In our last note, we made some fun predictions for a number of companies in our eclectic universe. Of all the predictions, the one that made us the most nervous was that Ventyx Biosciences (Nasdaq: VTYX) would not consummate a licensing agreement with Sanofi for VTX3232. To be clear, we were comfortable enough to put it in writing, but unlike other predictions, this one could have left egg on our face. Sure, we made bolder predictions, like Delcath Systems (Nasdaq: DCTH) would be acquired this year. But if Delcath isn’t acquired by the end of the year, we aren’t going to see a press release titled “Delcath Not Acquired,” which would reinforce that our prediction was wrong. However, we knew a Sanofi VTX3232 decision was relatively imminent, given that their right-of-first-negotiation window was open, and if we were wrong, there would be a headline reinforcing our poor prediction. So when this week’s news broke that Ventyx was being acquired by Lilly for $1.2 billion ($14/share), we were pleased, not only because we are shareholders but also because the prediction, which we felt most nervous about, held true.
NLRP3 Arms Race
Two quick NLRP3 segues before we put Ventyx to rest. We have been talking about the company for almost two years, including a dedicated note from June 2024 titled “Ventyx: An Emerging NLRP3 Pure-Play With Some Legacy Baggage.” However, our first mention of the company came in a February 2024 note, where we made a passing comment that Ventyx was the perfect example of how frothy the obesity trade had become. Long-tenured Ventyx followers will recall that earlier that year, Ventyx had spiked off preclinical obesity data from its NLRP3 peer, NodThera Therapeutics. That leads us to our first segue: NodThera was rumored to be exploring going public early in 2025, before eventually raising $50 million in a Series D round in June. We would guess that, after Lilly’s acquisition of Ventyx, the IPO window for NodThera is wide open, but it also wouldn’t be surprising to see them sell to the highest bidder in what could become an NLRP3 arms race. It is worth reminding investors that Novo Nordisk already has an NLRP3 inhibitor in its pipeline from a 2022 licensing deal with Ventus Therapeutics.
Read At Your Own Risk
Our second segue revisits another company from that February 2024 note, which at the time was also benefiting from the frothy obesity trade. Zyversa Therapeutics (OTC: ZVSA) has an antibody, IC 100, that broadly inhibits inflammasomes, including NLRP3. Why bring up a penny stock that has been delisted from Nasdaq, has no cash, and has only ever generated preclinical data with IC 100? Because it is very cheap (~$2 million market cap), and it wouldn’t surprise us, following this Ventyx/Lilly news, to see Zyversa do some hand-waving about IC 100 and NLRP3. We are also, admittedly, degenerate biotech investors, always looking for affordable, undiscovered opportunities. So, for our fellow degenerates out there, we highlight Zyversa as a VERY speculative name that could benefit from investor enthusiasm around NLRP3 post Ventyx acquisition. Proceed with caution.
Pole Position & Potential Pivot
Given that the February 2024 note we keep mentioning above was titled “Rybelsus Redux: Entera Bio & Oral GLP-1s For Obesity”, it seems appropriate that we address some key recent developments at Entera Bio (Nasdaq: ENTX). As the title implies, our first note on Entera was a tongue-in-cheek commentary on a very early-stage asset in its pipeline, an oral formulation of Oxyntomodulin (OXM), a dual-acting GLP-1/Glucagon agonist for obesity. That asset remains active in Entera’s pipeline, and the company, along with its partner, OPKO Health (Nasdaq: OPK), has guided for an IND filing in 1H2026. However, anyone who has followed Entera closely knows that the company’s lead asset is EB613, a Phase 3-ready oral parathyroid hormone (PTH 1-34), in development for osteoporosis.
Around this time last year, we were highlighting FDA’s imminent decision on the qualification of total hip bone mineral density (BMD) as an approvable surrogate endpoint for fracture reduction in patients with osteoporosis, and how Entera with EB613 was the most leveraged public company to that decision. FDA didn’t meet its January guidance for BMD qualification, but Entera’s CEO, Miranda Toledano, remained steadfast that a favorable decision would still occur in 2025. Sure enough, a few weeks ago, even though 11 months late, FDA qualified BMD as a surrogate endpoint for osteoporosis drug approvals. This would appear to be a massive win for Entera (and women’s health); however, in July, in a move that likely foreshadowed the FDA’s qualification decision, the company announced it had already reached an agreement with the Agency to use BMD as the primary endpoint for an EB613 registrational trial in osteoporosis.
There’s nuance between the BMD endpoint FDA agreed to with Entera and the one they qualified last month. Regardless, Entera has had a green light to start a Phase 3 with BMD as the primary endpoint since July. Yet, as we begin 2026, the company hasn’t shared much detail on its Phase 3 plans. Entera remains positioned to be the first company to initiate a pivotal Phase 3 osteoporosis study with BMD as the primary endpoint, but the size and cost of that study have not been disclosed. In her Evercore presentation in December, CEO Toledano committed to starting the Phase 3 in 1H2026, so investors should expect the details of the Phase 3 study soon.
In the meantime, in May of last year, Entera began discussing its development plans for a next-generation EB613. Next-gen EB613 offers benefits over the parent, being a single, fixed-dose, daily treatment, and, importantly, it comes with fresh IP. Entera had guided that a Phase 1 study with next-gen 613 would begin before YE2025, and although there hasn’t been a press release announcing the study’s initiation, we expect it at any time. The development of a next-gen EB613 has us wondering whether the company could pivot to this new formulation for its pivotal osteoporosis program. Even if there were a pivot to next-gen EB613, we still think Entera should be the first company to launch a Phase 3 osteoporosis program with BMD as the primary endpoint.
At What Cost?
Investors have been waiting for more comprehensive data from Gain Therapeutics’ (Nasdaq: GANX) Phase 1b study with GT-02287 in Parkinson’s disease (PD) patients, after a rather opaque December press release, which qualitatively discussed some biomarker results but provided little actual data. This week, the company issued another press release and hosted a webinar, during which it shared more information on the Phase 1b results. The company highlighted a reduction in the GCase substrate glucosylsphingosine (GluSph) in cerebrospinal fluid (CSF) as being indicative of drug activity in the brain and on-target effect of GT-02287, which is intended to restore GCase function. The company also shared additional Unified Parkinson’s Disease Rating Scale (UPDRS) results from a larger patient cohort. The company reported a modest improvement of 2.2 points in the combined UPDRS II and III scores at day 90 in 15 PD patients treated with GT-02287.
We were hoping the company would share more details, in particular patient-level data, so we could compare GCase/GluSph results with UPDRS outcomes. Perhaps that data will be coming at a future scientific symposium. Nevertheless, we would describe the results shared by Gain thus far as mixed but still encouraging. We recognize that this is a small, early study and that, by its nature, the results would be open to interpretation. However, Gain needs money to fund Phase 2 development, and the hope was that these Phase 1b data would lift the equity, giving them options on how to proceed. Unfortunately for the company, the results haven’t resonated with investors, and although we think money should be available to them, the question now is at what cost? In our opinion, the best path forward for Gain is to seek an exit, assuming there are interested parties. We hear Sanofi is back in the market, looking for novel mechanisms to treat PD…