Good afternoon, everyone. Welcome to our second day of our Piper Sandler Healthcare Conference. My name is Yasmeen Rahimi. I'm a Senior Biotech Analyst here at Piper Sandler. Really excited to have the team from Ventyx Biosciences here, Raju and Alex, thank you so much for being here with us. Well, we have lots to cover in the next 25 minutes, and I have a feeling lots of people will be listening to this fireside chat, so we will make it worth their time. I think the first place to start off is, obviously, yesterday's announcement, right, for investors that, you know, learned that the RP study of VTX2735 has moved to 1Q. So maybe help us understand, and as you're going to be opening additional sites and a formulation change, so help us, because the data was expected in December. What was the rationale for moving it to 1Q and some of the changes that were incorporated if they missed the news? Yeah, of course. First, thanks for having us. Always good to chat with you. Yes. So the goal was to have 10+ patient data by the end of the year and then calibrate that against what's been seen with the Kiniksa drug. Yeah. At the same time, our longer-term broader plan is to get into phase III, second half of the year, to transition to a QD dose. First of all, to get a QD dose, that's the same PK/PD dose equivalence and eventually efficacy profile as the BID drug, and do as much work we can in the early part of this year, which is still the phase II period, and then make the transition to phase III seamless in the sense of not having to do as much dose ranging in a phase III study, and as we started to get closer to the 10-patient data and we realized that we had a QD drug now that we had developed, validated in healthy volunteers, done some PK/PD study, and what needs to be done is actually to look at the efficacy of this drug in the same population we're studying it. The team's recommendation was strongly to now pivot to the QD drug and sort of not, for lack of a better word, waste patients on the BID drug. The QD drug has always been in the extension phase. We have patients that have transitioned into the QD drug post week 13, and now the protocol amendments that we file allow us to then initiate dosing de novo with the QD drug, right? What we decided is to move into the QD dosing imminently. The next dosing period will be QD regimen only, and then still have one data cut, which instead of having now in December, it's going to be when we've got sufficient patients on the QD drug, at least one dose of the QD, potentially even a second dose depending on how the recruitment goes. And we think that's going to be that interim cut now that's moved out a couple of months is going to be much more fulsome in our understanding the A, the drug works and the mechanism is valid, and then how close are we to getting to our target profile, which is to have a drug that essentially has a profile like Arcalyst does in terms of pain score CRP, and start to move towards the phase III and really accelerate the phase III program. And to do this, we've started, as I said, we have an approval in Health Canada to add more sites. We are now filing into E.U. and the U.K. These are countries where Arcalyst is not approved. Biologics are not reimbursed in many of these states. All of this in totality is going to accelerate the program, right? Okay. So fast forward 1Q and the data disclosure comes in. Given that you have gotten close to, like, what, about 10 patients on the BID dose, so you're going to report out whatever data you have on BID, for sure one QD dose, maybe two QD dose, two doses. And you've expanded. Did you increase the size of the study? Like, will you still plan on trying to get another handful of 10 patients? So the original. In the remainder of the QD doses? Yeah. So those that have tracked our different filings, the amendments we've done. Initially, the trial was designed as a standalone phase II trial. We said up to 30 patients, look at the BID doses, six weeks as your endpoint, potentially continuing on to 13 weeks. And then we started modifying this proposal as we started thinking about, A, the phase III design, and B, what do we get out of this trial as much as we can extract, right? And so these amendments, as they added to the initial amendment, allowed us to expand the number of patients, but not necessarily to use them all on the BID drugs. Think of it as a patient pool now that you've done enough work, or the team has enough work to understand, yes, the drug works. And you start to move to the QD drug. You've got now safety going on for 24 weeks. So the goal is still up to 30 patients, but we want to use each patient to understand, or set of patients to understand the next iteration of this, which is, in this case, the QD drug. Do we need a—what's the optimal QD dose, right? Have you had a chance to look at the initial QD, BID doses of the initial data? So we look at, from a management perspective from us, and look at the entry criteria, but I have not looked at the totality of the data. Even if it's open label, I would not be here discussing the options and not, I would tell you. But what I do know is patients on this drug up to 24 weeks, patients are staying on this drug for six weeks, 13 weeks. That gives me a lot of confidence that we have a drug. That patients are. Right. But Right. But once you do the interim analysis, and we will certainly look at it, I will absolutely look at it, it'll tell you how close we are to the TPP. Yeah. And that leads me to the next question is we do have an approved product, Arcalyst, right? And we know what their response rate is around CRP reduction and pain reduction. Obviously, it's an infusion, and now they're moving to SubQ. Now a once-daily oral therapy is going to be key. Help me understand what you need to achieve both in CRP reduction as well as in pain reduction to warrant to move forward into a registrational study? Right. So in the trial readouts, as you would see in phase II and the extension now into the QD dosing, you look at two endpoints. One is reduction in CRP and the reduction in NRS pain score. Now, the pain score on a scale of 0- 10, we have folks coming in at the cutoff is greater than 4. CRP, you've got a mix of folks that are CRP positive, meaning the CRP is greater than 10 mg/L, or you've got folks that the CRP is lower than 10 mg/L, but they have to be on steroids, and they have to have evidence of MRI that's showing they have pericardial disease, right? So I think the fact that this drug drops CRP is a given, right? It's a mechanism of NLRP3. We've shown it now ad nauseam in phase I in CAPS study and the current study with the other molecule. The question is going to be, when we unmask the data, is to be how rapidly do you drop CRP? What's the kinetics of it? But I think more important, how rapidly do you affect the pain score, right? I mean, you don't walk around saying, "Oh my God, the CRP is so high today." But if you're in pain, you need to have a quick response. You have to have a sustained response, right? And I think to be competitive with Arcalyst, you're going to have to have a response on the pain score that gets you to a similar profile as their molecule, right? They got like a, what, four-point difference then? I think on a scale that starts at four, I'm sure patients—I mean, I think the mean was about five, Alex? 4.5. 4.5. Ours might be higher depending on what they're coming in at, but I believe you have to go down to a pain score of zero or one for this drug to be competitive with Arcalyst. Now, if it's not and it's still an oral drug, there will be room for it, but that's not what we aim for, and again, as I've always said, the mechanism is solid and dominant in this particular indication. This drug will work, right? What you need to now do as part of any development program is to optimize the dosing to get the tweaks. Like, how rapidly do you drop it, right, and a lot of PT drugs will drop CRP. They will sustain it. The difference between two dosing exposures is going to be how rapidly it falls and sustains versus like one may go down in a day. The other drug might take a couple of days to go down. Those are the kind of things that we have to decide because it's not the CRP. It's the pain score thing that's going to determine compliance in patients in the long run. So that's where we are. Is there a reason to believe, I mean, across different CAPS now and type 2 diabetes patients, you've shown consistently, right, 80%+ in Parkinson's, right, and all our NLRP3 drugs are 80%+ reduction, almost normalization CRP. Is there any reason to believe why you wouldn't see a similar profile change in there that you could come out suddenly, surprisingly, 50 or 40 or something like that? I wouldn't look at percentages. Remember, I always remind people, your percentage decrease is driven by how high you start, right? So you're looking at normalization? You're looking still to where do you bring it down to? Are you going to bring it down to the basal level, what I call the homeostatic immune level that's driven by an NLRP3, right? So if I activate an NLRP3, my CRP, my IL-1 beta, IL-6 is now elevated, right? And if I block it, I'm going to bring it down to where it should be in a homeostatic state. That's the goal. Now, if I have a large dynamic range, I'm starting at, for example, T0 30. I bring it down to one. That's a very high percentage. If I'm starting at four, I bring it down to one. That's only 75%, right? So percentages are misleading. It's more. Getting you to normal. Getting to normal, and the question is, bringing it down to normal, what does that have to, how does that affect your pain score in this case, right? Because we have so much evidence in the cardiovascular, the CANTOS, the risk reduction. We don't really have any evidence with an NLRP3 compound other than colchicine, which is the mixed compound, into what happens with pain reduction. And again, I keep emphasizing the kinetics of response because that's how quickly you start to feel better, right? That's the way it goes. How soon post the 1Q data would you be in a position to kick off a registrational study, engage with the agency and the government? I think the engagement of the agency, whether it's the end of phase II or a type C, is really when we have a package that we understand the trial design and we have some understanding of the doses that we want to take. That's going to help us, right? Otherwise, you can have a discussion in absence of, "Oh, these data," and you'll get a pushback in this case. That's the reason to do some of this work now. A typical delta between phase II and phase III is anywhere from six to nine months. With this change in our interim cut, there is no impact. There's no negative impact on the timelines, which will still be in the second half of the year. The CMC is not an issue. We've done all the reg work required. It's going to be really the dialogue with the agency. And then the normal startup time, I think what we've done now proactively is, again, typically we would have finished at day two and started opening sites in Europe and Canada and E.U. and so on, right? And what we realized is doing it now as part of the phase II program gets you a feasibility study in E.U. and U.K. and Canada and other parts of the world. Israel, for example, is a good place to go. And also gives you familiarity with these sites, with the KOLs, with the investigators that then you can, again, seamlessly transfer these sites into phase III sites. Phase II sites are not going to be as large as, or the numbers are not going to be as large as phase III sites. But now you have a positioning in the E.U., in Canada, in the U.K., and in other countries. You can add more sites. You are familiar with the investigators, and I think equally important is telling the patients that once they complete phase II, they'll be allowed to enter the phase III program as well, right, so there's a lot of benefits here that thinking forward to phase III will actually help the program by doing what we're doing now. No, that's very helpful. And help us understand, obviously, the thought process would be this would be a chronic therapy for RP, right? What is the RP opportunity? I think Arcalyst is like what, Alex, on a runway to be $1 billion, what, four years into launch or something like that? Yeah. So. Yeah. So. Yeah. What is the? Alex Schwartz, Alex has joined us recently as the head of IR, and he's really taken a deep dive into this. So why don't you? In pericarditis, there's about 160,000 patients in the United States. Of those, 40,000 have recurrences, multiple recurrences per year. Of those, there's 14,000 who are the severe patients with multiple, multiple recurrences. Arcalyst is currently in about 1,800 patients in that most severe population, and they're trying to get a little bit earlier. Now, if we come up with a product profile that Raju described earlier, an oral medicine, we can price it how we want to price it. That leaves a really significant opportunity for us to participate there. Alex, help me understand in terms of the RP market, is what is the number when you say severe, what is the definition of recurrence rate between severe to maybe moderate? We're talking three plus recurrences a year. So lots of pain, lots of acute episodes, fear of once they get their episodes under control, fear of another episode. It's a. Their label is in severe and specific to severe? It's recurrent pericarditis. Recurrent. And team, what is for investors who haven't done work on Arcalyst? What is their current pricing? And you noted you have flexibility for an oral drug to drive that even higher, yeah. Their current WAC pricing is over $300,000 a year. We'll do the pricing work when we get into phase III, but that, again, just leaves us a significant area where we can choose to participate. Okay. With volume considering as well. And I guess if you think about it in this market, their option right now is what, monthly infusion? Weekly infusion, and then they hope to have a twice every other week or monthly injection in. Okay. Versus your approach, which would be a once-daily oral therapy. Once-daily oral. Therapy, that would be very, very helpful. Is there an opportunity to even think about development in an earlier and a larger market of maybe not recurrent but a milder population who is at risk, doesn't have recurrence yet, but could be at risk of recurrence? Are there biomarkers or risk factors identified? Absolutely, right? But the first thing is to actually compete in this market as Arcalyst. That's very helpful. And team, maybe help us understand, obviously, maybe one more question is what we also like is that the phase II development is not really laborsome in terms of duration and number of patients. So maybe for investors who haven't looked at the Arcalyst, what study size did they run and duration? Obviously, we would assume you'd be doing something similar. I think Arcalyst, I think, was an 80+ patient trial. They had the luxury of a single dose as an approved drug, and we will definitely have to do a dose ranging or adaptive design in our case. Otherwise, I think the parameters are going to be similar, randomized withdrawal trial, similar duration. I think the key is going into Europe and U.K. and Canada, I think, is going to be the real difference where we can really accelerate the phase III. Okay. So team, VTX2735 path is pretty straightforward, right? You're going to have the 1Q data. You're going to get ready for phase III. There's a big market opportunity. There's differentiation. Can you communicate what the TPP is to move forward? Well, that's only part of the story. You have an entire portfolio of NLRP3s, of which one of them you have partnered with Sanofi for Parkinson's, and you showed very strong initial data. So maybe help us understand sort of how do you think about the totality of your NLRP3 proof pipeline in your sort of view on asset by asset? Which ones do you want to keep? Which ones do you are interested in partnering out? So I think if we look at our portfolio today, and a lot of kudos to the team. It's not me. It's the entire village that's built this portfolio. I truly, truly believe we have the best NLRP3 portfolio out there, right? And we hope to show you as part of the R&D Day some of the other compounds in the NLRP3 space. We want to own the space given the number of disease opportunities indications that are out there. And so 2735 is a peripheral compound. It's going into recurrent pericarditis. You could easily pivot this compound into a cardiovascular indication. It's got all the attributes of what you saw in the 3232 cardiovascular side of the study, right? You don't need the CNS component of the 3232 to do what we did. Again, we'll show you the totality of the data in terms of CRP reduction, IL-6 reduction, very similar to what you saw with 3232 in that study as well. Now, a little clarification with respect to Sanofi. It's not a partnership. It's what's called a ROFN, right? Which means that for an equity investment that they did in Ventyx, $27 million investment, they have what's called a right of first negotiation on VTX3232. It's on the compound. And this ROFN period starts when we deliver the second of two data packages, the first one being the 10-patient Parkinson's trial and the second being the 160+ patient obesity/cardiovascular risk trial. And that data packet was delivered to them, right? Now, initially, the interest they have shown is in CNS disease. They have a lot of expertise there with the BTK compound, now with the acquisition of the TREM2 from Vigil. A great team to have interacted with. That's the benefit of having this ROFN and the commitment to take these drugs in places where most folks say it's a graveyard, a very hard. They truly believe that NLRP3 could be disease-modifying in Parkinson's and Alzheimer's and other indications. Now, 3232 can still be positioned in a cardiovascular indication, ASCVD, while you take 2735 into an RP market. But the ROFN period is really on 3232, and until that period plays itself out, they have the right of first dibs on making a proposal and. What are the terms of the timing of that? The timing of the ROFN is the timing of the ROFN. We haven't disclosed it, but if you typically look at the ROFN timing, it's months, not years. It doesn't behoove anybody in this case to drag it on, right? I mean, anyone who wants to move this drug into patients, they've done enough diligence before in here. So I think decisions will happen within a reasonable timeframe. But that's on 3232, and it doesn't preclude anybody else to be looking at the entire portfolio, to be looking at 2735 and looking at sort of the holistic approach of how they position multiple compounds. But that's the relationship we have with Sanofi. And let's say they choose to not opt in, right? And I assume that you will disclose that. And then what will you do with 3232? How do you think? Obviously, the RP path is straightforward, right? Less capital-intensive. Your timelines are determined. How do you think would you be actively trying to look for another partner to look for 3232, or would you want to have capital on hand to do develop 3232? And then the question will come for which indication. Yeah. Absolutely. It's a good problem to have. It's a good problem to have, and I have publicly stated that we're not going to venture into the Parkinson's and Alzheimer's as Ventyx. It just requires a muscle and the bandwidth taking these drugs because there's multiple ways to look at these trials. I think cardiovascular is an area where a company like ours could actually do a focused secondary prevention of MACE imaging trial. It wouldn't be that different from what we showed in the 3232 case, but we biased more towards an ASCVD population, but eventually, it requires an outcome trial. And even pharma will find another pharma to do those trials, right? If you look at the history of BMS and Pfizer in the cardiovascular space. Again, if you look at patients and the time to get there, it really has to be done with the speed and haste that only a large entity can do, right? But we control what we can do in the RP space. We control what we can do in the narrower MACE space. There's also a number of really attractive indications that fall both within the cardiovascular. If we look at what Tourmaline was doing, it was an AAA trial. There's a number of itis diseases, I call it, pericarditis, myocarditis, rheumatoid arthritis, osteoarthritis, really unmet need as a safe drug. So we've done a planning for much of this, but in this case, we think this will all play itself out in the next months. Then we will decide where and how we position these molecules. The last piece is that, just like in life now, there's so many tools to have people come to you and make relationships. People know who we are. People know our data. It's all in the public domain, right? So it doesn't prevent anyone from looking at the cardiovascular space or our compounds. But we control what we control at this point. Wonderful. Well, team, you have a tremendous year. You put VTYX in your Google and didn't see it's been up over, what, 700% over the last year and more to come. What's Kiniksa? Alex, is it what market cap? Like $4 billion market cap? Yeah. You're at like, what, $700 million market cap? And Arcalyst is the approved product that requires infusion. It's at $4 billion. That's a co-partnered program with Regeneron. So it kind of gives you an idea of how much the company has done this year and how much more momentum it has going into the next year. So it's been a pleasure having you at our conference, and thank you so much. Yeah. Likewise. And I just want to make sure I don't forget to thank the employees, the patients that have been with us, and employees who have been patient with us. And we look forward to just having a good year. Wish you guys all happy holidays. We don't see you and see you on the other side. That's right. Let's thank Raju and Alex.