Welcome to the Viking Therapeutics’ 2020 Fourth Quarter and Year-End 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. [Operator instructions] As a reminder, this conference call is being recorded today, February 17, 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, February 17, 2021, 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.

Thanks, Stephanie and thanks to everyone listening on the webcast or by phone. Today, we’ll provide an overview of our fourth quarter and year-end 2020 financial results as well as an update on recent progress and developments with our pipeline programs and operations. 2020 was a productive, but challenging year for Viking. Highlights from the year included our continued progress with enrollment of patients in our Phase 2b VOYAGE study evaluating our lead thyroid hormone beta receptor agonist, VK2809 in patients with biopsy-confirmed non-alcoholic steatohepatitis and fibrosis. We worked hard to push this study forward against the headwind created by the pandemic and are gratified that the majority of our sites remain open despite various regional lockdown measures. With respect to presentations in 2020; in August, we presented additional details from a prior 12-week Phase 2 study of VK2809 in patients with non-alcoholic fatty liver disease and hypercholesterolemia. These data were the subject of a podium presentation at the International Liver Conference or EASL. The results highlighted the durability of effect following treatment with VK2809 as well as consistent efficacy in high-risk subgroups. In 2020, we also initiated clinical development of our second thyroid hormone beta receptor agonist, VK0214. In September, we commenced the Phase 1 trial to evaluate the safety, tolerability and pharmacokinetic profile of VK0214 in healthy subjects. We also continued in 2020 to manage our balance sheet, to ensure our ability to execute through key clinical milestones and ended the year with approximately $250 million in cash. I’ll provide additional detail on our 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 Chief Financial Officer.

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 later today for additional details. I’ll now go over the financial results for the fourth quarter and year-ended December 31, 2020 beginning with the results for the quarter. Our research and development expenses for the three months ended December 31, 2020 were $9 million compared to $6.5 million for the same period in 2019. The increase was primarily due to increased expenses related to clinical studies, salaries and benefits and stock-based compensation, partially offset by decreased expenses related to manufacturing for the company’s drug candidates and services provided by third-party consultants. Our general and administrative expenses for the three months ended December 31, 2020 were $2.2 million compared to $2.4 million for the same period in 2019. The decrease was primarily due to decreased expenses related to illegal and patent services, professional fees and salaries and benefits partially offset by increased insurance expenses. For the three months ended December 31, 2020, Viking reported a net loss of $10.9 million or $0.15 per share compared to a net loss of $7.5 million or $0.10 per share in the corresponding period in 2019. The increase in net loss and net loss per share for the three months ended December 31, 2020, was primarily due to the 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 fourth quarter of 2020, as compared to prevailing interest rates during the fourth quarter of 2019. I’ll now go over the results for the full year. Our research and development…

Thanks, Greg. I’ll now provide an update on our development activities beginning with our lead program, VK2809. VK2809 is an orally available prodrug of a novel small molecule agonist of the thyroid hormone receptor that possesses selectivity for liver tissue, as well as the beta receptor subtype. Data to date suggests that treatment with VK2809 may provide benefits in a range of metabolic disorders, including NASH and fibrosis. In a prior 12-week Phase 2 study in patients with non-alcoholic fatty liver disease and hypercholesterolemia, VK2809 exhibited what we believe to be a best-in-class profile, demonstrating exceptional potency along with encouraging safety and tolerability. This study successfully achieved its primary and secondary endpoints with patients receiving VK2809, demonstrating statistically significant reductions in liver fat content, as well as improvements in LDL cholesterol. VK2809 also performed well on exploratory measures, demonstrating significant reductions in other plasma lipids, such as triglycerides, apolipoprotein B and lipoprotein (a). Importantly, these results were achieved without any serious adverse events being reported among patients receiving VK2809 or placebo. Follow-up results from this study, where the subject of an oral presentation at the International Liver Conference or EASL during the third quarter of 2020. The newly reported data highlighted VK2809’s durable benefit and in particular, 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 5 milligrams of VK2809 daily maintained a response at week 16. In addition to…

Thank you. [Operator Instructions] Our first question comes from Derek Archila with Stifel. Please go ahead.

Hey guys. Good afternoon and thanks for taking the questions. Just two from us, I guess, first Brian in terms of completing enrollment now in the second half of 2021, I guess, what are the odds we see the 12-week MRI data this year versus maybe early 2022. And then in terms of the POC study at 0214 and X-ALD, I mean, just can you give us a sense of what you need to do to get that study up and running, after you get the phase 1 data for the normal healthy volunteers, and can you just remind us what type of data we’ll actually get from that proof of concept study, like any relevant biomarkers that you might report? Thanks.

Thanks, Derek. I appreciate it. So with the liver fat data from VK2809, I’d say that the probability is obviously lower now to have data by the end of the year than it was earlier. What we’ve guided to typically is that following the announcement of completion enrollment, probably going to be four to five months before the data are available. And so to the extent that pushes beyond December or January, we’d be announcing in the first part of 2022. with the VK0214 study, we have identified the sites. we’re in the process of finalizing contracts and getting the protocol finalized. What we have to do is select the doses based on the SAD and MAD exposures and data. And we haven’t yet done that, but I think we should be in a position to start this study, around the middle of the year. That’d be a guess from my part. And what we’ll be looking for there in the first part of the study is just what happens to how does exposure affect lipids, preliminary look at cholesterol triglycerides in the healthies, and then in the 28-day portion in patients, we would look not only lipids, but in particular at the very long chain fatty acids that are accumulated in this population.

Great. Thanks, guys. Congrats on the progress.

Thanks, Derek.

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

Hi, thanks for taking our questions. Just anecdotally, there appears to be some behavioral changes such as increased sedentary lifestyle and increased alcohol intake during the pandemic, do you have any data to substantiate that or dispel that basically, we’re just curious if the pandemic and opposed to the lifestyle changes may offset some of the therapeutic benefits of the drug, and what if anything you may be doing to mitigate this. Thank you.

Thanks, Joon. Yes, I mean, I’ve heard that as well. I don’t have anything to share from our study, but I don’t know that that would necessarily blunt the effect on lipids. But we don’t have anything further to share on that. It was a good point, but nothing available for us.

And just to follow up on the timing of the beta readout, what’s the rate limiting step once your enrollment is completed and leading out to beta, can you just walk us through the important rate limiting steps to top by MRI-PDFF?

Yes, yes. So, once the last patient is enrolled, it’s a 12-week treatment window, and then following the completion of that 12-week window, it’s always difficult to predict when the data would actually be available, but we felt four weeks to eight weeks seems to be a reasonable time window to clean up and get the data ready for a disclosure.

Great, thank you.

Thanks, Joon.

Our next question comes from Michael Morabito with Chardan Capital Markets. Please go ahead.

Hi, team. Just wanted to ask a couple of quick questions; first, for the VOYAGE. Can you go into a little bit more detail about how many sites you currently have opened versus how many are closed and how many more sites you plan to open and which will be in the U.S. and ex-U.S.? And then on OpEx, I was just wondering if you could give us a little bit of more color on what you expect on the R&D front throughout 2021, compared to what we saw in 2020 with expanded enrollment to VOYAGE and moving forward with X-ALD? Thanks.

Yes. thanks, Michael. We’ve tended to not give a lot of granularity on enrollment and number of sites up and running, but I’ll say that the trial was originally designed to have, I think 70, 72 sites open in the U.S. and then 10 to 15 open outside of the U.S. and I’d say we’re there on the U.S. side. We’re not quite there on the ex-U.S. side. We will be adding some more sites in the first part of this year in the U.S. and ex-U.S. So, the total number of sites that will be up through the course of the study will likely be closer to 100, I would guess. But we haven’t given sort of a blow by blow as to how many are open and not open. And what was your second question?

Second question was just on what to expect from R&D expense throughout 2021, and how that will compare to what we saw in 2020?

Yes. I’ll hand it over to Greg to answer.

Hey there, Michael? Yes, I think thinking about 2021 versus 2020; I think we are probably anticipating approximately a 50% increase in OpEx for 2021 versus 2020 driven exclusively from R&D versus the G&A increases.

Great. Thank you. And just a quick follow-up question for X-ALD, how is enrollment preparing for that trial compared to what you’re seeing in NASH with VOYAGE, and do you expect that to change when you move from healthy volunteers and the patients?

Yes. well, in the healthy volunteer portion of the study going great, no delays at all there, healthy volunteers are easier to find, and they’re less likely to avoid medical clinics, although they are – there is some reluctance there. but we haven’t yet started the X-ALD portion. So, we’ll see how that turns out, but we would expect to start that closer to the middle of the year.

Great. Thanks for taking the questions, guys.

Thanks, Michael.

Our next question comes from Matt Luchini with BMO capital. please go ahead.

Hi, good afternoon guys. Thanks for taking the questions. So, I guess one more first on site and enrollment as it relates to VOYAGE. So, I guess is this – is the issue that the sites you have online are not hitting their expected sort of patient targets, or is it that the sites you were hoping to get online or not all the way online yet, and that you need to kind of expand the denominator to hit enrollment. and then on the – I guess the formulation study, maybe you could just tell us a little bit about sort of how you’re thinking about, I guess its tablets versus soft gel and why – what your market research is saying about why one may be advantageous over the other? Thank you.

Yes. Thanks, Matt. So, with the enrollment, I think the – by far, the largest contributor to that is the global pandemic that is led people to be a little more cautious on going out. we’ve had multiple regional lockdown measures that have been implemented, released, and then re-implemented. I think that’s – I mean, that’s 99% of the reason and mitigate that we’ve decided to add some additional sites. But I don’t know that it’s really necessarily underperformance. Everybody is a little slow right now, because of the pandemic. with the formulation studies the – the current formulations of capsule and we wanted to tablets and soft gels are probably, a little more commercially, friendly and have better stability. So, we have developed both. A tablet may be a little bit better for combo work and a soft gel might be a preferable for single agent, but we haven’t made any of those determinations. It just gives us flexibility and gives us two formulations that have a great stability and great overall PK characteristics.

Got it. Okay. And on the phase 1 healthy volunteer data, I – should we just assume this comes via press release or do you expect to hold it for a conference?

Yes. that’s a great question. We haven’t decided yet, because we haven’t seen the data yet. So, I mean, maybe, something like AHA or ACC given that we might be looking at lipids in these patients, but aren’t these people, but we just haven’t made that decision yet.

Okay. So that just – I guess to clarify that you would be presumably starting the inpatient study if you’re thinking about holding it all the way to AHA, you might be starting the inpatient study ahead of disclosure of those, healthy volunteer results?

Well, we might give a top line, here’s what a very, very minimal data on our lipids look like, but to indicate what the overall safety tolerability data look like, we wouldn’t want to disclose anything that would jeopardize the ability to present it in the future. But again, it’s a decision that we can’t speculate too much on until we see the data.

Great. Thank you very much.

Thanks, Matt.

Our next question comes from Steve Seedhouse with Raymond James. please go ahead.

Hi, thank you. Brian, you mentioned the liver impairment study establishing 2809 safe to administer across varying degrees of liver impairment. Just curious what the highest dose you were required to test in that study and for what duration and also if depending on what you assess in that study if you can determine if there’s a difference in activation of the prodrug or PK of the biproduct across different degrees of liver impairment.

Yes. we – thanks, Steve, that’s a great question. We looked at the 10 mg dose in that study. You’re not required to do like a dose range or anything in that. And it was really, PK was really similar to the matched – healthy matched controls. when you get to the severe patients and we would never target the end drug to that population, but when you get to severe, you do see a slight slowing of clearance. But according to our PK consultants, there would not be expected to be any sort of a dose adjustment. So overall, a little surprising to us that it was activated well. And only when you get to the most severe patients, do you see any difference, but nothing that would indicate a safety concern or a lack of activity, concern.

Got it. And just when you say most severe, are these cirrhotic patients, or what are we talking about in terms of level of severity?

Yes. Their Child-Pugh C and I believe that the vast majority of them would be, yes. Yes. So, you look at the – I think it’s Child-Pugh 5 to 6, 7 to 9 and 10 to 15 for the mild, moderate, severe. And so a majority of them have cirrhosis.

Okay. And then one quick one on – go ahead.

No. I was going to say that it’s just not a population we target ever, but it’s just good to know that there is no change in PK in that population.

Right, right. Okay. And just to close on VOYAGE, so I would imagine that some of the first patients enrolled, I guess, would be coming through their 52-week follow-up. I’m just curious if you can comment, I know enrollment’s been slowed by the pandemic, obviously the 52-week biopsy’s important. Can you just comment on if there are any missed visits issues with collecting that biopsy? that’d be helpful. Thanks.

Yes, sure. We have had patients complete that that final visit and haven’t had too many problems with the – since the biopsy visit is such an important visit. we haven’t had any real issues there. There are – because of the pandemic, some – maybe during the study, some visits that aren’t perfectly on schedule, but surprisingly, not a lot of missed visits and a lot of those are we’re able to do televisits and that sort of thing. So, there’s more flexibility because of the pandemic, but there haven’t been significant issues like that. And again, we’re super focused on that, the MRI at 12 weeks and the biopsy at 52 weeks. So, those are the ones, which were much more closely monitoring.

Got it, very good. Thank you.

Thanks, Steve.

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

Hey, guys. congrats on the quarter and thank you for taking my question. On your X-ALD program, I’m wondering if you could talk about any flexibility you have in the primary endpoint for future studies or is it fair to say the six-minute walk test should adequately capture outcomes in this patient population?

Yes. Thanks, Julian. It’s a great question. We know that this six-minute walk and the sway amplitude have been employed in other later stage X-ALD studies, but we have not spoken with the FDA about what registration endpoints would look like. We just know that has been the gait-related and balance-related endpoints have been used. And so we don’t – not able to answer that right now until we talk to the FDA, but we certainly expect one of those or maybe the composite to be to be the focus.

Okay, great. Thanks.

Thanks, Julian.

Our next question comes from Andy Hsieh with William Blair. Please go ahead.

Great. Thanks for taking my questions and congratulations to Marianne and Greg. So, I have two questions. So one, Brian, you kind of talked about the formulation work that you’ve done with 2809. Just curious about first of all, 0214, is that also a capsule? And are you thinking about doing the same and within the context of X-ALD, can you kind of talk about different formulation with X-ALD patients, is the action of swallowing a little bit different compared to, let’s say like, NASH patients or healthy patients?

Yes. Thanks, Andy. It’s a great question. The work is already sort of underway with different formulations. Right now, we are using a capsule with VK2809, but we prefer a tablet and some of that works underway. I’m not aware of any muscle difficulties with the esophagus or swallowing or anything like that, I mean, it could be, but it just hasn’t come up in any of our discussions with KOL, it’s more incontinence gait balance that, that sort of thing.

Got it. And also, you’ve probably enrolled a number of healthy volunteers for the 0214 study. Just wondering if you could share some maybe, initial observations from that study?

Not a lot, it is a very well tolerated, the exposures appear predictable, but we’re pretty much blinded to placebo and treatment. So, it’s hard to know, I mean, we know from the PK reports that there is drug onboard and in patients, who have received it, and there aren’t any surprises there, but we’re blinded otherwise to lapse in other aspects of the study.

Okay. That’s helpful. Thank you. Thank you so much.

Thanks, Andy.

Our next question comes from Yale Jen with Laidlaw & Co. Please go ahead.

Good afternoon, and thanks for taking the questions. The first question is in terms of the liver impairment data, do you – should we anticipate that to be reported or published anytime soon?

Hi, Yale. Probably not. This was something that is just a requirement for NASH programs prior to Phase 3. So, we just got it out of the way here, but probably, not going to report any of the data. I don’t know, maybe, but we haven’t – wasn’t under consideration.

Okay. One more question here is that in terms of the ex-U.S. sites that you brought on board more recently, I know the pandemic still rampage right now in other countries. But so far, have you seen sort of progress of those sites and how satisfied given the circumstances of those sites in terms of recruiting patients?

Yes. That’s a great question. It’s very slow. I think bringing those sites onboard has been much, much more arduous than expected. And some of that is just due to the people being locked down, its communication is much more impaired, and getting responses from regulatory authorities, that kind of thing. So, it’s definitely slow. I think Europe it feels a little bit behind the U.S. as far as the severity of the lockdowns and the easing of restrictions. We hope that that on both sides eases over the next few months, but Europe is certainly locked up right now.

Okay, great. Thanks for the updates and best of luck.

Thanks, Yale.

Our next question comes from Mayank Mamtani with B. Riley Securities. Please go ahead.

Hi, team. Thanks for taking the question and congrats, Greg and Marianne. So, two quick ones on NASH and then have a follow-up on X-ALD. Brian, is there anything you need about the screening criteria for VOYAGE and just curious how long do you think these patients are staying in that screening period by protocol, but obviously, in line for waiting for – waiting to get the first dose, is there any data you could provide on that any input and then also medium follow-up whenever the last DSMB meeting occurred. any input you can provide on that would be helpful.

Yes. Thanks, Mayank. So, the screening window takes around six to eight weeks depending on what the status of a person’s prior biopsy might be. We have extended that because of the pandemic and the FDA allows you to get some more flexibility on that. So, I think we allow them up to 12 weeks now and nothing unique other than you’ve got to have a biopsy confirmed NASH, and F2 and F3 fibrosis that sort of thing at least 8% liver fat content. And what was your second question?

The median follow-up maybe, across different doses, maybe the last time there was a DSMB meeting.

Yes. The – well, the DSMB is scheduled at specific intervals, predetermined intervals. So, there isn’t really a follow-up per se on each DSMB meeting. the trial will have people come back for a week for visit following completion of 52 weeks, but there isn’t really a follow-up on each DSMB meeting.

Okay. And then on X-ALD, just curious about the knockout mice data that you have obviously, great effect on long chain fatty acids. I’m just curious on the implication of just biologically trying to understand the game, the importance of C20 and some of the other markers there like C24 and C26 especially, there’s a little bit of heterogeneity and how much knockdown you’re getting in the brain, spinal cord and even though some liver effects, anything you can comment across these different markers that you have with long fatty chain acids.

Yes. Yes. Thanks, Mayank. So, the marker that’s typically used for diagnosis is C26 lysophosphatidylcholine and that’s known to be toxic long chain fatty acid. The C28 is also toxic. And the reason that the short chains are of interest is that these undergo a two carbon elongation process. So, the C26 comes from the C24, which comes from the C22, which comes from the C20. So, if you can reduce the C26 and the C28, and reduce the C20, C22 and C24, you’re impacting the marker of interests for toxicity, as well as the pool that feeds into that. And so it’s sort of a two-pronged effect that we would hope over time would have an even larger benefit on the more toxic long chain fatty acids.

Excellent. Thanks for taking my questions, again.

Thanks, Mayank.

[Operator Instructions] Our next question comes from Jay Olson with Oppenheimer. Please go ahead.

Hey, Brian. Thank you for the update and we appreciate you taking our questions. We have two of them. Can you comment on any competitive events you’ll be watching out for in 2021 and especially, have any updates from intercepts and or magical mice impact the regulatory strategy you’re contemplating for VK2809? And then our second question is related to your view of the progress in non-invasive NASH diagnostics. And if there’s any possibility that you could potentially run a non-invasive registrational trial for VK2809?

Yes. Thanks, Jay. Really great big picture questions. And we do keep a pretty close eye on the competitive landscape. I think, intercepts regulatory dialogue, everybody’s interested in and seeing how that plays out and hopefully, it goes well for them. The space has had a pretty long window here of mediocre and negative news. So, it’d be great to see them proceed through the regulatory process. We always keep an eye on the injectables. It’d be interesting to see the FGF21. So, from Bristol-Myers, for example, we haven’t seen data from those as far as I’m aware really interested in those, because it looks like a really promising mechanism. So to the extent, those were available at EASL or later at AASLD, we’d be interested in seeing them. And then some of the injectables, the GLP1s and the dual agonists, I think, a little longer-term, but those would also be of interest – when we look at the competitive landscape. And as far as the non-invasive, I think we’re a little ways from that right now. We’re looking at the health panel and NIS4. but I think we’re ways out from having those be validated and accepted by the FDA and that was really kind of confirmed in that recent NASH workshop where they talked about non-invasive. I mean, they’re very promising, very attractive. Everybody wants them, but so far, there’s no validation at this point, so biopsy is the standard.

Okay, great. Thanks so much for taking the questions.

Thanks, Jay.

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

Great. Thanks, again for your participation and your continued support and we look forward to updating you again in the coming months. Thanks.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.