Biotech Values

[Mufaso]

VKTX- Yes the options activity has been very bullish for Viking. The stock has been on a tear since the earnings release April 25. The main "news" from the 1stQ earning cc was captured by Dew in #msg-174299679 where Dew surmised that Viking will be trying to go directly to Phase 3 with the VK2735 injectable form without first going through Phase 2b due to this Q and A:

Andrew Hsieh
...And then secondarily, it's mostly like a philosophical question on how you view the importance of seeing a pretty consistent plateauing just to get the maximum weight loss data just in terms of de-risking the program, is it important to see the plateauing.

Brian Lian
Yes. Thanks, Andy. For the plateau, from what we've seen right now, the Phase 2b studies that were performed with semaglutide and tirzepatide had not plateaued prior to the registration studies being initiated. So it's hard to really know how the FDA will judge the assessment of a plateau when the currently approved drugs did not reach that in their Phase IIb studies. So that's one of the things we hope to learn a little bit about in the upcoming Type C meeting.

The clear implication is that the main thing Viking would learn from the Phase 2b study is whether there was any plateauing of the drug in a 26 - 36 week study. Given several other GLP1 injectables didn't see any plateauing at this point, and Viking already knows what dosing they want as a max, they really aren't in a position to learn much from a phase 2b 6-9 month study. I do believe this is the main reason the stock has been on a tear since the call. Given the prior tolerability and efficacy of VK2735, Viking stands a good chance of going directly to phase 3 and shaving a year plus off the time it would would take to get VK2735 to market for Obesity. Note- Viking would not have an auto-injector available for phase 3 nor would they be able to try a once monthly dosing scheme in a 2b trial but neither of these things are a problem and neither are as important as time to market. (not to mention saving the cost of a phase 2b trial) I will be posting more extensively on what Viking may be wanting to discuss in the Type C meeting separately when I have time as there are multiple additional possibilities.

As other comments on the CC, everything was generally in-line. They reminded everyone that:

• They had almost $1 Billion in cash ($963 Billion) at the end of Q1.
  
• Burn rate of $27.4 in the quarter (really low for an early stage Biotech company with 3 major compounds in mid stage trials)
  
• They will read out on VK2809 in this quarter as expected (I'm surprised it hasn't read out already)
  
• They are seeking partners for VK2809 phase 3 (i.e.- they are talking to large pharma about "things"- hmmm wonder if the topic of acquisition might come up?)
  
• VK0214 phase 1b X-Ald results are on deck for "Mid-2024. (this is a slight delay from prior 1st half 24 guidance)
  
• Management is "acutely aware" of the manufacturing issues associated with making VK2735 (it's a peptide). While it will be a challenge, they commented that they think supply chain for ingredients (e.g.- solvents, materials, etc.) will be worked out be time they are ready to launch and that on the contractor side massive attention is being paid to peptide drug manufacturing. ( I will be commenting on this as well in a future post when I get time.)
  

Overall- IMO,VKTX remains as having the one of the best risk-reward profiles in Biotech going forward with a potential mega blockbuster drug in Obesity plus blockbuster opportunities for MASH and rare-disease.