Ventyx Biosciences, Inc. Q1 FY2023 earnings call

Ventyx's mission is to bring differentiated safe and effective oral medicines to large immunology markets. 2023 is a transformational year. Five Phase 2 clinical trials are ongoing across the wholly owned pipeline. VTX-958 is a potential best-in-class allosteric TYK2 inhibitor with three Phase 2 trials underway in psoriasis, psoriatic arthritis, and Crohn's disease. Progress is being made on the extended release tablet for VTX-958 towards the target profile. VTX-002, a S1P1 modulator, has phase 2 development for ulcerative colitis with enrollment in its phase 2 trial progressing well. The portfolio of novel NLRP3 inhibitors includes VTX-2735 in Phase 2 trials for familial cold autoinflammatory syndrome and VTX-3232 expected to enter Phase 1 studies this quarter.

R&D expenses for the first quarter of 2023 were $35.4 million, compared to $17.4 million in the first quarter of 2022. G&A expenses in the quarter were $7.1 million versus $5.3 million in the first quarter of 2022. The net loss in the first quarter of 2023 was $38.9 million, compared to $22.7 million for the first quarter of 2022. Cash, cash equivalents and marketable securities totaled $376.9 million as of March 31, 2023. These figures reflect the company's financial status during the first quarter of 2023.

Current cash equivalents and marketable securities are sufficient to support operations into 2025. R&D expenses are expected to increase directionally throughout 2023 with quarter-over-quarter variability as phase 2 trials progress and CMC activities for potential phase 3 trials are conducted.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ. Factors affecting actual results are discussed in periodic reports filed with the SEC, such as those related to clinical trial outcomes and market dynamics.

Q: Hey, guys, thanks for the question. Thanks for the updates. We had two areas we wanted to ask on the first was actually on the S1P1. I know you have data coming up later this year. There have been some studies that I've read out recently, had no placebo, then of course, some studies like the tRNA had a very low placebo. Can you just help us understand what things you have in place? And what strategies and what you expect to have for your placebo? In your upcoming study? And how to think about that versus the some of the other recent UC studies that I've read out in the past couple of months? And then the second question is you also have an update on the ER tablet 958. Can you just remind us? Are you testing multiple different technologies in that? Or is that one technology at different doses?

A: Excellent. Thanks, Mike, good to hear from you. Let me have Bill, talk about the S1P1 and trials and placebo and then I'll come back with ER tablet. Bill Sandborn: Yes. So it's a good question, Mike. I think that trials without placebo arms that are not controlled are not easy to interpret. And so you just have to take those data with a grain of salt. Placebo rates can vary the average placebo rate and moderate severe ulcerative colitis trials is about 7.5% or 8%. It can sometimes be as low as 2% or 3% and it can be as high as the low teens. More or less, the way you try to manage for this is to keep good control of the trial to monitor the disease characteristics of the patients that are coming into the trial. And we do that robustly. You can also sort of monitor the outcomes and pooled blinded data to see if the magnitude of response that you're seeing is, just barely crossing the threshold to be a response or whether it's a deep and a robust response. I'm not going to get into the details around any of those things, except to say we're well aware of all the characteristics, and we've monitored the trial very carefully as it has progressed. Raju Mohan: Good. Anything else on that Mike? Michael Yee: Very helpful. They're helpful. And then on the ER, tablet, I shed some light on that. What's going on? Different technologies? Raju Mohan: Yes. So it's a good question. And thanks for asking to clarify that. So we have we have a couple of different technologies. But it's important to understand that these are sort of complementary technologies. So what we do is we use one technology to make sure we're sort of using viral bio relevant dissolution methods, which is what's happening in the, in the absorption, dissolution absorption phase in humans. And then we complement this with a technology that actually simulates what's actually going to happen, the dynamics, the motility of what actually happens on absorption. So you really are sort of, using multiple technologies to make sure for lack of better we're checking a box in checking the appropriate boxes for most technologies. So if you maximize your chance of then when you go into human data, You've now made sure that you've simulated what you see both in terms of dissolution fluids and the solution rate and also absorption distribution in terms of what actually happens in a system where you've got, bile salts and motility or all of those factors and that's sort of the path we take with each iteration that we're doing towards our target product profile for that, tablet acuity dosing, and phase three. Michael Yee: Thank you. Raju Mohan: You're welcome.

Q: Good afternoon team and thank you so much for all the great updates. Two questions for you. Maybe the first one is to start off on as one peon. I know, most of the analysts and investors are very familiar on what the bar is in regards to efficacy into that data readout in the second half, but maybe what would be helpful is Dr. Sandborn if you could educate us on what do we want to see from a safety perspective out of the space to be that could highlight differentiation? So that's question number one. And then question number two is, tomorrow morning, we're going to see, some phase one data from the IL-23 oral product. And we'd love to, as we're looking at that data, think about how you guys are like, I guess, could we look at that and being able to predict sort of what the what the, I guess the comparisons or or the take to class versus to IL-23 class could offer, obviously, just on based on phase one data, and I'll jump back into the queue.

A: Yes, so let me let me address the protagonist question. Yes. And again, good to hear from you. So yes, the Phase One data supposed to come out tomorrow, the ISID meeting, followed by the more detailed efficacy data that's going to come out sometime. And I believe the July timeframe. Again, I think we had a similar question at the last call. And I think we have to wait for the data. And I think that PK/PD itself might be illustrative to some extent. But the real meat is going to be in the in the phase two data and how it compares to what we've seen with drugs in this class, the biologics and orals that have come out recently. So it's really difficult to speculate on something we have no idea about the new you and I have talked about the press release that came out early on. So I think let's wait for this data. Let's look at the PK/PD, it'll give us a little more color on this class of compounds. And we have none. And then we'll wait for the efficacy data and have a meaningful discussion on this class of drugs in particular. But let me just hand it over to Bill for the S1P1 question. Bill Sandborn: Yes. So just to frame the perspective, remember that the S1P1 class of medications has had regulatory approval in the United States since 2010, when Gilenya was approved for multiple sclerosis, and there's about a million patient years of exposure with Gilenya and their marketed dose has lymphocyte reductions in the low 70s, which is exactly where we are targeting for the higher of our two doses. So the context of the data that we release in the second half of the year, for from a safety perspective will be in the context of we're very well under stood class of drugs, with respect to all the potential safety issues. The second thing is to say is that, we'll be releasing 13 weeks of safety data. And so the, that's a limited period of time. So it's, it's not typical that you see a lot of important, what I would say are big ticket adverse events, anyway, in a early trial, but the data will be what they are, if you look specifically what you like to see, for drugs that are effective, typically the end well tolerated, you pick typically we'll see completion rate for 12 or 13 weeks in the single digits. So having patients complete, the induction course of therapy is one measure of safety and tolerability. Then, of course, you're looking at the proportions of patients that have severe adverse events and have discontinuation sort of related and flipside of that the relatedness of adverse events and severe adverse events to the to the compound as judged by the investigator, so we'll look at all those things. And then narrowly in the S1P1 class you can see heart rate reductions and AB blocks. And those can be, substantially mitigated with dosing titration regimens. And we think we have a good dosing titration regimen. So seeing what the rates of bradycardia is, in the first 13 weeks by treatment group and seeing if there are any cases of AB block and those sort of things, those will be of interest and would allow comparing and contrasting with other products, which may or may not be titrated. The other things that you see with S1P1 drugs are generally rare and you're not likely to see in phase two induction study. Yasmeen Rahimi: Thank you so much Dr. Sandborn for your comments.