Good day and thank you for standing by. Welcome to the Roivant First Quarter 2024 Earnings 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephanie Lee. Please go ahead.

Good morning, and thank you for joining today's call to review Roivant's financial results for the first quarter ended June 30, 2024, along with the 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 at www.investor.roivant.com. We'll also be providing the slide 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 all for joining. It's always great to have these discussions. We've held off on significant fund updates until this fall, so today we'll provide a straightforward set of updates, including some important points on clinical execution and a few other topics I'm eager to discuss. Starting on slide 5, this year is focused on our growth and expansion. We're working hard to deliver clinical data across our various franchises, particularly in the anti-FcRn area where substantial data will be available soon and over the next six months. We are also progressing with our pipeline, including brepocitinib, where we plan to launch our Phase 3 program in NIU shortly, along with upcoming data on namilumab and sarcoidosis. We will cover VTAMA today, where the story revolves around label expansion for AD and increased momentum in psoriasis volumes and revenues over time. We are actively expanding our pipeline with several mid-late-stage programs. Next month, we'll reveal a long-discussed program, so stay tuned for that. We're also prioritizing our capital allocation aggressively, focusing on share buybacks among other strategies. On slide 6, we take pride in our pipeline's current status. Regarding IMVT, despite interest in it, we believe our pipeline remains one of the strongest in the immune and inflammatory sector. We're excited about the range of opportunities available to us, particularly in the next 18 months, including pivotal data from brepocitinib. Starting with the quarterly updates on slide 8, we've completed enrollment in our Phase 3 dermatomyositis study, which has 241 subjects across 90 sites, marking it as the largest interventional DM study to date. We expect top-line results in the latter half of next year. We've also finished our end of Phase 2 meeting with the FDA concerning the NIU opportunity and are set to initiate a 52-week Phase 3 study soon. As you might recall from last quarter, there was a slight delay in the MG study, but we can now confirm that enrollment has been completed, and we anticipate data in Q1 of next year. The registrational program for MG is likely to begin next year as well, and we'll discuss additional programs shortly. We're also looking forward to unveiling our Phase 2 program next month, sharing some data in a similar format to this call. On slide 9, we're pleased with advancements at Genevant regarding our IP litigation involving COVID vaccine discoveries. We have requested a modified case schedule to obtain more information from Moderna, aiming for a trial kickoff in September 2025. Additionally, we've reached clinical regulatory milestones resulting in cash inflows, including a $28 million milestone from the Japanese approval of VTAMA, which we received in July, and our share of the remaining Roche proceeds for Telavant now that they have started, totaling $110 million, received this month as well. Now, let's delve deeper into Immunovant and the anti-FcRn field. While we have engaged in many discussions, I regret that the narrative has drifted toward a smaller pie instead of acknowledging the broader opportunities in FcRn biology and B-cell immunology. Our data indicates a promising landscape, and we want to reiterate our excitement about the program. As shown on Slide 11, we believe that IMVT-1402 has the potential to set a new standard due to its ability to suppress IgG without adverse effects on albumin and LDL levels, a notable improvement over our previous generation. Furthermore, we expect to introduce IMVT-1402 in an auto-injector format, facilitating convenient at-home self-administration, pending FDA approval, which we think will be an attractive option for patients. When we look at the growth of FcRn biology, Slide 12 shows substantial progress: there are now 23 indications under development for anti-FcRn antibodies, significantly increasing the patient population to approximately 4 million, with more expected soon. On Slide 13, we note that there have been 22 successful late-stage studies across nine indications with four different anti-FcRn antibodies studied in about 2,000 patients, leading to compelling data on this mechanism. Regarding competitive mechanisms in autoimmune diseases, seen on Slide 14, while we appreciate the developments in IgG degradation and CAR-T approaches, it’s worth noting that these areas are still earlier than FcRn advancements. Slide 15 illustrates FcRn’s position compared to the TNF class, which shows our broad range of indications, the significant sales performance of FcRn, and expectations that this class will grow at a faster rate than TNFs due to a broader development pipeline. This is an expansive opportunity with many large indications that can support various programs and mechanisms. Looking ahead on Slide 16, we have an ambitious plan for 1402, targeting four to five potential registrational programs this fiscal year, with ten indications anticipated by next year. We're eager about the upcoming data to validate our approaches. For VTAMA, on Slide 18, I want to share that we generated $18.4 million in product revenue this quarter, remaining steady in terms of GTN yield. Importantly, script volumes have risen by 20% year-on-year, revealing consistent growth in the psoriasis market. We're still striving to improve, particularly with the anticipated launch for AD after this year's approval. Regarding GTN fluctuations, we did experience a reset in one payer contract earlier this year, impacting our rebates. However, I believe this will stabilize moving forward, and overall net pricing remains positive. On Slide 20, I want to highlight key upcoming catalysts, including the undisclosed program with clinical data next month. We're also excited about 1402's detailed development plan and forthcoming data from the batoclimab Graves' study. Top-line results from the Phase II trial of namilumab in sarcoidosis will also be announced, and we expect the pivotal expansion of the VTAMA label for atopic dermatitis by year-end, along with pivotal data from batoclimab and myasthenia gravis expected by the end of our fiscal year. In summary, on Slide 22, our financial performance shows a normal quarter, with net income of $57 million and total revenues of $55 million, including product revenues of $18 million. We ended the quarter with $5.7 billion in cash and equivalents, reflecting the re-purchase from Sumitomo in April. Our debt has decreased due to the renegotiation at Dermavant, and share count is approximately 739 million. To conclude on Slide 24, we have an exciting schedule ahead with significant catalysts and data releases coming soon. I look forward to discussing these updates in the coming months. Thank you for listening, and I'll now pass it back to the operator for the Q&A session.

And our first question comes from Allison Bratzel of Piper Sandler. Your line is open.

Hey good morning. Thanks for the update Matt, and thanks for taking the question. Just one for me on Priovant. Now that you've met with FDA on brepo and NIU, just I guess what is left to be worked out or decided on the Phase III design? I think you'd given some high-level guidance looking for 300 to 350-ish patients and a protocol basically as close to NEPTUNE as possible. I guess just high level, is that still the case? And is any of this protocol design dependent on the 52-week readout later this year? And then just I guess on that longer-term follow-up, what would you view as an outcome that reinforces your view on the opportunity in uveitis? Thanks.

Yes, sure. Thanks. So look first of all extremely constructive interaction with FDA. I think they are really excited to see a new opportunity in NIU, which is a disease that really needs to be studied. I think we feel good about where that's headed. I'd say the previous guidance was largely in line with what we expect to see. And I think we got just about everything we really feel like we needed to make that program a success. So really at this point small tweaks but just getting steady up and running and we'll be able to provide a full perception of it pretty soon here honestly. And then I'd say, basically none of the study design hinges on the 52-week data, although obviously, we saw something surprising. We were closely at it. And I think – I don't think there's anything in particular we're looking for in 52 weeks to reinforce the program other than continued strong benefit to patients, which given the quality of the 24-week data we certainly expect. Thanks, All. Thanks for the great question.

Thank you. Our next question comes from Corinne Johnson of Goldman Sachs. Your line is open.

Hey, good morning, team. This is Craig on for Corinne. So following the completion of enrollment of the VALOR study. Can you kind of outline how the final enrollment compares to your original expectations? And maybe walk us through some powering assumptions there?

Yes. Sure. A couple of things. One is the actual number of patients to be enrolled at 241 was a little bit higher than our original plan for the study, originally it had been 225. So we feel extremely well powered. I don't have a lot to say on like baseline characteristics or demographics right now. I think we're perfectly happy with the patients that we've enrolled and we think it sets us up well. I guess the other comment I'll make with a shout out to the Priovant team is PM is an incredibly difficult indication in which to develop drugs, these patients are hard to find. And frankly, our experience is that the key is a lot of leg work with the sites. This is – so we spend a lot of time talking to investigators trying to get out there in the field to make sure that we have what we needed. And so yes, I'm very proud of the effort there. I'm proud of how quickly that study was able to get to fully enroll and looking forward to sharing that data when it's available. It's the largest as I said earlier. Thanks for the question.

Of course. Just one more if I may. Could you just remind us of what you're looking for in terms of the go no-go decision for the Phase II namilumab data coming relatively soon?

Look I think – we haven't articulated like a simple straightforward bar. And I think the truth is that sarcoidosis is one of these diseases, where there's not a lot of other therapeutic mechanisms. There are not a lot of options for patients who are suffering with the disease. So I think the bar is meaningful. I think the bar is – if the study works, it’s certainly worth progressing. As with all Phase II trials, we're going to evaluate the qualitative data and we'll think about what else is on our plate. We're also looking for consistency across not just the primary but across a few secondaries and a bunch of different ways that people look at the treatment of sarcoidosis patients. Thank you.

Got it. Thank you, guys.

Thank you. Our next question comes from Brian Cheng of JPMorgan. Your line is open.

Hey, guys. Good morning. Thanks for taking our question. Maybe first is with the recent sell-off in the market just – does it make it easier or harder for you to find a new asset? Does it change the way how you negotiate?

Thanks, Brian. Great question. I will hand over to Mayukh. But the short thing I'll say is we – look, we work with a wide range of different prospective partners. They are affected by varying degrees to the financial markets. But mostly we're focused on getting great opportunities at prices that we're excited about. But Mayukh, what would you say to the question about the sell-off?

Yes. Look, I think the short answer is it depends. But I think I don't know if there's too much more to add to what Matt said.

Thanks, Mayukh. So Brian I think the short answer – the other piece is sort of the question behind the question is we remain really excited with what we see in the world and we're looking forward to doing the right deal at the right time.

I have a question about 1402. I want to get a clearer understanding of your approach to this asset. Considering the ten indications you are preparing for in the upcoming fiscal year and the various opportunities you've outlined in your presentation, how do you decide which areas to focus on? More importantly, how do you plan to gain recognition for these efforts from investors, particularly since they seem primarily interested in MG and CIDP? Essentially, how will you ensure that 1402 is acknowledged for exploring new indications? Lastly, could you provide some details on the timing of data releases this fall? We're expecting a Phase II asset announcement in September, as well as updates on the Graves plan for Immunovant and sarcoidosis data. What is the schedule for this data flow? Thank you.

Thanks, Brian. All great questions. Look unfortunately, I think the anodyne answer that's also true is obviously, the biggest factor that's going to go into our picking through the indications is the quality of the biology, the size of the unmet need, where we can be competitively positioned, cost and risk kind of trade-offs. Like those are obviously, the main factors that go in. I'd say, a couple of things about 1402 that I find exciting or about the existing landscape and it seems like Mayukh may want to jump in also. One of the things that we've said, over and over again about FcRn, is that anyone's Phase II studies, everyone's Phase II study that goes both ways. It means that we need to be careful about what are made out, but it means that once you know, what the depth of IgG suppression does in a patient population, you could really be front of the pack. And so, I think we're looking at indications where we can be in the front of the pack where we can get out there commercially and sort of be neck and neck, with our competitors hopefully, with deeper IgG suppression. So I think that's obviously, a factor. For what it's worth, we also think MG is a really big opportunity. We also think CIDP is a big opportunity. And as a reminder, we're generating a meaningful data set in MG with batoclimab that will underscore and get to the better question just in the coming months. So I think there's a lot focus on there even batoclimab focused on the existing commercial indications.

I think you hit most of the point, Matt. I'd just like to say Brian that you framed the question, which is people are focused on MG and CIDP and everything else basically is upside.

That's right. Yes., I think that's a great way to put it. And in terms of cadence of catalyst flow, look, we have a busy call it six to seven months ahead here. I'd say, September will be a busy month and then the namilumab data comes later this fall. And then, I think we've said, MG will come kind of early next year and CIDP kind of probably, a little bit thereafter. So I think that's what the sort of a medium flow looks like. And obviously, shortly on the heels of that we'll be looking at the end and beyond.

Okay.

Great. Thanks, Brian.

Thank you. Our next question comes from Dave Risinger of Leerink Partners. Your line is open.

Thanks very much. And thanks for all the updates. So I have two questions, please. First, could you provide more color on the LNP litigation including the event path ahead and then second, could you discuss external transaction prospects including the size potential of deals that you're looking at? Thanks very much.

Yes, of course. Thank you, Dave. Those are both excellent questions. Regarding the LNP litigation, we cannot disclose too much about ongoing litigation, but I can share that we're currently in the discovery phase. As I mentioned earlier, we hope this process will continue for a few more months. We, along with Moderna, Arbutus, and Genevant, have requested a moderate extension to obtain answers to some outstanding questions. That’s the next step for us. Additionally, there will be a call with the judge in the coming weeks to seek approval for this timeline. If approved, we expect some rulings early next year followed by a trial a year from now. This timeline is slightly later than the most recent one, but it’s due to our initiative. As for external transaction price prospects, I will pass that over to Mayukh to address directly.

Hi, Dave. Thanks for the question. We have been cautious about being categorized and that remains the case. When considering the size of the opportunity, we view this as a portfolio. There will be variability with individual deals, but overall, we approach this on a deal-by-deal basis through an investment perspective. We see it as a good investment, and collectively, we aim to make a significant impact on our enterprise.

The only thing I'd add is, because we have the question sometimes I'm always surprised, when I get it. I think we are a very unlikely buyer of multibillion dollar public companies. I think we are stingy by nature and are looking for places, where we can spend more of the dollars on clinical development. So, we are never saying never as a company, but I think that's just truly about who we are. Thanks, Dave.

Thank you.

Thank you. Our next question comes from Dennis Ding of Jefferies. Your line is open.

Hi, good morning. Thanks for taking our questions. Two, for me. So maybe if, we can revisit sarcoidosis briefly. Correct me if I'm wrong, but previously, you may have characterized the Phase II as potentially registrational. Can you reiterate that and see and confirm if that's true? Maybe talk a little bit about the path forward, if that data is positive. And then number two, around OpEx. I mean given Immunovant started a bunch of new trials over the next few years how do you think your OpEx will evolve during that time? Thank you.

Thank you. Regarding sarcoidosis, it's a Phase 2 study involving 100 patients, which is substantial enough to be considered pivotal if successful, especially since there are many patients with significant unmet needs. Based on the quality of the data, we can engage in discussions with regulators. We believe it’s essential to develop a comprehensive program alongside this Phase 2 study, and we’re excited about the progress in this disease area, especially since there are no approved treatments outside of steroids, indicating a major unmet need. As for Immunovant, considering they are about to initiate several pivotal studies, I anticipate an increase in their operating expenses. While I cannot provide specific financial guidance right now, the cost of a Phase 3 program for an FcRn typically ranges from approximately $80 million to $120 million. These figures, along with overhead and personnel costs, should be reasonable estimates for the duration of these programs. Therefore, I expect their expenses will rise over time. Comparatively, some of our competitors have reported R&D expenses that could be insightful. A significant portion of the costs tends to align with the approach toward commercial launch from a general and administrative standpoint. Importantly, Immunovant is currently well-funded for this program, and we are pleased to be a strong partner for them.

Great. Thank you.

Thank you.

Thank you. Our next question comes from Yaron Werber of TD Cowen. Your line is open.

Thank you for taking my question. I have a couple of inquiries. First, I understand you plan to unveil your recently licensed Phase 2 program in September. Can you share any details today, such as the indication or the scale of the study? Is it randomized or an open-label study? Have there been other studies involving this mechanism in the indication you're exploring? Secondly, it seems that MG and CIDP will likely enter Phase 3 in Q1 with 1402. Regarding the other three conditions, are Graves', Sjogren’s, and perhaps another one in that order? Thank you.

Thank you, Yaron. We're just a few weeks away from discussing those assets, so I'll mainly hold off on comments except to reiterate that we're excited about the program. We have clinical data to share upon the program's release, and I believe that data will be informative to people. There is also a competing program from a large pharmaceutical company that has a similar mechanism and is being studied for a different indication, which we have mentioned publicly before. Besides that, we'll save further details until we reveal more in September, and I'm looking forward to it. Regarding the programs we've described, the Graves' data will be available soon, and we anticipate communicating both the data and the development plan for that program. The MG and CIDP data will begin to emerge early next year, and we have confirmed that MG will be in a firm study. We haven't disclosed the specifics of the other indications yet, but Immunovant will provide a comprehensive overview in the near future. To clarify, I expect Phase 3 studies for some of these programs, and we're aiming to have three INDs by the end of this year. All these INDs will involve registrational Phase 2/3 programs, so I anticipate that these studies will essentially conclude by the end of the year, with the other two starting in the first quarter. Thank you, Yaron.

Thank you. Our next question comes from Louise Chen of Cantor. Your line is open.

Hi, thank you for taking my questions here. I had two for you. The first one I wanted to ask you is if the launch of FcRn is a possibility just for Roivant to do on its own. Is that on the table? And then secondly just curious on the market opportunity for VTAMA and AD and how you're preparing for the launch of this product coming at the end of this year? Thank you.

Regarding the first question, we are certainly aware of a previous small biotech company that successfully launched an anti-FcRn antibody on its own. Therefore, it seems feasible for us to do the same. This appears to be an exciting opportunity, and the potential is substantial. We plan to focus on maximizing the value of this opportunity, and we are open to exploring all options. Concerning VTAMA and atopic dermatitis, our main focus is identifying prescribers who are currently not engaged with us, specifically pediatric allergists and dermatologists, as we will be the sole provider of new topical treatments at launch. It's crucial that we prepare effectively. Additionally, we are closely examining our current sales force targeting to ensure we are addressing the appropriate physicians and delivering the right messaging, particularly since the approach for atopic dermatitis differs from what is commonly seen in psoriasis. The pediatric demographic has unique characteristics, and the drug's safety and tolerability profile is even more favorable in the atopic dermatitis data set. Our data quality in this area stands out more significantly compared to other new topicals than it does in psoriasis. We need to communicate this effectively, especially since acute itch is a major symptom in atopic dermatitis, and we have very strong data to support that. We will ensure that we present the right messages to the right physicians while being careful not to overlap with those focusing on psoriasis, as we are eager to launch once we receive FDA approval. Thank you for your questions; I appreciate it.

Thank you. Our next question comes from Yatin Suneja of Guggenheim. Your line is open.

Yes. Thank you for taking my question. Maybe just one more on VTAMA specifically on the psoriasis side. I mean, if you look at the past I would say four, five quarters you are in that $18 million to $20 million range on a quarterly basis. I mean what does that imply about the overall market opportunity? What can you do to, sort of, reinvigorate sales in psoriasis? I understand you atopic dermatitis could give a lift, but just in psoriasis just curious, how you view the market what sort of peak sales you are assuming? Thanks.

Thank you for the question. I'm pleased with how we are positioned with VTAMA. The industry doesn't give us credit for it, so everything from here is an upside, which is a favorable situation to be in. As I mentioned in my prepared remarks, I believe our sales figures might downplay our progress due to some fluctuation in gross to net figures that we expect to resolve soon. In fact, our volumes are actually increasing, and we've been asked about the flattening of this curve for some time. We are up 20% in volume compared to the same quarter last year, and we are continuing to grow each quarter. As the gross to net figures stabilize, the foundation we are building each month and quarter will continue to benefit us. I'm optimistic that over time, the prescribing doctors who favor our product will increase their prescriptions. I truly believe psoriasis has significant long-term potential, although it has been a gradual process. In contrast, I see atopic dermatitis potentially providing a more immediate impact due to a larger patient population and more accessible data compared to our competitors. I am very excited about that launch as well. Thank you.

Thank you. Our next question comes from Douglas Tsao of H.C. Wainwright. Your line is open.

Hi. Good morning. Thanks for taking my questions. Matt I think from a business development standpoint you have largely focused on pulling individual assets out just given the sort of ongoing status in biotech does it ever change that you become more focused on looking at potentially acquiring companies?

We are generally just agnostic to the form in which great programs come our way. And so I think whether it's a company, whether it's an asset, I don't know if that's like the dividing line for us versus what are we getting and here's the value there? And do we think we can do something that matters with that. Mayukh, you got anything you'd add to that?

I think you got it.

I believe we've always been indifferent to that aspect. The majority of our current focus is on items in clinical development. When discussing companies versus assets, the distinction doesn't matter much to us. Our intentions are to seek out companies in the clinical or development stage programs. Thank you.

Thank you. Our next question comes from Andy Chen of Wolfe Research. Your line is open.

Good morning. Thank you for taking the question. One more question about VTAMA. Can you talk about specifically how you view competitive dynamics between you and your competition such as RQ that's an insight which patients do you think is going to prefer which product? And then on a related note and your pre-approval engagement work with PBMs do you foresee getting hit on gross to net if they prefer your competition?

Good. Thanks, Andy. Those are good questions and I want to give your special thanks because I think the analysts who come late in the rotation on these calls have a lot of work to do. So I appreciate the thoughtful question late in the morning. Look, on the first question, the key thing about these markets which we've said from the beginning is the competition is not other novel agents. The competition is steroids. There are many, many, many steroid scripts written. And the challenge is in changing well ingrained doctor behavior. I don't think in general it's like for the medium psoriasis or the median AD patients. It's like oh some docs sitting there and carefully thinking about the attributes absorbing versus Opzelura versus VTAMA and deciding on a patient-by-patient basis to give one or the other. I think the key point is getting docs comfortable that they have things to reach for. There are differences. In AD for example, we would hope for a label all the way down to A2. I think our competitors don't have labels that cover anything like quite that young. So I think there are opportunities to address patient populations that are different there. I think once-a-day application in AD is probably helpful the consistency of formulation the fact that it's a single concentration whereas at least one of our competitors has a couple of different concentrations going to be on the market. I think those things are all helpful, but it's not about like segmenting versus the other novel topicals per se. That's not sort of the major challenge mostly. And on the sort of PBM side, I think the short answer is commercially insured patients should have coverage for VTAMA under our current match care agreements. So I don't expect any super significant changes in the GTN or commercial dynamics on AD approval which is a great question. Thanks.

Thank you.

This concludes the question-and-answer session. I would like to turn it back to Matt Gline for closing remarks.

Look yes, thank you everybody. Thank you to all of our analysts for the great questions. Thank you everyone for dialing in for a relatively flat quarterly update. I'm looking forward to getting back on the phone in the coming weeks with some other things to share. And thanks to the Roivant team and to those folks actually involved. Thanks to all the patients and investigators who trust us and work with us. And we will talk to you very soon. Have a great day.

This concludes today's conference call. Thank you for participating and you may now disconnect.