Ventyx Biosciences’ employees are paying the price for a bad few months at the biotech. After seeing its share price plummet 94% in six months in response to R&D updates, the inflammatory disease company has decided to reduce its headcount by 20%.
San Diego-based Ventyx, which ended September with 99 full-time employees, used a financial filing to reveal it “committed to and implemented” a workforce reduction that affected around 20% of its staff earlier this week. The biotech expects to incur expenses of around $2 million in relation to the layoffs but has otherwise said nothing about the financial implications of the headcount reduction.
Ventyx is in a solid position financially, boasting a bank balance of $300.8 million at the last public count, but its pipeline took a hit in November. One month ago, the biotech revealed a phase 2 trial of its TYK2 inhibitor in plaque psoriasis hit its key endpoints but fell short of its internal bar for further development.
In response, Ventyx stopped development in psoriasis and psoriatic arthritis but kept going in Crohn’s disease, an indication in which a phase 2 interim efficacy analysis is planned for early next year. Ventyx CEO Raju Mohan outlined the thinking behind the decision to push ahead in Crohn’s at an investor event last week.
“Crohn's is a whole different value proposition than psoriasis, so a much bigger opportunity. There's no real safe and effective Crohn's drugs out there other than Rinvoq,” Mohan said. “The incremental cost of doing this study, the interim analysis, is [in the] single-digit millions. We'll look at it thoughtfully in terms of the readouts ... and we'll decide to then either discontinue ... or outline a path forward.”
Speaking at the same event, Martin Auster, chief financial officer at Ventyx, said the company had the cash to keep going until at least mid-2025. Auster caveated the forecast with an explanation of how the biotech still needed to “refine the plan and determine where investment is going to be” as it prepares for a phase 3 trial of its S1P1 receptor modulator, VTX002.
We now know where some of the investment is not going to be: payroll.