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

Okay. Welcome, everybody. I'm Douglas Tsao, senior analyst at H.C. Wainright. Welcome to the conference. So kicking off our first session of the morning, we have Roivant. I'm represented by the company's CFO, Richard Pulik. I've known Richard from even before his time with this company. Richard made the very long commute from his office, I guess, was on the 14th floor. So we appreciate him really going out of his way to appear today.

So it's been an eventful 12 months for Roivant. Most recently, we got the data for brepocitinib in NIU, that looked very positive, and we're awaiting data in dermatomyositis. And that's been an indication where there's been some competition. When you think about brepocitinib, what do you think the dual TYK2, JAK1 mechanism offers that perhaps some of those other therapies don't offer? And we've got -- if we get this data, how broad and how big a franchise could brepocitinib ultimately become?

Great. So look, I think the NIU data that we had was incredibly positive. Just to remind folks, we did an investor call on that pretty recently. We saw data that was almost 3x as good as HUMIRA. Again, the steroid tapering there was very aggressive. So if you look at the tapering versus HUMIRA was almost twice as fast, which sets a very high bar. And look, dermatomyositis, that's in a Phase III study that's reading out sometime next year. We can file that. We will start the NIU study at the end of this year. And I think with that, we are firmly in place for a multi-blockbuster franchise. If we look at the data that Pfizer generated before we got the program, we saw 6 positive studies. These are all Phase II studies, across -- if you look at our data versus JAKs or TYK2s, we beat almost all JAKs and TYK2s in those studies pretty significantly. So if we lean on that human data, we believe we're firmly in place to here have a very strong mechanism. And we really decided to develop this in rare diseases. So we're looking at -- there's really very little company. If you look at NIU, that's really treated with steroids, dermatomyositis -- steroids and HUMIRA dermatomyositis, is really the steroids. So there's really nothing for these patients. NIU, a lot of these patients, actually 30,000 of them become blind per year in the U.S. So there's a large unmet need. And we think this will be a very large franchise for us. So very excited about the data and bringing this forward in NIU.

And how broad -- because as you referenced, you're thinking about this from an orphan drug perspective? Pfizer had run a lot of proof-of-concept studies, Phase II studies in sort of more prevalent indications. Now that you have the NIU data, does that foster or encourage you to look in other indications? I mean obviously, SLE did not necessarily work out. And does that cause you to sort of think about adding others? And is there a right number for this franchise in terms of potential indications?

Look, I think we are looking at developing this potentially in other places. I would still say the underlying hypothesis is to develop this in rare disease. SLE, that was something that files showing ongoing. So it's essentially free for us to continue that study and have it read out. There, we did see disease activity across the 2 different doses. The issue here is always just with placebo, right? So the placebo response rates there were very high, and it didn't make much sense to bring it forward. As Matt had said, these studies are very difficult to run, especially in SLE. But I think we are in a good place here within NIU and dermatomyositis. And are thinking more broadly as well in other diseases. We haven't announced which ones yet.

And do you have a plan for when you would potentially start development in other indications with this asset?

I think the team right now is fully focused just to set up the NIU study, get that pivotal underway, meet with the FDA and get that up and running. And then certainly, we can think more broadly after that.

And for NIU and for the Phase III, when do you anticipate getting that -- getting alignment with the FDA and kicking that off?

So that would be some time later this year, and then you should see that in clinical trials come up at the end of the year.

Okay. Richard, you are a commercial stage company having launched VTAMA. The uptake in psoriasis has probably been a little more slowly than we initially anticipated. We are waiting approval in atopic dermatitis, which is a much bigger market. How do you see those 2 indications? And what makes -- gives you confidence that VTAMA should have more success in AD than it has in psoriasis so far?

So first, we had 2 Phase III studies. I mean the data was pretty incredible. The patient population was in the moderate to severe population. We saw almost complete -- really clear skin in 39% of patients at week 12, compared to DUPI that's -- if you look at some of the DUPI data in a similar population, that was at week 16, 46% clear -- almost clear skin, but that was at -- we're using a potential steroid as well. So as a topical loan, this is really incredible data. And that data was generated really from the age of 2. So this is a disease that's majority under 18 years old. We will be -- we anticipate that the data will be on label from the age of 2. If you look at some of our competitors, they're really focused on the much moderate population. I think if you look at the inside data so far and the approved label, that's from the age of 12, acutest at the age of 6. I know that they have other pediatric studies, but we'll immediately be on from the age of 2. And, if you look at the numbers of scripts here across rise in atopic dermatitis, there's roughly 400,000 on a weekly basis in the [indiscernible]. I mean it's a really incredible opportunity. So even a modest share there could mean a potential blockbuster. So we're excited to get that going. And this is really something where there isn't a lot for these patients, right? I mean do you have a biologic, you have some -- we are the first novel topical launch in the space in 25 years. We're not taking something that was developed as an oral or that was developed and then putting into cream. This has really dropped from the beginning to think through as a topical, and it impacts the T cells we see on label on the psorisis data that once you stop using the drug, it continues to work for 4 months. And then when you restart it, again, has the same level of efficacy that we saw in the trial. So we anticipate patients to be using these drugs. Once they achieve the clearance that they're comfortable with, they'll end up stopping using the topical and then they restart. Similarly, we saw data like that in AD. So again, we're going to be the only drug here with this remitted effect. And I think that really speaks to the differentiation of this mechanism and the opportunity that we have to change the landscape here and really move away from steroids.

And one of the other sort of key franchises for you is the FcRn and development of -- through Immunovant with both batoclimab as well as 1402. When last time I talked to Matt. He sort of was pointed much more towards 1402 development or your work in thyroid eye disease as well as Graves' disease versus MG, which has been the first sort of indication that argenx launched Vyvgart. Do you -- when you talk about sort of being more focused or excited about those launches, is that simply a function that you will see greater efficacy than what some of the other FcRns might be able to achieve there? Or is that simply the fact that you're going to be, if not a first move or much closer to market formation in those indications?

I think it's really a mixture of both. So if you look at the data we generated in TED, you saw roughly doubling of responses in the 640-milligram dose versus the 320-milligram dose. We then quickly moved into pivotal studies, right, that's reading out in the first half of 2025. And again, this is batoclimab that would be -- what we believe would be a fileable study and one we can use for registration. Right before that, you'll see data for a Phase II study with batoclimab in MG. Look, I think there as well. So TED, we're going to be first, right? We saw -- not this JPMorgan but JPMorgan before that argenx announced that they were going to Phase III significantly later than us, and they didn't have any of that the efficacy data or even differential in the 2 different doses, right? Because we're the only one that really has shown 80% IgG suppression since we have the 40-milligram dose. And MG, look, we haven't really seen a broad data set here that IgG matters. So I think that will be an exciting readout. We did see that in Graves' when we add that data in -- at the end of December, we are looking forward to seeing as well in CIDP that data in Q2, Q3, where again, we're testing 2 different doses and the potential for better efficacy. So within the next, let's call it, 12 months across all of those different diseases -- less than 12 months, we will hopefully continue to generate data that IgG matters across the breadth of these different diseases. We have the only 2 drugs here with -- that are ready subcu. These will eventually be launched with an other injector. And we'll see how that progresses and whether even in MG, we have the ability to be best-in-class. Obviously, we won't be first there. It's a pretty amazing job over last quarter that's well underway of $1 billion in peak sales. And I think we're going to be certainly our first and best in TED and Graves' and then potentially even in best in CIDP and MG as those readouts follow with broader data.

And when you think about TED and Graves' disease. There are 2 indications that are sort of closely related in that, right, TED is sort of a late-stage manifestation of Graves' disease. I'm just curious with your development of batoclimab, where I think your view is that the LDL effect is not necessarily as important in TED because it's a treatment that you sort of -- would not necessarily be chronic over the long term. And you -- but you've highlighted wanting to develop 1402 for Graves' disease. Does that imply that eventually you would want to potentially move 1402 into thyroid eye disease as well? Or do you think that you would potentially have both assets for those 2?