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.

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