I covered Viking Therapeutics (NASDAQ:VKTX) in August last year. Since then, there have been a few developments. This article covers those.

The first thing to understand here is that Madrigal (NASDAQ:MDGL) – which I covered recently – and Viking are working with drugs with the same basic mechanism of action. Both resmetirom and VK2809 are selective THR-β agonists that target a key receptor common to a spectrum of cardio-metabolic and fatty liver diseases. But the similarity ends there. Madrigal is in a much advanced clinical development stage – by some accounts between four and five years ahead – and the drug may actually be approved in NAFLD within a year or so. It is currently running a set of two phase 3 trials in NAFLD and NASH.

Viking, on the other hand, has completed a phase 2b trial in NAFLD – with excellent results – and last year began a phase 2b NASH trial. This trial will be completed in November 2021. It has an endpoint similar to Madrigal’s – relative change in liver fat content (assessed by MRI-PDFF) – which, studies have shown, is a good surrogate endpoint for resolution of fibrosis. Already in Madrigal studies, we saw how reduction of liver fat content by 30% or more positively affects fibrosis. So, this trial will be looking at that.

One problem we notice is in recruitment. While Madrigal’s biopsy-based liver trials are getting fully enrolled quite quickly, Viking’s are taking longer. Liver biopsy is a painful invasive procedure, and patients are probably trying to line up for the trial that will give them an approved drug sooner. Or maybe Madrigal’s outreach is just better – I do not know. But I note that Madrigal’s 700-patient phase 3 MAESTRO NAFLD trial got fully recruited two months ahead of schedule, while Viking’s 337-patient NAFLD trial is still recruiting after one year.

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So, if we have two drugs with the same mechanism, one five years ahead in clinical development over the other, why should we even bother with the other drug? What Viking bulls have tried to project is the allegedly better safety and efficacy profile of VK2809 over resmetirom. Given that there has been no head-to-head comparison, this is a tough one to digest. However, let’s look at the comparative differences in the two molecules to figure out if VK2809 is worth the wait.

I actually covered this extensively in August 2018 – and since the molecules are still the same, much of what we discussed that day is still valid. That article had an extensive reader discussion which shed a lot of light on the topic of comparative differences between VK2809 and MGL-3196. You should read it. The principle differences are:

Higher affinity – For MGL-3196, it has been said that it has a 28-fold higher affinity to TRβ than to TRα, while the activated form of VK2809 has approximately 16-fold higher affinity for TRβ (Ki = 2.2 nM) than for TRα (Ki = 35.2 nM).

More LDL-C reduction – IMB07811 decreased LDL cholesterol (41%), triglyceride (78%), ApoB, and Lp(A) levels while for MGL-3196, LDL cholesterol was reduced up to 30% and triglycerides up to 60%.

Possible ALT-elevation – A Viking study showed possible ALT elevation, but analysis showed that the way this was described may have been non-systematic.

Besides these differences in the molecules, another issue we discussed was the much longer clinical duration of the Viking molecule. While MGL-3196 was more or less consistently in development, VK2809 went into a long hibernation and was rejuvenated much later as a NASH molecule.

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That brings us to the critical question – what about patent protection? Here’s data from their 10-Ks:

VKTX

Source

There are six issued patents for VK2809, and since composition patents are applied for first, therefore expire earlier, it appears that their composition of matter patents are only valid till 2025. I did a bit of looking on google patents to find support for that assertion, but gave up because molecule and assignee names are not known to me, or could have changed. But the logic seemed good to me – and we discussed this in my earlier article as well, where a date of 2026 was given. So we will take patent expiry to be 2025 for granted patents. Of course, the IP landscape could quickly change if the company manages to get some other protection, but other than that, 2025 is the date we have.

MDGL

The company has three issued patents in the US directed to composition of matter, per its 10-K, and these expire between 2026 and 2033.

Now we come to the crux of the problem. VK2809 will possibly be approved before 2025. Its patents will immediately expire. That means, there will be a THR-β agonist in the market which will have gone generic by 2025 – and this molecule is almost similar to MGL-3196. Thus this patent expiry affects both companies. They will probably get some other sorts of exclusivities for a few years, NCE or ODD or whatnot, but the shelf life of either drug is very limited.

Bottom Line

Viking, in August, produced data from the NAFLD study which showed durable drug effect – “Treated patients experienced durable statistically significant reductions in liver fat content that were maintained at week 16, four weeks after the last dose of VK2809.”

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The company has some $255mn in cash as of the last statement. So it has enough cash to last for couple of years at the least. The current price is also depressed. All these things are good, but the concerns I discussed here are worrying. I plan to stay away from this stock for the time being.

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