Viking Therapeutics, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021; filed July 28, 2021. Viking is a clinical-stage biopharmaceutical company developing therapies for metabolic and endocrine disorders. It reported no revenue and no approved products.
Financial performance and liquidity
| Metric | Q2 2021 | Six months 2021 | Comparable 2020 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Research and development expense | $12.8 million | $24.3 million | $7.8 million; $15.8 million |
| General and administrative expense | $2.7 million | $5.4 million | $2.8 million; $5.8 million |
| Net loss | $15.4 million | $29.4 million | $9.6 million; $19.3 million |
| Basic and diluted loss per share | $0.20 | $0.38 | $0.13; $0.27 |
| Operating cash used | Not separately stated | $24.3 million | $11.0 million |
At June 30, cash and cash equivalents were $8.8 million and short-term investments were $219.4 million, totaling $228.3 million in cash, equivalents and investments. Current assets were $237.7 million, total liabilities $12.9 million, and stockholders’ equity $225.0 million. The filing reports no debt; lease liabilities totaled $0.2 million. Gross margin is not applicable because the company had no revenue.
Cash used in investing activities was $3.1 million and cash provided by financing activities was $7.1 million for the first half. Financing proceeds were primarily from warrant exercises. Management stated that available cash, equivalents and investments were expected to fund operations through at least September 30, 2022. The filing also says additional capital will be needed to fund operations and complete ongoing and planned trials.
Changes versus prior comparable periods
- Q2 R&D expense increased 64.6% to $12.8 million; first-half R&D rose 54.4% to $24.3 million, primarily due to higher clinical and preclinical study costs.
- Net loss increased to $15.4 million for Q2 and $29.4 million for the first half, compared with $9.6 million and $19.3 million, respectively. Lower interest income also reduced other income: $0.2 million in Q2 and $0.4 million for the first half, versus $1.0 million and $2.3 million.
- First-half operating cash use increased to $24.3 million from $11.0 million. Cash and cash equivalents declined from $29.1 million at year-end 2020 to $8.8 million; short-term investments were broadly unchanged at $219.4 million.
- Common shares outstanding increased from 73.2 million at December 31, 2020 to 78.2 million at June 30, 2021. The company issued shares in warrant exercises and raised $7.1 million from those exercises during the first half.
Pipeline, outlook and principal risks
- VK2809: The Phase 2b VOYAGE trial in biopsy-confirmed NASH remained underway, targeting approximately 340 patients. Its primary endpoint measures change in liver fat at week 12; histologic changes are assessed after 52 weeks. The filing provides no results or completion date for VOYAGE.
- VK0214: The company reported that a Phase 1 study in healthy subjects found the drug safe and well tolerated at tested doses, with no serious adverse events reported. After 14 days, dose groups showed reductions in LDL-C, triglycerides and ApoB; the study was not powered to establish statistical significance for these laboratory measures. A Phase 1b trial in adult male patients with X-linked adrenoleukodystrophy (AMN form) began in June 2021, initially testing placebo and 20 mg and 40 mg daily for 28 days.
- VK5211: Viking cited positive top-line Phase 2 results in hip-fracture recovery, but said it intended to pursue partnering or licensing before further clinical studies.
- Management expects R&D spending to increase as it advances VK2809 and VK0214 and pursues other programs; it also anticipates continued losses and expects losses to increase materially as development progresses. No specific earnings, revenue or trial-result guidance was provided.
- Key uncertainties include clinical safety and efficacy, trial enrollment and timing, regulatory approval, dependence on third-party CROs and manufacturers, and reliance on Ligand-licensed technology. The company disclosed that it may need further financing; equity financing could dilute shareholders, and financing may not be available on acceptable terms.
- COVID-19 could delay site initiation, enrollment and trial conduct, disrupt suppliers or CROs, and affect access to capital. Other risks include competition, intellectual-property protection and the ability to secure collaborations. Viking reported no material legal proceedings, no off-balance-sheet arrangements, and no subsequent events requiring disclosure. Management concluded disclosure controls were effective and reported no material change in internal control during Q2.
Important facts for investors to verify
- Current VOYAGE enrollment, timing and eventual efficacy and safety results; the filing does not provide a clear trial completion timetable.
- Whether VK0214’s Phase 1b study meets enrollment and endpoint goals, and how the healthy-volunteer biomarker findings translate to patients.
- Actual cash burn and financing needs against management’s stated runway through at least September 30, 2022, including any new financing or shelf-registration arrangements after the prior shelf expired July 19, 2021.
- Clinical spending and cash runway assumptions, including the potential effect of COVID-19 disruptions and increasing development costs.
- Share dilution from warrants, options and equity awards, and the terms and ongoing status of the Ligand license, including potential milestones and royalties.