VTYX Stock Rises on Strategic Equity Investment Deal With SNY

Shares of Ventyx Biosciences VTYX gained 7% on Monday after the company announced that it has entered into a $27 million strategic investment agreement with Sanofi. Per the terms of the deal, Sanofi will buy 70,601 of Ventyx's Series A non-voting convertible preferred stock for $3.8243 per share. Per the press release, each acquired preferred stock will initially be converted into 100 shares of common stock. 

The proceeds from this investment are anticipated to enhance Ventyx's cash reserves. With the addition of these funds, the combined total of current cash, cash equivalents and marketable securities is expected to support the company's planned operations until at least the second half of 2026.

VTYX Grants SNY Exclusive Rights to Investigational Drug

In return for the $27 million equity investment, Ventyx has granted Sanofi the exclusive opportunity to first negotiate certain rights related to the clinical programs of VTYX's investigational candidate, VTX3232. Notably, VTX3232 is an oral, selective, central nervous system-penetrant NLRP3 inhibitor, which is being developed for various neuroinflammatory and neurodegenerative indications, including Parkinson's disease, cardiometabolic disease, Alzheimer's disease and multiple sclerosis.

Ventyx believes that this strategic deal with Sanofi underscores the potential of VTX3232 to offer a disease-modifying treatment for CNS indications with significant unmet medical needs. The company will also be able to utilize Sanofi's large resources and prowess in developing treatments for immunological and inflammatory diseases.

Year to date, shares of Ventyx have lost 0.4% compared with the industry‘s 1.5% decline.

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VTYX's Development Programs for VTX3232

Currently, Ventyx is developing VTX3232 for the treatment of Parkinson's disease and obesity. In early September, the company initiated a phase IIa study to evaluate VTX3232 in patients with early Parkinson's disease. Top-line results are expected in 2025.

Ventyx is also currently gearing up to initiate a separate 12-week phase II study of VTX3232 by the end of 2024 in patients with obesity and additional cardiovascular and cardiometabolic risk factors. The planned study will assess the impact of VTX3232 on key inflammatory biomarkers and weight change, both as a monotherapy and in combination with a GLP-1 receptor agonist. Top-line data from this obesity study of VTX3232 is also expected in 2025.

The obesity market is currently dominated by two large drugmakers, Eli Lilly LLY and Novo Nordisk NVO, with their respective obesity drugs Zepbound (tirzepatide) and Wegovy (semaglutide). Despite having approved drugs in this space, LLY and NVO have been unable to cope with existing demand. Both companies have been investing heavily to ramp up production to meet increasing demand.

However, both NVO's Wegovy and LLY's Zepbound are administered as weekly injections. Novo Nordisk, Lilly and some other drugmakers are making oral medicines with different mechanisms of action for obesity, which can improve patient convenience.

Other Programs in VTYX's Clinical-Stage Pipeline

Apart from VTX3232, there are three early to mid-stage candidates in Ventyx's pipeline, VTX2735 (peripheral NLRP3 inhibitor), VTX002 (S1P1R modulator) and VTX958 (TYK2 inhibitor). While VTX2735 is being evaluated to treat cardiovascular and other systemic inflammatory diseases, VTX002 and VTX958 are under development for ulcerative colitis and Crohn's disease, respectively.

VTYX's Zacks Rank

Ventyx currently carries a Zacks Rank #3 (Hold).

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