A securities class action has been filed against Ventyx Biosciences, Inc. (VTYX) on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired: (a) Ventyx common stock pursuant and/or traceable to the Offering Documents (defined below) issued in connection with the Company’s initial public offering conducted on or about October 21, 2021 (the “IPO” or “Offering”); and/or (b) Ventyx securities between October 21, 2021 through November 6, 2023. This case has been filed in the USDC – S.D.CA.
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 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”).
That same day, pursuant to the Offering Documents, Ventyx’s common stock began publicly trading on the Nasdaq Global Select Market (“NASDAQ”) under the ticker symbol “VTYX”.
Pursuant to the Offering Documents, Ventyx issued over 9 million shares of its common stock to the public at the Offering price of $16.00 per share for proceeds to the Company of approximately $141 million after applicable underwriting discounts and commissions, and before expenses.
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 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 (“CMO”) Defendant William J. Sandborn (“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.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of Ventyx’s securities, Plaintiff and other Class members have suffered significant losses and damages.