All right. Good morning. Welcome to day two of the Barclays Global Healthcare Conference. My name is Carter Gould, Senior Biopharma Analyst here. I'm pleased to welcome Ventyx Biosciences to the stage. Joining us from the company, CEO and Founder, Raju Mohan. William Sandborn, President and CMO, and Martin Auster, CFO. Raju and team, thank you very much for joining us today. My pleasure. Seems like just last year we were talking about expectations for the first TYK2 approved in the space, what the label might look like. Clearly a lot has happened, both internally as well as the external competitive environment. I guess maybe just to start things off, can you just start off with how you think about differentiation of your TYK2 at a high level? I'm sure we'll dive deeper into a couple of those aspects. Yeah. I think our thesis on differentiation for our compound, TYK2 inhibitor, it's where we started out, what we've shown over the last couple of years, in early disclosures in our phase I data, and then most recently at the R&D Day. Where we laid out our phase II design and hypothesis for why we can dose up to the biologic-like coverage. That's sort of the end result of our, you know, sort of what we built up. The idea that we're dosing up safely or dosing up to the IC90 biologic-like coverage across multiple indications, that we're not boxed in, that we're not dose limited, and that we can explore biologic-like coverage to then aspirationally target biologic-like efficacy, right? Going back to our hypothesis, which has just gotten stronger for us and across the spectrum, you know, we believe we have the best-in-class compound or the best-in-class coverage goes with the selectivity of the compound. We built in selectivity for TYK2 versus JAK1 and other JAK isoforms. Selectivity across a broad spectrum, so no crossover of kinase activity, no crossover to any other pathways that we can discern. No active metabolites. Safety profile across multiple non-clinical studies, and the ability to dose safely up to, again, biologic-like coverage in our phase I doses, where we showed the highest dose across cohorts. Now the successful start of three phase II programs, first one being psoriasis, which we'll read out this year. We can talk more about that. Really the coverage of our IL-23 allows us to then go into Crohn's disease as well. Great. That's a great segue. I think, I guess maybe we start off with the upcoming psoriasis data. When we think about sort of the sensitivity of the profile to, you know, getting close to biologic-like efficacy, how important is that? There's clearly a, still a lot of room for differentiation from the sort of the bar deucravacitinib has set, but how critical is it that you start to get up to, you know, biologic kind of levels? Yeah. I wish we had some of the slides that Bill showed at the R&D Day. Let me just have him sort of, you know, present that as though the slides are being shown here as to why our thesis is so strong- in terms of the coverage and expected efficacy. Bill? Yes, it's pretty simple. If you go back to the phase II studies of anti-IL-23 biologics in psoriasis, if you take, for example, risankizumab or Skyrizi, in those trials, they had a dose of 18 mg a day, a dose of 90 mg a day, and a dose of 180 mg, and then recall that the final approved dose coming out of phase III is 150 mg. What you saw was if you had partial IL-23 inhibition with an 18-mg dose, you had PASI 75 rates of about 60%. As you went up to 90 and 180 mg, so five to 10-fold more, you had PASI 75 rates of about 90%. The 18 mg dose, which gives partial coverage, looks exactly like phase II or phase III Sotyktu data. I think that provides. It's the same story with Tremfya, Guselkumab. We already knew from antibodies that if you completely cover the target with intensive dosing, you can get up to PASI 75s of 90%. If you partially cover it, you're gonna be in the 50%-60% range. We know what the target coverage is with Sotyktu. It's nine hours of IC50 coverage and zero hours of IC90 coverage. Psoriasis is exquisitely sensitive to IL-23 inhibition, so even partial target coverage will get you that middle range, which is what they have. If you want to do better than that, you need to fully cover the target. Right. Very straightforward. Okay. Going back to more of my opening comments about the sort of the world shifting over the intervening year, we saw of course, Nimbus get taken out for $4 billion. We're gonna get that data this weekend. How has that sort of shifted your? I mean, sounds like your phase II plan was pretty well set already. You kinda knew what you wanted to do. Now as you think about sort of, the level of risk you wanna take or, you know, key decisions, how has that changed at all, sort of your process or your strategy or? No, not at all. Again, based on what we showed early on in our phase I data, our strategy is very straightforward. You know, Bill said psoriasis is exquisitely sensitive to IL-12p40 coverage, and we have class-leading coverage of IL-23. We have the ability to dose into Crohn's disease without being dose-limited. You saw some of the TYK2 data in IBD, where lack of coverage leads to suboptimal lack of efficacy in IBD. We have the ability to dose up to the IC90 coverage in Crohn's disease. I think the straight answer is nothing has changed for us. We're laser-focused on execution of our phase II trials. We again have the ability to keep reading back to our compound. We showed the safety profile in phase I, really nothing has changed for us. You know, we're obviously looking forward to seeing another TYK2 data in phase II. For us, you know, our path is very straight, you know. Okay. We didn't do the same experiment, right? Right. We won't speculate on the results, but the experiment that Nimbus Takeda did was to... They took four doses forward. Three of the four doses, the five, 15, and 30-mg doses, give robust IC50 coverage. Only the top dose, the 30-mg dose, at least to what they've previously disclosed, gives IC90 coverage, and it's for about five hours. Right. Three of their four doses should be at or above what, so TYK2 6 mg gives. None of them are, you know, up in that 16 to 24 hours of IC90 coverage that we will be exploring at the top end of the dose range. Right. If you think about the three programs, you have sort of the low-dose program, which is their TYK2. You have what's called medium doses, which is the Nimbus Takeda. You have the Ventyx, which is exploring well up into the, to the full coverage range. Let's see how it plays out this year. Okay. I wanna come back to Crohn's in a second, let me just. As we think about these phase II's reading out, are there any sort of initial assumptions you make in terms of where you wanna go with the registrational program in any of these indications? How many of those can you take forward? Just sort of how you're thinking through that level of risk and what's gonna be a critical decision, I guess, early next year sometime. Yeah. Maybe Martin can. Yeah. I mean, we've talked about our capital position kinda carrying us into 2025. That's gonna get us through the phase II trials that Bill and Raju described. It's gonna also allow us to be completely phase III-ready with both the S1P compound as well as the TYK2 compound. In terms of CMC and regulatory and the various steps you need to take. In terms of where we go registrationally, the data's gonna guide a lot of that obviously, right? There's some very clear indications and clear precedent with the TYK2, where you'd go based on where the IL-23, now 12/23 antibodies have had success. You're looking at psoriasis and psoriatic arthritis, potentially lupus, potentially, you know, IBD Crohn's and ulcerative colitis. Both are de-risked indications. There's a few other indications that are sort of in proof of concept, testing with some of these molecules as well that we're keeping an eye on. That's kind of... That's probably about as, you know, that's a pretty full plate. Okay. We're focused on phase III readiness right now. In addition to execution of the phase II trials, we're also getting ready with the phase III for, you know, for our programs, right? Be it psoriasis or S1P1 for UC, you know, where all the CMC talks, all the prep goes on. To that point, the R&D Day, you guys sort of revealed a little bit more on the extended release formulation and how that potentially could get to QD dosing. I mean, when we think about sort of the boxes you hadn't checked, one of them was you were still dealing with BID dosing. Now you've got a potential path to QD dosing. Can you talk a little bit about that process, what's left to go on that front, and how that's gonna factor into this decision-making? I'm really more interested in sort of the timelines when all this is gonna come together next year. Yeah. Right. Let's just go down stepwise. phase I, suspension. phase II, IR. phase III is gonna be a QD tablet. Essentially has coverage, trough coverage of IC90. The target pro-product profile is exactly as we laid out there. That's number one. Timing-wise, we've disclosed that we will have something to show second half of the year, early second half, on the extended release QD tablet. In terms of where we are, this is tried and true approach to take an IR formulation into an extended release. It's been done with a number of compounds, but close to home, it's been done with RINVOQ, it's been done with Xeljanz. Baricitinib and tofacitinib both were IRs in phase II and extended release, modified release in phase III. In terms of where we are, we showed at the R&D Day, the approach that we take and other people have taken. It's again, it's a tried and true approach of how you would take an IR into an ER QD. You essentially look at human relevant profile, in vitro profiles. Human relevant meaning dissolution characteristics, absorption, characteristics, and everything that you would want in terms of release of this drug over time and absorption and quantification. Then you build your tablets on the dose forms that you think will achieve your target coverage. You have a cycle. I'm not going to go too much in detail here. It's both not relevant because we will have a QD tablet by the second half. Really you use a human study to do your final iterations on the tablets, a build and test model, number of cycles after you took nail the ideal TPP, keeping in mind that your phase III tablets are also now towards your commercial angle. Number four, in terms of timing, we will wrap up the early tablet work, as we said, in early second half. It's a matter of just, again, keeping the line of sight on the phase III trial, the needs of the trial or trials, the quantity, the CMC, the stability, the packaging. All that will happen towards the end of the year going into early 2024. Really, in line and time with the start of phase III, which is going to be in the second half of 2024. That we've laid out. We showed some stuff at R&D Day. Right. We're going to show some data in early second half. Then after that's going to be basically housekeeping to make sure we just manage all the CMC work to get the production going. Okay. Maybe bouncing back to Crohn's, I think just broader in IBD, it feels like we're entering sort of a renaissance in new therapies, new modalities, new targets kind of popping up. It seems almost like once a month we now have some positive phase II data with some unanswered questions around some kind of key aspects there. Crohn's in particular has had a dearth of options relative to UC, but I guess just looking across IBD going forward, Bill, what are sort of going to be the anchor points as we think about that paradigm sort of shifting and evolving? Kind of an unfair question, but there's probably nobody else that can few people that can answer it as comprehensively as you. Perfectly fair. Let's look at the history. For, you know, biologic naive patients, both REMICADE and HUMIRA were about 20% better than placebo for induction. CIMZIA was about 10%. ENTYVIO is really about 10% and doesn't work in patients that have failed TNF blockers, so modest effect. The delta with STELARA is about 10%. That was the world until very recently. We see the anti-IL-23 antibodies. The proved one so far is SKYRIZI. Depending on which outcome measure you're looking at, it's in the 20%-30% better than placebo range, and it works about as well in biologic failure patients as it does in naive patients. That is a sea change to have a drug without black box warnings with that. The issue is it's parenteral, and that's still a barrier, especially for early use. You know, we don't think that that's a fluke because, you know, the phase II data with Tremfya, guselkumab, and with mirikizumab show kind of exactly the same thing. That's the frontier for Crohn's disease. You know, as we come to ulcerative colitis, we could talk about TL1A, but the TL1A data in Crohn's disease is uncontrolled, so pretty hard to make any sense of it. There are no controlled data yet with S1P modulators in Crohn's. Again, hard to know how big the impact is going to be. RINVOQ was unequivocally effective, recently had a positive opinion in Europe for Crohn's, and I anticipate it would be well received from a regulatory perspective in the U.S. 20% delta. The issue there is the black box warning of last-line use restrictions, it's going to be last. The two real innovations are IL-23 antibodies, safe, potent efficacy, and RINVOQ's oral efficacy, with, you know, safety labeling. You know, how does TYK2 fit into that? Our view is that if you go forward with the doses that maximize efficacy in psoriasis, getting you up to PASI 75s of 90% or so, you know, at or a bit above that those doses of IL-23 antibodies taken into Crohn's disease give really best-in-class efficacy and safety. We think we're the only TYK2 that, you know, has the profile to allow that to occur. We're doing that, you know, we're doing that experiment now. For ulcerative colitis, walk back through. REMICADE had a difference from placebo of about 20%. HUMIRA, 10%. SIMPONI, 10%. For induction, ENTYVIO, 10%. STELARA, 10%. You know, they're all not differentiated. Some have black box warnings, some don't. We get into the oral XELJANZ, 10%. ZEPOSIA, 12%. The etrasimod is a little bit inconsistent, but as much as 20%. RINVOQ is in the 20%-25% range, but with the last-line use restrictions. We have two phase II programs with Roivant and Prometheus that are showing in the 20% range better than placebo. Induction only. We'll need to see how that all plays out in the long term. You know, see it in two different programs. Looks real. To my way of thinking, you know, yesterday's news is all of these legacy 10% delta drugs. Tomorrow will be owned by the products that can have 20% plus efficacy during induction and then maintain it during long-term treatment. Who are the players? It's RINVOQ, but with their line of use restriction, potentially TL1A antibodies, but they got to show what they look like in maintenance, and we need to see long-term safety of those drugs and how their immunogenicity plays out and all those things. Potentially, etrasimod is just sort of on the fence there. In phase III, they had 1 10% delta trial and 1 20% delta trial. Our S1P modulator will have best-in-class lymphocyte reduction that looks like the best drugs in MS. In MS, up to lymphocyte reduction into the 70%+ range at baseline. That's where all the robust safety data is, and that's where you get the best efficacy. Those levels of reduction have not been studied in ulcerative colitis until now, and we'll deliver data in the second half of the year to show that. This is the story with In ulcerative colitis, our product is aimed at a 20% efficacy. Same thing in Crohn's disease. We think safe oral drugs with 20%+ efficacy is what the world is looking for now. I want to ask one sort of punchy question here. I want to come back to S1P because I think it was a nice segue. How much longer do you think we still have of doing these placebo-controlled studies? Are we going to have to start seeing some head-to-head studies even against some of the older biologics? Interesting. As you know, we're beginning to, as we establish a commercial presence in our company and are, you know, doing phase III planning for psoriasis. You know, most of the programs have active comparators. What you also see is that, you know, the placebo rates for PASI 75 with psoriasis are 10%. The really competitive drugs are, you know, 70%, 80%, 90%. It's a huge therapeutic effect. What we're talking about in IBD has been these differences over placebo of 10%-20%. This means to do active comparator trials. You know, they're really hard to do when you're looking at such modest efficacy. I think we are gradually seeing active comparator trials in ulcerative colitis. It... In many ways, it would limit being able to efficiently find new drugs that could give you that 30%, 40%, 50% delta because it's just so inefficient to do studies that way. I bet it'll be a multi-year transition to coming to IBD, but they're in spades in psoriasis. Okay. Maybe, coming back to S1P, at the analyst day, you laid out sort of this PD relationship with efficacy. I know the bio Twitterati have kind of, you know, pushed back on that a little bit. Can you know, I think some of the issues people have pointed to around some of the timelines and the different, just in terms of, like, the amount of follow-up in some of those studies. Can you maybe, you know, just walk through, you know, your level of confidence with that analysis and, you know, how solid it is? Yeah. I'm super confident. I don't put a lot of stock in bio, in Twitteratis. We had a whole series of slides that we didn't show just for simplicity. It's crystal clear in ulcerative colitis, if you look at, with Zeposia at 0.5 mg, which gives you, like, say, 30% lymphocyte reduction, and 1 mg, which gives you 50% lymphocyte reduction. There's a linear dose response, it's not shouldered. With etrasimod, if you look at the, 1 mg dose gives you about 30% lymphocyte reduction. The 2 mg dose gives you about 50% lymphocyte reduction. There's a linear dose response for clinical remission and for endoscopy. No debate about it's not shouldered. What people are doing is looking at patient-level data within a dose and saying, "Well, there's not a strong relationship." Well, of course there's not. You need to dose find. That's why you dose find. If you look in multiple sclerosis, they have dose found across 20% lymphocyte reduction to 50%, which is about what you have with ZEPOSIA, to 65% with Ponvory to 74% or so with Gilenya and with siponimod. Across that range, the MS drugs that get up to 65%-75% have the best efficacy as measured by reduction in MRI brain lesion counts and by reduction in annualized relapse rates. Twitter can tweet, but that doesn't make you know. Those are just facts. Okay, maybe just following up on S1P then, again, just how you then think about expectations for differentiation within the label. Clearly, the prior, preceding agents had some baggage. It looks like the etrasimod probably end up having some improvement relative to the preceding assets. As you think about your target product profile and your expectations, what would you expect? You know, you're trying to differentiate from Gilenya. Gilenya did not dose titrate, and they had a dose that would get to significant lymphocyte reduction. If you could sit through the in-office monitoring to get going on it was highly effective. All the next-generation drugs that have gotten past that. Three of the four did it with titration. That's what we're doing. The fourth, the other one, etrasimod, just selected a dose that you could do without titration. There's no issue with titration. It's a blister pack. Patients don't care. Doctors don't care. The idea that there's an advantage over not titrating is wrong-headed, I think. From there, the class of drugs is very safe, and it's all about efficacy. I think the major issue was really cardiovascular monitoring. Everybody's getting out of that, and then it's who did the best dose finding and showed the best efficacy. Okay. Perfect. Well, we're out of time. Ventyx definitely a story to watch as we get into the second half and start turning over these cards in these two studies. Raju and team, thank you very much for the time today. Of course. My pleasure always, Carter. Thank you. Thanks again.