Clinical-stage biopharmaceutical company Ventyx Biosciences (VTYX) saw its shares skyrocket to a new 52-week high of $41.29 after peer Bristol Myers Squibb’s (NYSE:BMY) Sotyktu was approved by the U.S. Food and Drug Administration (FDA).
Notably, Sotyktu (deucravacitinib), which is used for the treatment of plaque psoriasis, was approved by the FDA without any black-box warning. This means that the drug does not come under the purview of carrying serious safety risks and foretells a relatively easier entry into the market for other competitive drug makers.
Ventyx is also developing a similar drug labeled VTX958, which is “an oral, selective allosteric inhibitor of tyrosine kinase 2 (TYK2) with the potential to address a broad range of immune-mediated diseases such as psoriasis, psoriatic arthritis, Crohn’s disease, and lupus.”
Analysts’ View on Sotyktu Approval
Wall Street analysts were thrilled at the news of the FDA’s approval of Sotyktu sans a boxed warning. Most investors and analysts had expected the FDA to approve the drug with safety restrictions. However, the absence of warnings has made the drug makers look highly favorable to analysts, with the potential to earn huge revenues in the coming years.
H.C. Wainwright analyst Emily Bodnar called the no boxed warning approval a “best-case scenario for the TYK2 class” and a potential win for Ventyx’s VTX958. Bodnar believes that this will assist Sotyktu in overtaking competitor Otezla as the superior oral drug and increasing its market share. The analyst expects Ventyx to earn revenues of approximately $4.8 billion from psoriasis and psoriatic arthritis by 2035.
Bodnar also increased the price target for VTYX to $50 (31.2% upside potential) from $36 while maintaining a Buy rating.
Similarly, Jefferies analyst Michael Yee also raised the price target on VTYX stock to $60 (57.4% upside potential) from $30 and reiterated a Buy rating.
Yee believes that BMY’s approval without a black box warning was a surprise as investors had expected certain restrictions. The approval, he said, “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.”
Is Ventyx Biosciences a Buy, Sell, or Hold?
With all the good news flowing in currently coupled with analysts’ enthusiasm, Ventyx Biosciences surely looks like an attractive investment. On TipRanks, VTYX stock commands a Strong Buy consensus rating based on seven unanimous Buys. The average Ventyx Biosciences price target of $50.57 implies 32.7% upside potential to current levels. Meanwhile, the stock has exploded by 90.7% so far this year.
