Drug Catalysts Could Boost This Biopharmaceutical Stock's Value, Wells Fargo Says

March 21, 2023

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It was reported by Wells Fargo that Ventyx’s immunology and inflammation projects could be boosted by catalysts which could help it to more than double its stock price.

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The biopharmaceutical stock was given overweight coverage by analyst Derek Archila, who also set a $77 price target for the stock. His price prediction suggests that from where the stock closed on Monday, it will rise 103.4% over the following year.

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In a note to clients on Tuesday, Archila stated, "We anticipate numerous catalysts over the next 12 to 18 months for VTYX's small molecule immunology & inflammatory portfolio offer considerable upside for shares."

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Tuesday morning trading saw a nearly 1.2% increase in the stock. This year alone, it has increased by 15.4%.

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Archila believes that Ventyx is in a strong position to improve psoriasis treatment with a once-daily inhibitor that was developed by rival Takeda in a trial that suggests there is room for Ventyx to step in and offer better treatment. Ventyx's update on its tyrosine-protein kinase inhibitor, or TYK2, which is expected to be released by mid-2023, should serve as a key test of whether the company is able to differentiate itself from its competitors.

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The overall picture has been bright for the company, with Archila pointing out that there is a good chance it can set a new benchmark with its trial to treat moderate to severe ulcerative colitis. Wall Street expects to see the readout in the second half of this year, which would be "highly impressive," if the results meet expectations.

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Currently, investors are pricing both of these drugs in the same manner as they do for their competitors as they are not distinguishable from one another.

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It was further stated that two of Valley Therapeutics' clinical trials, known as VTX2735 and VTX3232, give private equity investors the chance to make a play on the trend of using drugs to suppress inflammation, which occurs as a result of infection or stress-associated stimuli.