SEC Filing – Ventyx Biosciences, Inc.

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10-Q

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


☐	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.

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

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;

▪

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.

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.

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.

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.

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	)