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Viking Therapeutics (NASDAQ:VKTX)
Q2 2020 Earnings Call
Jul 29, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Welcome to the Viking Therapeutics 2020 second-quarter financial results conference call. [Operator instructions] As a reminder, this conference call is being recorded today, July 29, 2020. I would now like to turn the conference over to Viking's manager of investor relations, Stephanie Diaz. Please go ahead, Stephanie.

Stephanie Diaz -- Manager of Investor Relations

Hello, and thank you all for participating in today's call. Joining me today is Brian Lian, Viking's president and CEO; and Greg Zante, senior vice president of finance. Before we begin, I'd like to caution that comments made during this conference call today, July 29, 2020, will contain forward-looking statements within the meaning of the Securities Act of 1933, concerning the current beliefs of the company, which involve a number of assumptions, risks and uncertainties. Actual results could differ from these statements and the company undertakes no obligation to revise or update any statement made today.

I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters. I'll now turn the call over to Brian Lian for his initial comments. Brian?

Brian Lian -- President and Chief Executive Officer

Thanks, Stephanie, and thanks to everyone listening on the webcast or by phone. Today, we'll provide an overview of our second-quarter 2020 financial results, as well as an update on recent progress and developments related to our pipeline programs and operations. I'll begin by reviewing the status of our ongoing Phase 2b VOYAGE study. As a reminder, this trial is evaluating our small molecule thyroid hormone beta receptor agonist VK2809, in patients with biopsy-confirmed nonalcoholic steatohepatitis and fibrosis.

Enrollment in the trial continues. And despite the ongoing pandemic, more sites are open today for patients screening and enrollment, and fewer sites are reporting operational disruptions compared with two months ago. We currently anticipate completion of enrollment in this study in the first half of 2021. I'll provide more color on VOYAGE in a few minutes.

During the quarter, we also made great progress with our second small molecule thyroid receptor beta agonist, VK0214, which we're developing as a potential treatment for X-linked adrenoleukodystrophy. We're pleased to report that we recently filed an IND with the FDA to initiate the first-in-human studies of this important molecule. We plan to initiate these studies following clearance of the IND. I'll provide additional detail on our development activities after we review our second-quarter financial results.

With that, I'll turn the call over to Greg Zante, Viking's senior vice president of finance. Greg?

Greg Zante -- Senior Vice President of Finance

Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Viking's Form 10-Q filing with the Securities and Exchange Commission, which we expect to file later today for additional details. I'll now go over our financial results for the second quarter and first six months ended June 30, 2020. I'll first go over the second-quarter results.

Our research and development expenses for the three months ended June 30, 2020 were $7.8 million, compared to $7.3 million for the same period in 2019. The increase was primarily due to increased expenses related to our clinical studies, manufacturing for our drug candidates, salaries and benefits, and stock-based compensation, partially offset by decreased expenses related to preclinical studies and services provided by third party consultants. Our general and administrative expenses for the three months ended June 30, 2020 were $2.8 million, compared to $2.2 million for the same period in 2019. The increase was primarily due to increased expenses related to stock-based compensation, legal expenses, and insurance expenses, partially offset by decreased expenses related to services provided by third-party consultants and travel.

For the three months ended June 30, 2020, Viking reported a net loss of $9.6 million or $0.13 per share, compared to a net loss of $7.7 million or $0.11 per share in the corresponding period of 2019. The increase in net loss and net loss per share for the three months ended June 30, 2020, was primarily due to the increases in research and development and general and administrative expenses noted previously, as well as decreased interest income due to the decline in interest rates throughout the second quarter of 2020 as compared to prevailing interest rates during the second quarter of 2019. I'll now go over our results for the first six months of 2020. Our research and development expenses for the six months ended June 30, 2020 were $15.8 million, compared to $11.8 million for the same period in 2019.

The increase was primarily due to increased expenses related to our clinical studies, manufacturing for our drug candidates, salaries and benefits, and stock-based compensation, partially offset by decreased expenses related to services provided by third-party consultants and preclinical studies. Our general and administrative expenses for the six months ended June 30, 2020 were $5.8 million, compared to $4.5 million for the same period in 2019. The increase was primarily due to increased expenses related to stock-based compensation, legal expenses, and insurance expenses, partially offset by decreased expenses related to services provided by third-party consultants, professional fees, and travel. For the six months ended June 30, 2020, Viking reported a net loss of $19.3 million or $0.27 per share, compared to a net loss of $12.6 million or $0.18 per share in the corresponding period in 2019.

The increase in net loss and net loss per share for the six months ended June 30, 2020 was primarily due to the increases in research and development and general and administrative expenses noted previously, as well as decreased interest income due to the decline in interest rates throughout the first half of 2020 as compared to prevailing interest rates during the first half of 2019. Turning to the balance sheet. At June 30, 2020, Viking held cash, cash equivalents, and short-term investments totaling $263 million and had 72,758,342 shares of common stock outstanding. This concludes my financial review, and I'll now turn the call back over to Brian.

Brian Lian -- President and Chief Executive Officer

Thanks, Greg. I'll now provide an update on our recent development activities, beginning with our lead program, VK2809, for the treatment of NASH. As a reminder, VK2809 is an orally available small molecule agonist of the thyroid homeowner receptor that possesses selectivity for liver tissue, as well as the beta receptor subtype, suggesting promising therapeutic potential in a range of metabolic disorders, including NASH. As we previously discussed, in a 12-week Phase 2 trial in patients with hypercholesterolemia and nonalcoholic fatty liver disease, VK2809 produced statistically significant reductions in liver fat content, as well as improvements in LDL cholesterol, meeting the study's primary and secondary efficacy endpoints.

On exploratory efficacy measures, evaluating other plasma lipids such as triglycerides, apolipoprotein B and lipoprotein A, treatment with VK2809 also resulted in significant reductions. Importantly, the study showed VK2809 to possess an encouraging safety and tolerability profile with no serious adverse events reported among patients receiving VK2809 or placebo. The initial data from this study were highlighted at the annual meeting of the American Association for the Study of Liver Diseases, or AASLD, in 2018. Additional data, including efficacy at the low dose of 5 milligrams daily, were presented at the international liver conference, or EASL, in 2019.

As we indicated on our last quarterly call, further results from this study have been selected for oral presentation at the upcoming 2020 EASL meeting, which will be held in a virtual format from August 27 through August 29. The VK2809 presentation will occur on Friday, August 28. In our view, the data obtained thus far suggests that VK2809 possesses several differentiating characteristics relative to the current NASH development landscape. In addition to the potent reductions observed in liver fat, which we believe suggests promise for improvement in other histologic features, VK2809's broader efficacy on lipid measures suggest additional potential cardiometabolic benefits for patients with NASH.

The compound's oral route of administration, liver-targeted mode of action and encouraging safety and tolerability to date combined to place it among the most promising development programs in the NASH landscape today. Given the encouraging findings from the 12-week Phase 2 study, last year, we initiated a 52-week Phase 2b study to evaluate the safety and efficacy of VK2809 in patients with biopsy-confirmed NASH and fibrosis. This study, which we've called the VOYAGE study, is a randomized, double-blind, placebo-controlled multicenter trial designed to assess the efficacy, safety and tolerability of VK2809 in the setting of NASH. The study is targeting enrollment of approximately 340 patients across five treatment arms, including 1 milligram daily, 2.5 milligrams daily, 5 milligrams every other day, 10 milligrams every other day and placebo.

The target population includes patients with F2 and F3 fibrosis, as well as up to 25% with F1 fibrosis. F1 patients must possess additional risk factors to be eligible for enrollment. The primary endpoint of the study will evaluate the relative change in liver fat content as assessed by magnetic resonance imaging proton density fat fraction from baseline to week 12, in subjects treated with VK2809 as compared to subjects receiving placebo. Secondary objectives include evaluation of histologic changes assessed by hepatic biopsy after 52 weeks of therapy.

We are currently enrolling patients in this study in the United States, and we remain on track to open sites outside the U.S. later this quarter. As we reported in our last quarterly update, we continue to closely monitor site activities in the context of the ongoing coronavirus pandemic. To reiterate an important comment from our last update, we have never paused enrollment in this study or indicated to our sites that we plan to defer any activities required for trial execution.

Since our last update, we're encouraged that sites continue to loosen many of the restrictions put in place earlier in the pandemic. We have more sites open for in-person and virtual patient engagement today than in prior months and anticipate further expansion of site activities in the coming months. In addition, we're pleased to report that dosing in this study has now exceeded six months and we look forward to completion of the planned 52-week treatment window that will enable the evaluation of VK2809 safety and efficacy on histologic endpoints in NASH. With respect to further expansion of clinical sites, we remain on track to open sites outside the U.S.

later this year in both the third and fourth quarters and continue to target over 80 sites globally. As we've previously indicated, we continue to anticipate completion of enrollment in VOYAGE in the first half of next year. I would now like to provide an update on our VK0214 program. Like VK2809, VK0214 is an orally available small molecule thyroid hormone receptor agonist that possesses selectivity for the beta receptor subtype.

We are developing VK0214 as a potential treatment for X-linked adrenoleukodystrophy or X-ALD. X-ALD is a serious degenerative neuromuscular disease for which no pharmacologic treatment exists. The disease is caused by a defect in a peroxisome transporter called ABCD1. This defect can result in increased plasma and tissue levels of very long-chain fatty acids, which are believed to contribute to the cerebral and motor neuron toxicities that are characteristic of the disease.

The thyroid beta receptor is an important potential target for therapeutic intervention in X-ALD because is believed to play a role in very long-chain fatty acid metabolism. Data from in vivo models have demonstrated that treatment with VK0214 produces reductions in very long-chain fatty acids in both plasma and tissue. These encouraging findings suggest potential benefit in the setting of X-ALD and we're eager to move VK0214 into the clinic. To this end, we are pleased to report that we recently filed an IND for VK0214 to initiate the clinical development of this important program.

Following clearance of the IND, we plan to initiate the first in-human studies of VK0214, to be followed by initiation of a proof-of-concept study in patients with X-ALD. We will provide more details on trial design upon study initiation. As we advance both VK2809 and VK0214, we continue to carefully manage our cash resources and maintain a strong financial position. As Greg stated earlier, we ended the second quarter with approximately $263 million in cash, which we currently expect will provide sufficient runway to achieve a number of the key clinical milestones that we believe will drive value creation in the future.

In conclusion, we continue to make exciting progress with both our VK2809 and VK0214 programs. With respect to our Phase 2b VOYAGE trial, evaluating VK2809 in patients with biopsy-confirmed NASH and fibrosis, we've increased the number of sites that are open and actively enrolling and look forward to adding new sites, both within and outside the U.S. in the coming months. We're also happy to report that we passed the six-month dosing milestone and continue to treat subjects for the planned 52-week trial duration.

We currently anticipate completion of enrollment in the first half of 2021. With respect to VK0214 for the treatment of X-linked Adrenoleukodystrophy, we recently filed an IND for this program, and we expect to initiate clinical development in the third quarter. Finally, during the second quarter, we continued to carefully manage our cash to ensure that we have the resources to optimally advance our key programs through their critical milestones. This concludes our prepared comments for today.

Thanks again for joining us. And now, we'll open the call for questions. Operator?

Questions & Answers:


Operator

[Operator instructions] The first question comes from John -- Joon Lee, excuse me, of SunTrust. Please go ahead.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Hi. Good afternoon and thanks for taking my questions. Brian, did I hear correctly that in your VOYAGE study, you have passed the six-month threshold? And you are now going beyond that in treating patients?

Brian Lian -- President and Chief Executive Officer

Hi, Joon. Yes, that's correct.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Great. So that pretty much puts the question at rest. OK. That's great to hear.

And then the other question I have is one of your peer companies, Intercept, received a disciplining CRL last month without an AdCom. And then the FDA stated that they did not believe the risk-benefit justified approval. What are your thoughts on that CRL? And how does this, if at all, change your development plans for 2809?

Brian Lian -- President and Chief Executive Officer

Yeah. Thanks, Joon. It's really a complicated question. And I don't have a lot of insight on the nature of the CRL or any discussions Intercept may or may not have had with the FDA.

As far as our plans, our plans are unchanged. So we're going to complete the VOYAGE study and read those data out and then plan for a Phase 3 trial. And currently, the guidance is unchanged with the registration endpoints. So we are not altering our strategy at all.

We look forward to completing the VOYAGE study. That's the main focus right now.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

In your view, if you look -- as you look at the profile of 2809 and compare that with OCA, what can you point to as a source of conviction that this 2809 won't be as nearly as a concern when it comes to review process down the line?

Brian Lian -- President and Chief Executive Officer

Yes. Well, it's a -- they're a little bit apples to oranges. It's a different mechanism with obeticholic acid. They did a longer, larger study.

We're focused now on a Phase 2b study. We're looking at both the registration endpoints as secondary endpoints at 12 months. But it's tough to make that comparison just because they're just different molecules targeting different receptors and different mechanisms.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Yeah. Understand. And then the last question is, when you report the additional data at EASL next month, what should we be focusing on?

Brian Lian -- President and Chief Executive Officer

Yes. We'll report data from the 16-week visit in that study. And then we'll also report data from some of the subsets of patients. Patients with higher BMI, higher baseline ALT, that sort of thing.

So I think it's an interesting data set. So we look forward to presenting it.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Great. Looking forward to it. And congrats and thanks so much.

Brian Lian -- President and Chief Executive Officer

Thanks a lot, Joon.

Operator

The next question comes from Michael Morabito of Chardan Capital Markets. Please go ahead.

Michael Morabito -- Chardan Capital Markets -- Analyst

Hi, guys. Thanks for taking the questions. I was wondering if you could go into any more detail on the ex U.S. sites that you plan to open.

You said about 80 sites globally. Do you know, once all is said and done, how many of those will be ex U.S. versus in the U.S.? And what do you think the mix of U.S. versus non-U.S.

patients will be by the time the study is finished?

Brian Lian -- President and Chief Executive Officer

Yeah. The mix should be about three to one, at least, maybe closer to four to one, but at least three to one. And we had originally targeted around 12 ex U.S., and we'll be potentially moving that up closer to 15. But that's sort of the broad mix there, primarily U.S.

but a little tranche of ex-U.S. as well.

Michael Morabito -- Chardan Capital Markets -- Analyst

And so when you enroll patients in the ex U.S. sites, do you expect the U.S. versus ex-U.S. next to be relatively equal in all five arms of the study?

Brian Lian -- President and Chief Executive Officer

I would expect so. Well, obviously, there are more U.S. sites, so we'll have more patients from the U.S. in the study.

But yes, it should be well balanced in that regard. It's a randomized study.

Michael Morabito -- Chardan Capital Markets -- Analyst

OK. And some of your competitors have hinted that they may be able to run registrational trials at -- with an endpoint of less than 52 weeks based on some of their data. From the data that you've seen today, do you think that there's any chance that you would be able to run a trial that would be shorter than a 52-week Phase 3?

Brian Lian -- President and Chief Executive Officer

So it's a good question. We don't know. We haven't generated any data longer than 12 weeks. We have the 16-week data from the follow-up visit, but the patients only received 12 weeks of therapy.

So we'll make that determination once we have our 12-month data in hand, but it's just hard to answer right now.

Michael Morabito -- Chardan Capital Markets -- Analyst

OK. Thanks for taking the question.

Brian Lian -- President and Chief Executive Officer

Thanks, Michael.

Operator

The next question comes from Matt Luchini of BMO Capital. Please go ahead.

Matt Luchini -- BMO Capital Markets -- Analyst

Hi. Good afternoon, and thanks for taking my question. And congrats on the progress. So it sounds like from an enrollment -- VOYAGE enrollment perspective, you're pretty optimistic on how things are progressing.

And so I'm just wondering, is the gating factor in terms of your enrollment guidance more actually on the ex U.S. side? Or is it still pulling enough patients through on the U.S. side? And then secondarily, while I appreciate that it's somewhat a moot point given that we passed the six-month mark. Can you just maybe comment, did the FDA actually come back and sort of bless VOYAGE to continue dosing? Or was it more a continuation of the no-news-is-good-news commentary that we saw last quarter? Thank you.

Brian Lian -- President and Chief Executive Officer

Yeah. Thanks, Matt. So on the second question, there was never any requirement that we check in with the FDA at six months. The trial that was cleared to proceed was a 52-week trial, and we were requested to submit our 12-month tox data at some time frame before any subject reach that six-month threshold.

So there wasn't any sort of a check in or OK or anything from the FDA. We didn't receive one. We didn't expect one, and there was never one outlined for us. With respect to enrollment, the modeling that we do for completion enrollment, it encompasses the time to get the U.S.

and ex-U.S. sites onboard. And then we have enrollment assumptions in each of those sites and model it out from there. So it's a combination of U.S.

and ex-U.S., and they're both going to be important contributors. But bulk of the contribution will come from U.S. patients, at least that's our expectation today.

Matt Luchini -- BMO Capital Markets -- Analyst

OK. And just given all the -- in terms of the initial PDFF data, should we be expecting that closer to, say, the tail end of the first half? Or do you think, really, it's a second-half event? Or is it still too early to say?

Brian Lian -- President and Chief Executive Officer

I think it's early to say. We'll report it as soon as we have it, but it's early to say. We have some -- a pretty broad window in there, and that reflects a lot of the uncertainty in the current clinical environment. But I don't think we're going to narrow it down today.

Matt Luchini -- BMO Capital Markets -- Analyst

Understood. Just thought I would ask. Thanks for taking the questions.

Brian Lian -- President and Chief Executive Officer

Thanks, Matt.

Operator

The next question comes from Steve Seedhouse of Raymond James. Please go ahead.

Steve Seedhouse -- Raymond James -- Analyst

Hi. Thank you. Just one question on X-ALD. First off, congrats on heading toward the clinic with that program.

I'm curious about the mechanism actually of 0214 and how much we know about that because you've highlighted, obviously, the effect on very long-chain fatty acids. My understanding is in this disease macrophage activation is a key driver of pathology as well and particularly for the cerebral phenotype and thyroid hormone signaling may influence macrophage function. So I guess I'm just wondering, in addition to looking at the very long-chain fatty acids, which you've shown a few times, and they improve, if you've also looked at the influence of the drug on immune cell response. And if you will look at that in the upcoming clinical trial and just maybe hatch out the mechanism a bit and optimize patient selection or something like that? Thanks.

Brian Lian -- President and Chief Executive Officer

Yeah. Thanks, Steve. The mechanism is really tied to the thyroid beta receptor having a regulatory effect on the expression of peroxisomal transporter called ABCD2, and that transporter is known to serve as a transport for very long-chain fatty acids, brings them into the proxy somewhere they're metabolized and discarded. And what it does is it sort of fills the gap that's left by nonfunctional ABCD1, all of these patients suffer from mutations in the gene for ABCD1, which renders that transporter nonfunctional.

And so up-regulating ABCD2, which we've shown in fibroblasts from patients, should result in a reduction in very long-chain fatty acids. And that's what we've seen in the in vivo models. We haven't looked at the inflammatory signaling effects. I think the way we look at it -- it's an important question.

The way we look at it is that the initial target here will likely be the AMN subset of the population. And if we can show benefit there, then we would really consider expanding into the cerebral cases, but the initial focus is more on the adult side.

Steve Seedhouse -- Raymond James -- Analyst

OK. OK. I appreciate that. That's helpful.

Maybe I'll just ask one more on that. And the Phase 1, is that initially in healthy volunteers? And maybe just if you could walk through sort of the initial clinical plan with the molecule since it's a new molecule here into the clinic?

Brian Lian -- President and Chief Executive Officer

Yeah. Yeah, yeah. Thanks. So it's going to be a -- we call it the stacked design.

So you start the single ascending-dose study. And once you're a cohort or two into that study, if things look clean, safety-wise, you then begin the multiple ascending dose portion at the lowest dose that the single ascending dose started. And so the single ascending, obviously, is one dose. Multiple ascending-dose study will be 14-day study.

And when we have some read on what the data look like there, we will then select the doses for the second portion of the study, which will target patients with AMN. And those patients will come in later because we've got to get through the 14-day portion with a few cohorts first.

Steve Seedhouse -- Raymond James -- Analyst

Terrific. Thanks, Brian. I appreciate it.

Brian Lian -- President and Chief Executive Officer

Thanks, Steve.

Operator

The next question comes from Jay Olson of Oppenheimer. Please go ahead.

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

Hey. Thanks for taking the questions. Maybe just to follow up on 0214. I'll add my congrats to moving that into the clinic.

Can you remind us what are the key differences between the PK/PD profiles for 2809 versus 0214? And how did those differences lead you to determine their respective clinical development programs in NASH versus X-ALD?

Brian Lian -- President and Chief Executive Officer

Yeah. Thanks, Jay. So they are different chemical structures, the substitution pattern on the aromatic rings is different than 0214. And 0214, in animals, anyway, has a shorter half-life, higher Cmax, and it also has better selectivity for the beta receptor.

So it's just got a different profile altogether on the PD side. That said, it does work pretty well in NASH. We always run them side by side when we do the animal studies, and it's also very effective in NASH. When we looked at the early data for X-ALD, 0214 just seemed to perform better than 2809 in the ABCD1 knockout model, which is a common model for X-ALD.

So it seemed to make more sense there. And we had VK2809 already in full speed for NASH. So that's what led to the decision to pursue X-ALD.

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

OK. Great. Thank you. That's very helpful.

And then can you maybe comment on the timing of when you expect to initiate a proof-of-concept study in X-ALD and what are the registrational endpoints for X-ALD?

Brian Lian -- President and Chief Executive Officer

Yeah. So there's no approved endpoint -- no approved therapeutic to date. We would expect the registration endpoints to likely focus on function, but we'll have that discussion with the FDA once we have some data in hand. The proof-of-concept will be from the upcoming clinical work, we'll look at changes in very long-chain fatty acids at 28 days.

And it's hard to time when the data will be available, but I would certainly hope to have data sometime in 2021 and sometime, hopefully, in the first half of 2021. But very difficult to determine that yet since we haven't started the singles and multiple ascending-dose studies just yet.

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

OK. Great. Thanks, again, for taking the questions.

Brian Lian -- President and Chief Executive Officer

Thanks, Jay.

Operator

The next question comes from Yale Jen of Laidlaw & Company. Please go ahead.

Yale Jen -- Laidlaw and Company -- Analyst

Good afternoon and thanks for taking the questions. In terms of the -- to follow-up on the 0214, in terms of the data release, would you guys be able to talk about the healthy one here, the PK study, maybe in the first half of next year before you talk more about the clinical data?

Brian Lian -- President and Chief Executive Officer

Yeah. I would say probably, Yale, I don't want to commit to that today without having yet started the study. But, yeah, I would think that would be a pretty reasonable course of action once we have some data to talk about what the profile looks like.

Yale Jen -- Laidlaw and Company -- Analyst

OK. Great. And maybe just one more question here, which, if I hear correctly, that EASL meeting you were talking about some lower dose, could you elaborate a little bit more on that? Or I just misheard?

Brian Lian -- President and Chief Executive Officer

No. Will be all three doses. Yes, we didn't separate out lower doses or anything like that. We'll look at the placebo and then the 5 mg and the two 10 mg cohorts as well.

Yale Jen -- Laidlaw and Company -- Analyst

OK. Great. OK. Thanks and, again, congrats moving things forward smoothly.

Brian Lian -- President and Chief Executive Officer

Thanks a lot, Yale.

Operator

The next question comes from Scott Henry of ROTH Capital. Please go ahead.

Scott Henry -- ROTH Capital -- Analyst

Thank you and good afternoon. I guess, first, the VOYAGE trial, are you noticing any changes in dropout rate given COVID-19 or maybe nothing at all? Just curious if you're noticing anything different there.

Brian Lian -- President and Chief Executive Officer

Yeah. That's a really interesting question. The answer is no, but you would -- you kind of expect it. But we haven't had any issues like that.

And part of that may be some of the accommodations that we're allowed to make from FDA loosening some of the general operating criteria, we can do phone visits when otherwise they may have been in-clinic visits. We can ship the drug to someone's house. So a lot of that stuff is just a little bit atypical, and that might make it easier for patients to remain in the study. But we were fortunate we haven't seen any surge in dropouts or anything just yet.

Scott Henry -- ROTH Capital -- Analyst

OK. Great. And then just shifting over to the model, R&D was pretty flat Q1 to Q2 this year. Should we start to see that trajectory increase throughout the second half? I mean, certainly, as the OUS sites come on and just perhaps higher volume in general, just thinking about that line?

Brian Lian -- President and Chief Executive Officer

Yes, I'll pass that over to Greg here.

Greg Zante -- Senior Vice President of Finance

Hey, Scott. Yeah. I think it should tick up here a little bit in the second half versus the first half, I think. We had commented, I think, at the last call that we would be up 25% to 50% opex-wise for the year versus last year.

I think it could be a little bit less than that, but I think it will tick up in the second half versus the first half.

Scott Henry -- ROTH Capital -- Analyst

OK. Great. And since I got you on the line, could you just tell me, just really briefly, what's going on in that other comprehensive gain loss? I mean, that number seems to bounce all around. I don't know what's driving those valuation adjustments, but curious.

Greg Zante -- Senior Vice President of Finance

Yeah. It's really just a lot of activity and churn in the investments that we have. So it's been a lot of activity in that area. So that's really what's going on there.

Scott Henry -- ROTH Capital -- Analyst

OK. Great. Thank you for taking the question.

Brian Lian -- President and Chief Executive Officer

Thanks, Scott.

Operator

The next question comes from Andy Hsieh of William Blair. Please go ahead.

Andy Hsieh -- William Blair -- Analyst

Great. Thanks for taking my questions. I hope everybody is doing well and staying healthy. So I have a follow-up on 0214.

So in terms of healthy volunteers for the first portion of the Phase 1 study, maybe educate us on X-ALD patients in terms of their metabolism? Do you expect any sort of significant differences between XLD patients in healthy volunteers in terms of PK/PD or ADME that could potentially kind of limit the generalizability of the initial data that you gather?

Brian Lian -- President and Chief Executive Officer

Yeah. Thanks, Andy. A really interesting question. So far, in reported studies with statins, for example, and fibrates, there haven't been any notable or significant differences in PK.

With VK0214, we don't expect any changes in metabolism in the patient population versus healthies, but we'll wait and see. I just don't -- I wouldn't expect there to be any dramatic changes. So we would think that the healthy volunteer data would be somewhat predictive for the patient population, but we have to do the study to really determine that.

Andy Hsieh -- William Blair -- Analyst

OK. Thanks for the insight. And maybe just one other question. So I guess in the past quarter, there's a lot of new developments in the NASH space.

One notable one is kind of data generated from the FGF21 space. Just curious about things that you are potentially doing in the background, maybe preclinical research on combination rationale. I remember you mentioned about you're interested in combining with 0612 in your pipeline and even 5211. So just curious about where you are in that process.

Brian Lian -- President and Chief Executive Officer

Yeah. And thanks for the question. We have looked at combinations, and we think there are some mechanisms that might play well with the thyroid beta activation and work on different elements of NASH that nicely complement VK2809. We haven't reported any of those data.

But I think when the time comes, we will report data, but we're just not in the position today to make any comments on some of that work. It is an area of interest to us, though, I'll say.

Andy Hsieh -- William Blair -- Analyst

OK. Fair enough. Great. Well, thanks for taking all the questions, and congratulations on the progress.

Good luck.

Brian Lian -- President and Chief Executive Officer

Yeah. Thanks a lot, Andy.

Operator

[Operator instructions] The next question comes from Julian Harrison of BTIG. Please go ahead.

Julian Harrison -- BTIG Research -- Analyst

Hi. Thanks for taking my question, and congrats on the steady progress here. Just one for me. Looking ahead at your 12-week readout for VOYAGE, which looks on track for next year, beyond MRI-PDFF, can we possibly get a glimpse of potential antifibrotic activity of VK2809 to biomarkers like Pro-C3 and ELF? Or is that readout most likely just going to be limited to steatosis? Thanks.

Brian Lian -- President and Chief Executive Officer

Yes. Thanks, Julian. Right now, the plan would be to focus on the MRI, but I think we'll look at the data when it comes in and decide what to communicate. But right now, really the focus, MRI-PDFF is the primary endpoint for the study.

We think that's the most important, at least at that 12-week time frame. But if we have other interesting things to share, we'll do that. But thanks for the question.

Julian Harrison -- BTIG Research -- Analyst

Got it. Thanks very much.

Brian Lian -- President and Chief Executive Officer

Thanks.

Operator

Thank you. The next question comes from Mayank Mamtani of B. Riley FBR. Please go ahead.

Mayank Mamtani -- B. Riley FBR -- Analyst

Thanks for taking my questions and congrats on the progress. Just two quick questions on VOYAGE, and then I have a data question. So just taking a step back and given the overwhelming evidence we now have of liver fat correlating with histology, not just at Karo but also NGM, I mean, is there a scenario after your PDFF, you don't really wait for histology and start planning for your pivotal? Any comments on that?

Brian Lian -- President and Chief Executive Officer

Yeah. Well, that actually is our plan. But we would want to begin planning for that Phase 3 as soon as we have data to identify dosing and start to think about the sizing, once we have the magnitude of the effect, that sort of thing. So that's certainly part of the plan once the 12-week data are available.

But you can't do too much given that the guidance requires long-term histology data prior to Phase 3, so we'll need to collect those data prior to going into Phase 3. But laying all that groundwork is definitely an important part of our planning for next year.

Mayank Mamtani -- B. Riley FBR -- Analyst

Got it. And then on the sites, how many sites, what proportion of sites are in the south for VOYAGE?

Brian Lian -- President and Chief Executive Officer

Yeah. That's a good question. I do not have the layout in front of me. It's a fair portion, and I just -- I don't have that proportion in front of me.

We do have a lot in the Midwest. We've got a lot on the West Coast. We have some in the sort of mid-Atlantic region. So we've got a -- the plan is to have 60 total.

And so I think what's interesting is even in these states where there do appear to be resurgences, we haven't seen the rapid contraction of site availabilities. I think the contraction is more on patients' willingness to show up at -- to sign up for a NASH study if they live in Houston, for example. But the sites have been far more open and available in some of these newer hotspots than they were, say, in the March time frame. But sorry, I just don't have the number.

So I think the sites are pretty well-diversified geographically, though.

Mayank Mamtani -- B. Riley FBR -- Analyst

Got it. And then my last question, as you think about the off-treatment data, any color on the ALD declines? Is it going to be fairly consistent with what you saw on the drug? Anything you'd comment on that? And then also the preclinical docks work, any findings that you could comment on that were beyond just the liver specific? Anything on the intestine or the cardiac that was part of the correspondent? Anything you could comment there would be helpful.

Brian Lian -- President and Chief Executive Officer

Sure. So we submitted the full 12-month data set, which obviously included a lot of detailed analyses of all tissue types. And we've always been comfortable with the profile, comfortable with the margins. And there was nothing of note to really highlight there.

So I don't know -- yes, there's not a lot of color to add there. With respect to your other question, the 16-week data, yes. So we'll have some data on the markers as well. I don't want to get too much into what the data are.

But yes, we'll have a number of different looks at sub-populations, markers, the 16-week liver fat data, all of that.

Mayank Mamtani -- B. Riley FBR -- Analyst

OK. Great. Thanks for taking my question, and I look forward to that data.

Brian Lian -- President and Chief Executive Officer

Thanks a lot, Mayank.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Stephanie Diaz for any closing remarks.

Stephanie Diaz -- Manager of Investor Relations

Thank you again for participation and continued support of Viking Therapeutics. We look forward to updating you again in the coming months. You can all disconnect today. Thank you.

Operator

[Operator signoff]

Duration: 44 minutes

Call participants:

Stephanie Diaz -- Manager of Investor Relations

Brian Lian -- President and Chief Executive Officer

Greg Zante -- Senior Vice President of Finance

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Michael Morabito -- Chardan Capital Markets -- Analyst

Matt Luchini -- BMO Capital Markets -- Analyst

Steve Seedhouse -- Raymond James -- Analyst

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

Yale Jen -- Laidlaw and Company -- Analyst

Scott Henry -- ROTH Capital -- Analyst

Andy Hsieh -- William Blair -- Analyst

Julian Harrison -- BTIG Research -- Analyst

Mayank Mamtani -- B. Riley FBR -- Analyst

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