Are we ready for the Great Obesity Drug Gold Rush of the 2020s?For high-profile biotech Viking Therapeutics (VKTX -13.36%), Monday was very much a good news/bad news kind of day. The company reported quite encouraging clinical results from a version of its investigational weight-loss drug. Before long, however, this was overshadowed by promising news from rival developers of similar treatments.Ultimately, after an early surge, Viking's shares closed the day more than 13% lower in price.Weight loss for profi ...

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Company Participation in Investor Conferences - Viking Therapeutics will participate in several upcoming investor conferences, including the Truist Healthcare Conference on November 7, 2024, the UBS Global Healthcare Conference from November 11-14, 2024, the Stifel 2024 Healthcare Conference on November 18-19, 2024, and the Jefferies London Healthcare Conference from November 19-21, 2024 [1] Company Overview - Viking Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel therapies for metabolic and endocrine disorders, with three compounds currently in clinical trials [2] - The company's lead compound, VK2735, is a dual agonist for GLP-1 and GIP receptors, showing positive safety and clinical benefit in Phase 1 and Phase 2 trials for metabolic disorders [2] - VK2809, another compound, is a selective thyroid hormone receptor beta agonist that has met primary and secondary endpoints in a Phase 2b study for NASH and fibrosis, and has shown significant reductions in LDL-C and liver fat in a Phase 2a trial for NAFLD [2] - The company is also developing VK0214 for X-ALD, which demonstrated safety and significant reductions in VLCFAs in a Phase 1b trial [2]

The U.S. presidential election will be held on November 5, 2024, but there’s another event that investors may want to vote on before the election. From November 3 through November 6, the Obesity Society will hold its annual meeting, ObesityWeek 2024. Viking Therapeutics Inc. NASDAQ: VKTX will be a key presenter. Viking Therapeutics TodayVKTXViking Therapeutics$71.75 -1.60 (-2.18%) 52-Week Range$9.32▼$99.41Price Target$108.60Add to WatchlistViking will provide updates on its lead candidate's progress, VK2735 ...

Thank you for reading my research on Seeking Alpha. If you want to learn even more about my method and how I discover these investment opportunities, please check out my subscription marketplace service, Compounding Healthcare , and sign up for a free trial.It has been over five months since my previous Viking Therapeutics (NASDAQ: VKTX ) article , where I laid out a case for Viking Therapeutics as a prime acquisition target thanks to their impressive pipeline targeting obesity, NASH, X-ALD, and sarcopenia. ...

Core Insights - Viking Therapeutics experienced a significant stock price increase of over 21% following its latest earnings release, outperforming the S&P 500 index which rose by only 0.2% [1] Financial Performance - In the third quarter, Viking reported a net loss of just over $21 million ($0.22 per share), a slight improvement from more than $22 million in the same period of 2023, beating analyst expectations of a $0.24 per share loss [2] - The company ended the quarter with $930 million in cash, equivalents, and short-term investments, a substantial increase from $362 million at the end of 2023, providing a strong financial position for ongoing operations [2] - Viking's operating expenses for the third quarter were slightly over $36.5 million, indicating a long runway for continued development [2] Product Development - Viking's VK2735 GLP-1 weight-loss drug has shown promising results in phase 1 and phase 2 trials, positioning the company favorably for potential FDA approval if it succeeds in phase 3 trials [3] - The successful approval of VK2735 would place Viking among a select group of approved drugs in a rapidly growing market, enhancing its attractiveness as an investment opportunity [3]

Core Viewpoint - Viking Therapeutics reported a narrower loss per share of 22 cents for Q3 2024, compared to the Zacks Consensus Estimate of a loss of 24 cents, and a loss of 23 cents per share in the same quarter last year [1] Financial Performance - Research and development expenses increased by 24% year over year to $22.8 million, driven by higher manufacturing and employee-related costs [2] - General and administrative expenses rose by 55% year over year to $13.8 million, primarily due to increased employee-related expenses, legal fees, and third-party consulting services [2] - As of September 30, 2024, the company had cash, cash equivalents, and short-term investments totaling $930 million, a slight decrease from $942 million as of June 30, 2024 [2] Pipeline Updates - Viking Therapeutics is developing three drug candidates: VK2735 for obesity, VK2809 for non-alcoholic steatohepatitis (NASH), and VK0214 for X-linked adrenoleukodystrophy (X-ALD) [3] - Management plans to initiate a mid-stage study for the oral formulation of VK2735 by the end of 2024 and has scheduled an end-of-phase II meeting with the FDA to discuss the phase III study for the subcutaneous formulation [3] - Positive results were reported from a phase Ib study of VK0214, which was safe and well-tolerated, significantly reducing plasma levels of very long-chain fatty acids compared to placebo [5] - The phase IIb VOYAGE study on VK2809 achieved secondary endpoints, with 40-50% of patients achieving NASH resolution compared to 20% in the placebo group [6] Market Reaction - Shares of Viking Therapeutics rose nearly 5% in pre-market trading, attributed to the positive pipeline update regarding VK2735, which has shown significant weight reduction capabilities [4] - Year-to-date, the company's shares have increased by 224.5%, contrasting with a 2.5% decline in the industry [4] Company Ranking - Viking Therapeutics currently holds a Zacks Rank of 3 (Hold) [7]

Financial Data and Key Metrics - Research and development expenses for Q3 2024 were $22.8 million, up from $18.4 million in Q3 2023, driven by increased manufacturing costs, stock-based compensation, and salaries [7] - General and administrative expenses for Q3 2024 were $13.8 million, up from $8.9 million in Q3 2023, primarily due to stock-based compensation, legal services, and third-party consulting [8] - Net loss for Q3 2024 was $24.9 million ($0.22 per share), compared to a net loss of $22.5 million ($0.23 per share) in Q3 2023 [8] - Cash, cash equivalents, and short-term investments stood at $930 million as of September 30, 2024, up from $362 million at the end of 2023 [11] Business Line Data and Key Metrics - VK2735 (obesity treatment): Phase 2 VENTURE trial showed up to 14.7% weight reduction after 13 weeks, with no plateau observed [13] - VK2809 (NASH and fibrosis treatment): Phase 2b VOYAGE trial achieved primary and secondary endpoints, with 63-75% NASH resolution rates and 44-57% fibrosis improvement rates [20] - VK0214 (X-ALD treatment): Phase 1b trial demonstrated safety and significant reductions in plasma levels of very long-chain fatty acids [24] - Oral VK2735: Phase 1 trial showed up to 5.3% weight reduction after 28 days, with dose escalation up to 100 mg completed [18][40] Market Data and Key Metrics - The obesity drug market is projected to exceed $40 billion in revenue, with injectable formulations expected to dominate (80% share) over oral formulations (20% share) [46] - The company is exploring monthly dosing for VK2735, which could serve as a maintenance regimen for weight management [32][65] Company Strategy and Industry Competition - The company plans to advance VK2735 into Phase 3 development for obesity, with an end-of-Phase 2 meeting scheduled with the FDA [15] - A new amylin agonist program is under development, with potential for combination therapy with VK2735 to enhance efficacy [26][36] - The company is evaluating partnerships for the NASH program (VK2809) and is in discussions with global peptide suppliers for long-term manufacturing capacity [42][56] Management Commentary on Operating Environment and Future Outlook - Management highlighted the strong balance sheet, which provides sufficient runway to execute key clinical milestones [25] - The company is optimistic about the potential of its pipeline, particularly the dual agonist VK2735 and the amylin agonist program, which could offer best-in-class efficacy [36][62] Other Important Information - The company submitted abstracts for the VENTURE and oral VK2735 Phase 1 trials for presentation at the ObesityWeek conference in November [14][18] - Results from the VOYAGE study will be presented at the AASLD Annual Meeting in November [22] Q&A Session Summary Question: End-of-Phase 2 meeting for VK2735 - The company plans to discuss trial design, dosing, and size with the FDA, aiming to finalize the Phase 3 protocol [29] Question: Monthly dosing for VK2735 - PK data supports monthly dosing, but it will likely be tested in a standalone study rather than included in the Phase 3 trial [32] Question: Oral VK2735 dosing regimens - The company is exploring additional dosing regimens and will disclose the Phase 2 study design closer to initiation [33] Question: Manufacturing capacity and infrastructure - The company is expanding its internal team and relying on external vendors to support upcoming Phase 3 trials [33] Question: Active control arm in Phase 3 - The Phase 3 study will be placebo-controlled, with potential for active comparator studies in the future [35] Question: Amylin agonist development strategy - The company plans to test the amylin agonist in combination with VK2735, with clinical trials expected to begin in 2025 [36] Question: Auto-injector for VK2735 Phase 3 - The company plans to use an auto-injector in the Phase 3 trial, with discussions ongoing to secure materials [50] Question: X-ALD program next steps - The next step for VK0214 is likely a registrational study, potentially focusing on functional or quality-of-life endpoints [52] Question: Maintenance dosing for VK2735 - Monthly dosing is viewed as a maintenance regimen, with potential to transition patients from weekly to monthly dosing [65] Question: Amylin and calcitonin receptor agonism - The company is targeting a balanced mechanism for its amylin agonist, as compounds with balanced receptor activity show better weight loss profiles [68]

Research and Development - The company incurred $70.7 million in research and development expenses during the nine months ended September 30, 2024, primarily for VK2735, VK2809, and VK0214 clinical trials [88]. - VK2735 demonstrated statistically significant mean body weight reductions of up to 14.7% from baseline in the Phase 2 VENTURE study after 13 weeks [78]. - VK2809 achieved a primary endpoint in the VOYAGE study, with significant reductions in liver fat content from baseline to Week 12 compared to placebo [80]. - In the VOYAGE study, up to 75% of VK2809-treated patients achieved MASH/NASH resolution with no worsening of fibrosis, compared to 29% for placebo (p=0.0001) [81]. - VK0214 showed significant reductions in plasma levels of very long-chain fatty acids in a Phase 1b clinical trial, indicating its potential efficacy for X-ALD [85]. - The Phase 2 VENTURE study for VK2735 enrolled adults with obesity or overweight, with a primary endpoint focused on percent change in body weight [78]. - The company plans to advance VK2735 into Phase 3 development based on FDA feedback following positive Phase 2 results [78]. Financial Performance - The company has not generated any revenue to date and does not expect to until drug candidates are approved and commercialized [88]. - Research and development expenses for Q3 2024 increased by 24.0% to $22.8 million compared to $18.4 million in Q3 2023, primarily due to higher manufacturing costs and stock-based compensation [94]. - General and administrative expenses for Q3 2024 rose by 55.0% to $13.8 million from $8.9 million in Q3 2023, mainly driven by increased stock-based compensation and legal services [95]. - Total other income for Q3 2024 was $11.6 million, a significant increase of 145.5% from $4.7 million in Q3 2023, primarily due to interest income [96]. - Research and development expenses for the nine months ended September 30, 2024, totaled $70.7 million, reflecting a 63.2% increase from $43.3 million in the same period of 2023 [97]. - General and administrative expenses for the nine months ended September 30, 2024, were $34.0 million, up 20.5% from $28.2 million in the prior year [98]. - Total other income for the nine months ended September 30, 2024, reached $30.1 million, a 194.0% increase from $10.3 million in the same period of 2023 [99]. Cash and Investments - As of September 30, 2024, the company had cash, cash equivalents, and short-term investments of $930.4 million, expected to fund operations through at least December 31, 2025 [100]. - Cash used in operating activities for the nine months ended September 30, 2024, was $56.6 million, compared to $55.7 million in the same period of 2023 [108][109]. - Cash used in investing activities for the nine months ended September 30, 2024, was $560.0 million, significantly higher than $214.8 million in the same period of 2023 [110]. - Cash provided by financing activities for the nine months ended September 30, 2024, was $611.5 million, compared to $271.2 million in the same period of 2023, primarily from stock offerings [111]. - As of September 30, 2024, cash and cash equivalents totaled $50,347,000, down from $55,516,000 on December 31, 2023 [117]. - Short-term investments available-for-sale increased significantly to $880,093,000 from $306,563,000 [117]. - Total cash and short-term investments reached $930,440,000, compared to $362,079,000 at the end of 2023 [117]. - A 10% increase or decrease in short-term interest rates would result in an annual interest income change of approximately $1.4 million [117]. - The investment portfolio is primarily composed of U.S. government securities, investment-grade corporate bonds, and money market funds [114]. - The company has implemented guidelines to limit the term-to-maturity of its investment instruments to manage interest rate risk [115]. - Interest income from cash and short-term investments will vary with fluctuations in U.S. interest rates [116]. - The company does not believe that the fair value of its investments has a material exposure to interest rate risk due to the conservative nature of the instruments [115]. - The investment portfolio is used to preserve capital, provide liquidity, and earn returns aligned with the company's risk appetite [114]. - The company accounts for its securities as available-for-sale, realizing gains or losses only upon sale or credit loss [115].

Financial Performance - Viking Therapeutics reported a net loss of $24.9 million, or $0.22 per share, for Q3 2024, compared to a net loss of $22.5 million, or $0.23 per share, in Q3 2023[19]. - For the nine months ended September 30, 2024, research and development expenses totaled $70.7 million, up from $43.3 million in the same period in 2023[20]. - The net loss for the nine months ended September 30, 2024, was $74.5 million, or $0.69 per share, compared to a net loss of $61.3 million, or $0.66 per share, in the corresponding period in 2023[21]. - Research and development expenses for Q3 2024 were $22.8 million, up from $18.4 million in Q3 2023, primarily due to increased manufacturing costs and stock-based compensation[18]. - General and administrative expenses for Q3 2024 were $13.8 million, compared to $8.9 million in Q3 2023, driven by higher stock-based compensation and legal services[18]. - As of September 30, 2024, Viking held cash, cash equivalents, and short-term investments of $930 million, significantly up from $362 million as of December 31, 2023[22]. Clinical Trials and Research - The Phase 2 VENTURE trial of VK2735 for obesity showed a maximum body weight reduction of 14.7% from baseline and 13.1% compared to placebo after 13 weeks[4]. - The Phase 2b VOYAGE trial of VK2809 in NASH/MASH demonstrated a median relative reduction in liver fat content of 38% to 55% after 12 weeks, with 85% of patients achieving at least a 30% reduction[8]. - VK2809-treated patients showed NASH/MASH resolution rates of 63% to 75% compared to 29% for placebo, and fibrosis improvement rates of 44% to 57% compared to 34% for placebo[9]. - VK0214 demonstrated significant reductions in mean plasma levels of very long-chain fatty acids and other lipids in a Phase 1b study, with mild to moderate adverse events reported[14]. - The Phase 1 trial of oral VK2735 showed dose-dependent body weight reductions of up to 5.3% from baseline, with placebo-adjusted reductions of 3.3%[6]. - Viking is developing VK2735, a dual agonist for metabolic disorders, with promising results from Phase 1 and Phase 2 trials[24]. - The company is also advancing VK2809, which successfully met primary and secondary endpoints in a Phase 2b study for non-alcoholic steatohepatitis[24]. - The dual amylin and calcitonin receptor agonist program is advancing, with preclinical data showing up to 10% weight loss in diet-induced obese mice[16]. - Upcoming scientific presentations include results from the 52-week Phase 2b VOYAGE trial of VK2809 at the 75th Liver Meeting on November 19, 2024[17]. - The company plans to initiate a Phase 2 study of oral VK2735 in obesity in Q4 2024, following positive results from a Phase 1 trial[5]. - Viking expects to hold an End-of-Phase 2 meeting with the FDA for VK2735 in Q4 2024 to discuss advancing to Phase 3[3]. - Results from the VOYAGE study will be presented at The Liver Meeting 2024, highlighting VK2809's efficacy and safety profile[12].