Viking Therapeutics: Playing Second Fiddle To Madrigal (NASDAQ:VKTX)

Viking Therapeutics (NASDAQ:VKTX) was once going almost head to head with Madrigal Pharmaceuticals (MDGL) in treating liver diseases like biopsy-confirmed NASH and the milder NAFLD. However, the company has fallen behind, despite releasing positive data from VK2809 over the years.

I covered Viking in late 2020. Both Madrigal’s resmetirom and VK2809 are selective THR-β agonists that target a key receptor common to a spectrum of cardio-metabolic and fatty liver diseases. However, Madrigal is just a lot more advanced in developing its drug than Viking is. I had a different opinion in 2018, however Madrigal did have a much higher market cap at that time. Unfortunately, so did Viking. They have both fallen, and by almost the same percentage. However, Madrigal is now nearing its endgame, and I haven’t covered Viking in a while – so let’s see where it is now.

VK2809 is an oral formulation which has shown positive data in 8 completed studies. Almost two years ago, I commented on the poor enrollment figures for Viking’s phase 2b Voyage trial in comparison to Madrigal’s own much larger phase 3 trial. That problem has persisted till date, and Voyage still had trouble getting itself fully enrolled earlier this year. They do hope to get fully enrolled this year, and release data by the end of 2022. I hope they can make it. It has been a long time for a 12-month study. The earlier, phase 2a trial produced very strong data. This data was as follows:

Viking previously reported data from a 12-week Phase 2a trial of VK2809 in patients with hypercholesterolemia and NAFLD. The trial achieved both its primary and secondary endpoints, and demonstrated significant reductions in liver fat and plasma lipids. Key results from the Phase 2a trial included data showing that 88% of patients receiving VK2809 experienced at least a 30% reduction in liver fat content at 12 weeks, including all patients receiving 5 mg daily doses. In addition, patients receiving VK2809 experienced improvements in plasma lipids such as LDL-cholesterol, triglycerides and atherogenic proteins. These results are of particular importance as VK2809’s lipid-lowering effects may indicate a potential cardiovascular benefit. This feature represents a significant point of differentiation when compared to other drugs and mechanisms in development that have been shown to increase plasma lipids and, potentially, cardiovascular risk. Patients treated with VK2809 in the 12 week study also experienced durable reductions in liver fat, with the majority of patients remaining responders four weeks after completion of dosing. The study also demonstrated the promising safety and tolerability profile of VK2809. No serious adverse events were reported, and patients treated with VK2809 reported rates of gastrointestinal disturbances such as diarrhea or nausea that were lower than those reported among patients receiving placebo.

Viking’s second asset, VK0214, is a compound targeting X-Linked adrenoleukodystrophy or X-ALD. This compound has had some problems. The FDA put a clinical hold on its phase 1b trial in January, however it was lifted in July. This is a minor matter and did not affect the stock much – you can read about it here. The trial has now resumed.

There’s a third asset called VK2735, a dual GLP-1/GIP agonist, which is in a phase 1 ascending dose study in metabolic disorders.

There’s not a lot more to say about Viking that hasn’t been said before.

Financials

VKTX has a market cap of $255mn, a cash balance of $168mn and cash burn of $33mn as of June 30. At that rate, they have cash for nearly 2 more years. Research and development expenses for the three months ended June 30, 2022 were $13.5 million while general and administrative expenses were $4.1 million.

Bottomline

VKTX has been too little too late. If Madrigal is successful, Viking will always be remembered as the company which also ran. If Madrigal fails, Viking, having a very similar molecule, will have a tough time convincing investors about its worth. Either way, there’s not a lot of opportunity here.

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