Ventyx Biosciences Shares Surge, Key Overhang Removed Says Analyst

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By Sam Boughedda

Shares of Ventyx Biosciences Inc (NASDAQ:VTYX) are up significantly Monday (up 62.5% at the time of writing), with analysts pointing to the approval of Bristol Myers Squibb's (NYSE:BMY) deucravacitinib on Friday night.

A Jefferies analyst reiterated a Buy rating and raised the firm's price target on the stock to $60 from $30 in a note reacting to the news. He explained that "VTYX has the potentially cleanest oral TYK2 inhibitor. The first one from BMY has just been approved, importantly with a very clean label w/ no Black Box or major restrictions."

He added that this was a "surprise vs investor expectations for a BB so this removes a key overhang, makes the class much larger and more attractive w/o labeling issues, and makes VTYX significantly more likely to hit $3-4B+ peak sales and attractive to pharma for strategic M&A."

A Credit Suisse analyst reiterated an Outperform rating and $63 price target on Ventyx. He stated that "overall, deucravacitinib's clean label sets a highly favorable precedent for the TYK2i class, and this profile is supportive of broad uptake potential. Deucra's label announcement removes a key overhang over VTYX shares (our top pick), which we believe remain undervalued given the company's broad pipeline optionality and de-risking Ph1 MAD data."

A Piper Sandler senior research analyst explained: "Given the clean label from FDA, we believe that the read through to VTYX will support a rally the shares tomorrow, and we would expect the positive momentum to continue based on a strong launch of deucravacitinib. The game changer with the label is no black box warning that is expected to open the door to broad inflammatory indictions, such as PsA (estimated $4B), Crohn's (est $13B), UC (est $7B), SLe (est $1B), and lupus nephritis (est $3B)." She maintained an Overweight rating and $50 price target on Ventyx.

A Stifel analyst said, "The approval of BMY's deucravacitinib (Sotyktu) with no JAK-like black box (label) represents a near best case for the next-gen TYK2 space (VTYX, Nimbus, Alumis, others), as we believe consensus (and our base case) largely anticipated that FDA conservatism would win out."

"For VTYX, we think the clean TYK2 class label leaves our thesis intact that VTX958's clean ph1 safety profile leaves the prospect for a best in class TYK2i on the table--recall that deucravacitinib only reaches partial IC50 coverage while VTX958 has achieved full IC90 coverage," added the analyst.

Finally, an Oppenheimer analyst maintained an Outperform rating and raised the price target on Ventyx shares to $65. "Key to the VTYX story, the deucravacitinib label does not include a 'Box Warning,' or other warnings related to MACE, mortality or thrombosis. We see this as a significant win for deucravacinitib, VTYX and other TYK2 developers, substantially differentiating the TYK2 inhibitors from the JAK 1-3 inhibitors," the analyst wrote.