On the move viking therapeutics – viking therapeutics (nasdaq vktx) seeking alpha abnormal endometrial biopsy results

As with speculative biotechs, cash is king. And after a first-quarter raise, Viking is good for $77.5 million in cash and investments. Dilution before catalysts is unlikely given its cash run. So, we’re likely to see some appreciation before then ( it is a birthday, after all). Upcoming Catalysts

This data will be an extension of its already successful phase 2 trial assessing its candidate in NASH. In preclinical data, thyroid agonists are known to decrease fat deposition, lipotoxicity, and inflammation associated with NASH. While this is more difficult to predict than the drug’s ability to lower cholesterol levels, as long as it maintains a safe profile, it should be positive.

VK5211 demonstrated spectacular efficacy and safety data in a phase 2 trial with patients who recently suffered a hip fracture.

A partnership will: (1) secure additional cash to fund operation without resorting to diluting shareholders, (2) provide further validation into its prospects, (3) ease the constraints and restrictions associated with a small company bringing a novel therapeutic to the market.

Proof-of-concept and IND-enabling work is ongoing for both glycogen storage disease type Ia and X-linked adrenoleukodystrophy, respectively. The latter is expected to begin a proof-of-concept study this quarter. Q1 2018 Earnings Call Takeaways

As we’ve outlined in prior calls, subsequent studies for this program will require the commitment of substantial financial resources. And we believe these efforts would be best executed by a partner, particularly one with an existing bone or musculoskeletal franchise. We are currently exploring partnering opportunities that will allow us to optimize the value of VK511 and move the program forward in the most efficient manner possible.

We believe the combination of prior human and animal data for VK2809 provides strong support for its potential benefit in liver disease, and we expect the results from our ongoing clinical trials to provide further evidence of VK2809’s promise in the setting of NASH.

David Bautz of Zacks Investment Research was concerned about the phase 2 trial excluding patients with type 2 diabetes. Lian estimated ~40-50% of NASH patients have type 2 diabetes mellitus (DM), so this is a valid concern (in terms of applicability). In the short term at least, this will likely make it easier for VK2809 to be demonstrated as safe (the exclusion of type 2 DM is one less comorbidity). If All Goes Well

Based on prior and historical data for thyroid receptors, in general there is a good chance (75%+) VK2809 will meet its primary endpoint of change in LDL-C in patients receiving VK2809 compared to placebo (time frame: 12 weeks). Because of the liver-specific workings of VK2809 and a short length of treatment (12 weeks), it is also likely that VK2809 will be considered safe. As I’ve stated before, in the end it will be a question of safety, not efficacy.

In the event (1) phase 2 for VK2809 is successful, propelling Viking Therapeutics to a NASH player, (2) the company secures a positively perceived partnership for VK5211, and (3) the general market cooperates, I envision the market cap appreciating towards $800 million to $1 billion (~ $15-20/share). If not before phase 2 data, Viking will likely have to raise cash to support phase 3 trials for VK5211 and VK2809, as well as ongoing proof-of-concept trials for younger pipeline prospects. All things considered, I will place a price target at $15 before the year’s end. This includes room for necessary dilutive financing.