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Ventyx Biosciences, Inc.

Case Details

Class Period: October 18, 2021 - November 6, 2023
Date Filed: March 01, 2024
Case Number: 3:24-cv-00415
Jurisdiction: Southern District of California
icon-casetype Case Type: Securities Case
Days Left to
Seek Plaintiff:
7

Case Summary

Ventyx is a clinical-stage biopharmaceutical company that develops small-molecule product candidates to address a range of inflammatory diseases. The Company’s lead clinical product candidate is VTX958, a selective allosteric tyrosine kinase type 2 inhibitor for psoriasis, psoriatic arthritis, and Crohn’s disease. In 2022, Ventyx initiated a Phase 2 clinical trial of VTX958 for the treatment of moderate to severe plaque psoriasis (the “Phase 2 SERENITY Trial”).

On September 29, 2021, Ventyx filed a registration statement on Form S-1 with the Securities and Exchange Commission (“SEC”) in connection with the IPO, which, after several amendments, was declared effective by the SEC on October 20, 2021 (the “Registration Statement”).

On October 21, 2021, Ventyx filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the “Prospectus” and, collectively with the Registration Statement, the “Offering Documents”).

The complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. In addition, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) VTX958 was less effective in treating psoriasis than Defendants had led investors to believe; (ii) as a result, VTX958’s clinical and/or commercial prospects were overstated; (iii) accordingly, the Company had misrepresented its ability to develop and commercialize effective product candidates; (iv) Ventyx’s post-IPO business prospects were thus inflated; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On November 6, 2023, during after-market hours, Ventyx issued a press release announcing results from the Phase 2 SERENITY Trial. Therein, the Company disclosed that “[a]lthough the trial achieved its primary endpoint, the magnitude of efficacy observed did not meet our internal target to support the advancement of VTX958 in plaque psoriasis.” Based on these results, the Company announced that it “will terminate ongoing activities in the Phase 2 plaque psoriasis trial effective immediately” and “terminate the ongoing Phase 2 trial of VTX958 in psoriatic arthritis.”

On this news, Ventyx’s common stock price fell $11.36 per share, or 80.62%, to close at $2.73 per share on November 7, 2023.

Then, on November 22, 2023, Ventyx disclosed in a filing with the SEC on Form 8-K that the Company’s President and Chief Medical Officer Defendant William J. Sandborn would cease to serve in those roles.

As of the time this Complaint was filed, the price of Ventyx common stock continues to trade below the $16.00 per share Offering price, damaging investors.

Documents
Complaint