Viking Therapeutics: Better-Than-Expected Trial Timelines While Pipeline Expands

seekingalpha07-25

Viking Therapeutics, Inc. provided a better-than-expected pipeline update when it reported second quarter earnings.Subcutaneous VK2735 will advance straight into a phase 3 trial, and this should speed...

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Pipeline Expands\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-25 23:17 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4706587-viking-therapeutics-better-than-expected-trial-timelines-while-pipeline-expands><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Viking Therapeutics, Inc. provided a better-than-expected pipeline update when it reported second quarter earnings.Subcutaneous VK2735 will advance straight into a phase 3 trial, and this should speed...</p>\n\n<a href=\"https://seekingalpha.com/article/4706587-viking-therapeutics-better-than-expected-trial-timelines-while-pipeline-expands\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1551013342.USD","symbol_name":"Allianz Income and Growth Cl AMg2 DIS 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updates strengthen both the standalone and M&A investment thesis on Viking Therapeutics.   Adam Gault/OJO Images via Getty Images Shares of Viking Therapeutics, Inc. (NASDAQ:VKTX) are up today after the company provided a better-than-expected pipeline update in its second quarter earnings report. The subcutaneously administered VK2735 will proceed straight to a phase 3 trial. This will speed up its potential market arrival by at least 18–24 months, and the company is keen to explore a once monthly dosing regimen of VK2735 in a separate trial in an attempt to improve dosing flexibility and convenience. The phase 1 trial of the oral VK2735 has reached the 100mg cohort and while management is blinded to weight loss data, they said the candidate continues to be well tolerated. I find this encouraging, but we have to wait and see whether 60mg, 80mg, and 100mg dose cohorts can extract greater weight loss than the lower dose cohorts. Viking also announced plans to submit an IND to start a phase 1 trial of the novel amylin agonist candidate, on which it presented positive preclinical data at the American Diabetes Association in June. I believe these updates are positive for Viking as a standalone entity. They continue to strengthen the M&A thesis for Viking, which I outlined in my initiation article. This is due to the potentially faster time to market for subcutaneous VK2735, the potential for VK2735 to be dosed once-monthly, and the pipeline expansion to include another novel target that has recently started to grab more attention among biotech investors. The missing piece in the near-term is the weight loss data of oral VK2735. If it shows good tolerability at higher doses and a weight loss effect that is similar to or better than Roche’s oral GLP-1 agonist CT-996, it would, in my view, put Viking in an even stronger position at the negotiating table with potential big pharma acquirers or partners. Subcutaneous VK2735 going straight to a phase 3 trial with additional plans to test once-monthly administration in a separate trial My baseline assumption for VK2735’s path forward was that a dose-finding phase 2b trial will be required before Viking can move to a registrational phase 3 program. I estimate that conducting a phase 2b trial would have added at least 18–24 months to the development timeline. And yesterday, Viking announced that it received written responses from the Type C meeting with the FDA, and that based on the agency’s feedback, VK2735 can proceed straight to a phase 3 trial for obesity. The company will conduct an end-of-phase 2 meeting with the FDA later this year. It also intends to provide details on the design and on the timing of the start of the phase 3 trial after it receives the minutes from this meeting. I believe it is reasonable to expect the start of the phase 3 program in the first half of 2025. Based on the size of the addressable population, the high interest in weight loss drugs and the expected continued shortages of Eli Lilly’s (LLY) tirzepatide (Mounjaro/Zepbound) and Novo Nordisk’s (NVO) semaglutide (Ozempic/Wegovy), these trials should enroll fast. We could see the top-line results as soon as 2027. Since the “time is money” saying definitely applies in this case, speeding up VK2735’s potential market arrival by 18–24 months is a very positive update for the company. It will pull forward revenues and will likely reduce cash burn and dilution, should Viking stay independent to finish VK2735’s development and launch it on its own. This also makes the company more interesting to potential suitors, as there are not many independent non-big pharma obesity assets that could be launched within the next four years. Separately, Viking announced plans to test a once-monthly dosing regimen of subcutaneous VK2735 in obese patients in a separate trial based on its long half-life. This may not result in as much weight loss as once-weekly dosing, but could be a viable path for maintenance dosing following weight loss induction. It could improve the long-term attractiveness of VK2735 due to the improved dosing flexibility and convenience. Oral VK2735 progressed to a 100mg cohort after being well tolerated in the 60mg and 80mg cohorts I hoped we could get further information on oral VK2735 in the Q2 earnings report, particularly, the weight loss data from the higher dose cohorts, but the update was still satisfactory. Oral VK2735 progressed to a 100mg cohort after it generated acceptable safety and tolerability in the 60mg and 80mg cohorts, and the company plans to start a 13-week phase 2 trial in the fourth quarter of 2024. As I wrote this week in my article on Roche’s (OTCQX:RHHBY) oral GLP-1 agonist CT-996, I continue to see VK2735’s tolerability as a potential significant differentiating factor in the oral obesity market. This is due to the placebo-like safety and tolerability compared to much worse gastrointestinal tolerability of competing candidates. However, tolerability will not matter if weight loss is not there. Roche raised the efficacy bar for oral obesity drugs last week when it reported much better weight loss data of CT-996 at week 4 compared to all competitors, including oral VK2735. I believe it is reasonable to assume oral VK2735 can extract better efficacy at higher doses compared to what it delivered with the 40mg dose. This is especially considering its dual GLP-1/GIP agonism that has shown better efficacy than GLP-1 agonists for subcutaneous versions, but we have to wait for the data to be reported to get more bullish on the oral VK2735 program. Adding an oral weight loss candidate with good efficacy, safety, and tolerability to an already strong subcutaneous program could be the missing piece that can seal the deal with big pharma suitors. IND submission for novel amylin candidate expected in 2025 Viking’s obesity pipeline is expanding, with the expected IND submission in 2025 for a novel amylin analog for the treatment of obesity. This candidate is actually a dual amylin and calcitonin receptor agonist (“DACRA”) and the company presented positive preclinical data at the American Diabetes Association last month. In the earnings press release yesterday, Viking said that its candidates reduced food intake in lean rats in the first 72 hours following a single subcutaneous injection and resulted in up to 8% body weight reductions compared to vehicle-treated animals. Separately, in a rodent model of diet-induced obesity, 24-day treatment with Viking’s compounds resulted in up to 10% weight loss from baseline. The amylin class is gaining more attention recently. In this week's article on Roche, I noted the positive data of Novo Nordisk’s (NVO) oral amycretin – an amylin and GLP-1 receptor co-agonist with weight loss data that look better than oral GLP-1 agonists.   EASD abstract Zealand Pharma (ZEAL) also reported positive data of its long-acting amylin analog petrelintide with what Zealand describes as “GLP-1-like weight loss.” Zealand Pharma investor presentation Amylin looks like another promising target for obesity and adjacent indications, as monotherapy and in combination with other existing and new mechanisms, and I believe this is a good move for Viking as it adds upside optionality to VK2735. VK2809 remains an afterthought I relayed my lack of enthusiasm for the VK2809 program for the treatment of NASH in my initiation article. Management seems to be feeling the same way, as they apparently do not want to spend more money on this candidate despite the strong phase 2b data, including the additional positive data since my previous article’s publication. The company plans to meet with regulators in the fourth quarter to discuss the path forward for VK2809. Management has emphasized that Viking will not proceed forward with a phase 3 trial on its own, and that it will seek a partner. As I said previously, I welcome any upside from VK2809, but would not assign a lot of value to it in its current state. It is years behind Rezdiffra, and many other potential approaches show good potential for the treatment of NASH, including the GLP-1/GIP class Viking’s primary asset VK2735 is part of. Conclusion Viking’s second quarter report has strengthened the investment thesis on the company:  Subcutaneous VK2735 could reach the market 18–24 months sooner than previously expected, as it is proceeding straight to a phase 3 trial. The long half-life of subcutaneous VK2735 allows exploration of a once monthly dosing regimen that could add dosing flexibility and improve convenience. The novel dual amylin-calcitonin receptor agonist is starting to get “air time” with a defined timeline to clinical entry and adds another candidate and new mechanism to Viking’s obesity pipeline. This may seem like an incremental update today, but a critical update in the medium and long-term. Oral VK2735 continues to be well tolerated in 60mg and 80mg cohorts, which allowed it to progress to the 100mg cohort.  I believe these updates are positive for Viking as a standalone entity and that they put the company in a better negotiating position with potential big pharma partners or big pharma acquirers. Of course, many of the risks have not disappeared. The obesity market is evolving very fast. While Viking is doing a good job keeping up, and more so after the amylin candidate introduction, there is still a high risk of falling behind its competitors and not being able to keep up as a standalone entity. There are also no guarantees any of the big pharma companies like what they see at Viking and that the company will ever be acquired.  Viking had $942 million in cash and equivalents at the end of the second quarter, and this should be sufficient to complete the phase 3 obesity program for subcutaneous VK2735 and make additional pipeline investments. Management estimates that the phase 3 obesity program itself will cost no more than $300 million.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2454803744"}