10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 001-40928

 

Ventyx Biosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

83-2996852

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

12790 El Camino Real, Suite 200

San Diego, CA

92130

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (760) 593-4832

 

(Former name, former address, and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

VTYX

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 6, 2023, the registrant had 59,048,108 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

Condensed Consolidated Statements of Stockholders’ Equity

4

Condensed Consolidated Statements of Cash Flows

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

91

Item 3.

Defaults Upon Senior Securities

91

Item 4.

Mine Safety Disclosures

91

Item 5.

Other Information

91

Item 6.

Exhibits

92

Signatures

93

 

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts included in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

our expectations regarding our product candidates and their related benefits;
the anticipated timing of releasing data for any current or future clinical trials;
the anticipated timing of commencement, enrollment, and completion of any current or future clinical trials for our product candidates;
the timing or likelihood of regulatory filings or other actions and related regulatory authority responses;
our beliefs regarding the perceived benefits and limitations of competing products, and the future of competing products and our industry;
details regarding our strategic vision and product candidate pipeline;
our beliefs regarding the success, cost and timing of our development activities and current and future clinical trials, including study design;
disruptions in the supply chain, including raw materials needed for manufacturing, animals used in research, delays in site activations and enrollment of clinical trials;
any impact of the military conflicts in Ukraine or the Middle East or the imposition of sanctions against certain countries as a result thereof;
the ability and willingness of third parties to engage in research and development activities on our behalf involving our product candidates, and our ability to leverage those activities;
our expectations regarding the ease of administration associated with our product candidates;
our expectations regarding the patient compatibility associated with our product candidates;
our beliefs regarding the potential markets for our product candidates and our ability to serve those markets;
the ability to obtain and maintain regulatory approval of any of our product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate;
our ability to commercialize any approved products;
the rate and degree of market acceptance of approved products, if any;
our ability to attract and retain key personnel;
the accuracy of our estimates regarding our future revenue, operating expenses, capital requirements and needs for additional financing;

ii


 

the sufficiency of our existing cash, cash equivalents and marketable securities to fund our future operating expenses and capital expenditure requirements;
our ability to obtain funding for our operations, including funding necessary to complete further development and any commercialization of our product candidates;
our ability to obtain, maintain, protect and enforce intellectual property protection for our product candidates and not infringe, misappropriate or otherwise violate the intellectual property of others; and
regulatory developments in the United States and foreign countries.

You should refer to Part II, Item 1A (Risk Factors) of this Quarterly Report for a discussion of other important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

iii


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Ventyx Biosciences, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts and par value data)

(unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

56,610

 

 

$

64,819

 

Marketable securities

 

 

244,209

 

 

 

253,122

 

Prepaid expenses and other assets

 

 

7,273

 

 

 

12,747

 

Total current assets

 

 

308,092

 

 

 

330,688

 

Property and equipment, net

 

 

686

 

 

 

407

 

Operating lease right-of-use assets

 

 

11,846

 

 

 

1,537

 

Marketable securities

 

 

 

 

 

38,672

 

Restricted cash

 

 

975

 

 

 

 

Other long-term assets

 

 

102

 

 

 

96

 

Total assets

 

$

321,701

 

 

$

371,400

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,338

 

 

$

6,433

 

Accrued expenses (includes related party amounts of $417 and $64, respectively)

 

 

16,391

 

 

 

9,514

 

Current portion of operating lease liabilities

 

 

479

 

 

 

412

 

Total current liabilities

 

 

26,208

 

 

 

16,359

 

Operating lease liabilities, net of current portion

 

 

11,853

 

 

 

1,146

 

Total liabilities

 

 

38,061

 

 

 

17,505

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; 900,000,000 shares authorized at September 30,
   2023 and December 31, 2022;
58,993,108 and 57,025,847 shares issued at
   September 30, 2023 and December 31, 2022, respectively;
58,971,931 and
   
56,980,845 shares outstanding at September 30, 2023 and December 31, 2022,
   respectively

 

 

6

 

 

 

6

 

Additional paid-in capital

 

 

656,575

 

 

 

581,237

 

Accumulated other comprehensive loss

 

 

(507

)

 

 

(1,123

)

Accumulated deficit

 

 

(372,434

)

 

 

(226,225

)

Total stockholders' equity

 

 

283,640

 

 

 

353,895

 

Total liabilities and stockholders' equity

 

$

321,701

 

 

$

371,400

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

Ventyx Biosciences, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (includes related party amounts of
   $
417, $220, $776 and $653, respectively)

 

$

49,750

 

 

$

25,468

 

 

$

133,747

 

 

$

57,553

 

General and administrative

 

 

8,201

 

 

 

5,952

 

 

 

23,901

 

 

 

17,012

 

Total operating expenses

 

 

57,951

 

 

 

31,420

 

 

 

157,648

 

 

 

74,565

 

Loss from operations

 

 

(57,951

)

 

 

(31,420

)

 

 

(157,648

)

 

 

(74,565

)

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(3,932

)

 

 

(1,010

)

 

 

(11,453

)

 

 

(1,484

)

Other expense

 

 

8

 

 

 

52

 

 

 

14

 

 

 

131

 

Total other (income) expense

 

 

(3,924

)

 

 

(958

)

 

 

(11,439

)

 

 

(1,353

)

Net loss

 

$

(54,027

)

 

$

(30,462

)

 

$

(146,209

)

 

$

(73,212

)

Unrealized gain (loss) on marketable securities

 

 

192

 

 

 

17

 

 

 

544

 

 

 

(1,204

)

Foreign currency translation

 

 

11

 

 

 

(38

)

 

 

72

 

 

 

(50

)

Comprehensive loss

 

$

(53,824

)

 

$

(30,483

)

 

$

(145,593

)

 

$

(74,466

)

Net loss per share, basic and diluted

 

$

(0.92

)

 

$

(0.59

)

 

$

(2.51

)

 

$

(1.43

)

Weighted average common shares outstanding, basic and diluted

 

 

58,880,427

 

 

 

51,667,768

 

 

 

58,363,174

 

 

 

51,037,771

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

Ventyx Biosciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended September 30, 2023 and 2022

(in thousands, except share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2023

 

 

58,713,982

 

 

$

6

 

 

$

646,918

 

 

$

(710

)

 

$

(318,407

)

 

$

327,807

 

Issuance of common stock upon exercise of stock options

 

 

249,257

 

 

 

 

 

 

1,649

 

 

 

 

 

 

 

 

 

1,649

 

Issuance of common stock upon vesting of restricted common stock

 

 

8,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

8,008

 

 

 

 

 

 

 

 

 

8,008

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

192

 

 

 

 

 

 

192

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

 

 

11

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(54,027

)

 

 

(54,027

)

Balance at September 30, 2023

 

 

58,971,931

 

 

$

6

 

 

$

656,575

 

 

$

(507

)

 

$

(372,434

)

 

$

283,640

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2022

 

 

50,899,066

 

 

$

5

 

 

$

404,987

 

 

$

(1,291

)

 

$

(160,549

)

 

$

243,152

 

Issuance of common stock from private placement, net of issuance costs

 

 

5,350,000

 

 

 

1

 

 

 

165,434

 

 

 

 

 

 

 

 

 

165,435

 

Issuance of common stock upon exercise of stock options

 

 

370,338

 

 

 

 

 

 

1,262

 

 

 

 

 

 

 

 

 

1,262

 

Issuance of common stock upon vesting of restricted common stock

 

 

7,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,167

 

 

 

 

 

 

 

 

 

4,167

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

(38

)

 

 

 

 

 

(38

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,462

)

 

 

(30,462

)

Balance at September 30, 2022

 

 

56,627,345

 

 

$

6

 

 

$

575,850

 

 

$

(1,312

)

 

$

(191,011

)

 

$

383,533

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 

Ventyx Biosciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Nine Months Ended September 30, 2023 and 2022

(in thousands, except share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2022

 

 

56,980,845

 

 

$

6

 

 

$

581,237

 

 

$

(1,123

)

 

$

(226,225

)

 

$

353,895

 

Issuance of common stock from at-the-market offering,
   net of commissions and offering expenses

 

 

1,176,470

 

 

 

 

 

 

48,408

 

 

 

 

 

 

 

 

 

48,408

 

Issuance of common stock upon exercise of stock options

 

 

770,934

 

 

 

 

 

 

4,273

 

 

 

 

 

 

 

 

 

4,273

 

Issuance of common stock upon vesting of restricted common stock

 

 

33,917

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued under employee stock purchase plan

 

 

9,765

 

 

 

 

 

 

214

 

 

 

 

 

 

 

 

 

214

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

22,443

 

 

 

 

 

 

 

 

 

22,443

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

544

 

 

 

 

 

 

544

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

72

 

 

 

 

 

 

72

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(146,209

)

 

 

(146,209

)

Balance at September 30, 2023

 

 

58,971,931

 

 

$

6

 

 

$

656,575

 

 

$

(507

)

 

$

(372,434

)

 

$

283,640

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

50,408,830

 

 

$

5

 

 

$

397,051

 

 

$

(58

)

 

$

(117,799

)

 

$

279,199

 

Issuance of common stock from private placement, net of issuance costs

 

 

5,350,000

 

 

 

1

 

 

 

165,434

 

 

 

 

 

 

 

 

 

165,435

 

Issuance of common stock upon exercise of stock options

 

 

787,670

 

 

 

 

 

 

1,482

 

 

 

 

 

 

 

 

 

1,482

 

Issuance of common stock upon vesting of restricted common stock

 

 

71,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued under employee stock purchase plan

 

 

9,074

 

 

 

 

 

 

115

 

 

 

 

 

 

 

 

 

115

 

Adjustment of offering expenses in the initial public offering

 

 

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

26

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

11,742

 

 

 

 

 

 

 

 

 

11,742

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(1,204

)

 

 

 

 

 

(1,204

)

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

(50

)

 

 

 

 

 

(50

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(73,212

)

 

 

(73,212

)

Balance at September 30, 2022

 

 

56,627,345

 

 

$

6

 

 

$

575,850

 

 

$

(1,312

)

 

$

(191,011

)

 

$

383,533

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

Ventyx Biosciences, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Nine months ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(146,209

)

 

$

(73,212

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

Depreciation

 

 

98

 

 

 

77

 

Loss on impairment

 

 

285

 

 

 

 

Amortization of right-of-use assets - operating

 

 

440

 

 

 

243

 

Stock-based compensation

 

 

22,443

 

 

 

11,742

 

Accretion of marketable securities, net

 

 

(6,989

)

 

 

(495

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets (includes related party amounts of
   $
47 and ($16), respectively)

 

 

5,679

 

 

 

(1,549

)

Operating lease liabilities

 

 

(234

)

 

 

(227

)

Accounts payable (includes related party amounts of ($1) and
   $
229, respectively)

 

 

2,839

 

 

 

9,877

 

Accrued expenses (includes related party amounts of $353 and
   ($
110), respectively)

 

 

6,781

 

 

 

2,037

 

Net cash used in operating activities

 

 

(114,867

)

 

 

(51,507

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of marketable securities, available-for-sale

 

 

(243,607

)

 

 

(142,508

)

Proceeds from maturities of marketable securities, available-for-sale

 

 

298,725

 

 

 

208,580

 

Purchases of property and equipment

 

 

(303

)

 

 

(163

)

Net cash provided by investing activities

 

 

54,815

 

 

 

65,909

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock from at-the-market offering,
   net of commissions and offering expenses

 

 

48,408

 

 

 

 

Proceeds from issuance of common stock from private
   placement, net of offering costs

 

 

 

 

 

176,530

 

Proceeds from exercise of stock options

 

 

4,273

 

 

 

1,482

 

Proceeds from issuance of common stock under employee stock purchase plan

 

 

214

 

 

 

115

 

Deferred offering costs

 

 

(