Viking Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Viking is a clinical-stage biopharmaceutical company developing therapies for metabolic and endocrine disorders. It has not generated revenue and reports one operating segment.
Financial performance and position
| Metric | Q1 2024 | Q1 2023 / prior date |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $24.1 million | $11.0 million |
| General and administrative expense | $10.0 million | $9.5 million |
| Operating loss | $34.1 million | $20.5 million |
| Interest income, net | $6.7 million | $1.0 million |
| Net loss; diluted loss per share | $27.4 million; $0.26 | $19.5 million; $0.25 |
| Operating cash used | $6.1 million | $24.6 million |
| Cash, cash equivalents and short-term investments | $963.0 million | $362.1 million at Dec. 31, 2023 |
At March 31, total assets were $967.5 million, total liabilities $33.6 million, and stockholders’ equity $933.9 million. Liabilities were primarily current operating obligations and lease liabilities; the filing reports no debt borrowings. Current assets were $966.3 million against current liabilities of $32.8 million. No operating margin is meaningful because the company had no revenue.
Changes from the prior comparable period
- R&D expense increased $13.1 million, or 119%, primarily due to higher manufacturing, preclinical and clinical study costs, stock-based compensation, salaries and consultant services.
- G&A expense rose $0.4 million, or 4.6%, with higher compensation and consulting costs partly offset by lower legal and patent expenses.
- Net loss increased $7.8 million. Higher interest income partly offset increased operating expenses.
- Operating cash use declined by $18.5 million, substantially reflecting changes in accrued expenses and other working-capital items; it should not be read as a direct measure of reduced underlying spending.
Liquidity, financing and cash flow
The March 2024 public offering generated $597.1 million in net proceeds from 7,441,650 shares sold at $85 per share; 2,193,251 shares were reissued from treasury. The company also received $46.7 million net from its ATM offering and $4.4 million from option exercises, partially offset by $42.1 million of shares withheld for employee taxes. Financing activities provided $606.0 million. Investing activities used $459.8 million, mainly to purchase marketable securities.
Management believes existing cash, cash equivalents and investments will fund operations through at least June 30, 2025, based on its current operating plan. It expects losses and R&D spending to rise as programs advance and says additional capital will be needed to fund operations and ongoing and planned trials. Up to $151.9 million of gross ATM capacity remained available at quarter-end.
Programs, outlook and risks
- VK2735: The company reported positive Phase 2 VENTURE results in obesity in February 2024: mean weight reductions reached 14.7% from baseline and 13.1% versus placebo after 13 weeks. A 28-day oral Phase 1 study reported reductions up to 5.3% from baseline and 3.3% versus placebo. Management planned to begin an oral-formulation Phase 2 obesity trial later in 2024.
- VK2809: The Phase 2b VOYAGE trial previously met its primary endpoint for liver-fat reduction. Biopsy results after 52 weeks of dosing were expected in the first half of 2024.
- VK0214: Phase 1b results in X-linked adrenoleukodystrophy were expected around mid-2024. VK5211 remains a potential partnering or licensing opportunity; the company intends to seek a partner before further clinical studies.
- Management expects increased development expenses and continued operating losses. Clinical outcomes, regulatory approval, manufacturing, trial timing, competition, reimbursement and access to future financing remain uncertain. The company is substantially reliant on licensed technology from Ligand and may owe up to approximately $1.54 billion in development, regulatory and sales milestones, plus single-digit royalties on future product sales.
- The company is pursuing trade-secret, contract and related claims against Ascletis defendants in federal court and the International Trade Commission; success is not assured. It reports no other legal proceeding expected to have a material adverse effect.
- Disclosure controls and procedures were assessed as effective at the reasonable-assurance level; no material change in internal control over financial reporting was reported for the quarter.
Important facts for investors to verify
- Subsequent disclosures on the anticipated VK2809 biopsy data, VK0214 Phase 1b results, and the timing and design of the planned oral VK2735 Phase 2 trial.
- The underlying trial data, including patient numbers, durability, safety and tolerability, and whether reported weight-loss and liver-fat results translate into later-stage outcomes.
- Management’s cash runway estimate against actual quarterly operating cash use, planned trial expansion and manufacturing commitments.
- Share dilution and remaining ATM capacity, including the impact of equity compensation and any future financing.
- Developments in the Ascletis litigation and the company’s licensed intellectual-property rights, milestone obligations and royalty terms with Ligand.