Viking Therapeutics, Inc. — FY 2023 Form 10-K
Reporting period: Year ended December 31, 2023. Filed February 7, 2024. Viking is a clinical-stage biopharmaceutical company developing therapies for metabolic and endocrine disorders; it has not generated revenue from operations.
Financial results and liquidity
| Metric (USD millions, except per-share data) | 2023 | 2022 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $63.8 | $54.2 |
| General and administrative expense | $37.0 | $16.1 |
| Total operating expenses / loss from operations | $100.8 | $70.4 |
| Other income, net, primarily interest | $14.9 | $1.5 |
| Net loss | $85.9 | $68.9 |
| Basic and diluted net loss per share | $0.91 | $0.90 |
| Net cash used in operating activities | $73.4 | $48.4 |
- Cash, cash equivalents and short-term investments were $362.1 million at year-end 2023, compared with $155.5 million a year earlier. Management said this was expected to fund operations through at least the first quarter of 2025.
- 2023 investing cash outflow was $179.1 million, mainly reflecting purchases of investments; financing cash inflow was $271.4 million, primarily from the April 2023 public offering.
- The April offering sold 19.8 million shares at $14.50 per share and generated approximately $270 million in net proceeds. Year-end shares issued and outstanding were 100.1 million, versus 78.3 million at year-end 2022.
- Total liabilities were $20.1 million, including $1.3 million of operating lease liabilities. The balance sheet reports no borrowings. Stockholders’ equity was $348.4 million; accumulated deficit was $377.9 million.
- Gross margin is not applicable because the company reported no revenue. No operating profitability or positive operating cash flow was reported.
Material changes and operating developments
- Net loss increased by $17.0 million year over year. R&D expense rose 17.6%, reflecting higher preclinical, manufacturing, stock-based compensation, personnel and consulting costs, partly offset by lower clinical-study costs. G&A expense rose 129.6%, mainly due to legal and patent services, stock-based compensation, consulting and personnel costs.
- Interest income increased substantially to $15.0 million from $1.6 million, partly offsetting higher operating expenses.
- R&D cash use increased to $73.4 million from $48.4 million. The company’s April 2023 equity financing materially increased liquidity but also expanded the share count.
Pipeline, outlook and key risks
- VK2809: The Phase 2b VOYAGE trial achieved its primary endpoint, with statistically significant reductions in liver fat at Week 12 versus placebo. Results from 52-week liver biopsies were expected in 2024. The filing reports encouraging tolerability across completed studies, but the candidate remains investigational.
- VK2735: The company completed its Phase 1 subcutaneous study, initiated the 13-week Phase 2 VENTURE obesity trial, and completed enrollment in October 2023. Results were expected in the first half of 2024. A separate Phase 1 study of a daily oral formulation was evaluating 28-day dosing.
- VK0214: A Phase 1b study in adult males with the AMN form of X-ALD was evaluating safety and tolerability over 28 days. The filing provides no clear results from this patient study. The company previously reported favorable short-term safety findings in healthy volunteers; these do not establish efficacy in X-ALD.
- Other programs: VK5211 had positive Phase 2 hip-fracture study results reported in 2017; Viking said it would pursue partnering or licensing before further trials. VK0612 was described as Phase 2b-ready; DGAT-1 and EPOR programs remained preclinical.
- Funding and execution: Management expects losses to continue and increase as development advances, and says additional capital will be needed to fund operations and planned trials. A $200 million at-the-market offering was available at year-end 2023. Future equity financing could dilute shareholders; financing may not be available on acceptable terms.
- Development and market risks: Candidates require further clinical testing and regulatory approval, and early-stage results may not predict later outcomes. Risks include adverse events, trial delays or failures, reliance on contract manufacturers and CROs, competition, reimbursement and pricing uncertainty, and dependence on licensed technology from Ligand.
- Licensing obligations: The Ligand agreement provides for potential development, regulatory and sales milestone payments of up to approximately $1.54 billion in aggregate, plus tiered single-digit royalties on product sales. Loss or termination of the license could impair development programs.
- Legal matter: Viking’s trade-secret and related lawsuits against Ascletis entities and an individual were pending in the Southern District of California and the International Trade Commission. The company intends to pursue the cases but gives no assurance of success; it states that no legal proceeding was expected to have a material adverse effect based on the information reported.
- The company reported effective disclosure controls and effective internal control over financial reporting; its auditor issued unqualified opinions on the financial statements and internal controls.
Important facts for investors to verify
- Whether the anticipated VK2809 52-week biopsy results and VK2735 VENTURE results were reported, and their full efficacy and safety data.
- VK0214 Phase 1b status, enrollment, results and next development steps; also the oral VK2735 study results and plans.
- Actual cash runway and spending trajectory against management’s estimate, including the timing and terms of any further financing or ATM share sales.
- Share-count changes, stock-based compensation and potential dilution, including the effect of future equity awards or offerings.
- Progress and outcomes of the Ascletis litigation, and any material developments in the Ligand license, milestone obligations or patent protection.