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

Good morning, everyone. Welcome to the BofA Healthcare Conferences. My name is Chi. I work with Jason Gerberry, who is the senior analyst here covering SMid Biotech and Spec Pharma and we are pleased to host Roivant Sciences today. And we have here with us is Richard Pulik, CFO of the company. Thanks for joining us.

Thank you so much for having me.

So maybe to start off for audience who's not familiar with the company. Maybe talk a little bit about what Roivant Sciences does as a company and the business model that you guys have.

Great. Yes. Thanks again for the invitation and for having us here. Look, Roivant, I would say, has one of the most exciting I&I portfolios out there. We have -- with $15 billion in peak sales potential across the various trials that we have ongoing. The company celebrated its 9-year anniversary on May 5. In its history, it has 6 FDA approvals under its belt, which again, I think is amazing in such a short history. And we have, as of the last reported cash number, $1.9 billion in cash, which essentially takes us into the second half of 2025. We have a lot of exciting readouts coming through that period, in particular this year and in particular this quarter, which I'm sure we'll talk about. We have a unique business model that we create these companies called Vants, which really helps incentivize the management around the various assets. So they come in, they essentially really have an opportunity to be incentivized by getting equity in that Vants itself, and they really drive the team and create it. And then the Roivant management team, we essentially look across those Vants. And as data emerges, we look at that, I would say, pretty across our own data, across the data that emerges from competitors and then we make a decision across the portfolio, whether to continue to fund or whether reprioritize. And so we have, I would say, based on some of the reprioritization we did last year where we terminated 6 programs and really made sure that the cash burn was under control. We've really reprioritized the portfolio, and I think we have a very interesting set of assets, which I'm sure we'll get into in more detail.

Great. Great introduction. I guess there's a lot of interest in the I&I space given the recent activities in the sector. Maybe you start with your Tier 1 asset. You have an antibody that is a Phase II development, near completion of that trial with some maintenance data coming up short-term. So maybe start off, there's obviously investor debate about competitive partitioning between your Tier 1 antibody 3101 and competitive molecules from Prometheus, maybe help us understand your view on that debate. Where you generally align with investor view? And where do you think there might be misconception out there about the competitive profile of your molecule?

Yes. I think to level set here, we have, I would say, probably one of the best data sets here for the anti-TL1A class. The Phase IIa trial had roughly 50 patients, the Phase IIb had 245 patients. The Phase IIa was an IV, the Phase IIb was in subcu. The Phase IIb was a proper dose range study that had placebo, 50 milligrams, 150 milligrams and 450 milligrams. And we showed at the beginning of the year, I would say some of the most compelling data we've seen in UC and not just from an efficacy perspective, but also from safety. On top of that, there was real differentiation with the biomarker where we saw our biomarker cover 60% of patients. I think one of the other competitor products here, it really captures only a quarter. And you saw separation on those patients, also in particular across patients who were using biologics and other systemic and very strong efficacy differential. So as you know, a lot of the patients are rotating to various therapies in this field. I think we have a really clear path and differentiation based on the induction data that we read out at the beginning of the year. And then this quarter you'll see we'll be sort of the company with the broadest data set, show that in the maintenance setting, I think the field is trying to answer for a 52-week endpoint. Does it continue to be relevant? Does it continue to be safe? And is the efficacy at the high bar that we saw at the 12-week data? So I think it's a very exciting time point, and investors, of course, are keen to see that as we progress in the field.

Cool. You mentioned about your biomarker strategy being different than your competitor, maybe broader coverage. Can you tell us a little bit about it if you were to speculate, obviously, you can't tell us much because of competitive reasons. You don't know much about competitive programs. But if you were to speculate, what enables you to have a broader coverage there?

Well, look, I think it's a key differentiation point that we're being pretty mum, frankly, on this kind of how we got to that point. But you saw very clear separation on modified Mayo and also for endoscopic data points. And I think that speaks to the ability here to differentiate in sort of an all-comer setting and then also help people understand where to go if they're on the therapies.

Fair. You talk about how important it is from a competitive standpoint to have subcutaneous Phase II data at a patient level at hand and from a competitive standpoint, how important is it to have that?

Yes. So when we talked about the induction data back in January, we said, it's not just that we have subcu data, we also did a proper dose ranging study. So we know at this point, based on the induction data, that the Phase III dose where we said we would run 1 trial with 1 dose or 1 Phase III with 1 dose and probably would need 2 for registration, but that's unlike what we've seen from others just to remind people the other data with IV. And so I feel like we're in a really good place here too. Once we see the maintenance data to very quickly move forward into these 2 Phase III trials in UC.

Did you say 1 dose or 2 doses?

One dose.

One dose, okay. And what are you doing with your formulation there? Are we talking about how many injections for dose are we looking up at the commercial product?

Yes. So we don't want to give away the dose here given the competitive nature, but we did say that at the highest 450 milligram dose, there would be 2 injections.

Okay. Cool. You have the Phase IIb data maintenance data coming up sometime this quarter. What's the latest thought and expectation by the data set?

Yes. I mean I think based on what you hear in the field and from our KOLs, the main things that people are looking at the juncture is, is the high efficacy maintained and is safety maintained? So I think that's the main focus here and what everyone is looking forward to.

Is there any theoretical concern why the efficacy or safety would have been maintained as you go from induction to maintenance?

I mean I think one of the stories that was out there is that the neutralizing antibodies were with some [indiscernible]. I think that was like a story that we heard. We were very open about the neutralizing antibodies when we announced the Phase IIb data, we said it was 8%, I think. I haven't seen the neutralizing antibodies from the other data. I think in their Phase I, they did have 6%. So again, I don't think this is anything that gives me cause for concern. And when we did the deal, we saw the week 40 data. And again, we didn't have any concern here and are looking forward to seeing the maintenance data and sharing that with you.

Cool. How informative the immunogenicity data and induction data, like, if you don't see an impact in the induction, it is a pretty tailwind for maintenance? Or is there any theoretical concern where immunogenicity neutralizing antibodies might accumulate or that the impact between having that initial build of antibody and the impact of that because there might be a lag of that. Do you have any view on that?

Yes. I mean, look, I think all we can speak to the human data we've seen so far, right? And what we've seen so far, again shows very strong efficacy. And at week 40, we saw that efficacy maintained. So I don't frankly have any concern here.

Okay. Cool. Maybe can you talk a bit about your approach with 3101 in Crohn's. I think you're thinking about doing a Phase II there. Can you tell us a little bit more about your effort in Crohn's disease?

So look, I think this is another great opportunity there. I think the right thing here to do would be to run a proper dose ranging study and also establish the biomarker. Once we have that data in hand, then the thought would be to move into pivotals. But we haven't done the dose ranging there.

Are you thinking about starting with the same set of biomarkers as in UC? Or do you think that this is more like maybe a bit of an experimentation as you do your Phase II, I think your competitor had to tweak or made a tweak to the algorithm when they read out their Crohn's data?

Look, I don't want to tip my hand there as well. But again, we feel very good with the biomarker we have, but I don't want to tip my hand there.

That's fair. Maybe we transition to VTAMA, this topical approved for psoriasis Phase III development in atopic derm. You've already read out one Phase III study in March. You have one coming up sometime this month. I know you've talked about it in the previous conference call, but what's the expectation there? Do you expect the second Phase III to last [ year ] replicate what you observe in the first Phase III?

Yes. Maybe just to start on VTAMA. So VTAMA is our topical approved right now in psoriasis. If you pull up the indication statement, it's very clean. The safety label is pretty incredible. There's no contraindications. There's no sort of limitations of use. And as people who are familiar in the derm space, you have about 400,000 topicals prescribed in the U.S. per week. I mean, it's an absolutely incredible number. In the psoriasis space, it's roughly 90,000 and the atopic derm space is roughly 320,000. So when we saw earlier in the year, the atopic dermatitis data from our first Phase III study, I mean, I think it showed the unbelievable opportunity right. This was moderate-to-severe patients down to the age of 2 and patients and dermatologists still treat these diseases with topicals. We haven't had a new innovative topical in this field for over 20 years. And the mechanism here also showed that when you use this drug, you can stop using it. It has remittive effect and continues to work for 4 months, and then when you start using it again, you have the similar efficacy as before. And it is the same, too. So the strength that we tested in the atopic derm is the same strength that's in psoriasis and that is currently approved. We have one other Phase III study reading out now. We said that's going to read out in May, but it's exactly the same study. We had a very strong data in Phase IIb. Our partner in Japan had a positive Phase III in atopic derm. So again, I think this should help validate that VTAMA is going to be one of the best topicals out there and should be standard of care throughout atopic derm across this class versus steroids.

Can you remind us the timing of the program if the second Phase III were to be in line with your expectation, what's the time-line you are following?

So we want to wait and make sure we have the safety data, right, because that will just take a little bit of more time to accrue and we said we'll be able to file them at the beginning of next year.

And as to the safety data because it's a different population than the psoriasis? Or can you leverage?

From H2.

Okay. Got it.

But I think that the safety actually we have seen in that Phase III study was embedded in the safety within psoriasis. So again, I don't have any cause for concern there. And then we showed as well data earlier in the year where we had children, 90% of the body surface area was covered with VTAMA, and there was really no systemic circulation and any safety concerns whatsoever.

Okay. Great. I mean, obviously, the product is already large launched in the psoriasis indications. If we tell the early launch experience so far, what are you doing there in the promotional space? And what's the payer access level for the product right now?