Earnings Call Transcript - ROIV Q2 2023

Operator, Operator

Good day, and thank you for standing by. Welcome to the Roivant Q2 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Ms. Stephanie Lee. Please go ahead.

Stephanie Lee, IR

Good morning, and thanks for joining today's call to review Roivant's financial results for the second quarter ended September 30th, 2023, 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 current 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 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.

Matt Gline, CEO

Thank you, Stephanie, and good morning, everyone. I appreciate you joining us this morning. This quarter has been quite eventful, yet the call feels uneventful since we've already discussed major updates like the Immunovant data from September and the sale of Telavant to Roche. I’m excited to give you our usual business update and take your questions. I'll discuss our current business status, the parameters of the Telavant sale, an overview of the Immunovant data presented in September, details about the VTAMA launch, and a brief on the upcoming brepocitinib data before concluding with financials and Q&A. To start, we are in November 2023, and as I've mentioned before, this has been a wild year. We anticipated it would be our biggest year, and it has certainly exceeded my expectations. We've introduced great Phase 3 data for VTAMA in atopic dermatitis and achieved strategic progress with the commercial launch. Earlier this year, we released remarkable clinical data for RVT-3101, our anti-TL1A antibody in ulcerative colitis, and we recently announced the planned sale of that program to Roche. In September, we shared the initial data from the IMVT-1402 healthy volunteer SAD and MAD trials, which indicated a potentially best-in-class anti-FcRn antibody with Batoclimab-like IgG suppression and no observed impact on LDL or albumin in the cohorts so far. There is still more data coming in, including the final 600 milligram multiple ascending dose cohort from Immunovant, SLE data from the Phase 2b study of brepocitinib, and Graves' data from Immunovant, making this year exceptionally rich in clinical data. I'm proud of the progress we've made. Regarding the acquisition, the plan is to sell the Telavant anti-TL1A antibody program to Roche for $7.1 billion upfront and $150 million in milestones. Roivant owns approximately 75% of that business, so we expect cash proceeds of around $5.2 billion at closing, plus $110 million from that milestone next year. Post-transaction, we anticipate a consolidated cash position of $7 billion for Roivant, representing an extraordinary capital position. Pfizer will retain commercial rights outside the U.S. and Japan, and we will continue our partnership with Roche. Roche will leverage its global pharmaceutical resources to maximize patient access across various indications. This transaction represents significant near-term value, capital efficiency regarding our initial investment, and transformational capital opportunities. We plan to be patient and strategic with our capital. We have a robust pipeline with Immunovant and our FcRn program, and we are eager to deploy some of that capital. We see exciting transaction opportunities on the horizon and are committed to being capital efficient in our business development transactions. While we may consider larger deals, we are also evaluating opportunities to return capital to shareholders. The catalyst roadmap remains unchanged despite this deal, and the TL1A program will adjust based on Crohn's data due by the end of the year. Our pipeline is strong, especially with VTAMA, which already has significant data and we anticipate important upcoming results from brepocitinib and our anti-FcRn franchise in the next year. Now, I'll provide a brief update on Immunovant and our other programs. We are exceptionally proud of our anti-FcRn franchise, with two programs that we believe can express IgG deeply. We are generating mid-stage clinical data that we believe will reinforce our hypothesis that deeper IgG suppression is beneficial. The IMVT-1402 study is nearing completion, and we expect to share the final 600 mg multiple-ascending dose data soon, which we feel will affirm the positive profile we've indicated thus far. In the realm of data generation, we recently published significant results regarding our product's efficacy in intertriginous psoriasis and the speed of itch relief in atopic dermatitis. Patients saw statistically significant improvement from placebo as early as week one, with visible separation within 24 hours, highlighting the importance of rapid relief. We expect an sNDA to be submitted early next year and anticipate launching later in the year. Next, I want to remind you of the upcoming data for brepocitinib. This drug has immense potential, with six positive Phase 2 studies showing strong efficacy. We are excited about the registrational study planned for Dermatomyositis in 2025 and the imminent Phase 2b SLE data readout this quarter. We see great potential in SLE and beyond, with studies also planned for non-infectious uveitis and possibly Hidradenitis Suppurativa. In closing, we look forward to sharing more about our progress and the upcoming data from our various programs. Thank you to our entire team, investors, and everyone who contributed to this successful quarter. I'll now hand it back to the operator for Q&A.

Operator, Operator

Thank you. Our first question will come from David Risinger of Leerink Partners. Your line is open.

David Risinger, Analyst

Yes. Thanks very much. Good morning, Matt and team. So, I have a few questions. First, obviously, VTAMA scripts have flattened for many months now. Could you talk about prospects ahead and whether we should really assume flattish scripts into calendar '24, or do you think there might be drivers for prescriptions to grow ahead of the addition of AD to the label at the end of calendar '24? And then second, clearly, management has shown an exceptional ability to acquire highly compelling assets and create tremendous shareholder value. But now, the company will have a huge amount of money to work with and probably faces undue pressure to you know put that money to work quickly? So could you just talk a little bit about, I guess, you know how the company can, you know, effectively time putting money to work in exceptional business deal-making in short order, i.e., you know, it's really not up to Roivant when great assets are up for sale, and when Roivant can acquire them. And so, how are you balancing considering transactions with what may be, you know, pressure to put cash to work? Thanks so much.

Matt Gline, CEO

Thank you, Dave, for the great questions. I appreciate your interest this morning. Regarding VTAMA, it hasn't been a major focus for investors lately, but we acknowledge that while script growth is happening, it's slower than we hoped. Demand continues to grow, and I expect this growth to remain steady in the coming quarters, with potential strategies to create a positive change. Prescribers have shared concerns about coverage and patient experiences, particularly at larger pharmacies such as Walgreens, although our current coverage position is competitive with other topicals, and patients who go to the pharmacy tend to have favorable experiences. This indicates a perception gap that we are actively working to address, including the exploration of direct-to-consumer marketing. I anticipate ongoing progress in the space until the AD launch, with the chance for better results as we strive to improve. Additionally, the AD launch represents a significant opportunity with a larger patient population. We believe it could potentially provide non-dilutive financing as it moves toward profitability or through partnerships. It’s crucial to be judicious with our spending, and we are critically assessing every dollar allocated to our programs, including VTAMA, to ensure those investments yield the best value. On the second point, I expect to reiterate this during our discussion: we consider patience a valuable asset. The ability to wait and strategically assess opportunities is vital, especially when we cannot predict when the best assets will be available. We aim to avoid missing out on promising opportunities by prematurely committing resources elsewhere. We recognize several exciting opportunities worth considering, comparable to our existing programs. While we see potential for deploying capital in the near term, we will prioritize patience, which we believe is advantageous given the current market conditions. We will remain transparent and provide regular updates to stakeholders regarding our status, plans, and capital deployment, especially as we receive new data. We’re not asking for blind trust; instead, we invite everyone to join us in our capital deployment journey.

David Risinger, Analyst

Great. Thank you.

Operator, Operator

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

Brian Cheng, Analyst

Good morning, guys. Thanks for taking my questions. First on Brepocitinib's upcoming Phase 2 data in SLE. Matt, you talked about the difference of steroid-tapering between the study compared to Deucra's Phase 2. Can you talk about just how might that impact the readout and given SLE is a heterogeneous indication, are there other variables that we should also consider that could impact the outcome ahead of the readout? And then I have a follow-up. Thank you.

Matt Gline, CEO

Yes, thanks Brian. We are very excited about brepo, and those are some relevant questions. SLE is a significant disease, and it presents challenges for various reasons, including the variability within the patient population and differences in placebo response rates. We are generally pleased with the study design, which has only been slightly modified since we took it on, and Pfizer has been executing it well. We believe the design is solid. While there are some minor differences in the mandatory steroid taper between our studies and the deucravacitinib study, the requirement for steroid tapers makes them more similar than different. Overall, there is considerable variability in placebo response rates and lupus studies generally, which is why we are being cautious in what we signal here. However, I would say that the agent appears to be biologically as promising as any SLE agents currently could be, at least as a small molecule, and the study design is strong. So, we will see how it progresses at this point. Mayukh, do you have anything to add?

Mayukh Sukhatme, CRO

Yes, I think you covered most of it, Matt. I really appreciated what Brian said. It's a complex disease with many different subtleties and nuances in each trial. Regarding the steroid taper, there are several factors to consider. For example, the severity of disease at baseline, such as baseline CDAI or baseline steroids, all contribute in various ways to the outcomes.

Brian Cheng, Analyst

And also just on Graves readout later this quarter. Can you help us set the expectations there? How does success look like to you? And you know, given it's a single-arm trial and the first FcRn program in Graves, how do you think of the success rate? You know, how do you think of the read-through coming from efficacy of FcRn showing in other indications?

Matt Gline, CEO

Yes, thanks. It's a great question. We are tremendously excited about what Graves could be. I'll take it and then Frank or 100 of what you’ve gotten any there. The Immunovant team has spoken about this. You know, Graves is pretty straightforward biologically here, and that it's relatively well understood to be auto antibody-mediated and there's a clear biomarker, entire hormone levels that you're looking to normalize. So, I think the data will tell us what we've got. I think we'll have a clear sense of what we've got. I think what we are looking for is relatively high rates of normalization of thyroid hormone levels, and we are also tracking people's ability to get off oral anti-thyroid drugs, and I think we will have a pretty clear answer to that question from this data. Frank, anything you'd add to that?

Frank Torti, Chief Medical Officer

I would say as a bar as we talked to KOLs, they've said, look, if you can get patients you know, about 50% of the patients to normalize thyroid levels that would be very clinically meaningful to them. And so, that's the bar we look to as, you know, a level of importance.

Brian Cheng, Analyst

Great. Thank you so much. Thanks.

Matt Gline, CEO

Thanks, Brian.

Operator, Operator

Thank you. And one moment for our next question. Our next question will come from Yaron Werber of TD Cowen. Your line is open.

Yaron Werber, Analyst

Great. Thanks for taking my question. I have a couple, one on brepocitinib and another on Immunovant. For brepocitinib, I wanted to follow up regarding lupus and SLEs for non-infectious uveitis. It seems to be a bit less competitive. What is your target for lupus? We have a good understanding of brepo's safety profile, so are you primarily focused on efficacy for differentiation? Also, what outcomes are you looking for to proceed with non-infectious uveitis? I have a quick follow-up as well.

Matt Gline, CEO

Yes, I'll take the SLE question. Mayukh, maybe I'll hand it over to you for the NIU question. Maybe on SLE, I think we've said this before, we think the safety profile of brepo is as you said well-understood. We've been in well over a 1,000 patients. We have a lot of data. It is, you know, effectively JAK-like from a safety profile perspective and we expect the FDA to treat it like a JAK inhibitor, so we will have the appropriate labels and so on. So, you know, I think that's pretty well-characterized. I think for us it's about efficacy. I think we feel the bar has been set by the Deucra studies, which are the current sort of best oral data in a large late-stage program that we've seen. Our view of the bar that Deucra adjusting for some pretty significant imbalances in their dosing arms. It's like a mid-teens SRI 4 placebo-adjusted delta and so we'd like to do kind of better than that in order to feel confident about progressing the program, but it will be a balance of the factors we'll look at multiple endpoints and so on. You know on NIU, I hand it for Mayukh, I think we should lay this out on the last call, but Mayukh. Please go ahead.

Mayukh Sukhatme, CRO

Sure. So, I think we'll make an overall assessment. This is, you know, kind of signal finding study here really. We are looking for treatment failure rate of no greater than 70%, the treatment failure rate is quite high in non-treatment. And so that's a good bar. And overall. I think really the bet here across these indications, fundamentally is on efficacy. And so, that's the thing that we are really looking to hit robustly.

Yaron Werber, Analyst

And then I have a follow-up on the TL1A deal with Roche, the words you use was ruthlessly monetized the immunovant stake. Can you just help us understand kind of philosophically or conceptually how you're thinking about that? Thank you.

Matt Gline, CEO

Sorry, I apologize you cut out, literally, as you said, what word we used, something monetize?

Yaron Werber, Analyst

I think it was ruthlessly monetized immunovant stake.

Matt Gline, CEO

I think we said we'd be ruthlessly economic about immunovant stake. I think I said, although we can go back and look at the transcript, but I think that's true. The way that we've always thought about this is, we are going to do what maximizes value. We think the FcRn program is as good a program as biotech has to offer at this point. It has true best-in-class potential. Numerically has an investment class potential in an area where IgG has been a phenomenal biomarker for clinical efficacy and where we have really exciting IgG suppression. We have been safety picture as what we can tell so far. So I think that program, our hands without monetizing it. Could be the basis for? Yes, one of the great I&I biotech companies of the next generation and we are excited and fully resourced to progress that program that way. But along the way as we've shown historically, we are going to evaluate options and we are going to make sure we understand the competitive landscape and understand the strategic options available to us and we are going to be ruthlessly economic in assessing that position and that's just who we are, well then.

Yaron Werber, Analyst

Thank you.

Operator, Operator

Thank you. One moment please for our next question. Our next question will come from Corinne Jenkins of Goldman Sachs. Your line is open.

Corinne Jenkins, Analyst

Yes, good morning. Maybe a couple from us. First, you mentioned the commercial potential you see Graves' disease. Could you just step us through how you're thinking about the market opportunity there? And in particular which patients within Graves' disease do you think are candidates for new therapeutic agents?

Matt Gline, CEO

Yes, perfect. Thanks. I’ll bring Frank into the conversation, and if he has anything to add after I give my initial comments, I’ll invite him to do so. This indication affects a large number of patients, with hundreds of thousands involved, and our study focuses on those who are not adequately controlled by antithyroid drugs (ATDs). A significant portion of patients, about 14% to 15%, on ATDs do not achieve full control. Therefore, there are many uncontrolled patients who currently lack effective treatment options. While surgery and radiation can be effective, they are complex procedures, and not everyone is willing to pursue those options. As a result, uncontrolled patients face a considerable therapeutic gap. There hasn't been new drug development for Graves' disease in a long time, making this a substantial indication with a large patient population that has unmet needs. When we speak to these patients, they express this concern clearly. Even some patients who are adequately controlled on ATDs report ongoing symptoms, although our primary focus will be on the uncontrolled patients. We believe this market could be very sizable, but it seems that many are not fully recognizing its potential due to the lack of recent development. I would add before passing it over to Frank that there’s an interesting dynamic at play as Immunovant gathers this data. The better the data is, the more we might need to keep some of it confidential to avoid complications, especially considering our previous experience with Phase 2 studies, which has generally worked in our favor in other indications. Overall, we see significant commercial potential here. Frank, do you have anything to add?

Frank Torti, Chief Medical Officer

I think you covered most of the important part. I mean, just to restate it. You know, there is a substantial opportunity in patients who are anti-thyroid medicine factory. And there is going to, you know, very large both incident and prevalent partnering population of patients who were just not getting enough benefit. This is a category of medicines that hasn't seen meaningful innovation in this disease state in decades. And so there's a ripe opportunity to come in, something that really matters and disrupt that and we'll look forward to talking about it more detail soon.

Corinne Jenkins, Analyst

Great. Thanks. And then you mentioned anyone's Phase 2 means everyone's Phase 2 for various inhibitors. That's a good segue to the data over the weekend in rheumatoid arthritis. From J&J. I guess, what were your takeaways from those results? And how are you thinking about the read-across your own program and plan in rheumatic disease?

Matt Gline, CEO

Yes perfect. So immunovant will obviously speak more to this consistently over-time, as we lay out our study plans and get everything geared up. Yes, yes. I continue to feel that the J&J RA data in the way that I felt when we are first seen the abstract, which is it's tremendously exciting to see an FcRn show signs of activity in an immune complex disease and it opens a large envelope of what of what could be possible, you know and say like, this data in and of itself need some work to better understand and characterize and J&J is doing some of that work. You know I think encouraging signs, include that you know the response rates look pretty solid specifically in patients who have the autoantibody measured in these sort of efficacy is well correlated with oral antibody suppression. And as we've talked about before, you know I think one of the things that's interesting about nipocalimab and the studies, it was it seemed to us somewhat under dosed. And so they really only got to, I think was about a 58% suppression of IgG, I think lower than that on the autoantibody. And so I think it's sort of possible understand that there is room for better efficacy at higher IgG suppression. You know I think it is not very likely, although this is for immunovant ultimately announced that we are going to immediately begin a large Phase 3 program in RA, but I think it's certainly really informative data for how we see the FcRn class developing and it suggests activity in an even broader set of indications one might have originally imagined. So I think that's kind of how we think about it.

Corinne Jenkins, Analyst

Great. Thank you.

Matt Gline, CEO

Thank you.

Operator, Operator

Our next question will come from the line of Robyn Karnauskas of Truist Securities. Your line is open.

Robyn Karnauskas, Analyst

Hi everyone, thank you for allowing me to ask my question. I really like the term "ruthless economic" to describe your company. I have three questions. First, you mentioned that Graves might need to keep some data close to the vest. How much data do you plan to release, or will you simply indicate that the results are positive and that you're moving forward? My second question relates to your comment about VTAMA potentially being an opportunity for diluted financing. Considering that you've sold assets in the past, how do you approach running the company in terms of identifying which drugs to develop and keep versus those to sell? Lastly, regarding VTAMA, you mentioned gross margins of 28% and that they are expected to remain relatively flat over time. What factors are influencing these gross margins? Are you still sampling, and how can you assist us in modeling gross margins for the next 18 months? Thank you.

Matt Gline, CEO

Yes, thanks, Robyn. I appreciate all of the great questions. The first question, I'll say having not yet seen the Graves data it's hard to say exactly what we would disclose. And it probably depends a little bit on the data and exactly what we seeing in the controllers of the outcome, but you know I think the full range is on the table in terms of when and how we share that data other than we expect to get the main thrust of it in the relatively near future. And so we will be able to say something. I'm confident. That would be helpful. On the other two questions. I guess, I will take the bigger strategic one first and I'll come back to sort of the VTAMA GTN progression. We are here to build a great durable long-lasting important biopharma company that delivers medicines to patients. As we did with the VTAMA that will mean that we commercialized products as we did with the TL1A that will mean, sometimes we can partner or monetize them. And you used the phrase again, you know we are going to be ruthlessly economic in deciding which of those again, just to be clear, we went non-dilutive financing in terms of the VTAMA, and I think the nice thing about VTAMA is you know in the event that we monetize that or partner geographies or whatever, that's one source of non-dilutive financing in the event that we don't and build it into profitability that's a steady stream of free cash flow out into the late 2030s is a different source of non-dilutive financing. And on top of that, we've learned a tremendous amount of our commercialization. We've built some infrastructure. We've got distribution agreements and things like that, that should be leverageable as we add additional products. and you know so you know I think overall, the launch of VTAMA has been an important formative experience for us. We are excited to continue to see it play out. We are excited to get the AD launch up and running and I am confident we will commercialize many products in our long life from here. You know on sort of GTN trajectories I think we are largely through contracting. And so the things that are going to drive GTN from here it’s not sampling for say we've never had sampling program that meaningfully affected our yields. It's getting patients onto the right side of the copay card. And it's getting more patients into a covered position at pharmacies like Walgreens and CVS and so on which is all its on ground work at some level. It's just getting out there talking to docs and working through key issues and make sure that patients are getting on drug. So I would model you know steady improvement in GTN yield overtime you know maybe at around or a slightly faster clip than the one that we've had in recent quarters. And I would expect that sort of continuing to build up to you know kind of 40-plus and getting to 50 eventually sort of steady state that product seem to get to. You know, I think some of the dynamics of the past couple of quarters with new contract signed, that create a little bit of volatility in the progression, but I expect it to be pretty steady from here.

Robyn Karnauskas, Analyst

And one follow-up is just on 1402 using the word ruthless it seems like with so many different indications, you can go after and how aggressive your competitors are spending money toward all these indications. How do you compete with them like how do you compete, you just go into indications where they're not going. It seems like it's just such a competitive state, even though you have a best-in-class we can argue your best-in-class drug. You know had you expect to run like 20 trials, I mean, how do we think about your plans for two given the plans for 1402 given the clinical landscape?

Matt Gline, CEO

I believe the first step in competing is to monetize an entity, such as an antibody, and generate significant capital, which positions us strongly if we need to conduct 20 trials. From that perspective, I think we are in a great place. We will be capital efficient, as we always strive to be, and we will be thoughtful about our direction. In terms of which indications we pursue and how we compete, we need to be aggressive, and I believe we are ready to be. This presents a substantial opportunity if we take that approach. Firstly, we have clear opportunities in areas like Graves disease, which we aim to establish as ours, giving us a solid foothold. Secondly, we will align our efforts with other Phase 2 studies being conducted and decide which ones can guide our pivotal programs, ensuring we stay ahead wherever it matters. This is our general strategy, and we see multiple first-in-class opportunities with the capital to support them.

Robyn Karnauskas, Analyst

Great. Congrats and thanks for the question.

Matt Gline, CEO

Thank you.

Operator, Operator

Thank you. One moment please for our next question. Our next question will come from Louise Chen of Cantor. Your line is open.

Louise Chen, Analyst

Hi, thanks for taking my questions. So I wanted to ask you, as you look to grow the company what therapeutic areas do you see the most unmet need in? And then, what areas you think might be a little bit too crowded? And then secondly on the HS indication for c, have you decided if you're going to move forward with it? And if you have, when do you think will start those studies? And then just lastly on 1402, just curious how you're thinking about the first indication, you're going to go after? Thank you.

Matt Gline, CEO

Yes, so I'll go in reverse order there. So you know the indication that we've disclosed as a 1402 indication has been Graves. So our plan if that data is successful is to progress in Graves, although, we are working on lots of other things that we just haven't talked about yet. I'll leave it to Immunovant to give specific updates at their cadence. On Brepo rates, yes I think we have not made a final decision yet and so there's no there's no specific plans or timeline. We are in a pretty close to ready position in terms of the basics, but we need to actually start study, if we're going to start study. I think the SLE data will be informative in terms of thinking about what payers with what with what and just how to develop the franchise, so I think we'll try to come back with more of an update on that after either the SOE or the SLE and NIU data. And then in terms of therapeutic areas where we see the most unmet needs we've always been therapeutic area agnostic. We continue to be therapeutic area agnostic. There is unmet need for patients in every therapeutic area. That's clear. Some areas are more competitive than others as this has been a year with a lot of activity in I&I although it's also proven to be as you aware some mechanisms have had an easier goal with than others in I&I. So we are looking across therapeutic area landscape and are really open to anything.

Louise Chen, Analyst

Thank you.

Operator, Operator

Thank you. And one moment please for our next question. Our next question will come from Douglas Tsao of H.C. Wainwright. Your line is open.

Douglas Tsao, Analyst

Hi, good morning. Thanks for taking the questions. Just maybe as a starting point, Matt, if you could provide some color on the time, I know you sort of indicated physicians are having some questions or sort of misperceptions around the coverage. I'm just curious what feedback you've gotten from a clinical standpoint both deposit as a negative and what sort of things you might need to correct within the physician community to perhaps sort of jumpstart growth within psoriasis? Thank you.

Matt Gline, CEO

Yes, perfect. So on the payer side, you covered it well. On the clinical side, we really have a little bit of a tale of two cities where we have talked to use it quite a lot in the practice and love the report constantly positive both patient feedback and their own feedback in terms of how that helps them to have a real steroid alternative at this level of safety and efficacy. And then, we have adapt to a writing you know I'd say like six or fewer scripts a month. We bucket them in a couple different ways. And you know I think those doctors still sort of experimenting. And so, we get different feedback. I'd say like we are not getting a lot of like specific negative perception is that we need to counteract. I'd say the main thing is these are docs who because they have only used the product a little bit have not sort of figured out how they want to think about it, vis-a-vis steroids. And so if anything, the feedback is yes this is a great product but steroids are pretty good too. And so I think that's what we are sort of most actively working on is how to help those docs to see the benefits we are starting to see the remitted benefit, see the tolerability benefit, you know the intertriginous data that we just put out here is potentially helpful to support our position we've always had day to day are. So you know I think those are the kinds of messages that matter. And it's really about working on continuing strategies to convert those docs to the kinds, who write it more. So you know as I said we are hopeful about work that we are doing there, but I want to be measured, given what we've seen over the past call it five to six months.

Douglas Tsao, Analyst

And that may be as a follow-up, and I know you touched on it a little bit on the Telavant call, but just given you know your sort of what your capital position will be does that change the sort of opportunities that you look at and sort of the commitment that those would take, be it either from a development standpoint as well as ultimately a commercial standpoint in terms of the infrastructure needed to support them. Thank you.

Matt Gline, CEO

Yes. I think the short answer is, it just puts us in an incredibly strong position to do anything. And so I mean in commercialized drugs to develop drugs we feel like we have the capital to pursue the biggest opportunities aggressively. You know I think we are still approval by nature and so I think it's still hard for us to stomach large upfront capital commitments, generally. And so I think that's probably the one thing where if we do it, it will be some really special. But other than that I'd say the main way I think about the capital, is it just let's just do more and I think I've said this a couple of places, now going, in hindsight, it doesn't seem like it should have been, but the decision to pursue the TL1A program a year ago was not totally easy decision, at least not for our entire team, because those would have been extensive Phase 3 studies and we are doing at a time where everyone's access to capital and our own access to capital were somewhat limited and I think I don't want to be in a position next time of tiptoeing around an opportunity that is that good. So, you know I think having this capital base and being able to put it to work really gives us strength in those kinds of discussions.

Douglas Tsao, Analyst

I have one final follow-up. In recent years, the company has gradually reduced its focus on some internal drug discovery efforts. Will some of those efforts come back into focus now that your cash position has significantly improved? Thank you.

Matt Gline, CEO

Yes. I think the evolution of that exercise in general for us has been a positive one. You know it's been challenging at times, but I think we've got some best on right now at the VantAI, Covant, Psivant that we are excited about and one of the things we like about it is I think we found very capital-efficient ways for that work to be funded through partnership or by outside capital. It's just that we have a lot of optionality on success, but it's always been pretty small piece of our burn and I'd say it's gotten significantly smaller over the best of all years as our late-stage pipeline has come into sharper relief. I don't candidly, expect that to change significantly, in the near term just because, I think we are pretty well set on how those businesses are running and we like to...

Douglas Tsao, Analyst

Okay. Great. Thank you.

Matt Gline, CEO

Thanks, Doug.

Operator, Operator

And one moment please for our next question. Our next question will come from the line of Yatin Suneja of Guggenheim Securities. Your line is open.

Unidentified Analyst, Analyst

Hey team good morning. This is Evin on for Yatin, and thanks for taking the questions. Two for us. The first is on brepo and then I have another one kind of on broader strategy. On brepo how would your POS changed for Dermatomyositis, if you didn't need the bar, the Deucra's bar in SLE? And then from a strategic standpoint, when you're thinking about the potential progression of Roivant to $20 billion to $30 billion company what proportion of the growth comes from the existing pipeline that you already have versus an external business development opportunity? So in other words, do you have to bring in an asset or two to reach that future valuation?

Matt Gline, CEO

Yes. I'll start by saying that our perspective on the probability of success in Dermatomyositis remains unchanged regardless of the outcome in Systemic Lupus Erythematosus. The biology of brepocitinib is well-established, supported by six successful and well-executed Phase 2 studies, and SLE is recognized as an ethical space. Hence, I don't foresee any impact on our confidence in the likelihood of success in Dermatomyositis based on the results in SLE, whether positive or negative. Even if brepocitinib proves to be effective, I'm uncertain if it will significantly alter our assessment of its probability in Dermatomyositis. At this stage, brepocitinib has shown itself as a viable agent, and our focus now is on identifying the most suitable therapeutic applications for its profile. Regarding our overall strategy, I feel quite confident. Even if we never pursue another business development deal, which is not a certainty because we are planning to engage in more, we currently have what we believe is the most promising late-stage immunology and inflammation pipeline, including FcRn and brepocitinib, among others. It’s clear to me that FcRn alone has the potential to generate substantial value, much like brepocitinib, which is also taking a different strategic approach. Rinvoq is on track to perform exceptionally well, and we believe we have an agent that offers notable competitive advantages over Rinvoq, particularly regarding specific activities. Therefore, I am convinced that we are not dependent on business development efforts for the next major growth phase. Practically speaking, if you’re asking about my expectations, I foresee considerable value creation beyond our late-stage pipeline as well. We have new opportunities because we have always been proactive, and the scope for prospects is currently as rich as it has ever been concerning the quality of opportunities we observe. We intend to capitalize on that potential given our current capital situation.

Unidentified Analyst, Analyst

Thank you very much. Appreciate it.

Matt Gline, CEO

My pleasure.

Operator, Operator

Thank you. And this will end the Q&A portion of the conference. I would now like to turn the conference back to Matt Gline for closing remarks.

Matt Gline, CEO

Yes, thank you. I just want to say thank you again to everybody to the Roivant teams to all of our investors to the patients and investigators our studies to our partners. It's been a phenomenal year. This is probably not the last time we get on the phone together given the amount of data coming. But just want to thank everybody for following along and what has felt like I really exciting moment for us. So, if we don't talk before Thanksgiving, and I guess again it's possible that we will, but if we don't talk before Thanksgiving have a great holiday for those who celebrate it, and I'm looking forward to getting on the phone again soon. Thank you very much.

Operator, Operator

This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.