Viking Therapeutics, Inc. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. Filed February 9, 2022. Viking is a clinical-stage biopharmaceutical company with no approved products or product revenue.
Financial results and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $45.0 million | $31.9 million |
| General and administrative expense | $10.7 million | $10.7 million |
| Total operating expenses | $55.7 million | $42.7 million |
| Net loss | $55.0 million | $39.5 million |
| Basic and diluted net loss per share | $0.71 | $0.54 |
| Cash used in operating activities | $47.6 million | $21.8 million |
- R&D expense rose 40.9%, primarily reflecting higher clinical-study, preclinical-study and manufacturing costs. Net loss widened as operating expenses increased and net interest income fell to $0.7 million from $3.2 million.
- At year-end, cash and cash equivalents were $26.4 million and short-term investments were $175.7 million, totaling $202.1 million. Current assets were $210.5 million versus current liabilities of $8.8 million.
- Total liabilities were $8.8 million, including a $29,000 current lease liability; the filing reports no borrowings or other debt. Debt is not a material funding source described in the filing.
- There is no meaningful revenue-based margin to assess. Accumulated deficit was $223.2 million. The company expects continuing losses and said existing cash and investments should fund operations through at least the first quarter of 2023.
- Investing activities provided $38.0 million, mainly from net maturities of investments; financing activities provided $6.9 million, primarily from warrant exercises. Cash and cash equivalents decreased by $2.7 million.
Business and material developments
- VK2809: Lead program, an oral selective thyroid hormone receptor beta agonist. The Phase 2b VOYAGE NASH trial was ongoing, targeting approximately 340 patients; its primary endpoint measures change in liver fat at week 12, with liver-biopsy assessments at week 52. The filing provides no new VOYAGE efficacy results for 2021. Prior Phase 2 results in NAFLD showed statistically significant reductions in LDL-C and liver fat, but these earlier findings do not establish efficacy in the ongoing NASH trial.
- VK0214: Oral candidate for X-linked adrenoleukodystrophy (X-ALD). A Phase 1b patient study began in 2021. In January 2022, after year-end, FDA placed it on clinical hold and requested an additional preclinical study before the trial could continue. The company said the request was not prompted by findings from ongoing or completed studies and expected to provide the information in Q2 2022.
- VK2735: Dual GLP-1/GIP receptor agonist. A Phase 1 single- and multiple-ascending-dose study began in January 2022, after the reporting period.
- VK5211: SARM candidate for recovery following hip-fracture surgery. The company reported positive Phase 2 results in 2017 but was pursuing partnering or licensing opportunities before further clinical studies.
- Other programs include VK0612, a Phase 2b-ready type 2 diabetes candidate, and preclinical DGAT-1 and EPOR programs. Development progress and commercialization remain uncertain.
Outlook, risks and contingencies
- Viking has no product revenue and expects significant ongoing losses. It anticipates increased R&D spending as it advances its pipeline and states that it will need additional capital to fund operations and planned clinical trials. Financing may be unavailable or dilutive.
- The company had an effective $600 million shelf registration and a $125 million at-the-market equity program; no ATM shares had been sold through December 31, 2021. A $50 million share-repurchase authorization had also produced no repurchases by year-end.
- Key risks include clinical failure or delay, patient-enrollment and COVID-19 disruptions, the VK0214 clinical hold, regulatory uncertainty, competition, reliance on third-party manufacturers and CROs, and dependence on licensed intellectual property from Ligand.
- The Ligand license carries potential development, regulatory and sales milestone payments of up to approximately $1.54 billion in aggregate, plus tiered single-digit royalties on future net sales. These are contingent obligations, not current debt.
- Viking reported no material legal proceedings. Management concluded disclosure controls and internal control over financial reporting were effective at year-end. The auditor issued an unqualified opinion on the financial statements; it did not attest to internal controls because Viking was a non-accelerated filer.
- COVID-19 could delay trials, enrollment and supply activities; management said its ultimate effects on financial condition, liquidity and results remained uncertain.
Important facts for investors to verify
- Latest VOYAGE enrollment, timing and results, including whether the trial’s week-12 and week-52 endpoints are met.
- Status and timing of the FDA-requested preclinical study and any lifting of the VK0214 clinical hold.
- VK2735 Phase 1 safety, tolerability and pharmacokinetic results, and subsequent development plans.
- Actual cash burn and runway relative to the company’s stated estimate, including any subsequent financing or ATM sales.
- Future R&D spending, potential dilution, and material terms or progress of any partnering arrangements.
- Ligand-related milestones, royalties and license obligations, as well as the scope and duration of relevant patent protection.