Viking's MASH drug scored where Madrigal's didn't, but shares fall on lack of direction

Viking Therapeutics is pulling up some extra long boats full of reasons the metabolic dysfunction-associated steatohepatitis (MASH) drug VK2809 could be a winner, but executives were mum on exactly what the med’s future will be given the competitive landscape.

The company reported additional endpoint data from a phase 2b study called VOYAGE. Viking had already reported that the trial met its primary endpoint, with patients experiencing statistically significant reductions in liver fat from baseline to Week 12 when compared with placebo. Now, the company is layering on the data with results for the secondary endpoints.

Up to 75% of patients who received VK2809 achieved resolution of the disease, previously referred to as nonalcoholic steatohepatitis (NASH), with no worsening of fibrosis. The placebo rate on this secondary endpoint was 29%. Up to 57% of patients experienced a one-stage or greater improvement in fibrosis with no worsening of MASH, compared to 34% for placebo.

Up to 48% of patients who received Viking’s med achieved resolution of MASH and a one-stage or greater improvement in fibrosis compared to 20% in the placebo group.

The study also showed similar rates of adverse events, including gastrointestinal events, among the placebo and treatment arms at Week 52. This was consistent with previous data at Week 12.

William Blair called the positive readout a surprise, given the trial was underpowered, “which we believe underscores the magnitude of the drug’s anti-fibrotic efficacy,” according to a Tuesday note.

That’s all great news and puts Viking as a contender with Madrigal Pharmaceuticals, which just secured the first-ever MASH drug approval. But will Viking sail on in MASH?

During a Tuesday conference call, executives declined to provide concrete next steps for the program until after they meet with FDA regulators. No matter how many different ways analysts tried to ask the question, CEO Brian Lian said the company will wait until that meeting to make any major decisions on the future of VK2809.

“The data are really excellent,” Lian said. “I think the plan now is to just meet with the FDA and receive feedback on phase 3 trial designs and really what's required for approval today and then make decisions from there.”

That sent Viking’s shares down by as much as 15%, according to William Blair. As of 1:14 p.m. ET, the shares had dropped 10% to $55.69, compared to $62.27 at close yesterday. Investors had been looking for some imminent catalysts from the update plus details on the capital and time investment that will be needed to run a late-stage study for VK2809.

Viking previously suggested that a partner would be needed to advance the therapy into phase 3. Again, on that question, Lian cited the FDA meeting.

“We've always said that the best outcome for phase 3 with this program is to have a larger partner involved for execution of the phase 3 trial. But we need to speak with the FDA in an end of phase 2 meeting and then make the decisions following that meeting,” the CEO said.

Whether a Big Pharma partner will have any interest in a MASH drug is to be determined. Most of the larger players have turned to the booming GLP-1 franchises as sources of relief for these patients. Eli Lilly's star diabetes and weight loss drug tirzepatide helped 74% of overweight or obese adults with MASH clear the condition without worsening of liver scarring, or fibrosis, after 52 weeks in data reported back in February.

One analyst said this, plus Madrigal's ongoing launch, “just seem like checkmate for everyone else” in MASH.  

Lian did mention that VK2809 is differentiated from others in the space given it’s a prodrug that can achieve chemically targeted delivery into the liver. The CEO would not give away any plans for the phase 3 trial design but said they will be discussing endpoints, dosing and approval requirements with the agency.

But where a Big Pharma could swoop in is to acquire Viking for its “metabolic trinity,” as William Blair analysts called it. That’s VK2809 in MASH, VK2735 for obesity and VK5211 as a lean muscle mass booster. Viking shares climbed by 80% in February on the news that patients on VK2735 had achieved weight loss of up to 14.7% after 13 weeks of treatment.

“Given the unprecedented market opportunity in obesity, we believe that the value of VK2735 will ultimately be maximized in the hands of a Big Pharma, which could best navigate the rebate/discount-driven reimbursement landscape,” the William Blair team wrote.

But VK2809 could also have some benefit to a buyer, because the drug demonstrated fibrosis improvement in the midstage trial where Madrigal’s Rezdiffra did not.

Viking is also doing some early work on co-formulating VK2735 and VK2809, which would pair an incretin with a MASH-busting drug for a further differentiated asset.

“While early in nature, we are highly intrigued by the approach as it could provide another layer of IP protection and extend the market exclusivity of VK2809,” the William Blair analysts said.

A key readout for VK2735 in obesity is expected any day now, according to William Blair.