt the study.

Got it. Thanks for taking my question.

Our next question will come from Mayank Mamtani with B.Riley FBR. Please go ahead.

Thanks for taking my questions and welcome Dr. Oliveira to the team. My question on screening for VOYAGE too. One was COVID related. Could you clarify if there's any change to the screening time that you have or what was the original screening time you had? Was it four or eight weeks? Just to make sure you don't lose patience you may have had in the screening period, so anything that might have changed there? Then the non-COVID related question I had was, as you know, there have been instances of other trials where due to biopsy, variation among readers, certain patients who weren't supposed to be in the study may have prevented it. Are there any criteria that you're ensuring to make sure that you are not enrolling patients that shouldn't be in the study for safety reasons, primarily?

Yes, thanks, Mayank. Both really good questions. We probably aren't going to get into the details of the study mechanics but the FDA in the COVID related guidance that they issued, does allow some extension of screening window to accommodate inconveniences related to some of the state-by-state shutdowns. I think that that's a tricky thing to navigate because you don't want that window to widen inappropriately and you don't want, for example, someone with a biopsy that's five months old to come in after eight months and expect to be enrolled. You have to be really careful with adjusting some of the things that you are okay adjusting because of the COVID flexibility that's allowed, but I think the more you begin to deviate from some of the entry criteria, the more problematic the analysis of the subsequent data become. We're able to make some accommodations like that but we've been leaning away from making dramatic accommodations because I think it creates a mess downstream. Great question. What was the second one?

The second one was just on the unsafe. Is there anything you're ensuring on the certain patients don't creep into the study that shouldn't be in the study based on learning's from other clinical grounds?

Yes, we are being particularly careful about any of the patients that are on the lower end of the NAS score and any patients who may be borderline on one of the sub-components. Those patients will receive extra attention to really try and obviate the issue that you highlight and that's having someone come in who's on the cusp of being too mild or something like that. The same issue arises with the fibrosis staging as well. You want to make sure that you've got an F3 and not someone who's like an F2.9. There's no such grade but you know what I mean. We are giving more attention to those patients who may be closer to the cutoff cost.

Okay, and just to clarify the DSMB [ph] schedule, I know you can't disclose that But have you had any yet or is there any that is going to be around the time you get closer to that six-month time window?

We haven't disclosed that schedule at all. There are multiple meetings though and so I don't know. That's probably all the more color that we're going to give on DSMB [ph] schedule.

Okay, great. Just the final question was a little high level so this off treatment data you'll have at EASL what is the thinking around obviously stopping treatment and maybe aligning other treatments to follow through or even combinations if you could comment on what your data is thinking there?

Well, on the EASL data, we'll look at data from patients who returned for a follow-up visit. What was the tie into the combos?

Any latest thought on the combination strategy? Have you thought about that?

We've considered a lot of different mechanisms to be suitable for combo. I think our preference is probably to remain with other oral agents rather than injectables. It's not a hard and fast assessment but it just makes the co-administration fix those combinations. That pathway is a little bit more amenable to a more standard development process rather than a combination with an injectable. I think a lot of these mechanisms could be suitably combined. We're just skewing towards the oral.

Great. Thanks for taking my question.

[Operator Instructions] Our next question will come from Scott Henry with Roth capital. Please go ahead.

Thank you, and good afternoon. It's somewhat related COVID question. Let's say you get a patient screened in the trial, active dosing and 12 weeks comes up and the patient just goes dark for one reason or another because of COVID-19. What is the risk of patients falling out of the trial, if any? I'm just curious, your thoughts on that. Do you enroll a couple of more patients or maybe you don't expect that to happen?

Thanks, Scott. Thankfully, that hasn't happened at this point. I think those last to follow up cases would be treated as they would be in any trial. You always lose some patients to follow up and you either impute their data or older styles use the LSDF or something. We haven't had that issue. It wouldn't be any different than somebody who gets in a car accident and needs to drop out or anything like that so we wouldn't have any special accommodations there.

Okay, great. Then a question just on the financials. Should we expect spending both on R&D and G&A to dip down in 2Q as activity perhaps slows down and then pick up in the second half of the year from a modeling perspective?

It's pretty stable, maybe a slight increment up in the second half but pretty stable. Do you want to comment on that, Greg?

Yes, I agree. It's pretty stable throughout the year but up a bit, as we said last time.

You see an incremental skew to higher expenses as you proceed through the year.

Okay, great. Thank you for taking the question.

Our next question will come from Julian Harrison with BTIG. Please go ahead.

Hi, thanks for taking my question. Thinking about 2809 tolerability and safety profile and broader metabolic benefits, I was wondering how you see the F2 landscape evolving in the next few years and beyond by a few derived metrics, what patient characteristics or comorbidities do you think really reinforced the case for BK2809 in this setting? Thanks.

I don't think there would be necessarily any safety or tolerability issues with really the F0 through the F3 population. It's different when someone becomes maybe very highly cirrhotic may or may not be challenging to take VK2809 but that wouldn't be the candidate patient that we'd be targeting. I think the overall metabolic profile for VK2809 is really suitable for someone who has diabetes and dyslipidemia along with NASH, atherosclerotic disease due to the effect on atherogenic protein. We are very fortunate that the mechanism has such a broad lipid-lowering benefit with Trigs and LDL and Appleby and LPLA [ph], in addition to the effect on liver fat and potentially fibrosis. We think that the patient population, the obese, the patients with dyslipidemia would be really great candidates.

Got it. That's helpful. Thanks very much.

Our next question will come from Yale Jen with Laidlaw & Company. Please go ahead.

Hi, Brian, thanks for taking the follow-up question. This is really follow up what Scott asked which is that I know it's not happening but what if in going forward COVID-19 situations do impact on patients coming in but ultimately not being screened up? Would the protocol have any amendments that can add more patients to make compensation to that or that's not in the current protocol design?

It is not in the current iteration. It hasn't been an issue. If you develop COVID as an enrolled patient, that would be treated as basically any other ill but it would be due to COVID-19 infection. To the extent that that becomes a more significant issue for patient health, they may elect to pause those things or drop out but that's no different from someone who developed any other illness during clinical trial. So there is no special accommodation. We don't have any plans to expand enrollment in anticipation of some COVID-19 related increase in dropouts.

Okay, great, thanks. Appreciate it.

This concludes our question-and-answer session. I would like to turn the conference back over to Stephanie Diaz for any closing remarks. Please go ahead, ma'am.

Thank you again for your participation and continued support of Viking Therapeutics. We look forward to updating you again in the coming months. Have a good afternoon, you can all disconnect now. Thank you.

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