Earnings Call Transcript - ROIV Q2 2026

Operator, Operator

Good day, and thank you for standing by. Welcome to Roivant's Second Quarter 2025 Earnings Call. Please note that today's conference is being recorded. I will now hand the conference over to your first speaker, Stephanie Lee. You may begin.

Stephanie Lee Griffin, IR Manager

Good morning, and thanks for joining today's call to review Roivant's financial results for the second quarter ended September 30, 2025. 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 current slide numbers as we present to help you follow along. I'd like to remind you that we will be making certain forward-looking statements during today's presentation. We strongly encourage you to review the information that we 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.

Matthew Gline, CEO

Thank you, Steph, and good morning, everybody, and thank you for listening. I appreciate all of you dialing in. So not at all a quiet quarter for us; we put out both the Graves' data and, obviously, the Phase III data for brepocitinib in DM. So it's a tremendous moment of transformation for the business, but a relatively quiet earnings call as we look forward to getting everybody together in December for a more detailed discussion about where we stand as a business and our future on our Investor Day on December 11. That registration link is live on our website, and we look forward to seeing you all there. Today will be more of a review of what's happened in the recent quarter, followed by a deeper dive into the future when we get together in December. I'm eager to start out on Slide 5 with a short victory lap, reflecting on what has been a pretty wild year for us. Most notably, starting with the VALOR data for brepocitinib in DM, which hit on all 10 ranked endpoints and presents a phenomenal dataset that we believe will transform the lives of DM patients. The NDA filing remains on track and is planned for the first half of next year, and it will be the first novel oral therapeutic in DM, if approved. We also released data this quarter from the durable remission arm of the Graves' disease trial for batoclimab, setting us up for future developments in our 1402 Graves' program, demonstrating disease-modifying potential. Earlier this year, we put out some data in MG and CIDP, validating that deeper dosing is indeed better for FcRn from an IgG expression viewpoint. Additionally, we initiated potentially registrational trials in Graves', myasthenia gravis, CIDP, difficult-to-treat RA, and Sjögren's, along with a POC trial in CLE under Immunovant. So we have some exciting progress there with IMVT-1402, which we hope will lead us to best-in-class and potentially first-in-class across multiple indications. We received a favorable Markman ruling this quarter for Genevant in the Pfizer case and continued progress in the LNP litigation, with a jury trial in the Moderna case scheduled for March 2026. Our capital position remains robust, with $4.4 billion in cash and cash equivalents, which will sustain our current pipeline to profitability as well as support pipeline expansion and potential additional capital return, including the $500 million that we currently have authorized. On Slide 6, we have been showcasing this slide for a while, but it feels increasingly real with each passing quarter as we look at our late-stage pipeline, which excites us with 11 potential registrational trials and indications with blockbuster potential. The first of these dermatomyositis has now passed, but many more await, leading us to the slide we've been presenting since June on Slide 7, showcasing a stacked 36 months ahead with multiple registrational data sets—first DM and NIU for brepocitinib, followed by the beginnings of a long list in 1402, including multiple blockbuster indications, especially in Graves'. This moment signifies a real change and transformation for the business, and internally, the team is energized; so too are external stakeholders like investigators and patients, as well as our investors. I will now recap the major data sets from the quarter. I won't spend much time on these since we've communicated much already, but they are worth repeating due to their exciting nature. Starting with the brepocitinib VALOR data on Page 9, which succeeded with significantly robust and consistent data across primary and all key secondary endpoints, highlighting a clear dose response and setting us up for 30 milligrams as the ideal dose. Responses were rapid, deep, broad, and meaningful across the board, showcasing a statistically significant delta to placebo on mean TIS, with early and comprehensive responses across multiple endpoints, including muscle and skin. On Slide 10, recall that this is a patient population with substantial unmet need—75% of these patients are only on steroids or ISTs and are struggling to achieve appropriate control, many requiring high doses of oral prednisone. A small fraction, only one-quarter, are currently on other therapies. Thus, we are witnessing tremendous enthusiasm from all the physicians we've engaged with regarding this data already, and we're keen to continue this as we advance through the registration process next year. As for Slide 11, reflecting on prior data, this primary endpoint represents mean TIS, a textbook validation of positive clinical results, statistically significant at the high dose and starting from initial time points with clear dose response outcomes. Interestingly, our focus initially was on steroid tapering as a risk mitigation strategy to ensure clear benefits against actively managed background therapies. However, we also showcased a significant dose response on steroid reduction, evidencing our success in having a higher percentage of patients reduce their steroid doses or completely cease them while on high-dose brepocitinib, which has resonated significantly with physicians focused on helping DM patients reduce high-dose steroids. Furthermore, more than one-third of brepo 30 patients achieved major TIS responses coupled with minimal or no steroid burden at week 52, another exciting outcome. We saw over half of the patients achieving a TIS40—a moderate TIS response—while receiving remarkably low doses of oral steroids. Moving to Slide 12, the statistical robustness of our data set is noteworthy, with low p-values across every secondary considered, demonstrating benefits in muscle, skin, and disabilities reported by patients across the board. For next year, the NDA submission is progressing as swiftly as possible, with the primary gating item currently at the drafting stage. We anticipate filing during the first half of next year, alongside data readouts from our ongoing proof-of-concept study in CS, which is expected next year and the anticipated readout from the NIU study, currently projected for first half of 2027. Furthermore, we will follow up with sNDA for NIU soon after, alongside further indications. On the breeding side, we encountered remarkable data in the Graves' disease remission study presented earlier this quarter, which we reflect upon on Slide 16. It's a considerable patient population grappling with significant unmet needs. A critical point to note is the shift away from ablation, as patients prefer not to undergo surgical procedures or radioactive iodine treatment, revealing that a substantial proportion (25-30%) of Graves' patients are relapsed, uncontrolled, or intolerant to ATDs; thus, the gap for new medical therapies is substantial. As shown on Slide 17, these patients face higher risks of cardiovascular complications and thyroid cancer than the general population, which escalates their healthcare complexities. Among hospitalized Graves' patients, 16% are diagnosed with thyroid storms, posing a 20% mortality risk. We will further delve into this on December 11, but I wanted to highlight the magnitude of this issue. There are approximately 65,000 newly diagnosed patients yearly, 20,000 of whom fall into the refractory category, with a total of 880,000 diagnosed in the U.S.—330,000 of whom are either intolerant or unable to adequately manage their conditions. During our batoclimab study, we showcased compelling results, including substantial disease-modifying benefits in this patient segment. Of the 25 baseline participants, we treated them with high-dose batoclimab for 12 weeks, followed by another 12 weeks on a lower dose, and after 24 weeks without the drug, we observed that 20 out of the initial 25 were responders to therapy. After tapering to a low dose, 18 out of the 25 remained responsive. Remarkably, of the 21 patients we were able to track at week 48, 17 still exhibited response longevity post-therapy cessation. This benefit significantly reduces or eliminates the need for ATDs in a patient group previously uncontrolled, where nearly half of off-drug responders transitioned from ATD reliance altogether. Our findings on Slide 20 reflected this with a rapid decline in TRAb levels, wherein the majority of patients maintained reduced or normalized TRAb levels, underscoring the therapy durability. Across various indications for 1402, Slide 22 indicates a data-rich year ahead for us, with timely results expected across various therapeutic areas, including D2T RA and CLE next year, as well as Graves' and MG in 2027, followed by Sjögren's and CIDP thereafter. One noteworthy small update today is that while our TED study remains on schedule for completion this year, we will likely defer announcing top-line data until we can present findings from the second study in H1 next year due to the evolving competitive environment surrounding TED and Graves' disease. We have ongoing litigation in the LNP space, so for those monitoring that, we are currently in pre-trial discussions, with the judge reviewing summary judgment briefings as the process gears towards a March trial. In the Pfizer case, progress remains on track in discovery; the favorable Markman ruling issued has positioned us well for our strategy moving forward. To encapsulate the financials briefly, this quarter presented a straightforward picture with a loss from continuing operations net of tax amounting to $166 million. Our cash and cash equivalents total $4.4 billion with no outstanding debt, reflecting substantial share buybacks achieved over the past 18 months. Overall, we are strongly poised, as stated, to reach profitability soon. Further financial details and catalyst roadmaps can be found on Slide 28. Subsequently, I believe we've traversed an exciting 12 months behind us, setting us up for even more remarkable developments ahead. We feel invigorated by the efficacy transformation we've achieved over the past months, and I'm eager to push that momentum forward. Lastly, as a reminder, we are hosting an Investor Day on December 11, 2025, with a live registration link now available. I hope to see many of you there as we close out the year and focus on the future together. Thank you for your attention during this relatively quiet earnings call, but certainly an active quarter.

Operator, Operator

Our first question comes from Dave Risinger with Leerink Partners.

David Risinger, Analyst

Congrats on all the progress, Matt, and looking forward to the event on the 11th. So my question is, could you please comment on what we should be watching next with respect to the Pfizer litigation? Specifically, in international markets and then in the U.S.

Matthew Gline, CEO

Thanks, Dave. I appreciate the question. It's tough as always to comment on ongoing litigation. I have nothing to say about any potential timing associated with international cases. This upcoming period is busier, and I expect we should see a scheduling process for the Pfizer case, learning more about the timeline and a potential trial date in the near future. That's the aspect to keep an eye on from a public perspective at this stage.

Operator, Operator

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

Lut Ming Cheng, Analyst

Just 2 quick ones from us. How do you feel about argenx stepping into Graves' and whether that has any impact on your strategy for 1402? And then we have a quick follow-up.

Matthew Gline, CEO

Thanks, Brian. It's a great question, and we're certainly aware of the competitive landscape in Graves' disease. In a light-hearted note, I'd say imitation is the finest form of flattery; it's great to see an increased focus on treatment options for these patients. In our Phase II study, we've evaluated both high and low doses of batoclimab and witnessed substantial benefits from higher dosing. We believe we should present a competitive profile. Ultimately, this population has significant unmet needs, and more research within this space overall is welcome—our data suggests that we're well-positioned to address these challenges. Thanks, Brian.

Lut Ming Cheng, Analyst

Great. And just one quick one. So on the Investor Day next month, could you discuss what you want investors to gain from this event? Is it more of a broader recap of your current strategy, or will there be unveiling of completely new data or directions at Roivant?

Matthew Gline, CEO

I think it will be an exhilarating event. I can't disclose everything now as it wouldn’t be interesting if I revealed it all upfront. Nevertheless, it's a critical juncture for our business, with investor dynamics shifting. We're eager to communicate our strategy in depth and the commercial and patient need perspectives relating to our product pipeline. There may be new updates or data, depending on our timeline, but I expect an enthusiastic discussion about our future opportunities.

Operator, Operator

Our next question comes from the line of Samantha Semenkow with Citi.

Samantha Semenkow, Analyst

Just for Graves', when thinking about the remission data, is there any way to tease out the impact of starting on the high-dose batoclimab in that study? How much did that actually contribute to the remission rates you observed? Is there anything you could share from your analysis for the competitive landscape?

Matthew Gline, CEO

Thanks for the great question. We need to be cautious about sharing specifics due to the competitive landscape, but generally speaking, remission correlates with TRAbs achieving normal levels over prolonged periods. Our belief is deeper IgG reductions will lead to improved outcomes. The high dose delivered rapid responses and meaningful TRAb reductions, which we expect will be significant drivers for our continued success.

Operator, Operator

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

Yaron Werber, Analyst

Great. Maybe a quick question. We've been receiving inquiries about the ongoing preliminary summary judgment against Moderna regarding U.S. government involvement in the EUA, focusing on whether the government took control of vaccine distribution and if that would characterize them as a commercial party. Can you offer any insights regarding that? Your thoughts would be appreciated.

Matthew Gline, CEO

Thanks, Yaron. As always, it's difficult to comment on ongoing litigation, and ultimately, this will be decided by the presiding judge on the 1498 question. It's worth noting that Moderna's sales of COVID vaccines in the U.S. represent less than half of their total global sales, and claims suggest a portion of damages could fall under 1498. The scope of concern here is somewhat limited, so it’s crucial to manage expectations while also maintaining confidence in our position. As always, there's a lot of mathematics involved.

Operator, Operator

Our next question comes from the line of Prakhar Agrawal with Cantor Fitzgerald.

Prakhar Agrawal, Analyst

Congrats on the progress in the quarter. My first question is about Sjögren's disease. There’s been considerable excitement over the market opportunity recently, especially with Novartis' BAFF drug, ianalumab. Could you contextualize how FcRns could differentiate in terms of ESSDAI scores or specific endpoints? Do you believe you could achieve a first-in-class status in this indication? Also, I would like to inquire, do you plan to apply for the FDA's National Priority Voucher for brepocitinib?

Matthew Gline, CEO

Thank you for the questions. On Sjögren's, we share the excitement surrounding the market opportunity; it's a significant patient population facing unmet needs. A number of therapeutic classes have shown promise, and we aim to cement our position as best-in-class. Our goal is to launch as close to first-in-class as possible, so we are keeping our timelines very tight regarding competitive advantages. I don't want to commit to a timeline but believe we can position ourselves advantageously out of the gate. Regarding FDA's CNPV, we haven’t released our plans yet, but given the high unmet need for this orphan population, we’re mulling over several strategies.

Operator, Operator

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

Corinne Jenkins, Analyst

Following up on the earlier question regarding competitive intensity in Graves’ disease, there seems to be an increase in companies pursuing that indication. How are you thinking about the evolving clinical landscape, and what informs your decisions regarding sequencing strategy in this space over time? Separately, any updates on business development?

Matthew Gline, CEO

Thanks, Corinne. The competitive landscape is indeed heating up, which we find exciting in the Graves' arena—it's invigorating to see attention to the pathology that has historically lacked robust options. From observing the myasthenia gravis market, I see that while there's been considerable competition, FcRn medicines have established a solid foundation—our data indicate similar prospects here. We're confident in our position regarding timing and mechanism; FcRn is aptly suited for treatment requirements. As for business development, we remain well-capitalized and continue seeking expansion opportunities congruent with our strategic goals. We want exploration avenues that hold potential to complement our existing pipeline and plans.

Operator, Operator

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

Yuchen Ding, Analyst

We have 2 questions if we may. First, on Pulmovant. You will have Phase II PH-ILD data in the second half of next year. How confident are you regarding the translatability from PAH to PH-ILD? What expectations should we have surrounding that update? Plus, I'm curious about the positive delta on PVR? Secondly, regarding the LNP litigation, have you investigated how many of the U.S. doses were administered to federal government employees in the context of summary judgment?

Matthew Gline, CEO

Thanks, Dennis. Both of your questions are excellent. For Pulmovant, we’re indeed excited about mosli. You've raised a valid concern; there's inherent risk in moving from PAH data to PH-ILD—even so, PVRs have historically shown strong translational capacity. While there are challenges, we believe our format will effectively address those issues. Thus, we remain cautiously optimistic and eagerly await the Phase IIb data expected in H2 next year. Regarding LNP, we haven’t calculated the exact percentage of doses administered to federal employees. However, you can infer it's a rather small proportion in the grand scheme.

Yuchen Ding, Analyst

Got it. And if I can sneak one more in on the LNP litigation. Can you remind us of the status regarding the OUS trials? We aren’t very familiar with the OUS process. Specifically, how many cases have been filed and which one is the further along? Is it possible to expect an initial decision in 2026?

Matthew Gline, CEO

Sure, great question. We've indeed filed several OUS actions, including in the UPC in Europe, Canada, Japan, and a few other jurisdictions. These litigations are ongoing, and we’re hopeful for critical hearings in 2026. The advantage of some European jurisdictions is that they have expedited processes, which may yield outcomes in 2026, and we'll keep you informed as events develop.

Operator, Operator

Our next question comes from the line of Yasmeen Rahimi with Piper Sandler.

Dominic Risso-Gill, Analyst

Congrats on a great quarter. This is Dominic, on for Yasmeen Rahimi. We have a question regarding the upcoming TED data. Could you help us understand your expectations for the studies that are about to read out? What are you hoping to see so you can consider development in light of the competitive environment?

Matthew Gline, CEO

Thank you for your question. We anticipate some results soon, and while the competitive bar for TED is high, we’re aware that IGF-1Rs have significant efficacy, yet they do come with safety concerns. So, we're focused on acquiring data that align with our overall positioning. Moreover, we believe understanding the interaction between hyperthyroid Graves’ patients and TED will yield valuable insights on the mechanisms affecting both conditions.

Operator, Operator

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

Douglas Tsao, Analyst

As you referenced, Graves’ and TED are interrelated. Considering that argenx may potentially enter the market with VYVGART targeting both conditions, how are you viewing the potential of pursuing TED with 1402 versus batoclimab, thus addressing the market with two different molecules?

Matthew Gline, CEO

Thanks, Douglas. It’s indeed a great question. Right now, as we await TED data, our understanding will become clearer regarding 1402's role within these patient populations. Different physician specialties manage Graves’ and TED patients distinctly, spotlighting specific phases of disease management. It’s conceivable that, should our data favorably support it, we could promote 1402 as a regulatory first approach that extends beyond Graves'. The bigger Graves' market context presents a more promising entry point, especially as our launch with 1402 precedes the TED narrative. To address brepocitinib's significant results in DM—first-rate outcomes—it's worth exploring indications within different subtypes of myositis, like IMNM and AS. We've thoughtfully assessed potential indications beyond those outlined and believe that brepocitinib holds considerable promise across several targets, so we remain excited about its potential applications based on its validated efficacy.

Operator, Operator

Next question comes from the line of Tess Smith with Leerink Partners.

Thomas Smith, Analyst

Could you provide insights on the TED program regarding the competitive landscape, specifically your thoughts on recent IL-6 data and its approvability? How does batoclimab stack against that data set? Additionally, any updates on your overseas study with 1402 and timelines for data from additional indications?

Matthew Gline, CEO

These are pertinent questions. I won’t speculate about the approval aspects of other medicines. The IL-6 study had a notably high placebo response, which has certainly caught our attention. However, regarding the competitive landscape, we think it’s healthy overall. IGF-1Rs show efficacy but come with their own safety and tolerability issues. As for our overseas efforts, while we have substantial registrational programs underway with 1402, our commitment to effective POC studies continues. When we have additional insights to share about these efforts, we certainly will.

Operator, Operator

Our next question comes from the line of Brandon Frith with Wolfe Research.

Brandon Frith, Analyst

Have you provided any analogs for brepocitinib's DM launch? What should we expect regarding the launch cadence, both short- and long-term?

Matthew Gline, CEO

Notably, DM has a high unmet need with few novel therapies recently launched, making direct analog comparisons a challenge. That said, I believe it’s wise to guide cautiously regarding launch rates while pursuing a robust path to patient engagement on a large scale. As we work towards peak market penetration, we know significant opportunities are forthcoming, so we aim for a well-strategized rollout.

Operator, Operator

Our next question comes from the line of Sam Slutsky with LifeSci Capital.

Gaurav Maini, Analyst

This is Gaurav, on for Sam from LifeSci. On Graves', how is the opportunity of uncontrolled Graves' disease compared to the FcRn market in MG? How do you view the opportunity? Is it bigger, smaller, similar?

Matthew Gline, CEO

It’s difficult to determine as the MG market has been notably strong, but there’s a vast pool of uncontrolled Graves' patients, providing us a chance to create something impactful. I anticipate significant differences in patient populations’ dynamics, but we will discuss this commercial opportunity in more depth on December 11. We foresee our insights from physician engagement during study enrollment as valuable data for shaping market strategies.

Operator, Operator

There are no further questions at this time. I will now turn the call back over to Mr. Matthew Gline for any closing remarks.

Matthew Gline, CEO

Thank you all for listening this morning. Once again, a phenomenal quarter for us regarding the results we delivered. Most importantly, I'm looking forward to gathering on the 11th to discuss the future and dive deeper into some of the questions raised in today's call. I hope to see many of you there. Have a great end to your year, apart from that. Thank you.

Operator, Operator

This concludes today's conference call. Thank you for your participation, and you may now disconnect. Goodbye.