All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Goltz. We're the biotech analysts here, and it's my pleasure to introduce the team from Viking Therapeutics. To my immediate left is Brian Lian, CEO. To his left is Neil Aubuchon, Chief Commercial Officer, and to his left is Greg Zante, CFO. Before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Just a reminder, format for today is a fireside chat. If anyone in the audience has a question, please raise your hand and we can try and address it in our discussion.
Maybe with that, Brian, I can just hand it over to you to make some introductory comments, and then we can go in the Q&A.
Sure. No, thanks a lot to Morgan Stanley for the invitation. We've got a great schedule and really happy to be here. We really appreciate it. A lot happening at Viking this year. The main program is in obesity. It's a peptide we call VK2735. Completed a phase II study and showed approximately 15% weight loss from baseline after 13 weeks. We advanced it into phase III development. We have two ongoing phase III trials today. One's called VANQUISH-1 in patients with obesity, and one's called VANQUISH-2, and that's in patients with obesity and type 2 diabetes. Both trials fully enrolled and both likely to read out data toward the second half of 2027. Those are weekly subcutaneous injections. We've got another formulation of the same compound that's an oral tablet formulation.
Showed promising data in a phase II trial, so we're planning to move that into two very similar phase III trials in the fourth quarter. I think of that program as being 12- 18 months behind the subq program. So we'll kick those off in the fourth quarter. We've really been focused on with the company providing products that give patients the greatest amount of optionality, whether it's a subcutaneous injection, oral tablet, and we're conducting a study now that explores different dosing regimens. So following weight loss with a weekly regimen, we're transitioning people to an every other week regimen or a monthly regimen. Looking at, we call it maintenance study. We're looking at what happens to body weight after you transition from weekly to every other week or monthly.
The goal there is to keep people roughly where they were when they made the transition to less frequent dosing. We have guided to data from that study this quarter, and we will maintain that guidance today.
Great. Thanks for that introduction. A lot going on and a lot to talk about here. Maybe just to start, a big picture question, and you touched a little bit on this in your prepared remarks here about differentiation and obesity, right? There is a lot of change happening and maybe where do you see your products kind of fitting into the market?
Yeah. Well, we would hope that for the general population, BMI above 30 or 27 plus one comorbidity, that we would provide a viable therapeutic option. One thing that I think differentiates us from other development programs and marketed programs is we have the same molecule, GLP-1/GIP, in both the subq and the oral formulation. So you could transition presumably from one to the other without necessarily an increase in the risk of new adverse events or anything like that. If we can successfully develop the less frequent dosing regimen, it is another opportunity to keep patients on therapy and improve persistence. Long-term persistence, a big challenge with these patients. But long-term persistence is really what is required to realize the long-term benefits of sustained weight loss.
We would hope that we are differentiated because we can provide more options to keep people on therapy for a longer period of time and maintain a healthy weight.
Yep. In terms of options, you also mentioned your oral option here and there's been sort of some recent approvals there. Maybe talk about how you think that market's evolving and where ultimately orals might play in the market here.
Yeah. The way we look at the orals is it's going to probably continue to be the smaller component of the market. Still a pretty substantial component of the market, but way we see it is 75/25, something like that, injectable oral. The recent launches, the peptide launch that was earlier this year has done remarkably well. It's sort of been assisted by having the same brand name for both the injectable and the oral product. The second launch, a small molecule oral GLP-1 agonist, a little bit slower out of the gate, but now picking up steam. We see both as, I think, really expanding the market, not necessarily cannibalizing the injectable market, but leading to an expansion.
Ultimately, we see the orals as maybe being a little bit of a funnel to the injectable products since the orals don't match the same degree of weight loss compared to the injectables. So once someone's on an oral, they're comfortable with the side effect profile, they're excited to be losing weight, and they get to maybe 8%-10% weight loss, there's really only one way they can go to achieve higher weight loss, and that's through an injectable product. So we see conversely, the oral market as really potentially being a big expander to the subq market.
Yep. Makes sense. You mentioned your peptide, and just given that one of the questions that comes up frequently is just manufacturing capacity, et cetera. I know you've done a lot of work there, so maybe just talk about the current state of
Yeah. Because there were shortages in some of the earlier launches, we spent a lot of time looking at sourcing manufacturing capacity. Right now we have a base agreement with CordenPharma, I think a well-known party in the peptide manufacturing space. Our agreement with there is for a multi-ton capacity of API, at least 100 million units of vial and syringe products, at least 100 million units of auto-injector products, and then at least 1 billion tablets as well. All of those elements are expandable at our option. Since the CordenPharma agreement, I think we announced that in March of 2025, we've added three additional API manufacturers, all in the multi-ton range. We will continue to build in redundancies across the supply chain for vial and syringe, as well as auto-injector.
All continuing to develop there, but I think we feel pretty good about the API situation.
Yep. Great. Wanted to touch a little bit on just your current thinking and commercialization. I know Neil joined earlier this year, and you've been developing that. Maybe just talk about some of the options you're thinking about, and how you think about partnering as well.
Sure. I can start. I'm sure Brian will add. First of all, we've stated publicly that we are always open to strategic collaborations, so whatever we do is not going to get in the way of that. But at the same time, we have to plan for the business as if we're running it ourself. It's great to start out with a really good product. We know that the dual agonists tend to perform better than the mono-agonists in clinical trials. We're going to have the second injectable dual agonist. We're going to have the first GLP-1/GIP dual agonist oral. It's the same molecule, so you'd expect it to be the same brand name. We think that is going to give us commercial efficiency, so those are some things definitely is a good starting point.
Second is, as a smaller company, one of the challenges smaller companies have is access. 50% of the business now is in cash. From day one, we are going to have equal access to all of the big players. We are also seeing the Medicare GLP-1 Bridge program go extremely well. The uptake, at least early days, has been very positive. We would expect to have access to that. The other thing we are starting to see is companies are carving out this benefit. They are creating what they call a direct-to-employer option, where they are treating this like a gym membership, where they are subsidizing let us say $100 or $150 a month to their employees, and the employees are paying the incremental, call it whatever, $150 a month out of pocket. In that model, patients can go to whatever product they want. There is no formulary.
We can debate the exact percentage it is going to be, but unlike almost any other category, when we launch, we are going to have exposure to the vast majority of the market with no access restrictions. That is a huge advantage for us. The other thing is that there are companies out there now that are doing direct-to-consumer engagement and marketing, frankly better than big pharma companies are doing. All of those companies want to work with us. We are having conversations with many of them, and that is a very efficient path for us to get consumer engagement. For all those reasons, we have to be humble. We have to see how the data reads out, et cetera. But for all those reasons, it gives us a lot of optimism that we can commercialize successfully ourself.
Yeah. Great. I just wanted to shift now to VK2735 and specifically your subq formulation. Brian, you mentioned you recently completed enrollment in the phase III, and you should have data second half of next year sometime. Maybe just talk about your expectations around the profile and maybe how it might compare to treatments that are available today.
Yeah. Hard to predict how the phase III will perform, but in the phase II, we had dosed up to 15 mgs weekly, and after 13 weeks, we saw 14.7% weight loss from baseline, which feels pretty competitive versus the existing landscape. Certainly easily competitive with the GLP-1 mono-agonist class. The trial we are doing now will increase the dose at the top end to 17.5 mgs and extend the dosing window to 78 weeks total. Where that leads us on efficacy, it is hard to predict. But we think overall, the trajectory from that 13-week study should be promising when you consider extending out 78 weeks. The goal would be to have something that is well-tolerated, low rates of nausea and vomiting, predominantly mild side effects, and something that gives efficacy that is really competitive with the existing agents. It is a really significant market opportunity.
There's going to be increased fragmentation as the market matures. We don't need 40% market share to be successful. I think we can have a much smaller portion of the market and really have a successful franchise.
Yep. Can you talk a little bit more about just safety expectations? You mentioned you're dosing higher in the phase III versus the phase II, but I think there's some differences in titration and also where you start. How do you think that all sort of plays out in the safety profile you might see?
Yeah. In the phase II study, we had started at 2.5 mgs in three of the cohorts and 5 mgs in one of the cohorts. What we saw when we compared the cohort that started at 5 mgs versus the cohort that started at 2.5 mgs, is we saw much lower rates of nausea in the 2.5 mg initiation versus the 5 mg. We've seen this across the space as well, is the lower you start, the better tolerated. What we did in the phase III is we've started people at 1.25 mgs for two weeks, then go up to 2.5 mgs for four, and you go up in 2.5 mg increments in four-week blocks.
The thinking is there that maybe you have this little teaser dose, low dose, maybe that helps with some of the known GI side effects, your nausea, vomiting, constipation, diarrhea, that are known to happen when you start a GLP-1 based therapy. Even though we're going higher at 17.5, we're hoping that that initial two weeks might ease people into it a little bit more smoothly. Another advantage is just intrinsically with the molecule, the Tmax is a little bit later. It's at three days. Even starting at 1.25 mgs, you're starting low and you've got that gradual onset. It almost serves as a kind of a micro titration that we would hope would lead to an improvement in adverse event profile. Don't know yet, though.
Yep. Makes sense. Maybe similar sort of line of questioning for your oral formulation. Maybe highlight what you saw in your phase II study, and maybe how that profile compares to currently available agents.
Yeah. The profile for the oral, we had seen, I think about 12% weight loss in the high dose, which was 120 mgs. We are coming down a little bit in dose in the phase III study. One thing we learned in the phase II is we had dosed people with four tablets, and they were a little bit larger tablets. That was not a great experience for some people, so we focused on reducing the tablet size, reducing the tablet count, and really kind of on the middle of that dose response curve from the phase II, which had gone up to 120 mgs.
We have not disclosed the design yet. We will disclose that when we start the studies in the fourth quarter. But overall, similar population. One study would be in obesity, one study in obese diabetics. Shorter studies, smaller studies, a lot less expensive than the sub Q.
Like I said earlier, probably 12-18 months behind the sub Q studies.
Why are you confident in sort of shorter, smaller studies?
Oh.
Yeah.
Yeah. We had asked the FDA if, since it's the same molecule,
Yeah
both the subq and the oral, we asked in an end of phase II meeting, can we leverage the human data, safety data that will be generated in the subq phase III program for the oral phase III program? The FDA indicated, everything works out, yes. They always point out risks, if something behaved unexpectedly, but under a normal set of circumstances, that should be acceptable. We are able then to leverage the safety data. We knew we could do it with the animal tox data, so we didn't have to redo the animal tox. We're leveraging the subq human data, and that allows us to shrink the sizes of the studies from a total of about 5,600, 5,700 in the phase III subq down to 75% lower than that. Because we don't titrate as long,
we can shorten the overall. You got to be 52 weeks at the post titration dose, but the titration window is shorter, so makes the whole trial shorter. The expense of the oral phase III is quite a bit lower than the subq phase III.
Makes sense. Okay, great. Maybe now we can shift to the maintenance study. You mentioned 3Q. I know everyone wants to talk about this, so let's get into it. We're all waiting. But maybe just at a high level, unmet need for maintenance right now and kind of the advantages of your approach, maybe.
Yeah. I mean, the goal is to provide options that allow people to conveniently stay on therapy. When people reach their target weight range, we would like to provide a more convenient means of staying at that target weight range. There are a lot of ways to do it. You could just reduce your weekly dose, but that is not really a convenience advantage. We thought because our half-life is around nine days, and one old rule of thumb is you dose every 4- 5 half-lives. We thought, well, maybe you can dose once a month. The PK from the phase II indicated, yeah, maybe that is possible. We designed the study to look at transitioning from weekly dosing to every other week dosing and monthly dosing.
With the monthlies, we have gone up from 17.5 mgs per month to 22.5 mgs per month is the top dose there. In the every other week, we are looking at 5 mgs, 7.5 mgs, and 10 mgs every other week. Completed the study earlier in the summer and we are waiting for the data. What we would like to see there, on the big picture, we would like to see at week 21, which is when people transition from weekly to less frequent, we would like to see negative slopes through that window without a plateau.
When you transition to the less frequent dosing, we would like to see moderate side effect profile. Big question is when you dose less frequently, do you re-initiate the adverse events because you have not had a dose in a little while and the plasma levels have gone down? That is a big question.
Because if you maintain but everybody vomits, no one is going to want to take the drug. If we can show a decent tolerability profile through the maintenance window, that is a really important thing to show in the study. We have an arm that goes 17.5 mgs all the way through 33 weeks. The important, regardless of the magnitude at week 33, what does the slope look like? Is the slope continuing negative without evidence of a plateau at 33 weeks? That is another really, really important element to look at. How do you define maintenance?
Right.
That is an open question. When we look at the emerging literature, it seems like if you can keep people within 75% of their initial weight loss, you are likely to retain the cardiometabolic benefits that were achieved in the initial weight loss. In the maintenance period, if we can, after 12 weeks, keep people within 75% of the weight loss that they had achieved at week 21, I think that would be of interest as well. What we will do with the data then, our VANQUISH phase III study is going to be entering into a 52-week extension study that will happen late this year or early in 2027. We would like to, if we see interesting data in the maintenance study, bring one, two, three arms into that extension study and explore maintenance then over a longer dosing window, which would be 52 weeks.
Great. Can you talk about just the titration schedule and how it compares to your phase II versus your phase III? They are all a little bit different.
Yeah
This has kind of been a focus for people, and what does it really mean, I guess? Or how do we?
Yeah
interpret?
Titration schedules, as far as if you are making the comparison with tolerability and efficacy. The goal of this study was to really get people to the high dose where you can transition to the monthly dosing regimen. We wanted to push people up there as quickly as possible, but without giving too many headaches on tolerability. We have compressed the titration steps to two weeks, and we have also started a little bit lower. The first dose is 1.25 mg. Second week is 2.5 mg, and then from there it is every two weeks you go up 2.5 mg. You are going twice as fast as our phase III trial, and a little bit faster than the phase II. The phase II went in three-week blocks. I am less concerned.
Tolerability is a risk with this, but I am less concerned about tolerability in the 21-week window because the goal of the study is to really explore that week 21 transition to less frequent dosing and look through week 33.
Understood. Maybe in the maintenance period, you touched on this a little bit with the safety and the theoretical risk of if you extend the dose, you might sort of get some spikes in exposure.
Yeah.
But at the same time, after you treat patients for a longer period, they kind of get accustomed to it and maybe less-
Yeah
tolerability.
It's a trade-off.
Yeah.
Don't know. What we've seen in prior studies is this GI constellation of adverse events, which is nausea, vomiting, constipation, diarrhea. Tends to happen, call it the first six weeks or so of dosing, and then it really kind of tapers from there. The question is, when you go from weekly and suppose you're at 21 weeks, that rate's going to be low at 21 weeks, and then you transition to a monthly dose that's pretty high, like a 20 mg, 22.5 mg dose. If you don't take a dose for a month and then you take that high dose, are you going to trigger all the same GI adverse events? I can see it either way.
The trough level after 30 days is going to be fairly low, and then you can take a drug and plasma, and you can take a dose that's going to bump it really high. That might reinitiate some of the adverse events. But the other way to look at it is you've got meaningful plasma levels of drug throughout the course of the month. So it's not like you're going from-
Right
zero, and it's not like you're truly going a month from the last meaningful plasma level. Which of those wins, I don't know.
Yeah.
If you can show decent tolerability through the maintenance period, it's really important, I'd say almost more important than the maintenance effect, because if you can show good tolerability, it gives you room to maybe push the dose higher-
Yep
if it's well-tolerated.
Yep. Makes a lot of sense. In terms of this top-line result we are going to get here fairly shortly, can you just clarify what we will get? Obviously, safety is important, and people are going to want to see the difference between the maintenance phase and the induction phase. You also pointed out your 17.5 mg dose that goes all the way out to 33 weeks on a weekly basis. Will we get separate weight loss for that arm specifically as well?
Yeah
I think those need to be what people are focused on.
I have not received it yet, but we would
Yep
probably want to report all the above.
Okay.
I know there's high interest in that 17.5 mg. You're looking at 15 people, so hard to
Right
know how that's going to predict a
Yep
4,000 patient study. But I know people
Fair
interested in that, so we'd probably want to report that. The tolerability and the maintenance period, also the proportion of weight loss that's maintained
Yep
through the maintenance window, also would be something we'd want to report.
For that 33 week, 17.5 mg arm, what do you think the bar there is? Or what are you hoping to see? I know you said continued downward slope, but this is going to kind of be the longest data-
Yeah
we've seen. It's a hard question.
It is a hard question because I don't know. No matter what I say, it's going to come back to haunt me. I don't know. We would hope to exceed what we saw-
Fair
in the 13-week study, obviously.
Yep.
But if the 33-week slope is still negative, I think that's a really important finding, and the efficacy will mature over time if dosing is continued.
Yep. Understood. Makes sense. We're all looking forward to that. Maybe we can just switch to VK3019, that's your amylin agonist. Maybe give us just a brief background there, what you've seen pre-clinically, maybe how it stacks up and kind of next steps there.
Yeah. Interesting molecule. It's a peptide, a long-acting peptide. In the binding assays, it's fairly well-balanced on calcitonin and AMY3. In rodents, very competitive with cagrilintide, another advanced amylin agonist. When we looked at obese monkeys, the weight loss effect was greater than with the VK2735. So everything looked really interesting in the initial data that we've generated. We haven't published a lot of these data, but look promising. Right now we're doing a single ascending dose study, and we would hope, if that looks attractive, we'd follow it up with a multiple ascending dose study, a four-week weekly study.
Okay, great. Maybe now in the last few minutes, we can go through a couple survey questions. These questions are across the biotech team here. We are asking all companies, and they are kind of in these hot topic areas. But maybe if we start with the first one, it is just how does the rise of China origin innovation sort of change your competitive positioning in your R&D versus BD playbook?
We have always considered China to be a pretty rich source of programs. We spent a lot of time in the FXR class back when NASH was really hot in 2018, 2019, 2020, and saw a lot of programs out of China that looked interesting. So we have always felt that China is a big source of programs. But for whatever reason, a lot of them do not proceed too far. Maybe it is capital, maybe it is other issues, do not know. We have seen a lot more, I guess, publicity around some of these Chinese assets, particularly in the obesity space, so that is the only space we look at, really. But maybe in other spaces as well. But more recently, it has been more prominent. So I do not really know how to think about that because we saw so many before.
What our understanding is, though, is that the price points have maybe equalized a little bit more.
Mm. Yep.
Whereas maybe five years ago, a lot cheaper to get something-
out of China. Because it's resulted in this rush of interest, the price points have changed, and there isn't necessarily the large delta that there was previously. But I would expect it to continue to be a source of new programs.
Yep. Okay. Moving to the second question, this is a more recent hot topic, just implementing AI adoption. Are you doing that? If so, where does it sort of change any decisions or timelines or costs or probabilities of success? Any measurable evidence there? And how should we expect that to kind of evolve in the future?
Yeah. We're kind of dabbling a little bit-
Yep
in AI. Everybody's trying to figure out how to best use it. So where we're using it is in trying to improve efficiencies. If you can design a development plan quickly with a particular asset, maybe AI can help with some of just the administrative side of development plans, protocol development as well. Maybe you can use it there. So I'm sure there are a gazillion places, but we've been pretty kind of incremental with our use of AI. We haven't necessarily done it with discovery programs. I think we have some ideas as to how to use it properly, e specially in the peptide space. But very early in our adoption there.
Yep.
One thing we can say is that consumers are using it, and so by the time we come to market, it's something we need to be ready for. So I think this is going to hit the industry not only on the R&D side, but also increasingly on the commercial side.
Makes sense. Then third and lastly, just which policy variable, whether it's FDA, Medicare negotiations, MFN, tariffs, global pricing, matter most to your economics, and what have you changed, if anything, because of it? I know some of that doesn't quite fully apply to everything, but it might impact some of your decisions.
Yeah. Pricing's a big deal.
Yep.
Where does the obesity market really price out at? We haven't talked about pricing
Yep
because it's a little ways out for us.
Yep.
We would hope that pricing still sustains reasonable margins for a company like us. As far as FDA's been in a lot of flux recently.
Fortunately for us, we haven't seen real changes in response times or engagement or anything like that, which is a bit of a surprise given that we feel like there has been a lot of turnover there, or at least maybe a lot of reduction in force there. So far so good with our engagement with the FDA.
The big question is going to be the Medicare Bridge program.
Yeah.
What's going to happen to that in 2029?
Yeah.
There's still a lot of political uncertainty around that, so that's something we're obviously watching quite carefully.
Yeah.
Yeah.
Okay, great. Looks like we're out of time, so why don't we end it there? Thanks, Brian Lian, Neil Aubuchon, and Greg Zante. Appreciate your time today.
Thanks, Mike.