Viking Therapeutics, Inc. — Form 10-Q Summary
Reporting period: Three and nine months ended September 30, 2021. Unaudited interim results; amounts below are in millions of dollars unless stated otherwise.
Business context
Viking is a clinical-stage biopharmaceutical company developing treatments for metabolic and endocrine disorders. It reported no revenue and has no products approved for sale.
- VK2809: Phase 2b VOYAGE trial underway in biopsy-confirmed NASH, targeting approximately 340 patients; the trial includes assessment of liver fat at week 12 and biopsy-based outcomes after 52 weeks.
- VK0214: Phase 1 study in healthy subjects completed; the company reported favorable tolerability and dose-dependent exposure. A Phase 1b trial in adult men with X-linked adrenoleukodystrophy began in June 2021.
- VK5211: Management said it intends to pursue partnering or licensing before additional clinical studies.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $10.8 | $7.1 | $35.1 | $22.9 |
| General and administrative expense | $2.6 | $2.7 | $8.0 | $8.5 |
| Net loss | $(13.2) | $(9.3) | $(42.6) | $(28.5) |
| Net loss per share | $(0.17) | $(0.13) | $(0.55) | $(0.39) |
| Operating cash flow | Not presented quarterly | $(35.2) | $(16.3) |
Gross margin is not meaningful because the company had no revenue. At September 30, 2021, cash and cash equivalents were $11.3 million and short-term investments were $204.9 million, totaling $216.1 million. Current assets were $224.3 million versus current liabilities of $11.4 million. Total liabilities were $11.4 million, principally accounts payable and accruals; the filing reports no debt. The office lease liability was $0.1 million and the lease was due to expire in January 2022.
Changes versus the prior comparable period
- Q3 R&D expense rose 51.7% year over year, mainly due to manufacturing, clinical studies and preclinical studies. Nine-month R&D rose 53.5%, reflecting higher clinical, preclinical and manufacturing costs.
- Q3 net loss increased by $4.0 million; nine-month net loss increased by $14.1 million. Lower interest income contributed to lower other income in both comparisons.
- Nine-month operating cash use increased by $18.9 million. Cash, cash equivalents and short-term investments decreased from $248.4 million at year-end 2020 to $216.1 million at September 30, 2021.
- Common shares outstanding increased from 73.2 million at December 31, 2020 to 78.2 million at September 30, 2021, including shares issued on warrant exercises. Warrant exercises provided $7.1 million during the nine-month period.
Outlook, risks and unusual items
- Management estimated available cash, cash equivalents and investments would fund operations through at least December 31, 2022. It expects continued losses and increased R&D spending as VK2809 and VK0214 advance; no specific revenue or earnings guidance was provided.
- The company may need additional financing to complete ongoing and planned trials. Its effective shelf registration permits up to $600 million of securities, and its ATM agreement permits up to $125 million of stock sales; no ATM shares had been sold through September 30, 2021. Future equity financing could dilute shareholders.
- COVID-19 could delay trial-site initiation, enrollment and clinical operations, and disrupt suppliers, CROs or manufacturing. The extent of any financial or operational impact remained uncertain.
- Development and regulatory outcomes are uncertain, and the company depends substantially on licensed technology from Ligand. The filing describes potential Ligand milestones of up to approximately $1.54 billion and single-digit royalties on future worldwide net product sales.
- The company reported no material legal proceedings, no off-balance-sheet arrangements and no subsequent events requiring financial statement adjustment or disclosure. Management concluded disclosure controls were effective; no material change in internal control was reported for the quarter.
Important facts for investors to verify
- Progress, enrollment, timing and results of the VK2809 VOYAGE trial and the VK0214 Phase 1b trial.
- Whether the stated cash runway remains adequate as trial, manufacturing and other R&D expenses rise.
- Any subsequent use of the shelf or ATM facility, and the resulting financing terms and share dilution.
- Key obligations, milestones, royalties and termination provisions under the Ligand license agreement.
- Whether COVID-19, clinical execution, safety findings, manufacturing capacity or regulatory requirements cause delays or added costs.