1/ The immune system is the primary surveillance system for preventing cancer. We have mutations occur all the time, but it only evolves into cancer once it learns to escape the immune system.
2/ The tumor begins when a cell gains a mutation that allows it to grow and replicate faster then normal. Otherwise, these cells are completely normal cells in every way. We call this hyperplasia or a benign growth.
3/ Natural Killer (NK) cells are the primary cells for detecting damaged or defective cells. They have pattern recognition receptors on their surface for Damage Associated Molecular Patterns (DAMPs).
4/ As cancer cells grow and mutate, the mutated self proteins can become antigens which the immune system can recognize and use to mount a response. These are called Tumor Associated Antigens (TAA).
5/ The T cells can recognize these new mutated self proteins and mount a cell mediated response against these tumor cells. As the T cell kill tumor cells, the Antigen Presenting Cells (APCs) will clean up the dead cells.
6/ This allows the APC to present new antigens from the tumor cells to the T cells and activate a further response. This called Epitope Spreading. As the tumor cells die, they release more tumor antigens for the immune cells to use to continue to kill more tumor cells.
7/ The tumor can only survive in this hostile environment if it develops mutations that allow it to escape this process of immune surveillance.
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This is my updated profile for Viking. They are 1 of my 5 Innovators. They are in the mid stage and moving into later stages of development. They have some validation, but still a long way to get across that finish line.
Management:
Intro to Management:
I have been following this company on and off for several years, so I know the management well. So far, I had time to catch up on the company by listening to several of their webcasts and presentations over the last few months. I have been impressed with their management team thus far. There are a few key areas of business that I think a management team has to demonstrate expertise in to build a long term winning biotech company.
Clinical Development:
They need expertise at advancing drugs through the clinical development process. So far, the company has advanced two programs through the end of phase 2 with MASH and Obesity. That shows they have some ability to move through clinical development but still have a way to go before reaching successful approval. They should be starting a phase 3 soon for the subcutaneous injection in obesity in Q2 of 2025. The oral phase 2 study should start in second half of 2025.
Regulatory Development:
They need expertise at navigating the regulatory process with the FDA. So far, they haven't had to deal much with the FDA. They are just starting phase 3. It will take some time before they get to that point. We will have to wait and see how it goes.
Managing Balance Sheet:
They need expertise at managing the balance sheet. They have $853 million in cash and no debt. They burned about $52 million in their Q1 quarter. Their costs will ramp as they advance into phase 3. They just signed a deal for manufacturing which included $150 million over the next 3 years. They also started a buyback for $250 million. I don't think that is a wise choice when they need cash to run phase 3 trials and build a commercial sales team. I am watching their cash flow statements, and I have not seen any buying of their stock yet. I think they know better.
Commercial Sales:
The final key expertise for a management team is the ability to build a successful commercial sales team. So far, they have no commercial products, and they are still quite a way from being commercial. We will have to see if they decide to partner or go it alone with commercial sales.
Future Potential:
VK2735:
Mechanism of Action:
This is novel dual agonist of the glucagon-like peptide 1, or GLP-1, and glucose-dependent insulinotropic polypeptide, or GIP, receptors. It is being developed in both oral and subcutaneous formulations for the potential treatment of obesity.
Obesity Data:
The Venture study was a phase 2 study for VK2735 subcutaneous injection vs placebo for 13 weeks. It was once weekly injections for obese patient greater than 30 BMI or overweight with greater than 27 BMI. The placebo adjusted weight loss over 13 weeks was 13.1%. Up to 88% of patients on VK2735 had at least a 10% weight reduction versus only 4% on placebo. Next steps are the planning of the phase 3 study for subcutaneous formulation in 2025.
The phase 1 study for the Oral formulation finished up in 2024. This was a safety and efficacy study for 28 days for the oral dosing. Weight reductions were seen reaching up to 5.3% over the 28 days. This compares with the 6% shown in the 28 day study of the subcutaneous formulation. They just started the phase 2 study of the oral formulation in early 2025.
The phase 3 trial is ramping up to start and should be started by the end of Q2 of 2025.
The phase 2 Venture study for Oral formulation is fully enrolled and should read out data in second half of 2025.
Obesity Competitive Landscape:
The competitive landscape for Obesity is intense. There are two major big pharma players with Novo Nordisk and Lilly. Then there are a dozen or so other companies competing to get a slice of the market. The move is away from injectables and toward oral formulations. So far, Viking has one of the best oral data sets.
Obesity Market Size:
There are over 100 million Americans living with Obesity which is nearly half of the adult population. This market is expected to grow to over $100 billion sales by 2030. There is a lot of room for competition as the biggest limiting factor for proteins is manufacturing. Viking singed a manufacturing deal for $1 billion oral doses which comes out to about 2.74 million patients treated with a once daily dose per year. That would support about $5.4 billion in sales.
VK2809:
Mechanism of Action:
This drug is designed to be an agonist of the Thyroid Hormone Receptor Beta (TRB) that possesses selectivity for liver tissue, as well as the beta receptor subtype, suggesting promise for the treatment of metabolic disorders, including Metabolic dysfunction Alcoholic Steatohepatitis(MASH) and Non-Alcoholic Steatohepatitis (NASH).
MASH Data:
The Voyage study was a phase 2 study of VK2809 in NASH/MASH with fibrosis stages F1 to F3. The primary endpoint was change in liver fat assessed by MRI. The study was a measure from baseline to 12 weeks with biopsies at 52 weeks of treatment. The data showed that up to 75% of patients had MASH/NASH resolution compared to 29% on placebo. They also showed that 57% of patients had greater than 1 stage improvement in their fibrosis.
MASH Competitive Landscape:
This drug will compete with Madrigal's drug which has the same mechanism of action and is already on the market. The data support Viking with the better in class data. That should give them a strong competitive edge.
MASH Market Size:
There are estimated to be around 315,000 patients which would be the population for this drug. With a comparable cost to Rezdiffra, they could do at least $1 billion in sales and maybe two or three times that amount depending on competition and pricing. I am currently using $1 billion in my estimates for now.
Over the weekend, I spent a ton of time picking through the $NBI and $ARKG looking for ideas. I shared my comments on many, but not all the companies I looked at. Here is a list of links to those threads.
They have 35 holdings in the $ARKG and I am going to look at them all and give you my opinion.
$TWST is a DNA company that makes and sell DNA sequences to biotech companies. I don't see them becoming a very huge company. I think the potential is actually small. One of the reasons I sold them when I really got to know the company.
$RXRX I owned for a few years but recently sold them as I felt the company had a few issues that needed to be fixed like sticking with a failed drug, not allowing analysts to ask tough questions, and the constant insider selling. I would rather wait for them to prove me wrong before I risk my money as I got too many other good ideas.
There was a lot of hype over the FDA announcement for replacing animal testing with AI modeling over time. A lot of the companies in the TechBio space rocketed higher yesterday. The market is not smart enough to know the winners and losers. It paints with a broad brush. My plan over the coming weeks it does dig into these TechBio companies. This has been a major theme of mine for years now. With all my study of the space, I will be able to help you sort the winners from the pack.
Here is the link to the FDA announcement where they are going to replace animal testing with alternatives over time. That is right. The huge pop in the TechBio names seems to be very premature. Nothing it going to change right away.
They are going to be replaced with AI based models of toxicology. This means the digital chemistry companies will be driving this technology both Big and Small. These will be companies like $SDGR, $RXRX, $TEM, $ABSI Insilico, GenerateBio, Asimov and Iambic
I know in a market that is super bubbly with the indexes trading at over 27x earnings many investors are wondering where to put their money. I know I have been looking and searching for value of any kind in this market.
1/ #Tech is a very big space, but there are some key themes here I am focused on as I think they are still innovative and disruptive. They are #Cloud, #Cybersecturity and #Automation.
2/ Automation is the easiest to cover first as it is all about replacing laborers in repetitive tasks with robots and equipping those robots with controller enabled with #AI and #ML to allow them to learn and improve the processes.
I know in a market that is super bubbly with the indexes trading at over 27x earnings many investors are wondering where to put their money. I know I have been looking and searching for value of any kind in this market.
1/ The next major theme is Financial Technology called #FinTech. This has been very disruptive to the old school financial industry which has been very complicated and unfriendly to consumers for many decades. I know last year I abandoned my obsolete old bank for fintech.
2/ Many of these companies disrupted the space by just building simple to use and very easy apps. I have been doing online banking and trading for over 20 years and its never been easier for consumers. These apps are very simple and very easy to use.