Ex­clu­sive: Ready to ex­it 'qui­et mode,' joint en­ti­ty Ven­tyx de­buts its im­mune mod­u­la­tor pipeline with $114M round

In the crazy world of biotech fi­nanc­ing, pre­co­cious star­tups are scor­ing big checks from in­vestors with some of­ten laugh­ably ear­ly da­ta. Now, a Cal­i­for­nia im­mune mod­u­la­tion play­er is ready to un­cloak with a nine-fig­ure down pay­ment in hand and an un­usu­al­ly ad­vanced pipeline.

Encini­tas-based Ven­tyx Bio­sciences has scored a $114 mil­lion eq­ui­ty in­vest­ment to try three dif­fer­ent im­mune mod­u­la­tor tar­gets in the clin­ic, one of which is al­ready squared up for a Phase II study in ul­cer­a­tive col­i­tis.

Part of a joint en­ti­ty weav­ing to­geth­er three New Sci­ence Ven­tures com­pa­nies work­ing on im­mune mod­u­la­tors, a re­designed Ven­tyx sports an S1P1 re­cep­tor mod­u­la­tor for IBD as well as a TYK2 in­hibitor the biotech will ini­tial­ly pit against Crohn’s dis­ease in an up­com­ing Phase I.

Ra­ju Mo­han

The de­ci­sion to un­cloak its pre­vi­ous­ly-un­der-wraps pipeline — what CEO Ra­ju Mo­han called a “qui­et mode,” rather than stealth — was an op­por­tunis­tic play for Ven­tyx spurred by in­vestor in­ter­est in what the team was work­ing on.

“Part of the goal of set­ting up the sin­gle com­pa­ny is to have sin­gle in­ter­est from in­vestors,” Mo­han told End­points News. “This was not a plan — we had a lot of in­bound in­ter­est in our port­fo­lio, and we felt that com­bin­ing these to­geth­er, both for the com­pa­ny and for in­vestors, would be re­al­ly at­trac­tive.”

The round is led by ven­Bio Part­ners, which will plant Richard Gaster and Aaron Roys­ton on­to the com­pa­ny’s board. Third Point’s Ji­gar Chok­sey will al­so join the board as part of the fi­nanc­ing round.

Mo­han, the founder and CEO of Al­ler­gan-ac­quired NASH play­er Akar­na Ther­a­peu­tics, said Ven­tyx’s two lead com­pounds and a third tar­get­ing the NL­RP3 in­flam­ma­some are “tru­ly dif­fer­en­ti­at­ed” in a space brim­ming with big-name com­peti­tors.

The fur­thest along of Ven­tyx’s pipeline is its S1P1 re­cep­tor mod­u­la­tor pro­gram — OPL-002 — which the joint en­ti­ty ab­sorbed from Op­pi­lan Phar­ma. The “pe­riph­er­al­ly-re­strict­ed” mol­e­cule was de­signed specif­i­cal­ly for IBD, un­like oth­er S1P1s re­pur­posed from mul­ti­ple scle­ro­sis ap­pli­ca­tions — think mol­e­cules like fin­golimod or ozan­i­mod — and de­signed to mod­u­late the blood-brain bar­ri­er.

That speci­fici­ty for IBD, par­tic­u­lar­ly ul­cer­a­tive col­i­tis where Ven­tyx is hop­ing for an ini­tial ap­proval, means Ven­tyx can be ex­treme­ly spe­cif­ic in the drug’s tar­get­ing to lim­it down­stream tox­i­c­i­ties, Mo­han said.

Mean­while, Ven­tyx is al­so gun­ning for a Phase I study for its TYK2 pro­gram, VTX-958, an im­port from the orig­i­nal Ven­tyx Bio­sciences formed in 2019 and tar­get­ing a range of im­munol­o­gy con­di­tions. The first of those, Mo­han said, is Crohn’s dis­ease, but the biotech has as­pi­ra­tions in pso­ri­a­sis, pso­ri­at­ic arthri­tis and lu­pus, to name a few.

VTX-958 is what’s known as an al­losteric TYK2, which can in the­o­ry in­hib­it down­stream sig­nal­ing to IL-12, IL-23 and Type I in­ter­fer­on cy­tokines linked to in­flam­ma­tion with­out the nasty side ef­fects of the pan-JAK in­hibitor class with which it shares a mech­a­nism of ac­tion. Re­searchers have strug­gled to de­vel­op a TYK2 that is far more se­lec­tive in its tar­get­ing than the JAKs — but Mo­han be­lieves al­losteric VTX-958 could prove a win­ner there.

“A tru­ly se­lec­tive TYK2 does not cross over in­to the JAK fam­i­ly — and that’s what we have,” he said. “We think it has the po­ten­tial to be best in class.”

Even if VTX-958 does keep chug­ging along, it’s like­ly to face at least one com­peti­tor.

In No­vem­ber, Bris­tol My­ers Squibb rolled out Phase III head-to-head ear­ly da­ta for its own TYK2 hope­ful deu­cravac­i­tinib show­ing the drug beat out no less a chal­lenger than block­buster Ote­zla in clear­ing pso­ri­a­sis pa­tients’ skin. It was an ear­ly re­ward for Bris­tol, which opt­ed to stick with deu­cravac­i­tinib and bail on Ote­zla as part of its merg­er with Cel­gene. Mean­while, even small play­ers like Neu­ron23 are in the game for the first FDA-ap­proved TYK2. The biotech scored a $113 mil­lion com­bined Se­ries A and B in De­cem­ber and is ad­vanc­ing a TYK2 it be­lieves can stave off neu­ro-in­flam­ma­tion.

On top of those two lead com­pounds, Ven­tyx al­so has a NL­RP3 mod­u­la­tor in the pre­clin­i­cal stage for pe­riph­er­al, CNS-pen­e­trant and tis­sue-se­lec­tive ap­pli­ca­tions, which could reach a broad range of ther­a­peu­tic ar­eas. The NL­RP3 in­flam­ma­some, a key sig­nal­ing pro­tein in the in­nate im­mune sys­tem, re­ceived a big boost as an an­ti­body tar­get for CV and CNS fol­low­ing No­var­tis’ read­out from its CAN­TOS study in 2017 show­ing its IL-1be­ta block­er Ilaris sig­nif­i­cant­ly re­duced CV risks.

Ven­tyx’s pro­gram, ZMG-2735, which tar­gets NL­RP3 to reg­u­late down­stream IL-1be­ta cy­tokines, is “very close” to the clin­ic, Mo­han said, with­out of­fer­ing time­lines.

With its slate stacked, Mo­han said Ven­tyx was im­me­di­ate­ly fo­cused on get­ting its clin­i­cal pro­grams through the next cou­ple years — but could be open in the fu­ture to cap­i­tal­iz­ing on the ris­ing tide of biotech val­u­a­tions, whether that’s an IPO, re­verse merg­er or oth­er­wise.

“We’re well fund­ed, we can take all these com­pounds through proof of con­cept for the next cou­ple of years, we’ve got a bunch of re­al­ly ex­cit­ing dis­cov­ery pro­grams — so hon­est­ly our laser fo­cus is on build­ing this com­pa­ny,”  he said. “That is the near term goal, but hav­ing said that we will look at all op­por­tu­ni­ties whether they’re fi­nanc­ing or strate­gic at the ap­pro­pri­ate time.”

Ven­Bio, Third Point and New Sci­ence were joined by new in­vestors in the round, in­clud­ing RTW In­vest­ments, LP, Janus Hen­der­son In­vestors, Welling­ton Man­age­ment, Or­biMed, Sur­vey­or Cap­i­tal (a Citadel com­pa­ny), Far­al­lon Cap­i­tal, Vi­vo Cap­i­tal, Lo­gos Cap­i­tal, Qim­ing Ven­ture Part­ners USA and Cor­morant As­set Man­age­ment.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

How to col­lect and sub­mit RWD to win ap­proval for a new drug in­di­ca­tion: FDA spells it out in a long-await­ed guid­ance

Real-world data is messy. There can be differences in the standards used to collect different types of data, differences in terminologies and curation strategies, and even in the way data is exchanged.

While acknowledging this somewhat controlled chaos, the FDA is now explaining how biopharma companies can submit study data derived from real-world data (RWD) sources in applicable regulatory submissions, including new drug indications.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

David Lockhart, ReCode Therapeutics CEO

Pfiz­er throws its weight be­hind LNP play­er eye­ing mR­NA treat­ments for CF, PCD

David Lockhart did not see the meteoric rise of messenger RNA and lipid nanoparticles coming.

Thanks to the worldwide fight against Covid-19, mRNA — the genetic code that can be engineered to turn the body into a mini protein factory — and LNPs, those tiny bubbles of fat carrying those instructions, have found their way into hundreds of millions of people. Within the biotech world, pioneers like Alnylam and Intellia have demonstrated just how versatile LNPs can be as a delivery vehicle for anything from siRNA to CRISPR/Cas9.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 120,300+ biopharma pros reading Endpoints daily — and it's free.

David Livingston (Credit: Michael Sazel for CeMM)

Renowned Dana-Far­ber sci­en­tist, men­tor and bio­phar­ma ad­vi­sor David Liv­ingston has died

David Livingston, the Dana-Farber/Harvard Med scientist who helped shine a light on some of the key molecular drivers of breast and ovarian cancer, died unexpectedly last Sunday.

One of the senior leaders at Dana-Farber during his nearly half century of work there, Livingston was credited with shedding light on the genes that regulate cell growth, with insights into inherited BRCA1 and BRCA2 mutations that helped lay the scientific foundation for targeted therapies and earlier detection that have transformed the field.

Leen Kawas (L) has resigned as CEO of Athira and will be replaced by COO Mark Litton

Ex­clu­sive: Athi­ra CEO Leen Kawas re­signs af­ter in­ves­ti­ga­tion finds she ma­nip­u­lat­ed da­ta

Leen Kawas, CEO and founder of the Alzheimer’s upstart Athira Pharma, has resigned after an internal investigation found she altered images in her doctoral thesis and four other papers that were foundational to establishing the company.

Mark Litton, the company’s COO since June 2019 and a longtime biotech executive, has been named full-time CEO. Kawas, meanwhile, will no longer have ties to the company except for owning a few hundred thousand shares.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Sen. Richard Durbin (D-IL, foreground) and Sen. Richard Blumenthal (D-CT) (Patrick Semansky/AP Images)

Sen­a­tors back FDA's plan to re­quire manda­to­ry pre­scriber ed­u­ca­tion for opi­oids

Three Senate Democrats are backing an FDA plan to require mandatory prescriber education for opioids as overdose deaths have risen sharply over the past decade, with almost 97,000 American opioid-related overdose deaths in the past year alone.

While acknowledging a decline in overall opioid analgesic dispensing in recent years, the FDA said it’s reconsidering the need for mandatory prescriber training through a REMS given the current situation with overdoses, and is seeking input on the aspects of the opioid crisis that mandatory training could potentially mitigate.

Suresh Katta, Saama CEO (via YouTube)

As AI con­tin­ues to en­tice Big Phar­ma, a Car­lyle-led drug­mak­er syn­di­cate shells out $430M for cloud com­put­ing play­er

The AI revolution permeating Big Pharma took a big financial step forward Wednesday, with VCs and major drugmakers coming together to acquire a cloud-focused company.

Led by the Carlyle Group, the investors will put up $430 million for a majority stake in Saama, a company that collects patient data to help speed along the drug development process. The investment arms of Pfizer, Merck, Amgen and McKesson all participated in the financing, in addition to other prominent life sciences VCs like Northpond.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 120,300+ biopharma pros reading Endpoints daily — and it's free.

Raju Mohan, Ventyx Biosciences CEO

Ven­tyx sprints to Wall Street less than a year af­ter emerg­ing from stealth

Editor’s note: Interested in following biopharma’s fast-paced IPO market? You can bookmark our IPO Tracker here.

It took seven months from exiting “quiet mode” for Ventyx Biosciences to land its very own stock ticker, raising $165 million in venture funds along the way.

Now, after pricing a massive $151.5 million IPO, the Encinitas, CA-based biotech is gunning for Phase II.

Ventyx priced close to 9.5 million shares at $16 apiece on Wednesday, the midpoint of its $15 to $17 range. CEO Raju Mohan filed the S-1 papers at the end of September, just over a week after unveiling a $114 million Series B round. He penciled in the standard figure of $100 million at first, likely knowing that in the last year, it’s been common for biotechs to raise much more than those initial estimates.

Bris­tol My­ers pledges to sell its Ac­celeron shares as ac­tivist in­vestors cir­cle Mer­ck­'s $11.5B buy­out — re­port

Just as Avoro Capital’s campaign to derail Merck’s proposed $11.5 billion buyout of Acceleron gains steam, Bristol Myers Squibb is leaning in with some hefty counterweight.

The pharma giant is planning to tender its Acceleron shares, Bloomberg reported, which add up to a sizable 11.5% stake. Based on the offer price, the sale would net Bristol Myers around $1.3 billion.

To complete its deal, Merck needs a majority of shareholders to agree to sell their shares.