Replies to post #249964 on Biotech Values

[Whalatane]

jbog. thx for the analysis . I'm just holding VKTX for the P2 VENTURE trial with results expected 1st half of 2024. I'll reassess the landscape then based on those results .
Appreciate your DD
https://vikingtherapeutics.com/pipeline/metabolic-disease-program/vk2735/
I think this eventually goes to oral dosing JMO
Kiwi

[Whalatane]

jbog. congrats on todays move in ALT . Huge vol ...whales moving in / takeover spec ?
Kiwi

[Mufaso]

Jbog

Very good comment's. Thank you. My adds below on some selected comments of yours:

First, Let's look at the Market. It's projected to be $100B within five years. I can see it happen but to put that number out they're assuming the drugs are going to be priced like today. My best would be that prices will have to decrease unless the Government and Private insurers step in, but on the other hand I see no reason that they wouldn't have a larger patient pool over time. So for now I'm going to use a number of $70B/year in 5 years.

Really agree with this in principle but the market size is really hard to predict. I would add that even if drug prices drop considerably the market may turn out to be larger than 100B (not that I'm predicting that). Consider 75% of the US population is forecast to be overweight in 5 years with 50% of the population either obese or morbidly obese. Lets say its worth $100 per month or 1200 a year for someone to be on a weight loss drug so that they have a better quality of life. Let's say it's also worth $100 a month to the insurance companies for fewer medical complications such as cardiac issues, knee hip issues, sleep apnea, et cetera to put or keep someone on a weight loss regimen that includes one of these drugs. If just 10% of the obese/overweight US population or 30 million people were to go on a weight loss drug at a cost of $2500 a year split between and insurance you get $2400 x 30,000,000 = 72,000,000,000 or 72 billion. Ad in Global sales and you can get over 100B. My point is not that the market is going to be 100 billion or 70 billion but rather weight loss drug prices could drop from about $1000 a month today to $200 a month and we could still hit a really huge never seen before market size just in the United states. The thing that will dictate how many people actually go on these drugs is tolerability/safety.

As of today we have the big boys controlling the market, namely Lilly and Novo. Of course they're in this position by accident, they were working on diabetes and found weight loss was a side effect. Sounds like the Ivory Soap or Viagra story doesn't it.

Yes it does. The thing is I do think both LLY and NVO are going to run into some trouble. NVO is soon to be in trouble because Zepbound/Mounjaro is eating Semaglutides lunch in both T2D as well as weight loss which will really become apparent as soon as Lilly gets out of their manufacturing limited situation. On Eli Lilly I learned a long time ago the hard way that PE of 90 plus for an established company can be a bad thing. Wall Street tends to be forward-looking and I see the day where someone realize competition is coming. (FYI-I just sold all of my LLY acquired earlier this year to pay for some other bio mistakes I made.)

This brings us to today. We have Viking and Altimmune working on Nash but end up with a Nash/Weight loss drug and numerous other company's dealing with the weight loss function. Mufasco, you mentioned Structure Thera but when they "forgot" to weigh 24 of their 40 patients on the high dose at their LAST weigh in I came away with the impression that this management group is lying or trying to outdo Revance's management team for the bottom of the barrel award.

LOL. Sadly (given my RVNC position), Revance management still has honors there. Yes structure had a ridiculous occurrence happen for their 2A of GSBR-1290. The troublesome study was the phase 2A in a diabetic patient population (studied for both T2D and Obesity) and not not the Phase 1 study soley for Obesity in a non diabetic population. In the very last week (12) of the T2D phase 2 study, at one center, 24 patients were not weighed. The center that caused the problem has acknowledged their error and is funding the costs associated with adding/finding new patients. I listened to the conference call Structure had and believe them that this was a simply a dumb mistake as crazy as that sounds . FYI- Structure has since added the same number of patients that were not correctly monitored and has continued the study. While Structure remains blinded to data from the Phase 2a obesity cohort, there were no adverse-event related discontinuations through the end of the study at 12 weeks for any of the 40 participants in the Phase 2a obesity cohort.

Commenting on the interim results that Structure did report from their phase one study of GSBR-1290 in non-diabetic obese adults. -> As with any phase one trial it was very small, n=5 for each cohort including placebo. -> On these results, the market cap of Structure (GPCR) basically doubled from 1.4 billion to 2.8 billion. -> Clearly, Interest in an oral weight loss pill is off the charts (The action in GPCR is why I believe the2/3rds of Roche's approx. $3 B offer for Carmot was related to the Oral opportunity presented by CT-996 with the remainder split somehow between the injectable GLP-1/GIP drug and the Type 1 Diabetes drug)

I've also benefitted in Vikings success by my long term holdings of Ligand Pharma, Most of Vikings drugs (3) were provided by Ligand in exchange for 30% of Vikings stock, Ligand has been seller of the years when the stock has hit peek levels.

Ligand sold 0.65m shares of Viking at $9.32 in Feb and 2.5m shares in Mar just after results were released on VK2735 injectable results. (from $14.4 to $16). LGND now only owns 3.6 million shares of Viking which is less than 3.5% of the company given there are now 100m shares of Viking outstanding.
https://investor.ligand.com/all-sec-filings?page=4#document-8155-0001193125-23-085535
While Ligand is entitled to royalties ranging from 3.5% to 7.5% on VK 2809 (for Nash) and a $10 million milestone upon initiation of phase three for VK 2809, Ligand doesn't have any part of Vikings VK 2735 weight loss drug other than their small stock position. (Ligand does have an interest in Vikings X-ALD drug I suspect is a similar deal to VK 2809 and also an interest in Vikings SARM drug VK5211 which I don't think is ever going to amount to anything.) While I'm certain you knoiw this, I only point all of this out so that others don't get the idea that Ligand owns 30% of Viking today. They have a small minority stock position left and a small yet noteworthy interest in Vikings Nash/X-ALD drugs. In terms of share price, Ligand is about where it was a year ago while Viking went from about 4 to where it is today (about 18 at time of this post.)

I don't know Vikings goal, is it to bring this to market or Partner. Alt has stated they cannot bring it to market as they are talking to partners right now and expect to have someone carry the ph3 trials. Both these companies will probably run two 2500 patient trials at a guess of $30k-$50K per patient.

Viking hasn’t stated specifically whether they intend to partner their NASH drug and it's way too early to comment on their weight loss drug. However their body language is pretty clear. I believe that management wants to sell the company sometime next year after the next readouts in their 4 programs (my guess is July to Sept 2024) Here is why I believe that: 1)They are still a very small company and had only 22 employees when they filed their annual report last year. Last month I did a pretty exhaustive but admittedly less than foolproof search of LinkedIn for current Viking Therapeutics employees and found that they might be up to the 25-28 range in terms of employees so they are not gearing up for any ph3 studies as far as I can tell. 2)Previously, Vikings VK5211 SARM drug met top line phase 2 efficacy and safety goals. At that time Viking management stated they were looking for a partner. A partner never materialized and the program was shelved. 3)Reading management posture today who takes a large portion of comp from stock and having listened to almost all Viking conference calls, my sense is that they are actively listening to drug partner proposals and would not start phase three on their own for any of their existing programs.

[vinmantoo]

Whalatane/Vin/Mufaso

Here's my opinion on the Weight Control Market:

Jbog and Mufaso, thanks so much for the detailed descriptions and opinions about the weight loss drugs. Lots to think about before making any decisions. Thanks also to anyone else who made their opinions known. That is what makes this board so great. There are plenty of informed investors willing to take the time to provide their insights, experiences and hopes to help guide others. Thanks also to Dew for starting and moderating this board.

[DewDiligence]

LGND receives $2M milestone payment_for_FDA_approval_of Capvaxive (#msg-174614515):

https://www.businesswire.com/news/home/20240618130919/en

I thought this amount might be somewhat larger.