U.S. Markets closed

Edited Transcript of VKTX earnings conference call or presentation 1-Aug-19 8:30pm GMT

Q2 2019 Viking Therapeutics Inc Earnings Call

San Diego Aug 8, 2019 (Thomson StreetEvents) -- Edited Transcript of Viking Therapeutics Inc earnings conference call or presentation Thursday, August 1, 2019 at 8:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Brian Lian

Viking Therapeutics, Inc. - President, CEO & Director

* Michael Morneau

Viking Therapeutics, Inc. - VP of Finance & Administration

================================================================================

Conference Call Participants

================================================================================

* David Bautz

Zacks Small-Cap Research - Senior Biotechnology Analyst

* I-Eh Jen

Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst

* Jay Olson

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Joon So Lee

SunTrust Robinson Humphrey, Inc., Research Division - VP

* Joseph Pantginis

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Mayank Mamtani

B. Riley FBR, Inc., Research Division - Research Analyst

* Scott Robert Henry

Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research

* Steven James Seedhouse

Raymond James & Associates, Inc., Research Division - Research Analyst

* Tsan-Yu Hsieh

William Blair & Company L.L.C., Research Division - Senior Research Analyst

* Stephanie Diaz

Vida Strategic Partners Inc. - President & CEO

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Welcome to the Viking Therapeutics 2019 Second Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, August 1, 2019.

I would now like to turn the conference over to Viking's Manager of Investor Relations, Stephanie Diaz. Please go ahead, Stephanie.

--------------------------------------------------------------------------------

Stephanie Diaz, Vida Strategic Partners Inc. - President & CEO [2]

--------------------------------------------------------------------------------

Hello and thank you all for participating in today's call. Joining me today is Brian Lian, Viking's President and CEO; and Michael Morneau, Vice President of Finance and Administration. Before we begin, I'd like to caution that comments made during this conference call today, August 1, 2019, 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 SEC concerning these and other matters. I'll now turn the call over to Brian Lian for his initial comments.

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thanks, Stephanie, and thanks to everyone listening on the webcast or by phone. Today, we'll provide an overview of our second quarter financial results as well as an update on recent progress and developments related to our pipeline programs and operations.

The second quarter of 2019 was exceptionally active at Viking. While it may have appeared relatively quiet from the outside, I can assure you that this was a time of great progress inside the company. Early in the quarter, we presented a late-breaking poster at the EASL Conference in Vienna, highlighting new data from our Phase II trial of VK2809. These results demonstrated that VK2809 when dosed as low as 5 milligrams per day produced efficacy that was similar to that observed at the higher 10 milligram doses reported previously. These new data provide further support for our belief that VK2809 possesses best-in-class characteristics, and we are excited to further evaluate this agent for the potential treatment of non-alcoholic steatohepatitis, or NASH. We worked diligently during the quarter to prepare for our planned IND filing with the FDA, which will outline our upcoming Phase IIb clinical trial in patients with biopsy-confirmed NASH. I will provide additional detail on our second quarter development activities in a few minutes. But first, we'd like to review our second quarter financial results.

I'll now turn the call over to Mike Morneau, Viking's Vice President of Finance and Administration, to discuss our financial results. Mike?

--------------------------------------------------------------------------------

Michael Morneau, Viking Therapeutics, Inc. - VP of Finance & Administration [4]

--------------------------------------------------------------------------------

Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Viking's 10-Q 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 second quarter and 6 months ended June 30, 2019.

Our research and development expenses for the 3 months ended June 30, 2019, were $7.3 million, compared to $5.2 million for the same period in 2018. The increase was primarily due to increased manufacturing expenses related to our drug candidates, preclinical study efforts, salaries and benefits, use of third-party consultants and stock-based compensation, partially offset by a decrease in clinical study expenses.

Our general and administrative expenses for the 3 months ended June 30, 2019, were $2.2 million, compared to $1.7 million for the same period in 2018. The increase was primarily due to increased stock-based compensation expense, salaries and benefits, use of third-party consultants and professional fees.

For the 3 months ended June 30, 2019, Viking reported a net loss of $7.7 million or $0.11 per share, compared to a net loss of $6.7 million or $0.13 per share in the corresponding period in 2018. The increase in the net loss for the 3 months ended June 30, 2019, was primarily due to the increases in research and development and general and administrative expenses noted previously, partially offset by an increase in interest income. The decrease in net loss per share for the 3 months ended June 30, 2019, is primarily due to the additional shares outstanding at June 30, 2019, versus those outstanding at June 30, 2018, given the additional shares issued by the company since June 2018, primarily through a public equity offering.

Our research and development expenses for the 6 months ended June 30, 2019, were $11.8 million, compared to $8.3 million for the same period in 2018. The increase was primarily due to increased manufacturing expenses related to our drug candidates, preclinical study efforts, salaries and benefits, use of third-party consultants and stock-based compensation expense, partially offset by a decrease in clinical study expenses.

Our general and administrative expenses for the 6 months ended June 30, 2019, were $4.5 million, compared to $3.5 million for the same period in 2018. The increase was primarily due to increased stock-based compensation expense, salaries and benefits, use of third-party consultants, insurance expense and professional fees.

For the 6 months ended June 30, 2019, Viking reported a net loss of $12.6 million or $0.18 per share, compared to a net loss of $10.2 million or $0.21 per share in the corresponding period in 2018. The increase in net loss for the 6 months ended June 30, 2019, was primarily due to the increase in research and development expenses and general and administrative expenses noted previously, partially offset by an increase in other income related to the decrease in the fair value of the debt conversion feature liability as well as an increase in interest income. The decrease in the net loss per share for the 6 months ended June 30, 2019, is primarily driven by the additional shares outstanding at June 30, 2019, versus those outstanding at June 30, 2018, given the additional shares issued by the company since June 30, 2018, primarily through a public equity offering.

Turning to the balance sheet. At June 30, 2019, we had cash, cash equivalents and investments totaling $292.6 million. As of July 30, 2019, Viking had 72,210,630 shares of common stock outstanding. This concludes my financial review, and I'll now turn the call back over to Brian.

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [5]

--------------------------------------------------------------------------------

Thanks, Mike. During the second quarter, we continued working diligently to prepare for our upcoming Phase IIb study of VK2809 in non-alcoholic steatohepatitis. 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 lipid disorders, including NASH.

In September of last year, we announced positive results from our Phase II trial of VK2809 in patients with hypercholesterolemia and fatty liver disease. The trial achieved both its primary and secondary endpoints, demonstrating potent reductions in liver fat content and improvements in plasma lipid measures. These results were presented last November during the oral late-breaker session at the Annual Meeting of the American Association for the Study of Liver Diseases, or AASLD. Additionally, updated results were presented this past April in a late-breaking poster at the Annual Meeting of the European Association for the study of the Liver or EASL.

The Phase II trial randomized patients to receive VK2809 doses of 5 milligrams daily, 10 milligrams daily, 10 milligrams every other day or placebo for 12 weeks. The trial's primary endpoint evaluated the effect of VK2809 on LDL-cholesterol after 12 weeks of dosing compared to placebo. The key secondary endpoint evaluated change in liver fat as assessed by MRI proton density fat fraction, or MRI-PDFF.

As we reported at both the AASLD and EASL conferences with respect to the trial's primary endpoint, VK2809-treated patients achieved statistically significant reductions in LDL compared with placebo-treated patients. In addition, VK2809-treated patients experienced statistically significant improvements in other lipids, including triglycerides and the atherogenic proteins, apolipoprotein B and lipoprotein (a).

With respect to the key secondary endpoint, VK2809-treated patients experienced significant reductions in liver fat as assessed by MRI-PDFF. The magnitude of this response remains unmatched among oral agents in development today. Specifically, patients receiving VK2809 dosed at 5 milligrams daily for 12 weeks experienced a median relative reduction in liver fat content of approximately 54% from baseline. Patients receiving VK2809 doses of 10 milligrams every other day experienced a median relative reduction in liver fat content of approximately 57% from baseline. And patients receiving VK2809 doses of 10 milligrams daily experienced a median relative liver fat reduction of approximately 60% from baseline. Across all VK2809 cohorts, the median relative reduction in liver fat was approximately 57%. By comparison, patients receiving placebo experienced a median relative reduction in liver fat of approximately 9%.

The trial also included a responder analysis, which was intended to assess whether the observed reduction in liver fat may predict broader clinical benefit. Patients were characterized as responders if they experienced a greater than or equal to 30% reduction in liver fat content. This threshold is of interest as multiple studies have demonstrated that liver fat reduction of 30% or more correlates with increased odds of improved overall histology.

In this study, all patients treated with VK2809 dosed at 5 milligrams daily experienced at least a 30% reduction in liver fat content. Approximately 77% of patients receiving VK2809 dosed at 10 milligrams every other day, demonstrated at least a 30% reduction in liver fat content and among patients treated with VK2809 doses of 10 milligrams per day, approximately 91% experienced at least a 30% reduction in liver fat. The responder rate across all VK2809 cohorts in this study was approximately 88%. By comparison, approximately 17% of patients receiving placebo demonstrated a response.

VK2809 also demonstrated an encouraging safety and tolerability profile in this study. No serious adverse events were reported among patients receiving VK2809 or placebo, and the overall numbers of adverse events were relatively evenly distributed across treatment arms.

Given the promising potency and safety demonstrated in this study, we believe VK2809 is positioned as one of the most promising compounds in development today for the potential treatment of NASH. VK2809's unique potential to improve liver health, while also providing global cardiovascular benefits through reductions in systemic lipids is a key differentiating factor when compared to many other agents currently in development for this setting.

As we have previously discussed, later this year, we plan to initiate a Phase IIb study of VK2809 in patients with biopsy-confirmed NASH. To that end, we recently submitted a pre-IND briefing package to the FDA in anticipation of filing an IND to initiate the study. As a reminder, our existing IND, under which our 12-week Phase II study was conducted, is filed with the FDA's division of metabolism and endocrinology products, which is where many lipid-targeting agents are reviewed.

Our planned IND will be filed with the FDA's division of gastroenterology and inborn Errors products, the division in which NASH drugs are typically reviewed. While the details of our planned Phase IIb study will be informed by our FDA interactions, we currently anticipate that the trial will target patients with F2 and F3 fibrosis as well as a limited number with F1 fibrosis. We expect to evaluate more than one dose of VK2809 for up to 12 months.

In preparation for the study, we've been hard at work putting the resources in place to allow us to begin enrolling patients as soon as possible after we are cleared to proceed. We look forward to providing further information about the study as we move closer to initiation.

I'll now provide an update on our VK0214 program. VK0214 is being evaluated as a potential treatment for X-linked adrenoleukodystrophy, or X-ALD. X-ALD is a devastating disease caused by a defect in a peroxisomal transporter called ABCD1. Defects in this transporter can result in an accumulation of very long chain fatty acids in plasma and tissue. These elevations are believed to contribute to the severe cerebral and motor neuron toxicities that are characteristic of the disease.

The thyroid beta receptor is an important potential target for therapeutic intervention in X-ALD as it is a known regulator of very long chain fatty acid metabolism. Like VK2809, VK0214 is an orally available small molecule thyroid receptor agonist that possesses selectivity for the beta receptor subtype.

To date, results from in-vitro and in-vivo studies of VK0214 have been encouraging. These data had demonstrated that administration of VK0214 results in a significant reduction of very long chain fatty acids in both plasma and tissue, potentially leading to a therapeutic benefit. We are currently conducting the IND-enabling work for this program and plan to initiate a proof-of-concept study in humans early next year. We are excited to be advancing this program into the clinic and believe that VK0214 may represent the first potential pharmacologic agent for this debilitating disease.

Moving to corporate matters. We continue to maintain a strong balance sheet. As Mike indicated, we completed the second quarter with over $290 million in cash and equivalents. Our net burn in the quarter was approximately $6 million, which is consistent with our historical burn of $1.5 million to $2 million per month. While we expect expenses to increase with the initiation of new clinical studies, we believe our current cash balance is sufficient to allow completion of multiple clinical inflection points, including our planned Phase IIb study of VK2809 in biopsy-confirmed NASH as well as proof-of-concept studies with VK0214 in X-ALD. Despite this runway, we remain keenly focused on managing our financial resources and controlling our development spend.

To this end, concurrent with the filing of our quarterly Form 10-Q this evening, we will also be filing an at-the-market or ATM prospectus with the SEC. To be clear, we do not anticipate a need for additional capital in the near term, nor do we plan to utilize the facility at this point. Rather, we're filing the documents as a matter of good housekeeping, in line with many other companies at our stage of development.

Lastly, I'd like to take this opportunity to welcome the newest member of Viking's Board of Directors. We recently announced the appointment of Dr. Kathy Rouan to our Board. Dr. Rouan has nearly 30 years of pharmaceutical industry experience with drug discovery and development expertise across a range of therapeutic areas, including gastroenterology, cardiovascular disease, immunology and oncology. We are pleased to welcome Dr. Rouan to the team.

In conclusion, the second quarter was highlighted by continued progress toward our planned clinical studies with VK2809 and VK0214. The new Phase II data presented at EASL, validated the potency and safety of VK2809 even at the lowest dose of 5 milligrams per day. These results provide further evidence of VK2809's unique potential to improve liver health, while providing broad cardiovascular benefits, distinguishing it from other compounds starting in NASH and NAFLD, in general. Based on these findings, our team worked diligently during the second quarter to prepare for our planned IND filing for the continued clinical development of VK2809. We remain on track to file an IND and initiate a Phase IIb study of VK2809 in biopsy-confirmed NASH later this year.

In addition to our progress with VK2809, we continue to advance our pre-IND work for VK0214, and expect to initiate a proof-of-concept study for the treatment of X-ALD early next year. Finally, to support these endeavors, we continue to carefully manage spending and have made -- obtained a strong balance sheet that we believe will see the company through key milestones, including our planned clinical studies. This concludes our prepared comments for today. Thanks again for joining us.

And I'd now like to open the call for questions. Operator?

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question is from Joon Lee of SunTrust.

--------------------------------------------------------------------------------

Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [2]

--------------------------------------------------------------------------------

Congrats on all the progress. To the extent that you're able, can you share any feedback from any discussions you may have had with the FDA regarding your pre-IND submission? And regarding your upcoming Phase IIb NASH study in the second half of '19, are there any trial differences you hope to incorporate so you can differentiate 2809 versus the competitors? Any secondary endpoints of particular interest that we should be on the lookout for?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thanks for the question. So no, no dialogue with the FDA really with respect to the package that was submitted. We do expect that in the relatively near term. But there isn't a lot of back and forth after the submission. You have a date that you'll receive the response at. And regarding the design of the Phase II study. I think it's going to be a design similar to other Phase IIb studies that are out there. We don't have all of the parameters, we may change things based on the FDA feedback. But right now, it's going to look like other Phase IIb studies that have been completed and it's going to conform to the guidance that was published back in December.

--------------------------------------------------------------------------------

Operator [4]

--------------------------------------------------------------------------------

The next question is from Steve Seedhouse of Raymond James.

--------------------------------------------------------------------------------

Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [5]

--------------------------------------------------------------------------------

Brian, just on the nature of the interaction with the FDA here. My understanding is when you request a pre-IND meeting, the sponsor can request the meeting by phone, face-to-face or a written response only. So my question is what type of meeting did Viking request? And if Viking did request written response only upfront, maybe talk about whether that's because you didn't see anything controversial in the data package. Or just strategically, why that would be the direction you decided to go?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [6]

--------------------------------------------------------------------------------

Well, yes, it wasn't our decision. We requested a pre-IND meeting and we received a response that it would be a written response only. We didn't go back and debate or request anything further than that. We were told when the day would be, and we were told that it was going to be a written response.

--------------------------------------------------------------------------------

Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [7]

--------------------------------------------------------------------------------

Okay. And I assume the final clinical study reports for Phase IIa and preclinical data from the 6-month animal safety studies for VK2809 were submitted in the pre-IND package. So one question is, are the 12-month non-human primate studies also completed? And second part of that is do you have any general comments on the results of those studies that you'd be willing to share?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [8]

--------------------------------------------------------------------------------

No, we've always said we're not going to go through the data from the completed GLP tox studies, and that's pretty consistent across the industry. With the -- what was submitted in the pre-IND briefing package, I'm not going to itemize what was submitted there. You typically submit summaries of completed studies, not the several thousand-page clinical study reports, in a pre-IND package. The actual study reports go into the IND. But you summarize key findings in the briefing package with appendices that refer to key passages from the study reports.

--------------------------------------------------------------------------------

Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [9]

--------------------------------------------------------------------------------

Okay. Last question, any abstracts submitted to AASLD this year?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [10]

--------------------------------------------------------------------------------

Sure. Thanks. Not yet. We may submit one a little bit later. I know we're past the original deadline, but the late-breaker deadline has not come up yet. So we may submit one for a late breaker.

--------------------------------------------------------------------------------

Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [11]

--------------------------------------------------------------------------------

Just a follow-up, is that -- would that be additional data from the Phase IIa study or something else?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [12]

--------------------------------------------------------------------------------

Yes, it would be from the Phase IIa study, yes.

--------------------------------------------------------------------------------

Operator [13]

--------------------------------------------------------------------------------

The next question is from Jay Olson of Oppenheimer.

--------------------------------------------------------------------------------

Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [14]

--------------------------------------------------------------------------------

I was wondering if you could please comment on the doses that you're considering studying in Phase IIb. And then also, how fast do you think you can enroll that study or will you use the same study sites that you used for Phase IIa?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [15]

--------------------------------------------------------------------------------

Jay, thanks for the question. So we haven't given the details on the Phase IIb study. What we said is that there will be some representation from the Phase IIa studies. There will be overlap in some of the doses from the Phase IIa study as well as lower doses. And as far as the timing, as soon as possible. But I think if you look at a recent -- some of the recent Phase IIb studies that have been completed, that's kind of the timing that we would like to parallel. And so if you think of 4 to 6 quarters from initiation till the initial data readout, that seems like a fairly reasonable estimate. We won't know until we get the study underway. And as far as the clinical sites, we'll probably use a couple from the Phase IIa study, but it's going to be more sites. And so we won't use -- there won't be a lot of overlap there, just a couple.

--------------------------------------------------------------------------------

Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [16]

--------------------------------------------------------------------------------

Will that be a global study?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [17]

--------------------------------------------------------------------------------

No, we will be focused on the U.S.

--------------------------------------------------------------------------------

Operator [18]

--------------------------------------------------------------------------------

The next question is from Joe Pantginis of H.C. Wainwright.

--------------------------------------------------------------------------------

Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [19]

--------------------------------------------------------------------------------

Brian, you probably can't say too much to my questions, but I wanted to sort of go off of your prepared comments when you said how busy you guys have been behind the scenes. So with that said, I wanted to focus on business development, maybe I wanted to see if you had any comment about how things might be going for 5211? And do you have any potential early interest or phone calls or what have you for 2809?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [20]

--------------------------------------------------------------------------------

Yes, great question, Joe. So yes, there -- we had a good bio meeting, that was back in June in Philadelphia, a very busy schedule. And that was probably split pretty close to 50-50 on 5211 and 2809. And we've always said, with 5211, the registration path seems challenging there, but there are still some, I think, interested parties with that program, hard to guide to timing there. But I think it's safe to say it's not stuffed back in a shelf and forgotten about here at the company. With 2809, yes, everybody is aware of the compound and has watched the development and continues to watch the development. And I probably won't give any more color than that on any of the dialogue we've had there.

--------------------------------------------------------------------------------

Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [21]

--------------------------------------------------------------------------------

No, of course, I won't ask you when the term sheet is coming, but that's very helpful.

--------------------------------------------------------------------------------

Operator [22]

--------------------------------------------------------------------------------

The next question is from David Bautz of Zacks Small-Cap Research.

--------------------------------------------------------------------------------

David Bautz, Zacks Small-Cap Research - Senior Biotechnology Analyst [23]

--------------------------------------------------------------------------------

Brian, I'm curious if you would have any reason to believe that there would be a restriction on enrollment in the Phase IIb trial. And also, do you have any expectation that you're going to be required to conduct a drug-drug interaction study with statin, similar to what other NASH companies had to do?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [24]

--------------------------------------------------------------------------------

So I think that's kind of a standard course of development and we would certainly expect to complete drug-drug interaction studies through the course of VK2809's development. And as I said to an earlier question, we're not going to itemize what was included in the briefing packet or what will be included in the IND. As far as the enrollment restrictions, we don't believe that we should be held to enrollment restrictions, but it's hard for me to prognosticate what the FDA will come back with, but there is no evidence that we're aware of that would suggest that those restrictions should be applied. The same restrictions from the Phase IIa should be applied to the Phase IIb. But again, very difficult to guess what the FDA will or will not allow.

--------------------------------------------------------------------------------

David Bautz, Zacks Small-Cap Research - Senior Biotechnology Analyst [25]

--------------------------------------------------------------------------------

Okay. And what is left to do for 0214 before an IND can be filed?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [26]

--------------------------------------------------------------------------------

Well, we have to -- we've done a lot of formulation work with that compound, the formulation is somewhat challenging. And we will be working on the GLP tox studies in the second half of the year.

--------------------------------------------------------------------------------

Operator [27]

--------------------------------------------------------------------------------

The next question is from Andy Hsieh of William Blair.

--------------------------------------------------------------------------------

Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [28]

--------------------------------------------------------------------------------

Congratulations on all the progress. Just from a kind of timing or disclosure perspective, are you planning on kind of communicating with The Street in terms of when the written response from the FDA has occurred? And following that, would you let us know when you finalize the study design before initiating the study, just kind of -- I want to get a sense of the kind of the news flow in the second half.

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [29]

--------------------------------------------------------------------------------

Yes. I think the biggest news item will be the initiation of the study with the details on study design. I think that will answer questions that are out there. As far as when we receive a response, that's not going to help anybody decide anything. I mean, we'll -- we certainly wouldn't disclose any details that we receive from the FDA and the pre-IND information is not the IND itself and so we won't know really what the FDA thinks, until we file the IND with the exact protocol with our recommended patient population, and we get a response. So once we get that response and begin enrolling is when we'll disclose most of those details.

--------------------------------------------------------------------------------

Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [30]

--------------------------------------------------------------------------------

And -- okay. And it's my understanding that the IND immediately becomes active after 30 days. Is that correct? So basically, during that period of time, no news is good news?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [31]

--------------------------------------------------------------------------------

Yes. No -- what that normally means, you hear something on day 29. But yes, no news is good news, generally, yes, you don't hear anything, you're clear to proceed.

--------------------------------------------------------------------------------

Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [32]

--------------------------------------------------------------------------------

Okay. And lastly, in terms of enrollment, obviously, there's a lot of Phase II, Phase III trials ongoing in NASH. Just curious if there's any sort of strategy that you can employ to speed up or to incentivize patients to enroll in your study relative to others?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [33]

--------------------------------------------------------------------------------

Yes, it's a great question. There are a lot of studies out there, and both internally and at our CRO, this has been a real high focus area. We think that our understanding from hearing from some of the sites that will be participating, there's high enthusiasm for this program. And we know that sites have been very responsive in when queries are sent to them, according to our CRO, more than they are typically seeing. And we will be employing, I think, a lot of the learnings that have been collected over the years from the completed studies to hopefully minimize screen failures and select the right patients to enter the screening process. And all of that, we hope, will give us a reasonably productive enrollment time line.

--------------------------------------------------------------------------------

Operator [34]

--------------------------------------------------------------------------------

The next question is from I-Eh Jen of Laidlaw.

--------------------------------------------------------------------------------

I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [35]

--------------------------------------------------------------------------------

Congrats on the progress. Just want to be clear that, for the IND filing, that you would not anticipate any sort of face-to-face meetings, but just a more sort of regular exchange of mails or phone calls to finalize the process. Is that correct?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [36]

--------------------------------------------------------------------------------

That's correct, I-Eh, yes.

--------------------------------------------------------------------------------

I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [37]

--------------------------------------------------------------------------------

And my second question here is that the last presentation, you guys have shown a rather robust outcomes from a very low dose, if I may, part of that. So the question is that are you guys still contemplating maybe having some sort of a loading and maintenance dose type of scheme being placed into the Phase II study? Or you think those are other things you should do in a much later case -- later time after the Phase IIb?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [38]

--------------------------------------------------------------------------------

Yes, it's a great question, I-Eh. I think we had originally spoken about that or talked internally at least about that loading dose followed by a low maintenance dose. I think the trial is complex and challenging enough without implementing that sort of regimen as an exploratory arm. You could still do it in a separate study, and we'll see how this study goes. But I think that would be something that we could pursue in a separate study subsequent to the study or another time, but it won't be a part of the study.

--------------------------------------------------------------------------------

Operator [39]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from Mayank Mamtani of B. Riley FBR.

--------------------------------------------------------------------------------

Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [40]

--------------------------------------------------------------------------------

Congrats on the progress. Just 2 for Brian and one for Mike. Brian, could you maybe talk a little bit about the structural differences for 2809 and 0214? I understand, obviously, the target and the pro-drug format, but I think you mentioned formulation was different. And maybe if there's anything you could comment on the effect on (inaudible) and/or vinyl ketone derivative as a byproduct for each of them? That would be great. And then I have a follow-up.

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [41]

--------------------------------------------------------------------------------

Yes, yes. 0214 is a different structure. And the way we normally write these is the polar part is on the right-hand side and the aromatic ring is kind of extended to the left. The structure of 0214 has never been disclosed, but the substitution pattern on those rings is different between the 2 molecules. So it does have a little bit different profile in-vitro and in-vivo. It's more selective for the beta receptor and the PK parameters are a little bit different. We always run them side-by-side when we do the animal studies in NASH, and it's certainly very effective in NASH as well. Just when you look at the subcomponents, it just looks a little bit different. And so we think that, right now, I mean, just pursuing X-ALD is the best course there.

--------------------------------------------------------------------------------

Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [42]

--------------------------------------------------------------------------------

And that's really helpful insight. Just to follow-up on that. Then as you do the work together on either or and both together, has there been any observation in the last 6 to 9 months that kind of made your plans to be any different than where you started with?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [43]

--------------------------------------------------------------------------------

No, no, no changes based on data in the last 6 to 9 months.

--------------------------------------------------------------------------------

Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [44]

--------------------------------------------------------------------------------

Excellent. And then last thing, the placebo response on the slide deck was there anything different? I know you reported on an absolute basis for all doses. Was there anything that you saw that placebo response was different or similar to the earlier arm?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [45]

--------------------------------------------------------------------------------

No. No, I think that arm added 2 -- that cohort data set added 2 more placebo patients. I don't have the numbers right in front of me so -- and that -- those placebo patients did not have any meaningful impact on the overall placebo data.

--------------------------------------------------------------------------------

Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [46]

--------------------------------------------------------------------------------

And Mike, just one last question. There were 4 buckets, you said, in the R&D spend. I mean would you be able to give any color whether the increase from previous 6 months or 3 months was driven by any 1 or 2 of the buckets there, like manufacturing expense or pre-IND spend or anything else?

--------------------------------------------------------------------------------

Michael Morneau, Viking Therapeutics, Inc. - VP of Finance & Administration [47]

--------------------------------------------------------------------------------

Yes, it's a combination of the manufacturing spend as well as some of the efforts on the preclinical side in terms of, again, some of the preclinical efforts put together.

--------------------------------------------------------------------------------

Operator [48]

--------------------------------------------------------------------------------

The next question is from Scott Henry of ROTH Capital.

--------------------------------------------------------------------------------

Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [49]

--------------------------------------------------------------------------------

Just a couple questions. First on 2809, could you talk about what is the typical turnaround from a pre-IND submission to when you would get written feedback?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [50]

--------------------------------------------------------------------------------

It's 30 days.

--------------------------------------------------------------------------------

Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [51]

--------------------------------------------------------------------------------

30 days. Then it's 30 days from that point, the IND to the final or is that an overlapping 30?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [52]

--------------------------------------------------------------------------------

No, no. You submit a package, you get information from them and then you, at some later date, file an IND where a new 30-day clock starts.

--------------------------------------------------------------------------------

Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [53]

--------------------------------------------------------------------------------

And that's what my understanding was, so it's 30 days as well for the pre-IND submission?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [54]

--------------------------------------------------------------------------------

That's right.

--------------------------------------------------------------------------------

Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [55]

--------------------------------------------------------------------------------

Okay. And the second question was, if I recall, the original target for the IND was mid-summer, it would seem like we're into the fall, given today's comments. Was there anything that pushed that beyond mid-summer or is it still mid-summer? Just any color you could give would be great.

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [56]

--------------------------------------------------------------------------------

Yes. No, it is still around the middle of the summer. It's -- I'm not going to give a lot of additional color there.

--------------------------------------------------------------------------------

Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [57]

--------------------------------------------------------------------------------

Okay. Fair enough, which would certainly imply that you expect all this to happen very soon. Separate question, tied in a little bit to the R&D. It did jump up significantly in 2Q. How should we think about Q2 as a reflection of the rest of the year in terms of sequential growth? Or is it this -- should it dip before the -- until the trial starts or should we think about maintaining these levels?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [58]

--------------------------------------------------------------------------------

It's going to -- on the R&D side, it's going to tick up here in the second half of the year as we ramp up the spend for the Phase IIb study.

Yes. Thanks, Scott. And just to clarify, middle of the summer, the calendar summer is what we're referring to there. So middle of the calendar summer is when we had previously indicated we expected to hear something from the FDA, but we never have given a specific date there. Just to clarify that, though.

--------------------------------------------------------------------------------

Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [59]

--------------------------------------------------------------------------------

Just as a follow-up then, what exactly is the calendar summer?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [60]

--------------------------------------------------------------------------------

If you look at the calendar, it's June -- 3rd week of June to the 3rd week of September.

--------------------------------------------------------------------------------

Operator [61]

--------------------------------------------------------------------------------

The next question comes from Jason McCarthy with Maxim Group.

--------------------------------------------------------------------------------

Unidentified Analyst, [62]

--------------------------------------------------------------------------------

It's (inaudible) on the line for Jason. Just had a couple of quick questions here. So as I understand, you guys are currently focusing on working with the FDA and down the road eventually getting approval. But I was just wondering, once that's taken care of and achieved, do you have any intention of perhaps setting up meetings with the corresponding regulatory authorities in Europe. Is this something that you guys are kind of thinking about?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [63]

--------------------------------------------------------------------------------

Not right now, I mean, the focus near term is moving into the Phase IIb study. And that's -- I mean, we will likely queue up some sites in Europe, in the event that enrollment is slower than planned in the U.S., but there won't be any major European regulatory interactions.

--------------------------------------------------------------------------------

Unidentified Analyst, [64]

--------------------------------------------------------------------------------

Okay. Great. And then with respect to VK2809, is this primarily -- do you guys plan on primarily using this as a front-line therapy? Or do you have any intention of evaluating it in the context of using it in conjunction with other current standard-of-care therapies?

--------------------------------------------------------------------------------

Brian Lian, Viking Therapeutics, Inc. - President, CEO & Director [65]

--------------------------------------------------------------------------------

We think the data and the mechanism suggests that it could be used in either setting. I think, right now, the expectation is that combination therapy will likely provide the greatest benefit, but we think early-stage patients could probably benefit from the mechanism. And certainly, in combination, we think it could enhance and be complementary to some of the existing mechanisms or some of the other mechanisms.

--------------------------------------------------------------------------------

Operator [66]

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Stephanie Diaz, Vida Strategic Partners Inc. - President & CEO [67]

--------------------------------------------------------------------------------

Thank you. Thanks again for your participation and continued support of Viking Therapeutics. We look forward to updating you again in the coming months. You can all disconnect. Thank you and have a great afternoon.

--------------------------------------------------------------------------------

Operator [68]

--------------------------------------------------------------------------------

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