Sanofi secures negotiation rights for Ventyx obesity, Parkinson’s drug for $27M

After enduring several challenges, Ventyx Biosciences has secured a $27 million investment from Sanofi, which is anticipated to extend the biotech’s financial runway into late 2026. This equity investment grants Sanofi exclusive rights of first negotiation related to VTX3232, an oral selective inhibitor of NLRP3 currently focused on cardiovascular diseases, as per a release dated September 23. With this financial backing, Ventyx expects to sustain its cash flow well into the second half of 2026. As of June 30, the company reported holding $279.7 million in cash, cash equivalents, and marketable securities, according to filings with the Securities and Exchange Commission.

The $27 million investment involves Sanofi purchasing 70,601 shares of Ventyx's Series A non-voting convertible preferred stock. Each share is convertible into 100 shares of common stock, priced at $3.82 per share of common stock, representing roughly a 66% premium over Ventyx's share price as of the previous Friday. Consequently, Sanofi gains the first chance to negotiate for a license, grant, or transfer of any rights to VTX3232, a CNS-penetrant candidate aimed at treating various neuroinflammatory and neurodegenerative conditions.

Ventyx has already completed phase 1 trials in healthy adults for VTX3232, revealing that daily doses of the drug are well-tolerated and achieve target coverage in both plasma and cerebrospinal fluid levels. Ventyx CEO Raju Mohan, Ph.D., expressed optimism in a press release, stating, "We look forward to strengthening our relationship with Sanofi as the VTX3232 clinical programs progress." He added that data from a phase 2a trial involving patients with early Parkinson’s disease and a phase 2 trial for individuals with obesity and additional cardiometabolic risk factors are both expected in 2025.

The announcement had a positive effect on Ventyx’s stock, which rose by 10%, climbing from $2.30 per share at Friday’s market close to $2.54 by mid-morning today. However, the company's shares have declined by more than 90% over the past year. The recent funding news comes after a difficult period for the San Diego-based biotech. Most recently, Ventyx’s allosteric TYK2 inhibitor, VTX958, failed to help patients achieve remission in a phase 2 trial for Crohn’s disease, as reported in a July 29 release. The company attributed this failure to an unexpectedly high placebo response and decided against further internal testing of the asset, although VTX958 remains part of Ventyx’s pipeline.

In December 2023, Ventyx laid off 20% of its workforce following research and development updates that caused the company’s stock to plummet. A month before that, another phase 2 trial of the TYK2 inhibitor VTX958 in plaque psoriasis met key endpoints but did not meet the company's internal standards for further development.

Overall, the investment from Sanofi marks a significant turning point for Ventyx Biosciences, providing it with the necessary funds to continue its research and development efforts. As the company advances its clinical programs, particularly with VTX3232, the collaboration with Sanofi could prove instrumental in overcoming the past year's challenges and achieving future milestones.