VTYX - NASDAQ

Good afternoon, ladies and gentlemen, and welcome to the Ventyx Biosciences First Quarter 2023 Earnings Conference Call. At this time all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to turn the call over to Dr. Marty Auster, Ventyx's Chief Financial Officer. Please go ahead.

Thank you, Angela. Thank you everyone for joining us today. And good afternoon. Welcome to Ventyx’s Biosciences conference call and webcast, where we will be discussing our first quarter 2023 financial results and providing a business update. As a reminder, the company's most recent investor presentation can be found on our website at www.ventyxbio.com, under the Investors tab in the News & Events section. Before we begin today, I’d would like to remind everyone that, this conference call and webcast will contain forward-looking statements about the company, including without limitation statements about the anticipated timing of commencement, enrollment and completion of clinical trials for product candidates, the anticipated timing of release of clinical trial data, and other information about our product candidates, the market opportunities for product candidate and the expected time frame for funding operations with current cash equivalents and marketable securities. These statements are subject to risks and uncertainties that could cause actual results to differ. Factors that could cause actual results or outcomes to differ materially from those expressed and/or implied by such forward-looking statements are discussed in greater detail in our most periodic reports filed with the SEC, including our Form 10-Q for the first quarter which ended March 31, 2023 which we anticipate filing later today. Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements, in light of new information or future events, except as required by law. With that said, I'll hand the call now over to Dr. Raju Mohan, Ventyx's Founder and CEO. Raju, please go ahead.

Yes. Thanks, Marty. So good afternoon to all again and thank you for joining Ventyx's first quarter 2023 financial results conference call. Let me briefly run through this afternoon's agenda. And given that we just had our call in late March, I'll be brief and keep my comments focused on high level business update. Bill Sandborn, our President and Chief Medical Officer will then provide updates across our pipeline programs in a bit more detail. Finally Marty will present an overview of our first quarter 2023 financial results before we open the call for Q&A. As I always like to remind our audience, the foundation of Ventyx is our mission to bring differentiated safe and effective oral medicines to large immunology markets and markets with high unmet medical need and are currently dominated by injectable biologics. With 2023 shaping up to be a transformational year for authentics. We're off to a great start. Our team is executing across the board with five and a repeat five phase two clinical trials now ongoing across our wholly owned pipeline of internally discovered small molecule drug candidates. So with VTX-958, we remain confident that we are developing a potential best in class allosteric TYK2 inhibitor. Based on class leading target coverage and safety that we observed in phase one we see great potential to not only establish a differentiated profile in psoriasis and psoriatic arthritis, but also to be a first mover among TYK2 inhibitors in Crohn's disease, where we believe our ability to achieve trough IL-23 IC-90 coverage will be particularly important. We have three phase two trials now underway in black psoriasis, psoriatic arthritis, and Crohn's disease. And Bill will discuss these in more detail during his section in his comments On the development of an extended release tablet for QD dosing to 958 we continue to make progress towards the target profile the TPP and we remain confident that we will have optimized once daily tablet to advance into phase three trials in 2024. As we have previously disclosed and discussed our development strategy for this path incorporates an iterative process that allows us to sequentially evaluate multiple prototype formulations in humans. We look forward to providing a more detailed update in the early part of early second half of 2023. With our S1P1 modulator VTX-02, we believe we will be the first to truly explore the full potential of this mechanism in ulcerative colitis. And our aspiration for this asset have always been very clear, which are to demonstrate efficacy, and moderate to severe you see patients, ulcerative colitis patients, that is unambiguously differentiated from both across the market as opposed to and is competitive with what's superior to levels achieved by biologics. This efficacy profile, if achieved, should position VTX002 as a potential class leading safe oral agent in ulcerative colitis. And again, bill will provide more color on the progress of this trial. Beyond these lead programs, we continue to advance our novel and NLRP3 inhibitor portfolio, including our peripheral in NLRP3 inhibitor VTX2735, which is now in phase two trials in caps patients and a CNS penetrant. NLRP3 inhibitor VTX3232, which is expected to advanced into Phase One studies this quarter. So with that, I'll hand the call over to Bill Sandborn for a more detailed pipeline update, Bill?

Thank you, Raju. And good afternoon, everyone. I'm excited to provide a brief pipeline update today and to highlight recent achievements across our portfolio. I'll begin with VTX958. As you are all aware, we are now well underway with three phase two trials of VTX-958, including the serenity trial and moderate to severe plaque psoriasis, the harmony trial in moderately to severely active Crohn's disease, and then tranquillity trial and active psoriatic arthritis. Across this program, we believe we will be the first to explore near full suppression of the TYK2 pathways with the top dose and each of the three trials expected to achieve approximate trough IC-90 coverage of interleukin-12 and interleukin-23. So we are really pushing towards biologic like suppression of the interleukin-23 pathway. And we expect this to translate into differentiated efficacy closer to that observed with the anti IL-23 antibodies. This is our expectation not only in plaque psoriasis and psoriatic arthritis, but also in Crohn's disease where we continue to see a tremendous unmet need for a safe and effective oral therapy, and where we believe our class leading therapeutic window may afford us a strong position relative to competitors. Looking more closely at the psoriasis market, we remain very excited about the commercial opportunity for orally delivered small molecules to gain both market share versus legacy biologic therapies, as well as to continue to drive expansion of the treated population within the 28 billion projected 2023 global psoriasis market. We are particularly optimistic for the potential of the TYK2 inhibitor class and point the strong signs of early uptake for so TYK2 the first approved TYK2 inhibitor with indications of strong early share gains relative to both biologics and less effective oral options. We expect that the market opportunity for oral therapeutics and TYK2 inhibitors, specifically to continue to expand and coming year in the coming years. With the potential for greater TYK2 target inhibition to drive an enhanced efficacy profile, which we think will be a strong determinant of the projected total market share potential for and within the TYK2 class. As Raju mentioned the team has done an excellent job getting the VTX958 phase two program up and running over the past six months and we've made tremendous progress in enrolling the serenity plaque psoriasis trial. As we've stated previously, we are on track to report top line data in the fourth quarter. We’re looking forward to carrying this operational momentum into the other VTX-958. And phase two trials including the Tranquillity trial in psoriatic arthritis and the Harmony trial and Crohn's disease. And we continue to expect top line results from both of these trials in 2024. Shifting to VTX002 our S1P1 receptor modulator in phase two development for ulcerative colitis. I think Raju put it well when he said that the goal here is to be the first to truly explore the full potential of this mechanism and ulcerative colitis. This is similar to the story with VTX-958, where we talk about achieving differentiated coverage of the target pathway. You will recall that we previously shared data From our face to open label extension trial demonstrating that our high dose of 60 milligrams is achieving steady state absolute lymphocyte concentration or count reductions in the range of 70 plus percent compared to approximately 50% for a transfer, mod and symposia, and we believe that this differentiated pharmacodynamic effect will translate into improved efficacy in ulcerative colitis. And if we take a step back and look at the landscape and ulcerative colitis, this is a large market currently dominated by a lot by biologics, which achieved placebo adjusted clinical remission rates of around just 10% or slightly higher. And the anti TNF alphas, the alpha four beta seven integrin, inhibitors, and so on, all share this characteristic, there is a significant opportunity for a safe an oral therapy that can exceed this efficacy benchmark. Based on our conversations with physicians, we fully expect the S1P1 class will grow robustly, as suppose he continues to build volume. Meanwhile, the potential approval of [indiscernible] is expected later this year. If we can achieve our target product profile with VTX002, which is placebo adjusted clinical remission of around 20%. Or better than we believe there's an opportunity for VTX002 to become a class leading drug in ulcerative colitis. And as we mentioned in the press release, enrollment in the phase two trial of VTX002 has continued to progress very well. So we're excited about this program. And based on a 13 week primary endpoint, we are on track to report top line data in the second half of 2023. Finally, I'll briefly touch on our portfolio of novel oral NLRP3 inhibitors. On our last earnings call, we announced that we have initiated a phase two proof of concept study of our peripheral NLRP3 inhibitor VTX 2735 and familial cold autoinflammatory syndrome syndrome, or FCAS, which is the most common subpopulation of cryopyrin-associated periodic syndrome or CAPS. With our CNS penetrant compound VTX3232 we expect to initiate a phase one trial on healthy volunteers this quarter. Our goal is to position both of these NLRP3 inhibitors as phase two ready clinical candidates by establishing a differentiated profile in terms of safety pharmacokinetic and pharmacodynamic activity. We believe that there is a wide range of high value indications for future development of both our peripheral NLRP3 inhibitor VTX2735, and our CNS penetrant molecule VTX3232. On the peripheral side mechanism such indications include cardiovascular, dermatologic and rheumatologic diseases. With regard to NLRP3 inhibition in the CNS. There's a strong biologic rationale to potentially address devastating neurodegenerative diseases such as Parkinson's disease, and Alzheimer's disease, among others. In summary, this is a very exciting period for Ventyx. And our portfolio of novel small molecules. Execution has been strong across the pipeline. And we're very much looking forward to announcing top line data for VTX958 and VTXoo2 in the second half of this year. Before we move on to Q&A I'd like to hand the call back to Marty for a brief discussion of our financial results, Marty?

Thank you, Bill. You'll find details from our financial results for the first quarter and in March 31 in our press release and believe the 10-Q filing is also hit on the website. And I'll summarize those results here. R&D expenses were 35.4 million for the first quarter of 2023, compared to 17.4 million in the first quarter of 2022. This increase reflects the advancement of our pipeline in the later stages of clinical testing, including execution of the ongoing phase two trial of VTX02 and ulcerative colitis and the phase two programs for VTX-958 and psoriasis, Crohn's disease and psoriatic arthritis. As we previously mentioned, we continue to expect R&D expenses to increase directionally throughout 2023 with some quarter-over-quarter variability expected as our phase two trials progress and as we conduct our CMC activities in preparation for the potential launch of phase three trials 002, 958 and 2024. G&A expenses in the quarter were 7.1 million versus 5.3 million in the first quarter of '22. And the net loss in the first quarter of 2023 was 38.9 million, compared to 22.7 million for the first quarter of 2022. Cash, cash equivalents and marketable securities totaled 376.9 million as of March 31. This reflects an increase in from our end of year cash and equivalents balance of 356.6 million and reflects proceeds from the sale of stock on our ATM facility, which occurred during Q1 offset by our first quarter cash fund. And we continue to believe that our current cash equivalents and marketable securities are sufficient to support plant operations into 2025. With that, we conclude our prepared remarks for this afternoon's call. I'll turn the mic back over to Angela to begin the Q&A session where I'll be joined by Raju and Bill. Operator?

The floor is now open for questions. [Operator Instructions] Our first question is coming from Michael Yee with Jefferies. Please go ahead.

Hey, guys, thanks for the question. Thanks for the updates. We had two areas we wanted to ask on the first was actually on the S1P1. I know you have data coming up later this year. There have been some studies that I've read out recently, had no placebo, then of course, some studies like the tRNA had a very low placebo. Can you just help us understand what things you have in place? And what strategies and what you expect to have for your placebo? In your upcoming study? And how to think about that versus the some of the other recent UC studies that I've read out in the past couple of months? And then the second question is you also have an update on the ER tablet 958. Can you just remind us? Are you testing multiple different technologies in that? Or is that one technology at different doses? Thank you.

Excellent. Thanks, Mike, good to hear from you. Let me have Bill, talk about the S1P1 and trials and placebo and then I'll come back with ER tablet.

Yes. So it's a good question, Mike. I think that trials without placebo arms that are not controlled are not easy to interpret. And so you just have to take those data with a grain of salt. Placebo rates can vary the average placebo rate and moderate severe ulcerative colitis trials is about 7.5% or 8%. It can sometimes be as low as 2% or 3% and it can be as high as the low teens. More or less, the way you try to manage for this is to keep good control of the trial to monitor the disease characteristics of the patients that are coming into the trial. And we do that robustly. You can also sort of monitor the outcomes and pooled blinded data to see if the magnitude of response that you're seeing is, just barely crossing the threshold to be a response or whether it's a deep and a robust response. I'm not going to get into the details around any of those things, except to say we're well aware of all the characteristics, and we've monitored the trial very carefully as it has progressed.

Good. Anything else on that Mike?

Very helpful. They're helpful. And then on the ER, tablet, I shed some light on that. What's going on? Different technologies?

Yes. So it's a good question. And thanks for asking to clarify that. So we have we have a couple of different technologies. But it's important to understand that these are sort of complementary technologies. So what we do is we use one technology to make sure we're sort of using viral bio relevant dissolution methods, which is what's happening in the, in the absorption, dissolution absorption phase in humans. And then we complement this with a technology that actually simulates what's actually going to happen, the dynamics, the motility of what actually happens on absorption. So you really are sort of, using multiple technologies to make sure for lack of better we're checking a box in checking the appropriate boxes for most technologies. So if you maximize your chance of then when you go into human data, You've now made sure that you've simulated what you see both in terms of dissolution fluids and the solution rate and also absorption distribution in terms of what actually happens in a system where you've got, bile salts and motility or all of those factors and that's sort of the path we take with each iteration that we're doing towards our target product profile for that, tablet acuity dosing, and phase three.

Thank you.

You're welcome.

Thank you. Our next question comes from Yasmeen Rahimi with Piper Sandler.

Good afternoon team and thank you so much for all the great updates. Two questions for you. Maybe the first one is to start off on as one peon. I know, most of the analysts and investors are very familiar on what the bar is in regards to efficacy into that data readout in the second half, but maybe what would be helpful is Dr. Sandborn if you could educate us on what do we want to see from a safety perspective out of the space to be that could highlight differentiation? So that's question number one. And then question number two is, tomorrow morning, we're going to see, some phase one data from the IL-23 oral product. And we'd love to, as we're looking at that data, think about how you guys are like, I guess, could we look at that and being able to predict sort of what the what the, I guess the comparisons or or the take to class versus to IL-23 class could offer, obviously, just on based on phase one data, and I'll jump back into the queue.

Yes, so let me let me address the protagonist question. Yes. And again, good to hear from you. So yes, the Phase One data supposed to come out tomorrow, the ISID meeting, followed by the more detailed efficacy data that's going to come out sometime. And I believe the July timeframe. Again, I think we had a similar question at the last call. And I think we have to wait for the data. And I think that PK/PD itself might be illustrative to some extent. But the real meat is going to be in the in the phase two data and how it compares to what we've seen with drugs in this class, the biologics and orals that have come out recently. So it's really difficult to speculate on something we have no idea about the new you and I have talked about the press release that came out early on. So I think let's wait for this data. Let's look at the PK/PD, it'll give us a little more color on this class of compounds. And we have none. And then we'll wait for the efficacy data and have a meaningful discussion on this class of drugs in particular. But let me just hand it over to Bill for the S1P1 question.

Yes. So just to frame the perspective, remember that the S1P1 class of medications has had regulatory approval in the United States since 2010, when Gilenya was approved for multiple sclerosis, and there's about a million patient years of exposure with Gilenya and their marketed dose has lymphocyte reductions in the low 70s, which is exactly where we are targeting for the higher of our two doses. So the context of the data that we release in the second half of the year, for from a safety perspective will be in the context of we're very well under stood class of drugs, with respect to all the potential safety issues. The second thing is to say is that, we'll be releasing 13 weeks of safety data. And so the, that's a limited period of time. So it's, it's not typical that you see a lot of important, what I would say are big ticket adverse events, anyway, in a early trial, but the data will be what they are, if you look specifically what you like to see, for drugs that are effective, typically the end well tolerated, you pick typically we'll see completion rate for 12 or 13 weeks in the single digits. So having patients complete, the induction course of therapy is one measure of safety and tolerability. Then, of course, you're looking at the proportions of patients that have severe adverse events and have discontinuation sort of related and flipside of that the relatedness of adverse events and severe adverse events to the to the compound as judged by the investigator, so we'll look at all those things. And then narrowly in the S1P1 class you can see heart rate reductions and AB blocks. And those can be, substantially mitigated with dosing titration regimens. And we think we have a good dosing titration regimen. So seeing what the rates of bradycardia is, in the first 13 weeks by treatment group and seeing if there are any cases of AB block and those sort of things, those will be of interest and would allow comparing and contrasting with other products, which may or may not be titrated. The other things that you see with S1P1 drugs are generally rare and you're not likely to see in phase two induction study.

Thank you so much Dr. Sandborn for your comments.

Your next question comes from Derek Archila with Wells Fargo, please go ahead.

Hey, guys, thanks for taking the questions. Just a couple of for us. Maybe just first, we wanted to get your take on why we won't see a plateau for the TYK2 class. Even at IC-90 coverage. I guess. Some folks point to this Pfizer molecule which allegedly had IC-90 coverage for 24 hours and their 12 week data looking fairly similar to [indiscernible] cadence drug policy [indiscernible]. So just love to get your thoughts there. And then also, can you just remind us how many sites you have in the S1P1 trial in the geographic distribution of those sites? And any color on the split you would expect for advanced therapies versus it would also be helpful. Thanks.

Yes. Derek good question. And, you've seen some of that analysis out there. So, we'll address it again. And I'll have Bill again, talk a little bit about this, because we have taken it there. But let me just start out on some of the analysis being done out there with in terms of coverage, or model coverage and IC-70s, 80s and 90s that people have put out there. In particular, let's get outside the Pfizer compound. Let's focus on some of the of the analysis been done for [indiscernible] two Takeda doses they've been done. And look, cross trial comparison with small number of folks is really challenging, but the data are what they are right. I think our belief is that within those three examples, I can leave Pfizer out of there to the acidic to 12 milligram dose that people are using to model out the IC-50 coverage for about 18 hours I think, and the Tac-279, which is the IC-74 for 24 hours and this is data that's put out there I think is pretty consistent with what you can read from the various numbers disclosures 30 milligrams is IC-80 right. Now what we've said is we are going into our phase two trial in particular for psoriasis with trough coverage of IC-90 and our top doses. And then significant coverage for across other doses behind the trial. But we are going in with dose and doses that cover IC-90 for 24 hours, right. And our data are going to read out in the fourth quarter. And we'll see in our aspiration, as we've said this before to see differentiated efficacy across multiple readouts. So IC-50, 75 and IC-90, and differentiated efficacy from other compounds that we are now talking about. Right. So that's really is the crux of their argument. We're going in with maximum coverage. And we hope to show differentiated efficacy from what you've seen here, right. So again, it's yes, I've seen the analysis, we've seen the analysis. And this sort of always leads to this plateauing effect, in particular when people are sort of myopically focused on IC-75. But let me have Bill and see if he wants to add a little more to this discussion that we had before as well.

Yes, I would just say that if, when the dosing is sufficient to approximate a biologic like effect with interleukin antibody therapy at the optimal dose, what you see is a consistency across the outcome measures of trends for either for PASI-75, 90 and 100. And in phase two trials, you can have outliers sometimes. So, for instance, the if you look at the highest dose of the Takeda product, in phase two, the PASI 75, or the sorry, the PASI-100 in the [indiscernible] you would see with full biologic coverage. But the PASI-75, and 90 were not. So there's an inconsistency there that is different from what you see with a, with a well does drug at the plateauing of its pharmacodynamic effects. So it just doesn't make sense that eventually, with adequate target coverage, you wouldn't be able to reach an antibody like efficacy, because with antibodies, as you dose down, you will see left shifts of all the efficacy across the PASI-75, 90 and 100. And if you go up on the dose, you and have enough patience, you'll see consistency across those measures, all shifting up, in unison. So we'll have our data when we have the data, but we think that a well dosed drug will just show that consistency as you move through the dose range of population, the expected relationships for PASI-75, 90, and 100. Coming to the UC trial, so I think we probably won't comment in detail on exactly the characteristics of the patients that we have recruited. We have a substantial number of sites in multiple countries, pretty standard for the industry. And this looks like a typical international internationally conducted phase two trial, we've conducted it relatively quickly. And that's what it looks like the from a monitoring perspective. What we do will be as we are have pooled blinded data, you can stratify patients for high enrolling sites versus non high enrolling sites, specific high enrolling countries versus rest of world Advanced Therapy, naive versus Advanced Therapy failure. And what you're looking for is that you see consistency across those stratified analyses in the rates of the different outcome measures. And I feel good about the consistency of our data in biologic naive and biologic failure in high enrolling countries versus rest of world. So I think we're conducting a robust trial, and I'm not going to lay out all the exact patient population characteristics today, you'll see those when the data come out in the second half. But from a trial monitoring perspective, I'm very pleased with the consistency of the data.

Okay. Got it. Understood, super helpful. Thank you, guys.

Yes. Thanks, Derek.

The next question comes from Alex Thompson with Stifel. Please go ahead.

Hey, Great, thanks for taking my question. I think for timelines for the rest of this year. I think previously, you had mentioned that you expected to data, certainly 3Q early 4Q and then the 958 data after that just wanted to sort of confirm that those timelines are still what you're expecting. And then maybe, for Marty, if you could talk a little bit about what's embedded in your cash runway guidance in terms of spend?

Thanks. Yes , so for S1P1 we've always guided people to second half of the year, so it's going to be sometime late third quarter, early fourth quarter. And then for the psoriasis trial for 958 fourth quarter, so late fourth quarter I would probably guide people.

Hey, it's Marty. Yes, so our cash flow is expected to carry us into 2025. And what's included in that in those assumptions, then is completion across all the phase two studies that Bill spoke about today on the call. So that's the caps trial for 2735 the psoriasis psoriatic arthritis and Crohn's trials for, for 958, as well as the UC trial for 02 we anticipate being able to complete the phase one trial for VTX3232, our CNS directed NLRP3 inhibitor capital, and we expect to be able to produce materials and conduct necessary kind of like pre phase three trial costs around CMC, things like that. Getting into 2025 obviously does not necessarily get us through completion of any of the phase two trials we might be running based on data we get out of our face to readouts later this year.

Great, thanks.

Yes, thanks, Alex.

Next question comes from Chris Shibutani with Goldman Sachs. Please go ahead.

Thank you very much. Two questions. If I may, the first, I believe and Quinntrials.gov with the phase two psoriasis study, it appears that in the posting, but there's a slight change with a 16 week long term extension arm that was added, is this new? And if so, what drove this decision? Or is it just an updated aspect of the posting, and it's the study has always been designed this way. And then secondly, reflecting on the tick to development strategy and commercialization that Bristol's had, you previously commented for [indiscernible] that you expected a negative outcome from the Crohn's disease. Phase two, this has played out. Can you talk about your impressions? And if this has any influence on your thinking going forward on Crohn's? And then secondly, with particulars commercial performance, made recently talked about how that's done relative to Otezla? I think they talked about a 40% versus 60%. Share, how has this performance compared with your expectations, and maybe share with us your views updated on the commercial opportunity as a result of how [indiscernible] delivering thus far? Thank you.

Chris, those are three questions not two.

Yes 2A, 2B.

Yes, let me have Bill comment on trials.

Yes. So for the study design when we initially did the regulatory filings, we had toxicity, coverage Tox study coverage for up to 16 weeks of therapy, and so that the trial was designed with that in mind, and the primary endpoint was and remains week 16. Subsequent to that we have had sufficient long term or chronic Tox data to extend the duration of treatment beyond the 16 weeks, and we went through the regulatory filing process for that. And the clinical trials.gov update indicates that we'll do another year of therapy. So there was just the availability of supporting data with respect to Crohn's disease and TYK2, I don't think that we always expected that the outcome of the study would be negative, we'd know that with all 23 antibodies, that you need doses that will plateau at a high level IC-75 and 85% to 90% range, you need at least those doses, if not higher, to see efficacy and Crohn's disease. And, of course, the so TYK2 dose that was studied, was well below that and had estimated IC-50 coverage of about 16 hours in IC-90 coverage of zero hours. So no reason to believe that would work in Crohn's disease. And sure enough, that didn't we, we always knew that was what was happening and that we expected the trial to fail. And it's a completely different proposition from the hypothesis of our trial where we are studying doses up to 24 hours of IC-90 coverage that we think will show class leading efficacy and psoriasis and will likely be show strong efficacy in Crohn's disease as well. So it doesn't change our thinking at all. We completely factor that in.

And on the commercial.

Yes. On the commercial side keep it brief. So first, we've just recently hired a head of commercial here forward thinking across our trials, and looking beyond the psoriasis trial and other indications as well. I think this Tesla analysis for what it is. First, the analysis is always lagging as is now we begin our, our own discussions as part of our commercial planning with prescribers and KOLs. There is a huge amount of excitement in this class of drugs, right, big, big markets an oral which is clearly differentiated from Tesla. \ I think the market would grow, it's going to benefit us as we come into the market as we move along our trials. And I think with a drug with TYK2 class with safe drugs with efficacy that's comparable, but certainly better than what's been shown with addiction. I think the market would appreciate that. So we continue to, to feel very bullish about this class. And, and the prescribers that we're talking to now are bullish about the TYK2 inhibitors, so I think we just have to know it's still relatively early The days from the launch and I think we have to just appreciate what's happening in terms of not just Tesla but what what's the whole prescribing ratio in terms of biologic patients now your patients and folks that switching over from a Tesla or anything else to add Bill? No.

Okay, great. Thank you for sharing your thoughts.

Of course.

The next question comes from Emily Bodnar with H.C. Wainwright. Please go ahead.

Hi, thanks for taking the questions. I guess for the first one kind of following up on the previous question. [indiscernible] noted that they're going to have high dose data in the UC study later this year. So curious on any expectations you have for that study, and how that might impact your views for VTX958. And then maybe also, if you can comment on VTX2735, how you kind of plan on determining which indications you might want to take that acid into following the phase two [class] study. Thank you.

Yes. So again, I think Bill is addressed. He's discussed it before in terms of the [indiscernible] and you see the second trial get running. Once you take that first comeback.

Yes. It's not public, to my knowledge, exactly what the dose is. In phase one, they had a dose of 12 milligrams BID our calculations are that that would give approximately 24 hours of IC-50 coverage, and still zero hours of IC-90 coverage. And I'll remind all of us that 78% of patients had skin working class toxicity on that dose, so it was really not tolerable. So there have been rumors that they're studying 8 BID or 10 BID or even 12 BID. It's difficult to imagine it's 12 BID from a tolerability perspective. But even if it is, it's exactly the answer that I gave previously for Crohn's disease, even at 12 BID, it would not give coverage that you would expect to work in inflammatory bowel disease. And that just to remind us, what you also see is that the effect size with anti IL- 23 antibodies is larger in Crohn's disease than it is in ulcerative colitis. So you typically see differences between drug and placebo at optimal doses of 20% to 30% in Crohn's disease, and it's more in the 10% to 15% range and ulcerative colitis. So, the Lilly phase three program showed a 10% gain over placebo with [indiscernible] have recently reported 14% better than placebo and their phase three studies and ulcerative colitis for induction studies. As I recall the quotes high dose to crab a citizen of study is 40 patients for our per arm, drug and placebo if they are seeking to show a difference of 14%, which I think is the best case scenario. If you had a fully dosed antibody or a TYK2 inhibitor that has IC-90 for 24 hours, you'd be trying to show a 14% difference with four with 40 patients per arm, that's not going to work. So I predict it will fail.

All right, there you have it. So for NLRP3, as we said in our R&D day our goal for this year for 2023 is to position both molecules 2735, 3232 as phase two ready compounds. With respect to 2735. This is a peripheral compound we believe is the best in class and NLRP3 peripheral molecule out there. So we've done the phase one, we announced the Phase One data last year we've done the Tox work, we've done the CMC work to support the phase two trial. What we also were very clear about this last discussion was with our focus on driving the phase two trials for TYK2 with 958 with our focus on the UC trial for 002 we would we would sort of shift the focus from 2735 towards the end of the year. Again, this will be a phase two ready molecule. We have previously shared the excitement across a number of disease indications where IL-1 beta and IL-18 have been implicated and a lot of sort of validation from different trials out there in particular in the biologics. So we'll make a decision towards the end of the year. With this [indiscernible] compound how we proceed with the development, whether it's with a partner whether we go it alone. But for now, what we've done is was just in these as phase two already compounds focus on delivering on our promise with both trials for UC and for 002. So just stay tuned for 2735.

Great, thanks so much.

Yes. You're welcome.

Our next question comes from Sam Slutsky with LifeSci Capital. Please go ahead.

Hey, good afternoon, everyone. Thanks for taking my questions. Two quick ones, for me, one on the oral IL-4 receptor alpha program, remind me on the profile that you're looking for in your lead candidate, and then what target coverage she thinks needed for an oral Alpha receptor alpha to be effective.

So again, we're not we are not going to go into too much detail on that program. Sam, as you know, we're one of the few folks that has sort of embarked upon this challenge. We've disclosed our lead, just sort of little data on our lead comp compound in terms of the excitement we have, obviously, with going against a extremely successful drug out there [indiscernible] and what I would say, just stay tuned, we're moving along the lead up a program here, could all of the assets in place. We've said that we'll come back towards the end of the year and talk a little bit more about this as the program matures. So stay tuned.

Okay. And then just lastly, for the phase one study, we're for VTX3232, since you plan to take that into neuroinflammatory indications, just curious on how you're thinking about measuring the PD effect, and then what you would want to see with that for a CNS drug?

Yes. Great question. So there's little there is really no precedent for, or there's no data for NLRP3 that's been taken into a phase 1, or phase 1B trial, there was indication that the [indiscernible] compound had been taken, and there's no data released from that particular trial. So for us, it's really we think this is a best in class compound, it has a really good CNSidn profile in terms of KPU, use distribution across the CSF, what we expect to be the free fraction in the interstitial fluid in the brain. So our goal for the phase 1 study, it's a two part goal. First is to do a phase 1 study where we look at, of course, exposure, we will looking at safety, and exposure both in blood plasma, as well as in CSF, which is a surrogate for free fraction of the brain, and also a surrogate for what you expect in the interstitial fluid and in the CNS as well. So that's part one. What we're actually looking at now, and we will disclose our final intent is, is looking at, at potentially looking at biomarkers in a phase 1B trial, as well. And as you know that it's very complicated. And we have to make sure we understand what we're looking for, and calibrate that before we do something like that. But again, we feel very confident that a phase 1 standalone sideman with efficacy, PK in particular, looking at exposure in the CSF, is a very relevant path forward for the eventual development of this compound in longer phase two studies, again, the precedent for looking at CSF levels, and calibrating those two brain levels as well. I think in terms of, of biomarkers, of course, the ultimate biomarker [indiscernible] NLRP3 activity is IL-1 beta. But again, we're also be conscious of if and when we go into a disease population, what biomarkers do we expect to modulate in those patients and are they really sort of consistent with the duration of these trials? Are they really meaningful in terms of what would guide us through a phase 2 trial? So stay tuned for 3232 news coming out. Of course, we're as we said, we're going to dose the phase one, healthy volunteers in this quarter. And then we'll talk more about that future of this of the phase 1 trials and 1B trials in later discussions.

Got it. Thanks.

Yes. You're welcome.

Thank you. I would now like to turn the call back to Dr. Raju Mohan for some closing remarks.

Yes, well, again, thank you all you know, we just a spoke a few weeks back, it's always great to get together with you all and address the questions very thoughtful and appreciate the interest in our programs. And so let's, we'll see you guys again in a few months. So thanks again all and thanks to the team.