Viking Therapeutics, Inc. (VKTX) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call and Q&A reveal strong enthusiasm for Viking's obesity program and a robust financial position with $852 million in cash. The initiation of Phase II trials and upcoming Phase III trials for VK2735 indicate progress. Although some management responses were vague, the overall sentiment remains positive with potential market expansion and minimal tariff impact. The strategic plan and long-term manufacturing agreement further support a positive outlook.

Key Financial Performance

Research and Development Expenses (Q2 2025) $60.2 million, a 153% increase year-over-year from $23.8 million in Q2 2024. The increase was primarily due to higher expenses related to clinical studies, manufacturing for drug candidates, preclinical studies, stock-based compensation, and salaries and benefits.

General and Administrative Expenses (Q2 2025) $14.4 million, a 39.8% increase year-over-year from $10.3 million in Q2 2024. The increase was mainly due to higher expenses related to stock-based compensation and salaries and benefits, partially offset by decreased expenses related to legal and patent services.

Net Loss (Q2 2025) $65.6 million or $0.58 per share, a 194% increase year-over-year from $22.3 million or $0.20 per share in Q2 2024. The increase was primarily due to higher research and development expenses and general and administrative expenses.

Research and Development Expenses (First 6 Months of 2025) $101.5 million, a 112% increase year-over-year from $47.9 million in the first 6 months of 2024. The increase was primarily due to higher expenses related to clinical studies, manufacturing for drug candidates, stock-based compensation, and salaries and benefits, partially offset by decreased expenses related to preclinical studies.

General and Administrative Expenses (First 6 Months of 2025) $28.5 million, a 40.4% increase year-over-year from $20.3 million in the first 6 months of 2024. The increase was mainly due to higher expenses related to stock-based compensation, legal and patent services, and insurance, partially offset by decreased expenses related to third-party consultants.

Net Loss (First 6 Months of 2025) $111.2 million or $0.99 per share, a 124% increase year-over-year from $49.6 million or $0.46 per share in the first 6 months of 2024. The increase was primarily due to higher research and development expenses and general and administrative expenses, partially offset by increased interest income.

Cash, Cash Equivalents, and Short-term Investments (June 30, 2025) $808 million, a decrease of 10.5% from $903 million as of December 31, 2024. The decrease reflects the company's ongoing operational and development expenses.

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Operating Highlights

VK2735 Subcutaneous Formulation: Initiated VANQUISH Phase III registration program for obesity patients. Phase II VENTURE study showed up to 14.7% weight loss from baseline after 13 weeks, with good safety and tolerability. Planning to evaluate monthly dosing later this year.

VK2735 Oral Formulation: Completed enrollment for Phase II VENTURE-Oral dosing study. Phase I results showed up to 8.3% weight loss from baseline with good safety and tolerability. Results expected in the second half of 2025.

Amylin Receptor Agonists: Progressing with novel compounds showing promising weight and metabolic benefits in vivo. IND filing expected in Q4 2025.

Obesity Therapeutics Demand: Rapid enrollment in VK2735 trials indicates strong market demand for new weight loss treatments.

Financial Position: Cash, cash equivalents, and short-term investments totaled $808 million as of June 30, 2025, providing sufficient runway for Phase III trials and other programs.

Manufacturing Agreement: Secured comprehensive manufacturing agreement for VK2735 API and fill/finish capacity to support potential commercialization.

Pipeline Diversification: Advancing both subcutaneous and oral formulations of VK2735 to address diverse patient needs. Developing amylin receptor agonists as an additional mechanism for weight regulation.

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Risk or Challenges

Increased R&D Expenses: Research and development expenses increased significantly to $101.5 million for the first 6 months of 2025, compared to $47.9 million in the same period in 2024. This rise is attributed to clinical studies, manufacturing, and stock-based compensation, which could strain financial resources.

Net Loss: The company reported a net loss of $111.2 million for the first 6 months of 2025, compared to $49.6 million in the same period in 2024. This growing loss could impact financial sustainability and investor confidence.

Regulatory Risks: The company is advancing multiple clinical trials, including Phase III trials for VK2735 and an IND filing for the amylin receptor program. Regulatory delays or failures could adversely impact timelines and commercialization.

Adverse Events in Clinical Trials: Treatment-emergent adverse events, primarily gastrointestinal, were observed in trials for VK2735. Although most were mild or moderate, they could pose risks to patient compliance and market acceptance.

Dependence on VK2735: The company’s financial and strategic focus is heavily reliant on the success of VK2735. Any setbacks in its development or commercialization could significantly impact the company’s performance.

Cash Burn Rate: The company’s cash reserves decreased from $903 million at the end of 2024 to $808 million by mid-2025. While still substantial, the high cash burn rate could pose risks if revenue generation is delayed.

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Guidance & Outlook

Initiation of VANQUISH Phase III registration program: Viking has initiated the VANQUISH Phase III registration program for VK2735, targeting obesity and type 2 diabetes. The program includes two trials: VANQUISH-1 (targeting 4,500 adults with obesity or overweight with comorbid conditions) and VANQUISH-2 (targeting 1,100 adults with type 2 diabetes who are obese or overweight). The trials will evaluate the efficacy and safety of VK2735 over 78 weeks, with primary endpoints focused on percent change in body weight from baseline.

Development of oral VK2735 formulation: The company is advancing the oral tablet formulation of VK2735, which could serve as an alternative or maintenance treatment for obesity. A Phase II study (VENTURE-Oral) has completed enrollment of 280 participants, and results are expected in the second half of 2025.

Amylin receptor agonist program: Viking is progressing with its novel amylin receptor agonist program, which has shown promising results in regulating appetite and body weight. An IND filing with the FDA is planned for the fourth quarter of 2025.

Financial outlook and resource allocation: The company has over $800 million in cash, providing sufficient resources to complete Phase III trials for VK2735 and advance other programs. Viking emphasizes fiscal discipline to support its pipeline development.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:In the Phase I oral study, you reported fairly strong dose dependence regarding satiety and decreased appetite. Would you expect additional increase in patient satiety or decreased appetite durations longer than 28 days in the Phase II oral study, particularly for the lower doses?

A:Brian Lian stated that there might be some evidence of satiety as weight loss progresses, but it is uncertain. Other studies have shown inconsistent signals that do not always track dose or weight loss, though the Phase I study did show this. The Phase II study will provide more clarity.

Q:In the Phase IIa readout, will this necessarily include data from all cohorts, specifically the maintenance dosing arm at top line?

A:Brian Lian confirmed that the Phase IIa readout will include data from all cohorts as it is a parallel cohort study. He highlighted the cohort that doses up to 90 and then comes back to 30 for the remaining 4 weeks as particularly interesting.

Q:Do you have an oral dose in mind for the monthly dosing study due to start in 3Q? And will you have Phase II oral VENTURE data out before you start the monthly dosing study?

A:Brian Lian stated that they do not have a dose yet as they are waiting for Phase II oral data. While it would be ideal to have the data before initiating the maintenance study, it is not mandatory since the transition to oral happens after a titration period.

Q:In your Phase III VANQUISH trial, you have a top dose of 17.5 mg and a slower titration schema. Could you explain the rationale for going up from 15 mg and the titration schema relative to your prior Phase II trial?

A:Brian Lian explained that the 13-week study showed excellent tolerability and encouraging efficacy at 15 mg, so they decided to go slightly higher without compromising safety or tolerability. The titration scheme was adjusted to 4-week blocks to accommodate different sensitivities and improve tolerability.

Q:Is there a scenario in VENTURE-Oral that may compel you to study oral formulation as a frontline therapy or in late-stage development?

A:Brian Lian stated that it is hard to say without seeing the data. There is a possibility for it to be a frontline therapy, but it is premature to make decisions without the data.

Q:For the Phase III VANQUISH programs, have you started patient dosing? And can you share any rough predictions on how long you expect enrollment to complete?

A:Brian Lian confirmed that patient dosing has started but stated it is too early to make timing projections. He noted there is a lot of interest and enthusiasm so far.

Q:For the subcu monthly maintenance study, are you planning a randomized withdrawal design?

A:Brian Lian stated that they are not planning a randomized withdrawal design. Patients will be titrated up to a high dose and then transition to a range of monthly doses or daily oral doses.

Q:On the oral program study underway, could you provide details on the specific titration doses planned for arms with target doses of 60 mg or higher? And could the oral program advance straight to Phase III similar to the subcu?

A:Brian Lian explained that for doses of 60 mg or higher, titration occurs in 2-week blocks (e.g., 30, 60, 90 for 90 mg). Whether the oral program can advance straight to Phase III depends on the data, which they need to review first.

Q:For the maintenance study, how many cohorts are you considering, and what is the duration of treatment?

A:Brian Lian stated that the study is complex and sizable, with more arms than the VENTURE-Oral study. It includes monthly injections, daily oral doses, and weekly oral doses. The post-transition period will last around 3 months to assess PK and body weight curves.

Q:For the oral Phase II upcoming data, what are your expectations around the high dose versus the maintenance dose?

A:Brian Lian mentioned that the highest dose is 120 mg, with a maintenance cohort transitioning from 90 mg to 30 mg. He expects mid- to high single-digit weight loss percentages, with tolerability being a nuanced factor to evaluate.

Q:For the Phase III trials, why is the duration 78 weeks, and when will the trials be posted on clinical trials?

A:Brian Lian explained that the 78 weeks include a 52-week maintenance period plus a 26-week titration window. He stated that the trials will be posted on clinical trials shortly.

Q:For the oral data, if it reads out favorably, how long would it take to manufacture the clinical supply for Phase III?

A:Brian Lian stated that manufacturing would not be a gating factor as multiple batches are in progress at any given time.

Q:For the maintenance study, why did you select a 3-month transition point instead of 6 months?

A:Brian Lian clarified that the 3-month period refers to the post-transition phase to assess PK and weight regain prevention. The time to reach the transition point is longer than 3 months.

Q:What are the likely viable commercial doses for the oral program?

A:Brian Lian suggested that lower doses are more attractive for maintenance due to cost and production considerations. The arm transitioning from 90 mg to 30 mg is particularly interesting for exploring lower maintenance doses.

Q:How are you thinking about placebo patients in the VANQUISH study and keeping them motivated?

A:Brian Lian mentioned counseling for diet and exercise, regular clinician visits, and eligibility for an open-label extension as strategies to maintain placebo patient participation.

Q:What does the amylin program need to show in Phase I to warrant continued development in obesity?

A:Brian Lian stated that they need to see body weight impact and tolerability data. The Phase I study will help determine the trajectory and safety profile.

Q:For the Phase II VANQUISH programs, how will auto-injectors be used, and will a bridging study be needed?

A:Brian Lian stated that auto-injectors will be introduced early next year, and a bioequivalence study will be conducted to compare them with the vial and syringe.

Q:How do you see the impact of Lilly's orforglipron Phase III data on your oral program?

A:Brian Lian stated that the market can accommodate multiple agents, and they are not overly concerned about competition from orforglipron.

Q:What is the status of the calcitonin receptor program?

A:Brian Lian stated that the program is balanced between calcitonin and amylin, with a preference for a 1:1 ratio for better weight loss and food consumption profiles.

Q:Review of Unclear Management Responses

A:Management avoided giving direct answers or lacked clarity on several questions, including: 1. Whether the oral program could advance straight to Phase III, as they deferred to awaiting data. 2. The specific efficacy and tolerability hurdles for the amylin program, as they provided no concrete benchmarks. 3. The impact of Lilly's orforglipron Phase III data, as they gave a general response about market accommodation without specifics. 4. The rationale for selecting a 3-month transition point in the maintenance study, as the explanation was somewhat vague. 5. The likely viable commercial doses for the oral program, as the response was exploratory and lacked definitive conclusions.

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