Viking Therapeutics, Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. Viking is a clinical-stage biopharmaceutical company developing therapies for metabolic and endocrine disorders. Financial statements are unaudited. Dollar amounts below are in millions unless otherwise noted.
Financial position and performance
| Metric | Q3 / September 30, 2023 | Comparable period / prior year-end |
|---|---|---|
| Revenue | $0 | $0 in Q3 2022 and the first nine months of both 2023 and 2022 |
| Operating expenses | $27.3; R&D $18.4, G&A $8.9 | Q3 2022: $16.2; R&D $12.0, G&A $4.2 |
| Net loss | $22.5 in Q3; $61.3 for nine months | Q3 2022: $15.8; nine months 2022: $49.3 |
| Net loss per share | $0.23 in Q3; $0.66 for nine months | Q3 2022: $0.21; nine months 2022: $0.64 |
| Cash, cash equivalents and short-term investments | $376.2 | $155.5 at December 31, 2022 |
| Total assets / stockholders’ equity | $382.7 / $368.2 | $168.5 / $145.3 at December 31, 2022 |
| Liabilities and debt | Total liabilities $14.4, including $1.3 in lease liabilities; no borrowings reported | Total liabilities $23.2 at December 31, 2022 |
There is no meaningful operating margin given the absence of revenue. For the first nine months, operating cash use was $55.7, versus $37.5 in 2022. Investing activities used $214.8, primarily reflecting purchases of investments, while financing provided $271.2, principally from the April stock offering. Cash and cash equivalents alone were $37.2 at quarter-end.
Material changes and financing
- Q3 R&D expense increased 53.7% year over year, mainly due to higher clinical and preclinical study costs, stock compensation, salaries and consultants, partly offset by lower manufacturing costs.
- Q3 G&A expense increased 109.7%, primarily from legal and patent services, stock compensation, consultants, salaries and benefits.
- Net loss widened from $15.8 in Q3 2022 to $22.5 in Q3 2023, despite higher interest income. Nine-month net loss increased from $49.3 to $61.3.
- The April 2023 underwritten offering of 19.8 million shares generated $270.0 net proceeds. Shares issued and outstanding rose to approximately 100.0 million from 78.3 million at year-end 2022. The company also reported up to $200.0 million of remaining gross capacity under its ATM program at September 30, 2023; no shares were sold under that program after the new prospectus became effective through quarter-end.
Outlook, programs and risks
- Management stated that available cash, cash equivalents and investments were expected to fund operations through at least December 31, 2024, and separately stated that funding was sufficient for at least the next 12 months. It expects continuing losses and increased R&D spending as programs advance; additional capital may be needed, and financing may be unavailable or dilutive.
- VK2809’s Phase 2b VOYAGE trial had achieved its primary endpoint, with statistically significant reductions in liver fat at Week 12 versus placebo. Biopsy results after 52 weeks of dosing were expected in 2024.
- VK2735 completed Phase 1 subcutaneous testing; the company initiated the Phase 2 VENTURE obesity study in September 2023. A separate Phase 1 study of an oral formulation was also underway.
- VK0214 was in a Phase 1b study in adults with X-linked adrenoleukodystrophy. VK5211 had earlier positive Phase 2 results; the company intended to pursue partnering or licensing before further trials.
- Key risks include clinical failure, safety or enrollment delays, reliance on third-party CROs and manufacturers, competition, dependence on Ligand-licensed intellectual property, and the need for future financing. The company reported no material legal proceeding apart from its trade-secret and related claims against Ascletis defendants, which include a stayed federal case pending a related ITC decision; success is not assured.
- Management reported disclosure controls and procedures were effective at quarter-end and no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Timing and full results of VK2809’s 52-week biopsy endpoints, and whether they support further development.
- VK2735 VENTURE enrollment, safety, efficacy and readout timing, including progress of the oral formulation study.
- Actual cash consumption and whether the stated runway remains adequate as clinical activity and expenses increase.
- Potential dilution from the ATM facility or other offerings, and changes in shares outstanding.
- Developments and financial exposure related to the Ascletis litigation and the company’s Ligand license obligations.