UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 001-37355

VIKING THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-1073877
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
12340 El Camino Real, Suite 250 San Diego, California	92130
(Address of Principal Executive Offices)	(Zip Code)

(858) 704-4660

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.00001 per share	VKTX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒     No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒     No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐     No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Number of Shares Outstanding as of July 15, 2021
Common stock, $0.00001 par value	78,189,814

VIKING THERAPEUTICS, INC.

FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

TABLE OF CONTENTS

		Page
Part I.	FINANCIAL INFORMATION		1
Item 1.	Financial Statements		1
	Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020		1
	Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2021 and 2020 (unaudited)		2
	Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020 (unaudited)		3
	Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)		5
	Notes to Financial Statements (unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27
Item 4.	Controls and Procedures		27
Part II.	OTHER INFORMATION		28
Item 1.	Legal Proceedings		28
Item 1A.	Risk Factors		28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		60
Item 3.	Defaults Upon Senior Securities		60
Item 4.	Mine Safety Disclosures		60
Item 5.	Other Information		60
Item 6.	Exhibits		61
SIGNATURES			62

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Viking Therapeutics, Inc.

Balance Sheets

(In thousands, except share and per share amounts)

	June 30, 2021			December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	8,829		$	29,117
Short-term investments – available for sale		219,429			219,269
Prepaid clinical trial and preclinical study costs		8,254			7,276
Prepaid expenses and other current assets		1,150			442
Total current assets		237,662			256,104
Right-of-use assets		176			321
Deferred financing costs		7			48
Deposits		—			29
Total assets	$	237,845		$	256,502
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	4,210		$	3,988
Other accrued liabilities		8,463			7,811
Lease liability, current		198			330
Total current liabilities		12,871			12,129
Lease liability, net of current portion		—			29
Total long-term liabilities		—			29
Total liabilities		12,871			12,158
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.00001 par value: 10,000,000 shares authorized at June 30, 2021 and December 31, 2020; no shares issued and outstanding at June 30, 2021 and December 31, 2020		—			—
Common stock, $0.00001 par value: 300,000,000 shares authorized at June 30, 2021 and December 31, 2020; 78,189,814 and 73,215,940 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		1			1
Additional paid-in capital		422,745			412,589
Accumulated deficit		(197,583	)		(168,192	)
Accumulated other comprehensive loss		(189	)		(54	)
Total stockholders’ equity		224,974			244,344
Total liabilities and stockholders’ equity	$	237,845		$	256,502

See accompanying notes to the financial statements.

1

Viking Therapeutics, Inc.

Statements of Operations and Comprehensive Loss

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues	$	—		$	—		$	—		$	—
Operating expenses:
Research and development		12,804			7,780			24,340			15,766
General and administrative		2,737			2,826			5,430			5,787
Total operating expenses		15,541			10,606			29,770			21,553
Loss from operations		(15,541	)		(10,606	)		(29,770	)		(21,553	)
Other income (expense):
Amortization of financing costs		(21	)		(20	)		(41	)		(65	)
Interest income, net		181			1,040			420			2,344
Realized gain on investments, net		—			14			—			15
Total other income, net		160			1,034			379			2,294
Net loss		(15,381	)		(9,572	)		(29,391	)		(19,259	)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on securities		(85	)		1,145			(135	)		321
Comprehensive loss	$	(15,466	)	$	(8,427	)	$	(29,526	)	$	(18,938	)
Basic and diluted net loss per common share	$	(0.20	)	$	(0.13	)	$	(0.38	)	$	(0.27	)
Weighted-average shares used to compute basic and diluted net loss per share		77,897			72,487			76,348			72,422

See accompanying notes to the financial statements.

2

Viking Therapeutics, Inc.

Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

	Three-Month Period Ended June 30, 2021
	Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Capital		Deficit			Loss			Total
Balance at March 31, 2021		77,178,081	$	1	$	419,528	$	(182,202	)	$	(104	)	$	237,223
Employee stock-based compensation		—		—		1,491		—			—			1,491
Issuance of common stock under employee stock plans		89,646		—		343		—			—			343
Issuance of common stock from warrant exercises		922,087		—		1,383		—			—			1,383
Unrealized loss on investments		—		—		—		—			(85	)		(85	)
Net loss		—		—		—		(15,381	)		—			(15,381	)
Balance at June 30, 2021		78,189,814	$	1	$	422,745	$	(197,583	)	$	(189	)	$	224,974

	Six-Month Period Ended June 30, 2021
	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Shares			Amount		Capital			Deficit			Income (Loss)			Total
Balance at December 31, 2020		73,215,940		$	1	$	412,589		$	(168,192	)	$	(54	)	$	244,344
Employee stock-based compensation		—			—		3,068			—			—			3,068
Shares withheld related to employee tax withholding		(81,016	)		—		(473	)		—			—			(473	)
Issuance of common stock under employee stock plans		326,578			—		498			—			—			498
Issuance of common stock from warrant exercises		4,728,312			—		7,063			—			—			7,063
Unrealized loss on investments		—			—		—			—			(135	)		(135	)
Net loss		—			—		—			(29,391	)		—			(29,391	)
Balance at June 30, 2021		78,189,814		$	1	$	422,745		$	(197,583	)	$	(189	)	$	224,974

	Three-Month Period Ended June 30, 2020
	Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Capital		Deficit			Income (Loss)			Total
Balance at March 31, 2020		72,562,863	$	1	$	407,478	$	(138,384	)	$	(812	)	$	268,283
Employee stock-based compensation		—		—		1,648		—			—			1,648
Issuance of common stock under employee stock plans		51,934		—		227		—			—			227
Issuance of common stock from warrant exercises		143,545		—		216		—			—			216
Unrealized gain on investments		—		—		—		—			1,145			1,145
Net loss		—		—		—		(9,572	)		—			(9,572	)
Balance at June 30, 2020		72,758,342	$	1	$	409,569	$	(147,956	)	$	333		$	261,947

3

	Six-Month Period Ended June 30, 2020
	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Shares			Amount		Capital			Deficit			Income		Total
Balance at December 31, 2019		72,413,602		$	1	$	405,803		$	(128,697	)	$	12	$	277,119
Employee stock-based compensation		—			—		3,301			—			—		3,301
Shares withheld related to employee tax withholding		(17,124	)		—		(127	)		—			—		(127	)
Issuance of common stock under employee stock plans		112,961			—		239			—			—		239
Issuance of common stock from warrant exercises		248,903			—		353			—			—		353
Unrealized gain on investments		—			—		—			—			321		321
Net loss		—			—		—			(19,259	)		—		(19,259	)
Balance at June 30, 2020		72,758,342		$	1	$	409,569		$	(147,956	)	$	333	$	261,947

See accompanying notes to the financial statements.

4

Viking Therapeutics, Inc.

Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2021			2020
Cash flows from operating activities
Net loss	$	(29,391	)	$	(19,259	)
Adjustments to reconcile net loss to net cash used in operating    activities
Amortization of investment premiums, net		2,179			1,489
Amortization of financing costs		41			65
Stock-based compensation		3,068			3,301
Amortization of right-of-use assets		145			136
Interest expense related to operating lease liability		9			18
Realized gain on investments		—			(15	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(1,658	)		238
Accrued interest, net of interest received on maturity of investments		593			963
Accounts payable		223			777
Other accrued liabilities		652			1,484
Lease liability		(171	)		(165	)
Net cash used in operating activities		(24,310	)		(10,968	)
Cash flows from investing activities
Purchases of investments		(108,278	)		(138,991	)
Proceeds from maturities of investments		105,211			159,923
Net cash provided by (used in) investing activities		(3,067	)		20,932
Cash flows from financing activities
Public offering and financing costs		—			(26	)
Value of shares withheld related to employee tax withholding		(473	)		(127	)
Proceeds from warrant and option exercises and stock issuances under employee stock purchase plan		7,562			602
Net cash provided by financing activities		7,089			449
Net increase (decrease) in cash and cash equivalents		(20,288	)		10,413
Cash and cash equivalents beginning of period		29,117			8,377
Cash and cash equivalents end of period	$	8,829		$	18,790
Supplemental disclosure of non-cash investing and financing    transactions
Unpaid deferred public offering and other financing costs	$	50		$	50

See accompanying notes to the financial statements.

5

Viking Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. Organization, Liquidity and Management’s Plan, and Summary of Significant Accounting Policies

The Company

Viking Therapeutics, Inc., a Delaware corporation (the “Company”), is a clinical-stage biopharmaceutical company focused on the development of novel therapies for metabolic and endocrine disorders.

The Company was incorporated under the laws of the State of Delaware on September 24, 2012 and its principal executive offices are located in San Diego, California.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying balance sheet as of June 30, 2021, statements of operations for the three and six months ended June 30, 2021 and 2020, statements of stockholders’ equity for the three and six months ended June 30, 2021 and 2020 and statements of cash flows for the six months ended June 30, 2021 and 2020 are unaudited. These unaudited financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2020 contained in the Annual Report on Form 10-K filed by the Company with the SEC on February 17, 2021. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, the statements of stockholders’ equity for the three and six months ended June 30, 2021 and 2020 and the statements of cash flows for the six months ended June 30, 2021 and 2020. The December 31, 2020 balance sheet included herein was derived from the audited financial statements, but it does not include all disclosures or notes required by GAAP for complete financial statements.

The financial data and other information disclosed in these notes to the financial statements related to the three and six months ended June 30, 2021 and 2020 are unaudited. Interim results are not necessarily indicative of results for an entire year.

Risks and Uncertainties

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as the responses that the Company, other businesses and governments are taking continue to evolve. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a local and/or global economic slowdown or recession. Policymakers around the globe have responded with fiscal policy actions to support the healthcare industry and economy as a whole. The magnitude and overall effectiveness of these actions remain uncertain.

In addition, the Company’s clinical trials have been affected by and may continue to be affected by the COVID-19 pandemic. Clinical site initiation and patient enrollment have been and may continue to be delayed due to prioritization of hospital resources toward the COVID-19 pandemic. Some patients have not been and others may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, any inability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, may adversely impact the Company’s clinical trial operations.

The severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s service providers, suppliers, contract research organizations (“CROs”) and the Company’s clinical trials, all of which are uncertain and cannot be predicted. As of the date of the issuance of the Company’s financial statements, the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity or results of operations is uncertain.

Reclassification

Certain amounts reported in prior years in the financial statements have been reclassified to conform to the current year’s presentation.

6

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements relate to accounting for an operating lease and certain commitments. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents.

Investments Available-for-Sale

Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in accumulated other comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. The amortization of premiums and accretion of discounts is included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income (expense). The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents and marketable securities. The Company maintains deposits in federally insured depository institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity.

Prepaid Clinical Trial and Preclinical Study Costs

Prepaid clinical trial and preclinical study costs represent advance payments by the Company for future clinical trial and preclinical study services to be performed by the clinical research organization and other research organizations.  Such amounts are recognized as research and development expense as the related clinical trial and preclinical study services are performed.    

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, and lease liability obligations are included in the Company’s balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Please refer to Note 4 for additional information.

Deferred Financing Costs

Deferred financing costs represent legal, accounting and other direct costs related to the Company’s efforts to raise capital through a public or private sale of the Company’s common stock. Costs related to the public sale of the Company’s common stock are deferred until the completion of the applicable offering, at which time such costs are reclassified to additional paid-in-capital as a reduction of the proceeds.  Costs related to the private sale of the Company’s common stock are deferred until the completion of the applicable offering, at which time such costs are amortized over the term of the applicable purchase agreement.

7

Revenue Recognition

The Company has not recorded any revenues since its inception. However, in the future, the Company may enter into collaborative research and licensing agreements, under which the Company could be eligible for payments made in the form of upfront license fees, research funding, cost reimbursement, contingent event-based payments and/or royalties.

On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers and all related amendments (“ASC