Roivant Sciences Ltd. (ROIV) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the ADORING 2 Data Release Conference Call. [Operator Instructions] 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 Phase III results from ADORING 2, 1 of 2 pivotal Phase III trials of VTAMA cream with the treatment of atopic dermatitis. I'm Stephanie Lee of Roivant Sciences. Presenting today, we have Matt Gline, CEO of Roivant; Todd Zavodnick, CEO of Dermavant; and Phil Brown, Chief Medical Officer of Dermavant. 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. We'll begin with Matt Gline who'll give opening remarks. And with that, I'll turn it over to Matt.

Thank you, Steph, and good morning, everybody, and thank you for joining this morning's call. These are the fun ones, and we're really, really pleased with the update we have to share today. So I'm going to give most of the time over to the Dermavant team to present these data, which are hot off the press. But just briefly, before we do that, a couple of framing comments starting on Slide 4, which is, as a reminder, 2023 is an incredibly data-rich year for Roivant. This is the second major announcement of clinical data we put out. The first was from our anti-TL1A antibody in January. And we have more data, both from VTAMA coming with the second study in atopic dermatitis as well as our long-term chronic data from our anti-TL1A antibody 3101 later this spring as well as data later in the year from IMVT-1402 with brepocitinib. So an unbelievably impactful year for us. And I'll just say that today's data sets a high bar for the rest of the year. So I'm excited to watch that play through. The other thing I'll say on Slide 5 is this is now our ninth consecutive positive Phase III study coming out of the Roivant family of companies. That's pretty exciting to us. Obviously, you can't always expect that. But we feel like it speaks to the quality of execution that comes from Roivant and in particular, from Roivant model, which puts folks like the ones you're going to hear from today, Todd and Phil and Chris and others, in pole-position to deliver phenomenal outcomes. So I think that's just -- it's a track record we're proud of that comes from the quality of the talent that we have in our bank. And I do want to start just by saying thank you to all of the people at Dermavant, to Todd, the leadership team and the entire organization and to the physicians and patients who worked with us on the study, and I'm sure the Dermavant team will want to say that as well. So with that, without any further commentary from me, I'll hand it over to Todd Zavodnick, Chief Executive Officer of Dermavant, to introduce this great data.

Thanks, Matt, and again, good morning, everybody. Today is absolutely a significant day for Dermavant. We're delighted to be here with you to share the positive top line results from our ADORING 2 trial, the first of 2 pivotal Phase III trials evaluating the safety and efficacy of VTAMA cream 1% in atopic dermatitis. So in May, we plan to share with you the top line results from the identically designed ADORING 1. And before I hand the call over to Phil to run through these positive results, which you will see were all achieved with high statistical significance, I'd like to first put our atopic dermatitis program in context. So if you'd advance to Slide 7 for me. For this slide, you'll see that psoriasis and atopic dermatitis represent 2 of the large patients in dermatology and really in the whole of therapeutics. These combined market segments are expected to grow to a $38 billion opportunity by 2028, and we believe that VTAMA could represent a 2-in-1 opportunity with psoriasis and atopic dermatitis for dermatologists as well as their patients, given the FDA's May 2022 approval in psoriasis, coupled with today's impressive results in atopic dermatitis. Furthermore, as a treatment for psoriasis and atopic derm, VTAMA could offer treatment simplicity for patients, prescribers, payers, pharmacists with identical dosing regimens and drug strength at 1% once a day, and we'll talk about more of that later. So if we go to Slide 8, Speaking of our existing approval in psoriasis, I really want to take this opportunity to share with you the success to date of our commercial launch, where VTAMA cream is setting an absolute new standard in plaque psoriasis and is currently the #1 prescribed branded topical with more than 110,000 prescriptions written by over 9,300 unique prescribers. The fact is the numbers do not lie. Health care providers are choosing VTAMA to fill the unmet need for their plaque psoriasis patients. And it's a fact that we believe VTAMA truly has blockbuster potential. So we won the FDA's approval for psoriasis in 2022. And with today's results, I believe we have atopic dermatitis firmly in our sites. So we move to Slide 9. Additionally, I want to take some time to give a shout out to our entire commercial team, led by our Chief Commercial Officer, Chris Chapman, who has executed our game plan with pristine skill and aptitude. In just 9 months of launch, we've already achieved more than 60% of our commercial coverage for VTAMA with over 100 million lives covered to date and are ahead of plan in achieving 80% of covered lives by the end of '23. And this progress is borne out quarter-to-quarter in our consistent growth in VTAMA units, revenue and gross to net yield. With that, let me hand the call over to our Chief Medical Officer, Dr. Phil Brown, to walk you through the positive top line results for our ADORING 2 trial. Phil?

Great. Thanks very much, Todd, and good morning, everyone. Before I begin, let me summarize the trial results by saying that this -- in this study, VTAMA cream impressively hit all of its primary and secondary endpoints with a high level of statistical significance. Not only that, but the drug was extremely well tolerated with a very clean safety profile, which is evidenced by the very low discontinuation rate due to adverse events. If you would please advance to Slide 11. Here, we see the clinical design for ADORING 2. It's a Phase III trial of VTAMA in patients with atopic dermatitis, which matches the identically designed and ongoing ADORING 1 study. With regards to the eligibility criteria, we enrolled patients 2 years and older, given the significant unmet need in the pediatric population. Given today's compelling results, we believe this demonstration of efficacy in children as young as 2 could be a significant differentiator for VTAMA cream. In order to be enrolled, patients were required to have an IGA score of greater than or equal to 3 with an EASI score greater than or equal to 6 and a BSA between 5% up to 35%. All 406 patients enrolled in the study were randomized in a 2:1 fashion VTAMA cream versus vehicle. And both were administered once daily with -- to subjects for 8 weeks. Importantly, in this trial, children as young as 2 received the same dose and frequency of treatment as adults. And in fact, the same dose of VTAMA cream that is currently FDA-approved for adults with plaque psoriasis. Upon study completion, participants in ADORING 2 were eligible to roll over into our long-term safety study, ADORING 3. The study's primary endpoint was the percentage of patients achieving an IGA score of 0, clear or almost clear or 1, plus a 2-grade improvement from baseline at week 8. In addition, there were a number of secondary endpoints covering efficacy as well as key patient-reported outcome related to itch, one of the hallmark symptoms with atopic dermatitis. Please advance to Slide 12. This table summarizes the basic disease characteristics of our ADORING 2 subjects, which reflects moderate to severe disease with patients ranging from 2 to 81 years of age. The mean PP-NRS, the measurement of itch, was 6.8. Just to remind you, the PP-NRS is a 10-point scale. So that's a fairly high significant degree of itch. The trial was well distributed across age groups with a deliberate bias towards enrolling patients younger than 18 years of age. Please advance to Slide 13. As Matt and Todd mentioned earlier, the ADORING 2 study impressively hit its primary endpoint with a high level of statistical significance. Here, you can see that 46.4% of those treated with VTAMA cream out of 271 in that arm achieved an IGA score of 0 or 1 and a greater than or equal to 2 grade improvement from baseline at week 8, compared to just 18% of those receiving vehicle. The 28.5% difference between the 2 treatment groups was highly statistically significant as shown by the very low p value. Please advance to Slide 14. Here, we show the key secondary efficacy endpoint of EASI75, where nearly 60% of VTAMA-treated patients achieved at least a 75% reduction in disease burden by week 8 versus 21.2% for vehicle, a delta of 37.9%, which again was highly statistically significant. Please advance to Slide 15. This is our itch endpoint. The peak pruritus NRS is a well-defined validated scale for evaluating worst itch intensity in subjects with moderate to severe AD. It is a self-reported item designed to measure peak pruritus or worst itch over the previous 24 hours based on the following question. On a scale of 0 to 10, with 0 being no itch and 10 being the worst itch imaginable, how would you rate your itch at the worst moment during the previous 24 hours? Weekly averages were then generated to evaluate for the response on itch reduction. Itch is important because atopic dermatitis is a condition that causes dry, itchy and inflamed skin, which could be especially problematic for young children. Since it is a patient-reported outcome, we limited reporting to subjects greater than or equal to 12 years of age, which corresponds to how this instrument has been validated. I'm delighted to share that 52.8% of subjects achieved this clinically meaningful, greater than or equal to 4-point reduction in itch at week 8 versus 24.1% for vehicle. That represents a difference of 28.7% between the groups, which is highly statistically significant with a p value of 0.0015. Additionally, it's important to note that we saw similar results in those subjects under age 12. Please advance to Slide 16. Here, we have a summary table of treatment-emergent adverse events. As mentioned previously, VTAMA demonstrated an excellent safety profile in the study, including patients down to 2 years of age with no discontinuations due to AEs of special interest and with study and treatment discontinuation actually higher in the vehicle-treated group. Furthermore, we had a very high participation rate in our open-label long-term extension study, ADORING 3, of 92.4% of eligible patients, which underscores patient and investigator perception of VTAMA cream. It is also important to note that AEs in general were well balanced between vehicle and treatment arms with no AEs other than folliculitis occurring at greater than 3% in either arm. Please turn to Slide 17. In addition to the tables and the figures we have shared today, I want to share with you some images to help you understand how this subject reacted to treatment with VTAMA cream 1%. We always rely on statistics to illustrate our data. However, it's important to remember there are patients with individual stories that are the basis for all of these data. This is an interesting patient. It's an 8-year-old little boy. You can see by the photo the visible lesion on the back of the leg, and the data below highlight both the extent of the disease and how he and his parents rate the burden on quality of life. You can imagine as apparent how frustrating it must be to have your child suffering, itching, not sleeping and no adequate treatment options that you might feel safe with. So this patient is a nice reminder of what it means to suffer from AD and its impact on the individual, but as well the entire family. Starting at baseline on the far left, the subject had an IGA score of 3, an EASI score of 6.5, a PP-NRS score of 9 for itch. This is again a very high itch score. And what can be seen as you move your eye from left to right is that by week 2, the IGA score had declined to 1, the EASI fell to 3.0, and the PP-NRS itch score roughly halved to 4.6. This patient has moved from moderate disease IGA-3 to a regulatory success in just 2 weeks with a clinically meaningful over 4-point reduction in itch. This subject then made further progress through week 4, achieving an EASI 90 by this time. And you can see the continued improvement in symptoms as well. Normalization of the skin where the original lesion was. At week 8, the atopic dermatitis on his entire body is almost clear with an IGA score of 1, an EASI score of 0.9. The PP-NRS score is down to almost 0, and the CDLQI, which is a measure of quality of life, has gone down to 0, meaning the disease is no longer negatively impacting his quality of life. For this patient, a very meaningful improvement is observed at clearly meeting a regulatory success, but more importantly, significantly reducing the itch, lesions and as you might expect, significantly improving his quality of life. Please turn to Slide 18. Although not part of our ADORING 2 study, I wanted to quickly remind you why the safety profile demonstrated in this trial for VTAMA cream was not surprising. And I wanted to do that by sharing a summary of our pediatric maximal use PK study in atopic dermatitis, which we had announced back in November of last year. In our MUPK study, VTAMA cream demonstrated a favorable safety, PK and clinical improvement in atopic derma subjects down to age 2. There was a low incidence of adverse events and VTAMA cream was well tolerated even in sensitive skin issues -- areas. Moreover, minimal to no systemic exposure was confirmed under maximal use conditions in subjects with up to 90% body surface area affected. Now let me hand the call back over to Todd to summarize the ADORING 2 results.

Thanks, Phil, and thanks for sharing those exciting results. If we go to Slide 19. So in summary, VTAMA demonstrated highly statistically significant improvement and validated investigator global assessment for atopic dermatitis with 46.4%, achieving a score of clear or almost clear from baseline at week 8. In addition, VTAMA demonstrated highly statistically significant improvement in EASI75, a key secondary endpoint with 59.1% of subjects achieving EASI75 from baseline at week 8. And as Phil shared, in terms of itch, 52.8% of subjects greater than 12 years of age, receiving VTAMA cream experienced highly statistically significant itch improvement of greater than 4 points on the PP-NRS scale. VTAMA showed it was safe and well tolerated in this population, including children as young as 2 years of age. Adverse events in ADORING 2 were primarily mild and resulted in a low discontinuation rate of 1.5% on VTAMA and 3% in vehicle, and there was absolutely no discontinuations seen due to adverse events of special interest. Reinforcing the point. ADORING 2 had an extremely high 92.4% rollover rate. That's an extremely high number where they rolled into our ADORING 3 long-term extension study. Patients, children down to 2 and their parents voted to stay on VTAMA and roll into the long-term safety trial out to 52 weeks, which does speak volumes. Lastly, all of these results down to the age of 2, as we shared, were remarkable. Patients received VTAMA at the same 1% dose and once daily frequency that we have currently approved for adults with plaque psoriasis. Additionally, results are further reinforced by what Phil just shared within our pediatric maximal-use pharmacokinetic study, which showed minimal to no systemic absorption even under maximal use conditions with patients down to 2 and again, up to 90% body surface area. These are exceptional results for a product that we believe can truly transform dermatology. So VTAMA is a potential 2-in-1 product for 2 of the largest indications in dermatology. And I promise you, my team and I are racing to bring this innovation and much needed treatment to patients as fast as we possibly can. I wanted to finish up by saying I really sincerely, from my heart, thank everyone who is involved in this trial, especially the patients, the children, the adults and the investigators across the United States and Canada. I also want to put my shout out to the entire Dermavant team that worked extremely hard to make these results an absolute reality for the patients that need it. So now we look forward to sharing the results from our identically designed ADORING 1 trial in May. And with that, I'm going to turn the call back to Matt.

Thank you, Todd. Thanks, Phil, for sharing the great data from today. And thanks again to the whole Dermavant team, the Roivant team and the patients and the investigators. It's an important day. But I'm going to wrap up quickly and then we'll get to Q&A. And the first thing is, I think this data is probably good enough that it doesn't need to be put in context of other agents. But I think it is worth doing a little bit of it. So on Slide 21, and we showed EASI75 here, but we could have shown basically any other endpoint, and the story would have been the same. On a comparative basis, this is incredible data. It's really strong and it sets us up, frankly, not just to be a best-in-class product potentially among topical agents, but it's data that looks superior in many cases on crush rock comparison to systemic agents, injectable, things currently used for even among the most sick and severe atopic dermatitis patients. So it's incredible data that we are very proud of. That said, and I think this is an important point on Slide 22. It's not even just about the efficacy data, frankly. That's just one piece of the story. Relative to other agents, the safety data here and the overall profile, the simplicity of dosing, the consistency of the formulation across disease states, everything about this product sets it up to become really a new standard of care in our view for atopic dermatitis patients. And that's true. It's true versus some of the novel topical agents. It's true versus biologics. It's a really privileged position to be in. On Slide 23, just to wrap up around sort of the product. And obviously, we're really pleased with how this is working already in psoriasis. We've got powerful efficacy. We have rapid onset. But I believe from our review of this data will be true in atopic dermatitis as well, we have an incredibly clean label in psoriasis with remitted data on the label, and we're looking forward to the data from our extension study in atopic dermatitis. We have a favorable safety and tolerability profile that enables long-term use anywhere on the body, and we have a convenient once-daily product with an expected single tube for psoriasis atopic dermatitis, including for pediatric patients all the way down to the age of 2 right in the study. So an incredibly exciting profile. We think the product is already rapidly becoming the foundational standard of care kind of therapy in psoriasis. And we think this data enables absolutely the same in atopic dermatitis. And then the last one I'll make before I get on to practical stuff is on Slide 24. Look, we're just getting started here. In psoriasis, in recent weeks, we've been doing around 4,000 scripts a week. There are 90,000 topical prescriptions every week in psoriasis, the vast majority of which are corticosteroids. And now with today's data, this number has no meaning. There are close to 320,000 scripts every week for topicals and atopic dermatitis. And this data unlocks a lot more work to come on this. This data unlocks access to an unbelievably large patient population with high unmet need. So we're excited to grow into that market, and really pleased to get out there with this data set. Finally, we're going to Q&A. On Slide 25, it's really briefly our next steps. So as we've said, we expect the ADORING 1 top line readout to come in May of 2023, just a couple of months from now, and we expect the sNDA to go in, in the first quarter of 2024. So we'll talk more about approval timelines and things like that, but that's sort of the base case expectation here for what the next 9 months or so looks like. So with that, I'm going to say thank you again to everybody involved. And I'm going to hand the line over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of David Risinger with SVB Securities.

Congrats on the phenomenal results. I have 2 questions, please. First, the follicular events were 8.9% versus 1.5% for placebo, which was much better than the 20% in the Phase IIa/b trial and also much better than the low 20s seen in the Phase III psoriasis studies. So I was hoping that you could discuss that. And then second, could you please discuss the opportunity for payers to more proactively support VTAMA ahead of access to very expensive biologics and orals for patients with psoriasis and AD?

Thanks, Dave. I appreciate the question. I'm very glad you're able to be on today's call. Look, I'll take the second one first, and then I'll hand it over to Phil for the first one. On the payer opportunity, I think the question embeds the answer. Look, I think the psoriasis market already has a healthy group of very expensive systemic therapies with complicated tolerability. And there are a number of such therapies on the market or coming to the market in atopic dermatitis. And I think if you look at the quality of the data we have here and the quality of the data that we have in psoriasis, I absolutely think we are a force for good for payers in helping them to manage the high cost of putting these patients on systemic therapies. Frankly, if you look numerically in the cross-trial comparisons, I think there's a good argument that the patients respond better in some cases to VTAMA than to systemic therapies. So I think there's a huge opportunity for payers to use VTAMA proactively in that way. And as and if that develops, I'm sure it would be constructive, both the overall adoption and also to contract it with the payers, and I'm sure we're already seeing a little bit of that. So that's what I'd say on the payer side. On the follicular events question, obviously, I noted the same thing and find it a good sign overall. But maybe I'll hand it over to Phil to give the scientific answer.

Great. Yes, thanks. So I'll just start by saying, first off, this is a very different disease, very different disease, different population of subjects, and we have to start with that. Just by anecdote, I'll share with you. Follicular events, contact derma and headaches were predefined in both our psoriasis studies and in this study as AEs of special interest. I would just point out that's highly unusual for a topical to have this level of scrutiny towards an adverse event. And so we've sort of gone the extra mile, I think, to ensure from a very conservative standpoint that we understand how the product is behaving in these various patient populations. And I point that out because there may be some degree of ascertainment bias that's introduced on that basis because we called these out. All sites were trained, obviously, as we went into the investigator meeting with regarded look for these adverse events. And the feedback we've had is not just reflected in the data. Just the anecdotal feedback we've had from investigational sites is that they're just not seeing the level of follicular events that was observed in our psoriasis studies. And I would just point out, that's true of all the AESIs. In fact, contact derm is another one that if it was an event you would expect for the product, this is the population in which you would see it. And we're just not seeing high frequencies of these events in this population. So a very clean safety profile.

[Operator Instructions] Our next question comes from Neena Bitritto-Garg with Citi.

Congrats on the data. I'm just curious if you could talk a little bit more about the timeline to the sNDA submission? Can you just remind us if you're going to wait for the long-term extension data before filing? And if so, how we should think about potential for a remittive effect in atopic derm versus psoriasis?

Yes. So we gave the timeline earlier as first quarter of 2024. I'm not going to go into a lot of detail about exactly what goes into that date. But I'll say that I expect at least some of the LTE data will be available prior to submission. And as far as the remittive effect goes, I'll hand it to Todd and Phil if they have anything to add here. But I think the answer is we were very pleased to see it in psoriasis. We don't have the data from the extension study. So I can't say for sure what we'll see. It's a different disease state. But obviously, we're excited about the mechanism for VTAMA, and I'm looking forward to getting that answer. Todd or Phil, anything you'd add to that?

No, I think you hit it, Matt. I think the most important thing, these are different diseases, totally different diseases. But we are going to inquire on it. And I think the key takeaway to repoint out is that in dermatology, my last 10 years, I've never seen a rollover rate that we've seen, which 92.4% of patients that finished this trial, the parents and the children and adults, chose to roll over. And so in that long-term safety from week 8 to week 52, we're going to watch it, and we'll see. Most important, obviously, efficacy and safety, but we'll look at the remittive piece, too.

[Operator Instructions] Our next question comes from Louise Chen with Cantor.

Congratulations on the spectacular data. So I had a few for you. I wanted to ask you, how does your itch improvement compare to DUPIXENT? And then also, how do you think the data today really changes the treatment paradigm of AD for children and infants who aren't great candidates for injectables or oral? And the last one you had mentioned is that you think this has a blockbuster potential. So just curious, globally and in the U.S., how you think about that blockbuster potential.

Yes. I will take those in reverse order and also get some feedback from Todd and Phil on this as well. Starting with -- look, I think -- the data that I showed on Slide 24, around script volumes at AD, that's just in the U.S. So I think there is no question, the level of -- I mean these are unfathomably large numbers. The number of AD patients in the U.S. is extraordinary. And there is high unmet need. Topical steroids are problematic agents. They are, in some cases, limited in efficacy, they have tolerability issues. And obviously, we're blessed to be living in a moment where there's a lot of new therapies coming to market. But many of those therapies, not just injectable therapies, but many of the other topical therapies have tolerability limitations that make it difficult for pediatric patients -- young pediatric patients to want to use them. So I think the combination of the efficacy we've got and the tolerability we have is extraordinary and opens up an enormous market. And I think that's true in the U.S. and we haven't yet sort of put the final period on our European strategy, but there's a lot of patients there, too, and all of the same dynamic applies. So that's what I say about Europe and U.S. I kind of got to the pediatric question as well. Look, I think -- maybe I'll ask Todd to comment on that in just a second. And then on itch improvement compared to dupi, just numerically, I think adult dupi monotherapy at something like a 36% to 41% itch improvement responder rate that's gross, not placebo -- not placebo or vehicle adjusted, whereas we were 52.8%. So it's across our comparisons, different patient populations, et cetera, but I think the answer is it compares favorably to dupi introduction. Todd, do you want to take a little bit on the sort of paradigm question around children and infants, anything else you have on any of these others.

Yes, I had a couple of notes. I mean I think going back, Louise, the first comment on the reverse order, the blockbuster comment and Matt covered, it really turns into math and it turns into the right target product profile. And I think we've said it all along that I think with VTAMA, we have the right target product profile in a once-a-day nonsteroidal option. And in 2023, when you're looking at whether it's psoriasis or in the future, potentially atopic dermatitis, people want a nonsteroidal option that can deliver like a high potency steroid. And I think we have that in VTAMA. And as I said, the numbers don't lie. I mean, there's 110,000 prescriptions in just 9 months, not because we said so, but because health care providers chose it. So if we look at market size and we look at these 2 diseases and our ability to build share at a good pace, then it is a blockbuster mathematically. I think your second point around paradigm shift of what we see topically, orally or injectable-wise, I think at the end of the day, we know that, that the majority of time, I think, almost 65% to 70% in psoriasis and up to 90% in atopic dermatitis, a topical is first line. And I think in a lot of our qualitative survey work, what all the nonsteroidal companies would say, not just Dermavant to be respectful, is parents want their children off of steroids. And their first question is, I want -- is there a nonsteroidal option? And now when you see the data we have with the cleanliness on the safety side and the tolerability side, whether in psoriasis or in our first trial here in AD, I think it sets up for -- it's our job to execute and to really bring this paradigm shift to the market. And to sort of slow down the shift to an oral or injectable where maybe it's not needed. And I think that's the point I would kind of close with is when you look at our trial in moderate to severe and what we looked at, moderate disease is 3% to 10% body surface area, and severe is greater than 10%. And 60% of the patients lie there. And people say, well, why did you do that? Well, we replicated our Phase IIb. And honestly, it's demanded by the dermatologists that if you're going to bring a novel chemical entity to market, that you test it against the toughest cases because they'll get there on their own if they want to use it down to mild, but that's their choice. For us, we focused on moderate, severe because we wanted to take on the toughest patients. So I hope that gives you some color on that.

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

Congratulations on the data. Just one for me. So you have the second Phase III data coming up in May. Can you just comment on how the risk this is? I appreciate that placebo or vehicle can often fluctuate significantly. Maybe just talk about your level of confidence around the reproducibility of this data in the second Phase III?

Thanks, Dennis, for the question. And we're excited about the data. Look, I'm not a superstitious person. So I'll just repeat the facts here which is, we had very good data in a large Phase IIb study. We had a -- what we know is a highly statistically significant study from our Japanese partner in AD. And now we have very good data in a large Phase III study here with extraordinary outcomes as a very large separation and highly statistically significant results. I guess like I think -- I think relatively derisked is what I would say about the second Phase III study. I think there's, frankly, room in this data for a breadth of outcomes in the second study to still feel really good about it. But I think given what we've seen here, given what we saw in the Phase IIb, we're very pleased with where the product is headed.

Got it. Maybe a follow-up. In terms of your market research and talking with doctors and things like that, maybe talk about how willing doctors may be in prescribing VTAMA potentially off-label for atopic derm given the formulation is the same?

Yes. Look, it's always hard to speak for physicians on that point. This week is the beginning of the largest dermatology conference of the year, one of them, the medical meeting in New Orleans AED, the Dermavant team will be there in force. I am very confident, given the quality of this data set, the docs will take notice of the data, and that they will think carefully about what this means for their patients. And I think historically, when docs see data they like, they'll write a product. So I think we can say, especially dermatologists, they'll write the product they want to what they think is best for their patients. And I think the data is really supportive.

And our next question comes from the line of Yaron Werber with Cowen.

Congrats on the data. I have a couple of questions. When you look -- and I know you didn't have that in there, but I figured I'll ask about it. When you look at the data below 12 versus above 12, what do you see in efficacy just so we can sort of compare it to some of the comp competitors? And also, we don't have the graph of onset. Do you have a sense what happens in week 1, 2 and 4? How fast do you see a separation? And then maybe just finally, was the activity the same in the moderate as in the 16% of patients who were severe?

Yes. Thanks, Yaron. So I'll give it to Todd and Phil to answer much of those questions. Just on the onset point, so we only have the top line data to share today. We've obviously begun to analyze the other data, but it's early. The one thing I'll say is just clear we are going to be highly statistically significant and clinically meaningful at all the time points we measured starting early. So I think onset will be good for the product, and I think people will see a response early. So we'll share that data in full when we're ready. But in the short, I think we'll be very happy with the onset data. Todd, do you want to start and then kick it over to Phil on the sort of segmenting either below 12 or above 12 or?

It's kind of what you said, Matt. I mean, I think, Yaron, it's good to hear from you. I think you just got to give us time. We literally are racing to get this data out. Obviously, as Matt said, there's the American Academy of Dermatology in New Orleans. So we wanted to make sure this was timely as we head out ourselves. Give us time as we analyze all of the data. I think, right now, our focus was on the primary and secondary endpoints around IGA, EASI and itch. What I can say, as we interrogate the data into ADORING 3, is VTAMA is a drug that always tends to get better with time. And in this study, what -- all that we were able to glean is what Matt shared, which is statistical significance at all time points we measured starting at week 2, and we'll have a diary that we'll go into that we'll be able to look at itch as early as week 1 and week 2, and we'll report back as we get that data and we get our ADORING 1 data in May. So just give us a little bit of time. I think we're ecstatic on what we're able to share because I do believe it's sort of transformational even if 1 study, and we'll present the second study, and then at future scientific meetings, have the rest of it. So just give us a little bit of time.

Thanks, Todd. The only thing I'll say, just to be clear. We don't have the data to share numerically, but I'd say like overall, as we've looked at preliminary cuts across age, it looks consistent and strong across all age groups. So I don't think there's anything to worry about that. We're just excited to get the actual numbers to share, and we don't have them yet.

And would you wait for the second study and then present it in the medical meeting would you present one at a time?

The second study is coming in May. So I think the answer is probably the second study will be done before we present at medical meeting. But Phil, anything you'd add to that?

No, that's correct. I think we're going to wait for that next study to report out before we understand and have the opportunity to present the totality of the data.

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

This is Nicole on for Robyn. Congrats on all the data and progress. Can you talk about how signaling you view this being used over time given the data? Are there any early indications of some remittance effect? And if so, how should we think about maintenance use as a long-term use? Is it going to be every 2 months? How should we think about it? And in children, how long do these players last? So does it go away over time? Or do you see this as something that will be needed in parents' cabinets over the long term?

I'll have Phil to answer the question about the disease progression. On the early evidence of remittance and on the sort of maintenance and long-term use of the product, I guess the answer mechanically for VTAMA is we'll know once we've got the long-term retention data which will have answered over time. Just to remind you of what Todd said, which is that there is a 92% roll over into the extension study. So after 8 weeks on the product, caregivers and patients still want to be on it which I think is pretty telling. But Phil, what would you say about the sort of disease progression and how VTAMA fits in?

Yes. So obviously, atopic dermatitis is a very debilitating condition. It's chronic. And it's very distressing to patients because of the itch associated with it as well as the lesions that they experience. So the vast majority of patients need some degree of treatment to quiesce those flares. And it's a long term and relatively chronic condition, particularly in a subset of patients. So prevalence is high in children -- very high in children, but there's a large number of adults that also suffer from this on a chronic basis. So I think having a therapy that can be used anywhere on the body for any length of time with an excellent safety profile and manage the condition is going to be a welcome addition to the armamentarium.

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

Congrats on the data. The data that you saw is what you previously deemed as a home run and seemed very competitive against the biologics. How do you see your sales force changing the messaging to the target dermatologist audience? When do you have the label in atopic derm to stand out from your competitors compared to your current work with existing psoriasis label? And secondly, can you remind us what you're planning to add -- whether you're planning to add to your sales force once you have the go ahead in AD? And lastly, how does the timing of potential atopic derm approval overlap in your DTC campaign plan?

Thanks, Brian. Thanks for the great questions. The first thing I'll say is I believe I said that the data of the scenario would be a grand slam, not a home run. Just to correct the record about my prior comment. We're really excited about the data. Obviously, we can't meaningfully change our sales force necessary to include this data until end of approval, although you can imagine we'll be speaking about it medically with every opportunity. Maybe on the commercial plan from here, in terms of sales force, in terms of DTC, et cetera, I'll hand it over to Todd and Chris to see what they'd like to say there.

Yes. Thanks, Matt. Look, I think, first off, I'll just make some initial comments and hand it to Chris. ADORING 2 was just presented today, and we're ecstatic, and we're going to present ADORING 1 in May. So I think that's the starting point of where we're at. And obviously, we're so focused. I mean, as Matt shared, 75,000 prescriptions a week, mainly steroids, topical corticosteroids are being used in psoriasis. And our job is to drive that launch with consistent growth in the way we're doing it today in a very intense way. So I think right now, there's going to be a lot of AD education between now of ADORING 2 and our ADORING 1 data across the dermatology community, I'm sure from the podium and in various medical meetings and conferences where physicians are going to want to understand the data. And that's going to be our kind of first step from obviously a medical affairs perspective. With regards to sales force and early thinking and stuff like that, we can give you some thoughts, but Chris, I'll pass it to you.

Yes. Thanks, Todd. Before I answer directly, just take a step back for a minute to think about what we have just shared and what we have done in the last 9 months. So while certainly, from a commercial perspective, we would not change our messaging until we had an approved label for AD, but if you look at the highest level, what we have is a novel chemical entity that we brought into the psoriasis category, the first novel chemical entity in 25 years. So a category that was starved for innovation, and the dermatology community has embraced that product with over 110,000 prescriptions and 9,300 unique prescribers. So the positioning is not going to change because you have the same product, the same concentration, a nonsteroidal once a day with powerful efficacy, results that last, safe and tolerable. So now let's switch to the AV market. In psoriasis, it's very concentrated. About 9,000 dermatologists or NPPAs will write 75% of the psoriasis prescriptions. When you go to AD, you have to go to about 134,000 unique prescribers, which bring in other specialties. So certainly, when we think about field force sizing, we're going to take that market dynamic into context.

I think for context, what we've guided to before, there's about 125 reps at AD launch. I don't think we have anything -- any update to that to share right now.

Okay. And then lastly on the DTC campaign plan, how does that -- how does your potential AD approval to coincide with your DTC campaign plan?

Chris, do you want to -- or Todd, you go ahead.

Yes. I was just going to say it's a little too early, Brian. I mean, I think right now, obviously, we have a very controlled campaign in psoriasis. And I think we'll evaluate that. I mean we're well ahead with regards to atopic dermatitis and our internal enterprise operating plans and launch plans, and we'll be ready. And I think to reiterate what Chris said, I mean we're sharing with you the primary and secondary endpoints, all with high statistical significance that are really strong data today. But as Matt and Chris echoed, it's the totality of the product profile across these immunodermatology psoriasis AD down to 2 years of age, right, minimal to no systemic absorption in a once-a-day nonsteroidal option with solid itch data, 60% reduction at EASI75 and 46.4% on the IGA. It's not just the numbers, it's the totality of what you see that we truly believe will be transformational. So to your point, we'll be more than ready to consistently launch in psoriasis and have everything built over these next months to launch AD with Velocity.

Congrats on the grand slam.

Thank you.

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

I'll add my congratulations on the data. Maybe a couple for me, sort of following up on the last round of questions. One, just are you funded sufficiently to support this launch in AD? Or is there any -- like is it already included in your cash runway guidance? And then maybe two, as we think about market access and the cadence that, that would come online for atopic dermatitis, what should we expect given most of the psoriasis agreements will already be in place?

Yes. So on the first question, the answer is definitely yes. We had built into our guidance a full commercial plan for AD because we were, frankly, hoping for data of this quality. On the market access question, I'll mostly hand it to Todd. I'll just say, I think the really strong start that the Dermavant team has gotten in psoriasis will be incredibly helpful. And before I hand it to Todd, I'll just say kudos and thank you to the Dermavant team for the quality of coverage we've gotten to date, which I think sets us up really well. But Todd, over to you.

Yes. Thanks, Matt. I'm going to have Chris to address this as the Chief Commercial Officer. I think it's important.

Corinne, thanks for the message. And one thing that never changes in the industry when you have a second indication, when you come out and get the velocity of demand, that's a surrogate for unmet need. We have demonstrated that. So the adoption curve for the AD indication will be much more rapid than psoriasis. We're ahead of plan in psoriasis and anticipate 80% coverage during 2023. So I expect that to be much more rapid, and will certainly fuel our early adoption.

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

Congrats to everybody on the data. So just maybe following up on some of the questions on promotion. When we look at or think about the size of the atopic dermatitis market which obviously is considerably bigger, how much of that or the prescriptions are written, not by derms, but by primary care? And does that -- when you look at this data and how compelling it is, does it shift your thinking about your need or how much you would need to potentially hit pediatricians in particular?

Yes. Thanks, Doug. Thanks for the question. Thanks for joining. Look, I think Todd hit a piece of this, and I'll hand it back to him here again. I think the answer is, our general view is that the AD market, while not as concentrated as psoriasis market, it's still pretty concentrated, and that a focused field force could hit all the docs we need to hit. But Todd, Chris, please sort of back that up with the facts.

Yes. I'll go ahead and take that, and it's a very astute question, and I threw out a couple of numbers, but let me add an additional layer for context. While it's very concentrated in psoriasis to dermatology, the dermatologists that we're currently calling on represent 18% of the prescribers in the atopic dermatitis market, however, they represent 48% of the AD prescriptions. So I'll say it again. So they represent 18% of the universe of atopic dermatitis, 131,000 that I mentioned, but 48% of the prescription. So you do have some primary care, some allergists, some other adjacent specialties. But clearly, there is a primary focus on dermatology and then you layer on the high-decile prescribers from primary care, allergy, pediatric derm, et cetera.

Thank you. At this time, I'd like to hand the conference back over to Mr. Matthew Gline for closing remarks.

Thank you very much, and thank you, everybody, for listening. And I want to just say a final time here, thank you to everybody who worked on this study, from the folks at Roivant to help bring the product and originally to the Dermavant team who has done an extraordinary amount of execution here with many, many, many sleepless nights, to the patients and the physicians who worked on the study. It's obviously a result we're very proud of. So looking forward to continuing to provide updates as we've got them on ADORING 1 some more of the data here. And I look forward to talking again soon. Thank you, everybody, and have a great, great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.