Viking Therapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; unaudited. Viking is a clinical-stage biopharmaceutical company developing therapies for metabolic and endocrine disorders. It reported no revenue and has no approved products.
Financial position and performance
| Metric | Q1 2021 / March 31, 2021 | Comparable period / prior year-end |
|---|---|---|
| Revenue | $0 | $0 in Q1 2020 |
| Research and development expense | $11.5 million | $8.0 million in Q1 2020 |
| General and administrative expense | $2.7 million | $3.0 million in Q1 2020 |
| Total operating expenses | $14.2 million | $10.9 million in Q1 2020 |
| Net loss | $14.0 million; $0.19 per share | $9.7 million; $0.13 per share in Q1 2020 |
| Cash used in operating activities | $10.9 million | $4.3 million in Q1 2020 |
| Cash and cash equivalents | $16.8 million | $29.1 million at December 31, 2020 |
| Short-term investments | $224.9 million | $219.3 million at December 31, 2020 |
| Total assets / current liabilities | $250.1 million / $12.9 million | $256.5 million / $12.1 million at December 31, 2020 |
Cash, cash equivalents and short-term investments totaled approximately $241.7 million at quarter-end. The company had no reported borrowings; lease liabilities were $0.3 million. As a pre-revenue company with operating losses, gross margins are not applicable. The accumulated deficit was $182.2 million.
Changes versus Q1 2020
- Net loss increased by $4.3 million. R&D expense rose 44.4%, primarily due to higher clinical-study and drug-manufacturing costs; these increases were partly offset by lower preclinical-study spending.
- G&A expense decreased 9.1%, mainly due to lower stock-based compensation, legal and patent costs, and salaries and benefits.
- Other income fell to $0.2 million from $1.3 million, primarily reflecting lower interest income.
- Operating cash use increased to $10.9 million from $4.3 million. Financing provided $5.2 million, chiefly from warrant exercises; 3.8 million shares were issued upon warrant exercises during the quarter.
Programs, outlook and risks
- VK2809: Phase 2b VOYAGE trial in approximately 340 patients with biopsy-confirmed NASH. The primary endpoint assesses change in liver fat by MRI-PDFF at week 12; secondary objectives include liver-biopsy assessment after 52 weeks. The filing gives no results or specific completion date.
- VK0214: Phase 1 single- and multiple-ascending-dose study in healthy participants, initiated in September 2020, for development in X-linked adrenoleukodystrophy.
- VK5211: The company said it intends to pursue partnering or licensing opportunities before conducting further clinical studies. No partnership was reported in this filing.
- Management expected available cash and investments to fund operations through at least June 30, 2022, based on its current plan. It also expects continuing losses and increased R&D spending, and states that additional capital will be needed to fund operations and ongoing and planned trials. Financing may be unavailable or dilutive.
- COVID-19 could delay clinical-site initiation, enrollment and trial operations, and disrupt suppliers, CROs and manufacturing. The extent of the impact remained uncertain.
- The company relies substantially on licensed technology from Ligand. Potential future obligations include up to approximately $1.54 billion in development, regulatory and sales milestones and single-digit royalties on worldwide net product sales. Loss of the license could impair development.
- Viking reported no material legal proceedings, no off-balance-sheet arrangements, and no material change in internal control during the quarter. Management concluded disclosure controls were effective.
Key facts for investors to verify
- VOYAGE enrollment, trial progress and the timing and quality of VK2809’s planned week-12 and week-52 assessments.
- VK0214 Phase 1 progress and any subsequent safety or dose-selection disclosures.
- Actual cash burn against management’s runway estimate, and the potential timing, terms and dilution of future financing.
- Warrant-related share issuance and other equity awards; common shares outstanding rose to 77.2 million from 73.2 million at year-end.
- COVID-19 effects on trials and supply chains, and the company’s continuing dependence on Ligand-licensed intellectual property.