Let's go ahead and get started. Thanks for joining everyone. This is the Fireside Chat with Ventyx Biosciences. My name is Vikram Purohit. I'm one of the biotech analysts with the Morgan Stanley research team. Before we get started, I just need to read a brief disclosure statement. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, very happy to have with me, Raju Mohan and Marty Auster from Ventyx. Thank you both for joining us. Pleasure. Thanks, Vikram. Yeah. So we have roughly half an hour, quite a bit to discuss on the pipeline, but I thought maybe the best place to start is just a very quick recap from your side on what you think have been some of the key inflection points for the business throughout the year. Then from there, we can discuss some of your upcoming readouts and how you think about those events. Okay. Yeah, I think we'll recap the year, but perhaps recap the company. It's only been 2+ years. Sure. Two coming on three years here. We started the company with three targets, TYK2, S1P1, and NLRP3. We have an allosteric TYK2 inhibitor, VTX958. We have an S1P1R modulator, VTX002, and we have two NLRP3 molecules, 2735 and 3232. Over the course of the last couple of years, we initiated a phase II trial for S1P1, the UC trial. We finished the phase I for TYK2. We initiated three phase IIs for the TYK2 compound last year, and finished the phase I for NLRP3 peripheral molecule, and just initiated this year, phase I for the CNS compound. In addition to our discovery portfolio that we don't often talk about, but we've got some exciting programs. So essentially a tremendous amount of clinical work, culminating in us now in the Q4, having two phase II readouts for the S1P1 first, followed by TYK2. We've grown up from a company of about 15 or so people to close to, you know, 100+ now, heavily on the finance accounting side, on the G&A part of it. We've got a huge clinical team, all of the regulatory biometrics, QA, QC, CMC. So I think it's a very exciting time for us over the last couple of years, and clearly now in a phase II company and getting ready for phase III trials. Great. So I think the key topics to hit today are obviously your upcoming psoriasis readout. I want to spend a little bit of time talking about, excuse me, UC. And also, as you mentioned, you have some programs and efforts, earlier stage than that as well. So maybe we should make some time for that. But let's start with psoriasis. 958, there's a lot of focus on setting expectations for the SERENITY readout, excuse me, by the end of the year. But let's just unpack that step by step. So step one, how is VTX958 structurally distinct and in your view, differentiated from other TYK2 inhibitors in development? Okay. Now, you know, structures don't necessarily differentiate from the pharmacological profile, but it is structurally distinct from. Now, if you talk about chemical structure, it is quite distinct from Sotyktu. It is similar to. Look, if you go back to the kinase, if you want to talk about the lineage of the structures, there's a huge convergence as you go up between different kinase inhibitors, BTK inhibitors, EGFR compounds, MEK inhibitors, JAK inhibitors, TYK2 inhibitors, and some of them are kinase domain compounds, some of them are allosteric inhibitors. There's a couple of distinct families from which kinase inhibitors have been designed, evolved. We fall into one class similar to the Nimbus one, and there's the other class where we have Sotyktu and the Alumis molecule as well, belongs to that structure. Now, both of these structures for compounds we've talked about, Sotyktu, Takeda, Nimbus, us, they're all allosteric, they're all allosteric domain inhibitors. So, allows them to be selective for TYK2 versus other other JAK family members. But even, even in that particular allosteric class, we happen to have a, what, what I say, an exquisitely selective TYK2 compound. It has no signaling to the JAK cytokines. So it hits IL-12, IL-23. Interferon alpha has no effect on multiple readouts, IL-6, IL-10, IL-22, interferon gamma. So, highly selective compound, clearly differentiated from Sotyktu, which has some crossover in the JAK pathway, especially if you start to dose the compound higher. And so that's, that is a differentiation. Now, the other differentiation that we have, as we showed in the phase I study, was the ability to dose this compound up to levels where we can get IC90 coverage of cytokines of interest. In particular, for psoriasis, it's IL-23, and I don't believe that is unmatched by any of the other drugs that we're talking about. And that's the thesis that we have taken into our phase II trials. The complete coverage of IC90 on a dosing cycle, and the data will show sort of the outcome of this hypothesis, so covering IC90 for better part of the day. Sure, and that's a good, good segue into the next question. One topic that often comes up, when people think about competition in the class and the ability to differentiate is whether increased coverage, can truly lead to improved positive responses, or is there a certain point where you hit a limit? I know that's been a pretty active debate recently. So what's your view on how to think through that? Marty, you want to take? Yeah, I mean, I think we've certainly been asked that question many times, Vikram, and we've looked at it pretty hard. There's not really a good basis of sort of scientific evidence to support why that would be the case. If you continue to sort of max out TYK2 coverage, you should get nearly full IL-23 suppression. And we see with the biologic development, that you continue to see sort of improvements up to a point, maybe the ceiling's around the 80% PASI 75 range, but you continue to see sort of improvements in deeper response, PASI 90, PASI 100, as you go up in dose, until that kind of caps out eventually. So there's no rationale for why a TYK2 inhibiting agent should max out in the 60-something% range in PASI 75. So we're going to obviously explore that hypothesis with a, you know, kind of a nice expansive dose range in our phase II, and we're hoping to sort of, you know, just. Obviously, we're optimistic that we can sort of continue to improve upon that, but that's where we're at now. Got it. Okay. Let's then switch over to the actual clinical hurdle you see for SERENITY. In your mind, what is a great versus good versus suboptimal outcome for when the data is released? Yeah. Look, the bar was set with the TYK2, in the sense of having a non-JAK inhibitor selective compound showing efficacy in psoriasis, albeit, the coverage was much less than what we've shown with our compound. Right. As Marty pointed out, a lot of debate on PASI 75 and plateauing effects, but clearly the Nimbus drug showed the ability to see a deeper response now as you go into PASI 90 and PASI 100. So, you know, I think that's where sort of the bar is right now, right? And we're going in with higher coverage, better coverage with this compound. And, you know, I think... So let's play this out and see where that hypothesis takes us, right? There's just not enough data points. It's a hypothesis built on IL-23 coverage, which we've seen with a number of compounds, in particular, a really nice study done by AbbVie with Skyrizi, risankizumab. So I think that's where the... That's the hypothesis we have—we've played, and let's see what happens with the data. Great. Great. And there was a data set released over the summer from an oral IL-23 agent from Johnson & Johnson. I'm sure you've been asked about this agent before, but just to revisit that topic, how did that data set change, if at all, if in any way, change your view of, of competitive positioning for VTX958, potentially, or the hurdle for SERENITY? Yeah. Marty? Yeah, I don't know that it has. I mean, I think the data was generally seen by a lot of folks who sort of, kind of in the ballpark in line with sort of what Takeda had put out. Obviously, we're still sort of waiting for, you know, more information about how that drug will be pursued in phase III timing and dosing strategy and things like that. But by and large, you know, it's encouraging to see there is nice dose responses as you went up in dose, which you'd expect to see with an IL-23 inhibiting agent. I think that, you know, again, there's nothing about the oral route that sort of precludes dose response. So I think that's good to see. But I mean, again, I thought that data was generally seen as consistent with where other comps in the space, and I think ultimately, you know, Psoriasis is obviously a significant market. It's a $24 billion global market last year. It's going to continue to grow. There continues to be a fairly underpenetrated middle chunk of that population, folks with moderate disease who either maybe are resistant to injectables or, you know, don't want to take injectables, not yeah, or end up just kind of using a lot of high amount of topicals to kind of manage disease. And I think there's a really attractive population there to kind of go after with orals, with new oral agents, especially those without black box warnings that have, you know, kind of established safety profiles. So we're hoping to, you know, see the TYK2 class continue to iterate and kind of really go after that part of the market and do quite well. And then, obviously, if you look over into IBD, that's been a more challenging indication, and clearly is going to require, you know, kind of higher dosing levels and higher inhibition of IL-23 to generate effects. So we think the drugs that have, you know, sort of maximized TYK2 inhibition have the best chance to succeed there, and that's a much, it's a less competitive market. It's just as large of a market, really, if you combine UC and Crohn's, and the unmet need is incredibly high, where you're looking at, you know, approved drugs with placebo-adjusted treatment remission deltas of, you know, somewhere in the 10%-20% range, depending on which disease. But a lot of unsatisfied patients, a lot of patients who fail drug over time or who become refractory to antibodies. Mm-hmm. There's a lot of opportunities in those markets, and we're pretty excited about that. And obviously, have a phase II trial that'll read out in 2024 in Crohn's. Definitely want to get to the Crohn's program, but maybe one final question for you on 958 and psoriasis. Obviously, a lot of talk around differentiation versus across agents and what data sets could look like relative to each other, but from the market research work you've done, from the KOLs you've spoken to, what do you think is the efficacy differential that actually drives prescriber differences and, you know, diverging prescriber behaviors between oral agents and immunology in psoriasis? I think let's talk about like, if you want an example, like on PASI 75 or PASI 90, like what would be differentiating for a doctor, do you think? Well, first, I think it's in psoriasis and derm in particular, the safety is a key aspect of a molecule. I can diminish the safety effects in IBD, but certainly in the derm division on the FDA side, the prescribers, the community folks that prescribe, there's just a very high bar for safety and compliance. So that's number one, right? I think clearly, efficacy, response, and the ability to actually have a clear, to almost clear, response in psoriasis in terms of the resolution of disease is a big part of the molecule. And that's where I think a deeper response in terms of PASI 90 and 100 is the bar. And, you know, you've got good biologic drugs out there, right? I mean, you may have issues with the drugs in terms of, duration of response or diminishing response and other issues, folks, but just don't like, in particular, don't like injectables. And one of the reasons why we were so, efficient in recruiting these trials is because patients want to get on the oral drugs, right, and despite. So I think that's a number of factors there. So clearly, you've got effective biologics, but, you know, the orals, a safe, effective oral drug is going to start to penetrate that market, and, and that's what the, the doctors are looking for. Sure. Actually, let me ask you one final question on psoriasis. I wanted to touch on the extended release formulation. Mm-hmm. You have that under development. Just help us understand what the path is to incorporating that into potential late-stage trials for 958. Yeah. So, you know, there's been some questions about our delay in showing the data. We said early H2, it's now gonna be in the Q4, and it's simply part of the process. So we have our target profile, which is obviously to have a QD tablet that covers IC90 for the better part of the day, right? And essentially, you take the immediate release, which is what we're using for the BID formulation, and BID dosing in particular, and you adjust the release characteristics of this drug to then give you an extended release, right? And the way you do it is to build a hypothesis, test in vitro dissolution methods, and then you take this actual prototype and test in humans, get the data, come back, retool or tweak your formulation. And there's a few cycles that go on in this until you've got the actual target profile. The goal was always to complete this by the end of the year because nothing happens to the actual phase III until we have the phase II data. Mm-hmm. Once you have the phase II data, you have the exposure response, you've got your extended release prototype, you start now to manufacture the actual phase III tablets, and that'll start in any scenario, that was planned to start in 2024. There is no impact. This was never gating to the phase III start. Mm-hmm. We had built in enough buffer into the process that we would have ample time once we had the prototype done, the phase II data to do that. Got it. Okay, great. Let's move on to UC, but let me just take a pause if there's any questions from the audience on psoriasis before we leave that topic. Nope? All right. As you mentioned, VTX002 data, early Q4. I guess a question that kind of summarizes, I think, what's on people's mind overall. One, what is the thesis here for differentiation or the potential for differentiation? And then secondly, what are your expectations for a good outcome for this readout? Yeah, I'll take the first one and then have Marty address the sort of what the expectation would be for a good outcome there. So, you know, it's a similar hypothesis as we have for TYK2. In the S1P1, class that we've seen with ozanimod and etrasimod. So the Bristol drug and now the Arena Pfizer compound, it became very apparent to us as we were doing the initial phase I studies, and that would be exposure and the PD response. PD, in this case, is reduction in absolute lymphocyte counts, that the other two drugs were just not dosed high enough to be able to achieve the maximal reduction of lymphocytes, which is about 70%+, and we showed that in our early disclosure in January in UC patients, right? So we believe that we have now broken that ceiling with the other two compounds at around 50%, now broken that into the 70%+ range. And we believe that ability to achieve that lymphocyte reduction should, and that's of course again translate into a better clinical response. In this case, it's higher remission, clinical remission, which is the primary endpoint, and that's the hypothesis. It's a solid hypothesis built on other trials in MS, where higher lymphocyte reduction led to higher clinical response, right? And that's our, that's a clear differentiation of this compound on a pharmacodynamic basis, then translating into clinical efficacy. In terms of expectations, Marty? Yeah. So just in terms of efficacy, we'll be looking at our primary endpoint as a, you know, registration quality primary endpoint. We're looking at Modified Mayo Remission Scores. So if you look at sort of the kind of legacy of entrenched biologics, the placebo-adjusted treatment delta on remission is generally in the low teens for most of those drugs. More recently, in mid-stage or later development, you've seen a couple, you know, drugs that have pushed into the 20%+ treatment delta range. So that's been very exciting to the community. When you comp against just the S1P drugs, the drugs within our class that we're going after with VTX002, the first approved drug, ozanimod, had, again, a sort of a 12%, 13% type of treatment delta. The trial ozanimod had sort of more variable data. We're expecting to see FDA action on that coming up very shortly. They had a phase III trial with a 10% treatment delta, and the second one with a 20% treatment delta. So I think when you add all that up, I think what would be exciting here would be something that's pushing in the 20% range. We'll be looking in addition to sort of that remission, treatment, adjustment. We'll be looking sort of deeper into the components that make up the Modified Mayo Score as well, and we'll be talking about those when we have the top line. So looking at endoscopic subscores, things like that. As you know, this trial is running both a sort of a mid dose and a high dose, but it's a two-dose arm for VTX002. So one of those doses is targeting a lower, lymphocyte reduction, and the higher dose is targeting a differentiated lymphocyte reduction level. So we'll be looking to see differentiation between those as well. Got it. And on the topic of doses, you haven't, going back to 958, you haven't disclosed the dose levels in 958 that are being evaluated in SERENITY. Have you... Sorry to go back to that, it has reminded me. That's fine. Yeah, no, we haven't. It's just that our top two doses are common to all three, phase II trials, and the top dose has been, modeled to achieve IC90 coverage for 24 hours, okay, with take. And then we've got to drop down doses, all the... So there's four active dose arms now, and the last one, of course, would be the sort of the no effect dose that we think or pretty low effect dose. Okay. All right, great. Going back to you, Steve, that's helpful. Of course. Appreciate that. Yeah. Appreciate that perspective. In the time we have left, let's maybe pivot to some of the earlier stage programs. You mentioned in your opening remarks, you alluded to VTX2735, VTX3232. Maybe you can just talk about where those programs currently stand, what some of the next milestones are, and what people should kind of keep on their radars for those, for those programs. Right. So as we outlined in the R&D data this year, we're very clear about the strategy for NLRP3, which was to get both our molecules to be phase II-ready by the end of the year or early next year. What does that mean? Is to complete a robust phase I trial. We've done it for 2735. We showed a strong, again, in this case, a response on the biomarker, Mm-hmm, which is reduction in IL-1 beta, showed a very strong safety profile. There's been concerns about first generation NLRP3 compounds, and we had the great plans to look at the clinical safety markers, as well as in actually incorporate hepatic measurements, molecule. So 2735 is now a phase II-ready compound. All the CMC work, all of the talks to support a phase II program has been completed. On the other side, we have a brain penetrant, a CNS penetrant molecule, VTX3232. It's a distinct in structure, different chemotype from VTX2735. We initiated a phase I trial earlier this year. We hope to complete that in the Q1, and this compound was then also demonstrate not just reduction in IL-1 beta that we showed for the peripheral compound. We plan to look at drug levels in the CSF. The CSF levels are a surrogate for a free fraction in the brain. There's a lot of excitement on NLRP3, especially in the CNS angle for a number of neurodegenerative diseases, starting with Parkinson's disease, right? Again, we will have both compounds that will be phase II ready. We will have our phase II readouts from TYK2 and S1P1, right? I think then we have to look at the portfolio. We have to look at what we can efficiently do and complete on our own and where we think there's an opportunity for accelerated development for... especially for NLRP3, broad indications, big markets, the peripheral compound, that's cardiometabolic indications, potentially combination therapies with GLP-1 compounds. The CNS, as we talked about, neuro, Parkinson's is a start, right? I think, you know, we own all the IP to these drugs. We have a lot of optionality here, and we'll take a good look at the portfolio once we have the playbook this year. Got it. And this is a good segue into, a question I had on business development, partnerships. You've semi-answered it now, but just to put a fine point on it, of your pipeline programs currently that you're prosecuting, and maybe even discovery efforts that you've been prosecuting that don't show up on the pipeline page, how do you think about which molecules, which indications, which areas of work are more amenable to partnerships versus others? And then when you think about partnerships, are there beyond capital, are there capabilities or knowledge or know-how that you'd be eager to bring into Ventyx through a collaboration? Yeah. You know, we don't, we don't sort of narrow ourselves down into a partnership or a collaboration or, or anything like that, right? So clearly, these are big indications, right? And there's, there's big dollars associated with developing these compounds and, you know, and we'll do the right thing. So, Ventyx is no secret to partners out there. You know, each of our programs is big markets- Mm-hmm. exciting compounds, proven efficacy, and I think the differentiation is gonna draw the attention of folks. And, you know, we'll look at every opportunity as it presents itself, right? But the good thing for us is we control our decision here, and the data will drive that. And so, really no reason to talk about partnerships or collaborations at this point. We have the capital to initiate the first two phase III trials for UC and for psoriasis. We have capital going into early 2025, and, you know, we'll do the right thing for the company once we have the... As the data plays out, we'll decide how to approach each indication, each molecule thoughtfully. Got it. Okay, that makes sense. Going earlier into your pipeline, maybe earlier than 2735 and then 32, 33, IL-4 program, we'd just love to get an update on where that stands. Yeah. So, we won't have a formal update, necessarily, but we're in the stages of, of what we call lead development and lead optimization, right? It's a high bar against DUPIXENT. We're gonna make sure we choose the right approach to, to deciding which compounds will then go further into development, what we call a development compound, right? So just stay tuned. It's in active stages of, of lead optimization. Got it. And then more broadly on pipeline productivity, R&D productivity, as you think about the business for the next year or two, would you categorize yourself more at this point in just execution phase with the phase II studies underway, or do you think there's the potential to see new molecules kind of get added to the pipeline? Look, the company was built on a foundation of novel chemistry, novel biology, and differentiated compounds. We have a very distinct discovery group. We've got a group in Belgium, we have a chemistry group in San Francisco. We outsource a lot of chemistry as well, and that engine keeps humming. It feeds the pipeline, it supports early development, right? So, there are two distinct approaches, and that's what makes us unique. So, we are on one, you know, a full-fledged clinical company now, but we also have this exciting discovery pipeline, and you'll see fruits of that in the near term as well. Got it. Final question to close us out then. This may be a question for you, Marty. Housekeeping question. We talked about capital requirements, capital allocation, but just cash, cash runway, how far that gets you? Sure. So we had approximately $330 million capital, cash and equivalents at the end of the Q2. As Raju indicated, that'll carry us into 2025. So that envisions us kind of completing all the clinical work that we're talking about now, as well as kind of launching and starting the early parts of potential pivotal trials for psoriasis with the TYK2 and UC with the S1P modulator. You know, there'll be additional capital, which can be through financing, through partnerships- Mm-hmm. through, you know, structured arrangements. But certainly to kind of go through pivotal, through phase III studies and registration and ultimately approval, we'll need to kind of make strategic decisions. And again, that'll be very data-driven. So we'll have a lot to talk about at the end of the year, once we've gone through our phase II readouts. Great. With that, we're at time. Raju, Marty, thank you so much for joining me. Yeah. Appreciate your time. Thank you all. Thanks, everyone, for joining.