Hello, thank you for standing by. Welcome to Roivant Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. I will now hand the conference over to Stephanie Lee. You may begin.

Good morning, and thanks for joining today's call to review Roivant’s financial results for the third quarter ended December 31, 2023, along with a business update. I'm Stephanie Lee with Roivant. Presenting today, we have Matt Gline, CEO of Roivant. For those dialing in via conference call you can find the slides being presented today as well as the press release announcing these updates on our IR website www.investor.roivant.com. We'll also be providing the current side numbers as we present to help you follow along. I'd like to remind you that we'll be making certain forward-looking statements during today's presentation. We strongly encourage you to review the information that we have filed with the SEC for more information regarding these forward-looking statements and related risks and uncertainties. And with that, I'll turn it over to Matt.

Thank you, Steph, and thank you everyone for being here today. I appreciate it. It's great to discuss our third quarter results. I want to give a quick overview of our agenda. We will recap last year, review recent data from Univant, discuss the upcoming proof-of-concept results for brepocitinib in non-infectious uveitis, evaluate VTAMA's performance, highlight upcoming catalysts, provide a financial update, and then move to Q&A. This presentation should be relatively brief. As we've mentioned regarding last year, this will be our final summary of those results. On Slide 5, I'd like to remind everyone about the previous year, where we successfully continued both the commercialization and development of VTAMA, thanks to positive Phase 3 data from our studies, positioning us for an anticipated approval for atopic dermatitis later this year, following the filing of our NDA and sNDA. We've also completed the sale of our anti-TL1A antibody to Roche during this quarter. We have initial human data from IMVT-1402, indicating our next-generation anti-FcRn antibody effectively suppresses IgG without impacting albumin and LDL, presented in a convenient subcutaneous format. Additionally, our Phase 2 study in Graves’ disease yielded results that surpassed our expectations, which we will discuss further in this call. Unfortunately, our TYK2, JAK1 data for brepocitinib in SLE did not meet our primary endpoint, leading us to discontinue development in that area. However, we anticipate multiple additional results and programs from brepocitinib in the future. On Slide 6, we're proud of our ability to gather data for significant clinical programs efficiently. Looking at our track record, we stand out among major global pharma companies in terms of late-stage readouts last year, all while considerably minimizing costs. This demonstrates our model for capital efficiency in bringing programs to fruition. In 2024, as illustrated on Slide 7, we are focusing on growth and expansion, with an emphasis on delivering clinical data and strategic updates for our anti-FcRn franchise. Univant provided some updates yesterday, and we aim to explore 10 indications over the next couple of years, with four to five potential registrational programs proposed to start in the next fiscal year. Moreover, we expect to advance development for some underappreciated pipeline opportunities, including brepocitinib and namilumab, which we haven’t discussed much yet. We plan to shortly file our sNDA for VTAMA in atopic dermatitis, continue to drive revenue growth in psoriasis, and look forward to launching in atopic dermatitis. This represents a pivotal moment for us. As for business development, we are exploring transformative pipeline expansion opportunities in mid-to-late-stage development areas. Although I cannot share specifics today or a timeline for that, I am very enthusiastic about the prospects we are considering. We expect to finalize our capital allocation strategy soon and provide substantial updates. Following our deal with Roche, we requested your patience while we assessed options for allocating our $6.7 billion cash balance, which we intend to use in three key areas: ensuring Roivant reaches profitability, expanding our pipeline, and returning capital to shareholders appropriately. We believe that our call for patience is coming to an end, and we will have important updates in the near future. On Slide 9, I want to highlight our late-stage programs, including VTAMA, our FcRn franchise with batoclimab and IMVT-1402, as well as brepocitinib and namilumab. I also want to mention an undisclosed Phase 2 program that we'll provide details on later this year. We had anticipated developing data in RVT-2001 for transfusion-dependent anemia in low-risk MDS patients, but I regret to inform you that our Phase 1/2 study data did not meet our expectations, leading to the decision to discontinue its development after an interim analysis. Now, regarding Immunovant, we have a broad development strategy in place designed to maximize value through various strategic options. We are extremely excited about our next-generation antibody, IMVT-1402, which is anticipated to offer significant IgG lowering, similar to batoclimab, while maintaining a clean safety profile with minimal effects on albumin and LDL, and is designed for simple subcutaneous injection. The evidence supporting the need for deeper IgG suppression shows that patients benefiting from this approach can achieve improved clinical outcomes across various conditions. On Slide 13, from our recent study, we demonstrated effective IgG suppression at both 300 and 600-milligram doses with no significant impact on albumin or LDL levels. We believe our treatment can achieve over 80% IgG suppression with optimal dosing. The data also presents a clean safety profile with no severe adverse events reported. In regard to Graves' disease, we acknowledge the competitive landscape around FcRn and how everyone is keen to see Phase 2 data. However, we are quite optimistic about this opportunity, as indicated by our trial design, which administered high and low doses to patients with active Graves' disease. We designed the study to assess the normalization of thyroid hormones and established a response rate goal of 50%. So far, we are pleased to report that we exceeded that target significantly, showing promising results, particularly at the higher dosage. As we look at our pipeline, we have announced 22 indications for the anti-FcRn class. While there are a few competitive options in certain areas, the overall intensity in FcRn is relatively low, providing us a unique opportunity for broad development. Expect continued updates regarding IMVT-1402 this year, along with further strategic insights. Lastly, with our oral brepocitinib program, we are advancing our development strategy targeting orphan rheumatology, aiming for a significant registrational study in dermatomyositis with results expected next year. We are also excited to generate proof-of-concept data for non-infectious uveitis soon. The situation remains urgent when considering the unmet needs in non-infectious uveitis. With about 30,000 new cases of legal blindness attributed annually to this condition and a lack of approved therapies beyond Humira, we are motivated to demonstrate the effectiveness of our treatment. Our trial design includes comparison doses with the primary endpoint focusing on treatment failure rates, which we expect to present preliminary findings for in the first quarter of 2024. For VTAMA, our brand continues to show decent script growth in psoriasis, maintaining its position as the top-selling branded topical treatment since launch. We are pleased to note over 300,000 prescriptions written by more than 14,000 doctors, resulting in $20.7 million in product revenue for the quarter. Our payer coverage has improved significantly, achieving around 83%. Turning to atopic dermatitis, we recently shared impressive data from our long-term extension study, ADORING 3, and our results matched those of systemic therapies, highlighting a promising opportunity within this growing market. We plan to submit our sNDA for atopic dermatitis shortly, which puts us on track for potential approval later this year. In closing, we have an array of clinical data developments lined up, including ongoing updates for NIU and further FcRn results. We’re also working towards establishing deep IgG suppression in various diseases, with significant data expected for batoclimab's CIDP Phase 2b and Phase 3 programs in myasthenia gravis. We are also eager to see results from namilumab concerning sarcoidosis, a program currently underappreciated but with potential for significant value. Financially, for the quarter, we reported net revenues of $37.1 million, with R&D expenses at $120 million and SG&A expenses around $200 million, leading to adjusted EBITDA of $150 million. Notably, we recorded a net income of $5.1 billion related to the Roche deal, placing our cash and cash equivalents at $6.7 billion. In summary, we have a rich set of catalysts ahead, and I will now turn it over to the operator for Q&A. Thank you for your time today.

Our first question comes from the line of Allison Bratzel with Piper Sandler.

Matt, I think, I heard your characterization of the current setup as very conducive to business development, and how you see pipeline expansion opportunities that are transformative. I guess could you maybe set some guardrails on your current thinking on business development transformative makes it sound like you're looking at a single versus multiple opportunities, but not from interpreting that correctly. And then I think also I heard you say we should have an update on the capital allocation strategy before the next earnings report. Could you just help us understand kind of what's getting to that disclosure and how you expect to communicate that to the street?

I'm glad you asked that question, and I'll let Mayukh add to it as well because I think it's important. The general scope of what we're considering aligns with our previous deals. We're primarily looking at partnerships or acquisitions of late-stage programs, which are more likely to be programs than mergers and acquisitions. We expect several opportunities over the next year, including some that we've already pursued. When I refer to transformative, I mean that some of these programs will enter large late-stage studies that will significantly reshape our pipeline and enhance our already strong late-stage initiatives. Mayukh, do you have anything to add?

Thank you for your question. It's an important one, and I want to clarify what we are considering. It's unlikely that we're primarily looking at mergers and acquisitions; more likely, we’ll be focused on multiple programs. Regarding capital allocation, I anticipate making significant progress by the time of our next earnings call. This involves not only analysis but also advancing late-stage business development discussions to understand the full scope of that aspect. However, it’s tough to see how these developments will dramatically alter the overall picture. Additionally, we've mentioned the composition of our shareholder base, and for instance, Sumitomo has expressed a desire to divest their holdings due to their financial circumstances. We are continually engaging with all our shareholders to navigate this situation optimally for our success. Once these discussions reach a resolution, I believe we will be able to offer more clarity.

Our next question comes from the line of David Risinger with Leerink Partners.

So could you please discuss both the Moderna LNP litigation event path ahead and also Pfizer, LNP litigation developments to watch? I know that you're limited with respect to what you can say, but whatever you can provide on the call would be helpful. And then, Richard, could you discuss the spend 2024, specifically, SG&A and R&D.

Thanks, Dave. I appreciate your questions and your understanding of my limited ability to comment. Regarding the Moderna litigation, I can share that we had our claim construction hearing last week, and overall, we were pleased with our ability to present our key arguments. This hearing is significant, and we believe the judge will thoroughly consider everything discussed. We expect to have more information about the outcome in approximately 60 days, although there is no fixed timeline for the response. It's a complex matter, and we want to ensure everything is properly evaluated. On the Pfizer litigation, that case is still in progress, and while we don't have a set date for a claim construction hearing, we anticipate it will occur later this year. Many people are following these developments, and we appreciate that. Now, I will turn it over to Richard to discuss the spending for next year, but I want to mention that there are various factors at play. TL1A is out of the spending, and VTAMA is continuing to ramp up, which generally helps with cash burn. However, some aspects depend on the programs we currently have or will bring in. Richard, do you have any comments on spending?

Yes, I would anticipate that spend would be relatively flat over the next few quarters. Obviously, once AD approval comes through on VTAMA towards the end of the year, we would ramp up the sales efforts there, so you'd see an uptick as we approach that towards the end of the year. And then also as the 1402, R&D spend ramps up with the additional trials that we talked about that will also start coming through, but relatively flat over the next few quarters and then see a ramp-up as more trials come through. Also, we will see some data on NIU, so we'll have to make a decision there to see if we do additional spending depending on how that data reads out. And then start a dose at the end of the year as well.

Our next question comes from the line of Brian Cheng with JPMorgan.

Matt, in the last earnings call, we didn't touch on the asset that you acquired, and it was reflected as the 14 million items in the in-process R&D line and 10-Q. Can you give us more color here on the stage of the asset and indication? How much data was there behind this program, and when could we see the mixed data updates here? I have a quick follow-up.

On the unnamed asset, we've now provided a little bit more color. We've indicated that the program should be entering Phase 2, so that should give you a sense on stage. I won't say too much more. It's in a space where we feel like we have a reasonably decent handle on what's going on, but it is a development stage program. And the reason we're not talking very much about it right now is it's broadly a competitive space and we think we have an opportunity to be ahead. So we'll talk more about it later this year as the clinical program gets up and running. I think that was your main question there, right? And I think you had another one.

Yes. Related Immunovant plan here. It's quite a robust development plan for the next one to two fiscal years. With the speed that you're shooting for, do you see the need for Immunovant to partner off, or do you think that they can lean on Roivant for additional financial resources?

It's a very good question. As we consider the combination of Roivant and Immunovant, there wasn't a financial necessity for a partner, and the plan we've outlined is ambitious and comprehensive because we believe in our ability to execute clinically. Given the extensive opportunities we have, we are confident that both Roivant and Immunovant, utilizing the necessary resources, can achieve something significant here. The successful development of 1402 is one of the top priorities at Roivant. If Immunovant requires additional resources, whether personnel or financial, we will certainly engage in those discussions. Although I mentioned that the competitive intensity is relatively low, it is still a competitive environment, and we face strong, well-funded competitors. However, we are confident in our ability to keep up with them in clinical development. As we've stated previously, we will be very strategic in maximizing the value of the program, including exploring partnerships and other strategic opportunities for Immunovant to ensure we stay on track.

Our next question comes from the line of Yaron Werber with TD Cowen.

Now that the lupus study is readout, what's your latest thinking on which indications to prioritize for brepocitinib and when might we hear more about that broader indication list?

Thanks for listening and thanks for the good question, and we're very excited about brepocitinib. I will potentially ask Mayukh to comment a little bit on this too. I guess this is the maybe the first earnings call we've had since the brepocitinib lupus data. I don't think we read much of anything into the program at all from the lupus readout. We had always sort of indicated we thought it was going to be a high-risk readout because of lupus disease dynamics. And frankly, the drug effect in the study was reasonable or in fact quite good. The problem was we saw, as we've indicated, the largest placebo response rate, I think ever observed in an SLE study. And so, I don't think that gets particularly to the opportunity for the drug. And then the safety profile remained consistent with what we've observed historically. So I think the short answer is we are full speed ahead on our original plan that centers around dermatomyositis where the study continues to enroll. Well, that includes potentially NIU and obviously as Richard said, and as I said earlier, we'll have to make a decision on what to do in NIU after observing that proof-of-concept data coming in the near future. And then other indications, we continue to evaluate a reasonable breadth of indications that sort of fit into what we call the orphan rheumatology bucket. But I'd say, one that we are sort of making a decision on in the relatively near future, potentially depending on what we see in NIU, et cetera, is HS. Where we have quite good Phase 2 data. So I think things that fit nicely with that are still on the list for us, but we're first and foremost focused on DM and then NIU.

Our next question comes from the line of Dennis Ding with Jefferies.

Regarding business development, can you please clarify your previous comments? You said not a single program, but multiple programs. Will this all come from a single announcement, or is this more like a string of pearls type of business development path over the next year? And then question number two around Immunovant, has the company engaged with the FDA yet on a registrational path for Graves and the level of confidence that 1402 can go directly to Phase 3 and skip a Phase 2?

I will address the second question first and then provide a brief comment on the first. I will also check if Mayukh has any insights on the business development question. Regarding Immunovant, the main takeaway is that we will leave it to them to announce the specifics of the clinical plan for 1402. However, we are working through all the important regulatory questions with the FDA and others. Immunovant's guidance that they aim to enter four to five potentially registrational programs this year reflects their informed outlook on what they can achieve. We feel optimistic about this, and we'll provide updates on each indication as they become available. On the business development front, thank you for the question; it's a valuable clarification. We are not focused on a single large deal but rather see a number of opportunities that excite us. We have one project in-house and are considering a few others, so it's more like a variety of programs we might bring in over the next year and beyond, which aligns with how we typically operate. Mayukh, do you have any thoughts on this?

That's right. I think you hit the main point right at the end there. I mean, look, this is sort of a regular course for us. We're always looking for promising assets where we think we can make a difference and we're as focused on that as we've ever been. We're not resting, we're working hard towards it. The exact timing and sort of contours of that are still sort of unknown, but expect that, expect to hear more from us.

If I can just squeeze one last question here around NIU given basic data that's coming up soon here, could you comment on what's the bar for success here, given it's a small study and there's no placebo? I know there's some numbers in your slides around expecting less than 30% treatment failure rate, and you're estimating 80% to 90% stimulated placebo. But just wondering if you may actually need to see lower failure rates since placebo can be highly variable.

Actually I'll hand it over to Mayukh, do you have sort of thoughts on that question?

I don't have too much to add. I think you both mentioned that there is some variability, but we are approaching this like all our trials. We want to see a clear indication of efficacy for ourselves, even when considering potential variability in the estimated placebo rate. We will be eager to proceed if the results are clear.

The only other thing I'd add is, remember this is a 24 patient study. It's randomized in favor of the 45 milligram. In our experience looking at Phase 2 data, you often expect it to be straightforward, like getting a clear thumbs up or thumbs down, but instead, you often receive ambiguous results, leaving you wondering about their significance. It's challenging to condense the additional data from the study into a single figure. We established a 70% treatment failure rate as a benchmark, but it's important to note that we will thoroughly examine each patient to understand the drug's effects. These patients are quite ill, with 30,000 new cases of blindness occurring each year, which underscores our belief that we have an opportunity to make a significant impact with the right clinical insights.

There are two other points to add there. I think, look, we are sort of hoping to see a bit of a dose response here and that like, while there's not a placebo, there is a relatively low dose of brepocitinib that ought to give a little bit of a, let's just call it, maybe not placebo, but something kind of closer to placebo on efficacy and the 15 milligram dose. That's thing one. And thing two is I think at least in conceptualizing the Humira sort of comp that you cited. We've got a more aggressive steroid taper in our study than in the Humira study. And so, you'd expect to see a higher placebo failure rate as a result.

Our next question comes from the line of Louise Chen with Cantor.

I wanted to ask you first on how you plan to address the concentration in the shareholder base. Will that kind of all be done together with some of the announcements that you plan to make before the next earnings call? And then the second thing I wanted to ask you was on expansion of your pipeline, what therapeutic areas are you most interested in? And if you can't say what therapeutic areas you're most interested in, how competitive do you want to get with some of the most topical areas that people are investing in right now?

On the shareholder base side, I think the first answer is that is not a decision that we can make unilaterally. It depends on our desires, but also the desires of some of our concentrated shareholders who in many cases are happy holders and frankly, believe what we believe, which is that our stock is meaningfully undervalued given the sort of overall position of the company. So I think that's a discussion we have to have sort of bilaterally with each of them. We'll take it in turn you, I think, what we expect to do is to be ruthlessly economic and thoughtful about how we use our cash for that purpose. Whether that means we clean them up at once, whether it means we clean some of them up, I think that depends a little bit on their needs and their appetite and on making the right economic decisions. Stay tuned is the short answer. On the BD question, and again, I'll ask Mayukh comments as well, but I think the short answer is we are sort of necessarily agnostic to therapeutic area, because so much of our opportunity comes from strategic shifts and focus at our partners and that leading them to need to rethink their portfolio. So if someone is doubling down on immunology, maybe something else is falling out as a consequence. So we're pretty flexible in general because we're in that sort of string of pearls one program from here, one program from there dynamic. What that tends to mean is we are more excited about areas where a single program can kind of stand on its own. So, think of the immunology programs that we've developed, for example, and maybe a little bit less excited about areas where you need a concentration, either because it's like oncology where you're developing multiple drugs in combination in order to have a coherent plan or maybe because it's something like cell and gene therapy, where you have a sort of a need for manufacturing expertise that provides an economy of scale. So it's not that we would not go into either of those areas, but they're probably like modestly less likely for that reason. Mayukh, anything you'd add to that?

I think, as we look, and this is really typical of the history of the company, I think as I kind of look at the list of things that I would say that we're excited about and prosecuting pursuing, right now it's about an eclectic a list as one could kind of imagine in terms of therapeutic areas. So as Matt said, we're going to continue to be therapeutic area agnostic. I think we have tended, as for the reasons that Matt stated, we have tended to be in areas that probably at first glance tend to be a little bit off the run or a little bit contrarian. And sometimes, I think we've shown that sometimes those areas tend to heat up as we have sort of seen with FcRn and then with TL1A in the past. And so that could well happen again, but probably again just a mix.

The bar for us is not, is it competitive, the bar for us is can we get something that makes sense for us given the development plan, the economic terms, etc. And so, there are occasionally programs in very competitive spaces where idiosyncratic factors make them attractive from a sort of, like many people care about it perspective that are nonetheless easy for us to get. And then there are sometimes programs in less competitive areas where nonetheless they're harder to pry loose. And so I think it's not about sort of how many other people are doing it, it's about what we can get our hands on.

Our next question comes from the line of Corinne Jenkins with Goldman Sachs.

Maybe as a follow on to Louise's question, how do you think about Roivant's ability to add value to the assets that you're considering in those deals? And what do you view as the company's core competencies in that context? And then I was also wondering, you say that the environment is sort of in really good shape, it's the best it's ever been, but what metrics are you seeing that inform that comment and as the biotech market kind of has and hopefully will continue to improve, how do you expect the environment to go from here?

On the first point, I believe it's clear that our strongest asset throughout our history has been our creative, thoughtful, and aggressive approach to clinical development. We have successfully conducted 10 positive Phase 3 studies and many Phase 2 studies. We have adjusted our indication plans for programs when appropriate and have managed late-stage development effectively for programs where we are satisfied with the selected indication. Therefore, when evaluating a new program, our key strength lies in our efficiency, thoughtfulness, and creativity in development strategies and indication selection, along with our execution capabilities. Our ability to act quickly is something we take great pride in. Regarding the current environment, we are observing changes in the biotech market. There are various opportunities emerging, but the landscape is evolving, especially for companies trading under cash. Some of these market shifts may improve capital access for certain companies, while others remain less favored due to their current circumstances. We are taking a broad perspective and find this overall trend encouraging. However, the primary factor influencing our opportunity set is what is happening in big pharma, which remains unchanged. There is significant pressure on earnings per share and numerous patent expiries affecting many pharma companies across the industry. Additionally, the IRA is compelling our partners to reconsider their development strategies in various ways. This combination suggests that R&D portfolio prioritization must occur within these companies. If a large pharmaceutical company is revisiting its portfolio, we believe they would seek a partner that offers the capital to support a solid program, the capability to execute effectively, and a collaborative approach to structure these partnerships beneficially. We feel that we have a unique track record in these areas that distinguishes us from others in the biotech sector, positioning us as a preferred partner for those companies with genuine needs.

Our next question comes from the line of Neena Bitritto-Garg with Deutsche Bank.

So just a question about the non-infectious uveitis study. Can you just remind us what the definition of failure is that you're using the study? I know in some of the other studies that's a kind of multifactorial definition. And then on CIDP data for batoclimab, just wondering what you would consider to be kind of a meaningful difference, from a dose ranging perspective between 340 milligram and 680 milligram?

On NIU, Mayukh or Frank, feel free to add your thoughts. I believe our definition aligns with the others, although I currently don’t have the exact definition right in front of me to ensure clarity afterward. Mayukh or Frank, do you have the precise definition available? No problem if you don’t. Regarding CIDP, I think this is somewhat of a balance of factors. What we've observed in CIDP resembles IVIg-like response rates, and we hope that with a higher dose, we can achieve results that better meet the expectations of patients and providers compared to IVIg in terms of efficacy. That’s our general perspective on what we aim to deliver. The primary definition involves discontinuation or an intercurrent event at week 24.

Our next question comes from the line of Yatin Suneja with Guggenheim.

Could you discuss the competitive landscape regarding VTAMA and your marketing efforts? You are maintaining a similar level of investment, so how should we anticipate a shift in the atopic dermatitis market? What is the expected timeline for this, and what additional infrastructure would be needed for atopic dermatitis? Also, could you provide insights on net yield? How should we view 2024 in terms of net yield?

I appreciate the question, and it's very relevant. From a competitive standpoint, we still see ourselves as narrowly focused compared to other new topical agents in psoriasis. Physicians continue to choose us preferentially. As we’ve mentioned, our focus has traditionally been on capturing market share from topical corticosteroids, and this remains a priority. High-prescribing doctors frequently recommend our product and are enthusiastic about it, while others may only prescribe it a few times a month and have not yet realized the potential for more frequent prescribing. We're actively addressing these dynamics, and I'm optimistic that prescribing behavior will evolve over time. There are a few competitive developments, including a new foam launched by one of our competitors, but this does not significantly affect our product's usage since it is not often used for scalp treatments. We believe this is a good indicator for them, but it's not a major concern for us. We are also exploring our own foam product and considering expansion opportunities in that area. Regarding atopic dermatitis (AD), it represents a substantial market. We're enthusiastic about our product’s profile, which we believe is even more distinctive in AD compared to psoriasis. AD is less developed and potentially a faster-growing market, more receptive to new topical agents since there have been several already in the market. Therefore, we can target market share not just from steroids but also from competitors that have already established themselves. For the upcoming quarter, we expect to launch during our next fiscal year, with approval anticipated late this calendar year. We will focus on script volume uptake and anticipate significant growth. We aim to increase our sales representatives from about 100 to 125. There's not a drastic change in our commercial infrastructure, but we are actively learning from our psoriasis experiences to guide our direct-to-consumer strategies around the launch. The prescriber base for AD is a bit different and more dispersed, prompting us to consider strategies to reach beyond just dermatologists. Stay tuned for updates on that front. Regarding gross to net (GTN), our progress has been gradual but steady. We are working through some inconsistent contracting as contracts change or renew, but overall, I would characterize our growth this year as slow and steady. We might see a slight dip or flatness in the first quarter due to regular reasons like plan resets. I anticipate that the AD launch won't halt our progress but may temporarily slow it down as we ensure formulary setups are completed quickly. Thus, slow and steady is likely the best way to view GTN throughout 2024.

Our next question comes from the line of Douglas Tsao with HC Wainwright.

Matt, you indicated that you were sort of still agnostic I guess in terms of therapeutic area after you did announce the Telavant transaction with Roche. You sort of said that having a much greater cash balance potentially positioned you to sort of take on big opportunities further into development. Does that influence where, or sort of certain therapeutic areas that you might favor? Because obviously you have could the outlines of such a strong I&I portfolio right now.

I appreciate the question and thoughtful as always. I think first of all, we continue to appreciate the pleasing coherence we have in I&I, we think, but FcRn fits nicely with brepocitinib that namilumab and sarcoidosis is sort of hewing in the same directions. So look, I think to the extent that we see things in I&I that work for us, there's something nice to that. I think in many ways what our capital base and frankly our history of development in, remember some of our first Phase 3 programs we're in endometriosis and uterine fibroids and overactive bladder, which are not necessarily indications that we're jumping up and down about literally right now for new programs. But they're big studies and big indications, and I think we have a lot of history in that kind of disease state. One of the things that I think frankly differentiates us from many biotech companies is that our capital base allows us to do larger studies for broader populations. And so I think we will potentially take advantage of that both because those can be big opportunities and because there are opportunities that will sort of necessarily get passed over by smaller folks who don't have the capital position of the development experience to take them on. So I think that is a competitive opportunity for us that we will be taking advantage of.

And Matt, I guess as a follow-up, to the extent that you perhaps do pursue opportunities outside of I&I would you think about sort of new areas as ones in which you would want to start to build some scale? Meaning if you executed a new one single transaction as a potential therapeutic area, would you be what likely looking to add to that?

It's a discussion that we have internally as we look at our pipeline. And again, there are things that we see where we see a program and it makes more sense as a part of our portfolio than it does sort of on a standalone basis. So I think it's certainly possible as we build out additional programs that they will become nexuses of scale. I think it's important to know, though, we evaluate every program on its own merits. We evaluate every program based on the data we've got, and I think we're going to pursue sort of value and risk over sort of therapeutic concentration per se. But, Mayukh, I'll hand it over to you.

Yeah, I think, look, I think as you've seen from us, typically when we bring in a new program, I mean, it's sort of by definition it's got to have enough heft to kind of stand on its own. I think that's the lens through which we look at it, that's the lens through which we sort of hire a team to sort of prosecute around it, we typically call it a new vent, but that's kind of how we think about it. And last night it's, I guess like I would say, I can't underscore the comment Matt made enough about capital being a major competitive advantage for us. Both in terms of I think like what that brings as a solution to a perspective pharma partner and that we have the sort of scale of capital that is meaningful to them. And that is unique to us. And so I think we view that as precious.

Our next question comes from the line of Robyn Karnauskas with Truist Securities.

This is Nishant, filling in for Robyn. You mentioned a slow and steady approach regarding VTAMA GTN for the next year. In the last call, you referred to reaching 50% at steady state. Do you still believe that 50% is the long-term target for GTN? Also, in the broader picture for the company, how many assets do you plan to retain in the long run?

On the GTN question, I don't see any significant changes to our long-term steady-state guidance. Building up volume, which contributes to yield accretion, will take time. Our guidance of 50% remains consistent with other biotech launch programs, and the trends affecting us will largely mirror those impacting other programs. We plan to retain and develop the programs we are excited about and believe hold commercial importance and clinical potential. The trajectory may shift based on the quality of data we gather and insights from external opinions about these programs. If I could foresee a scenario where we kept all the programs in our pipeline as viable commercial opportunities, I'd be very enthusiastic. However, we will maintain a disciplined approach, and some of the targets we are pursuing are appealing not only to us but also to potential partners.

Ladies and gentlemen, at this time, I would like to turn the call back over to Matt for closing remarks.

Thank you, everyone. I appreciate you listening in. Thank you to the operator for moderating the call, and a special thanks to all our analysts, investors, and the entire team at Roivant. We are proud of what we've accomplished this quarter and are excited about what lies ahead as we build towards 2024. I'm looking forward to our future conversations and will speak to you all soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.