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

Good afternoon, everybody, and welcome back at our Guggenheim SMID Cap Biotech Conference. I am Verna [ Kayati ] one of the analysts here, and it's my pleasure to introduce the next company, Roivant. And here on stage, we have Richard Pulik, the Chief Financial Officer from the company. Welcome, Richard.

Thanks so much for having me.

So before we go into the Q&A session, why don't you tell us -- give us a little bit an overview of the company and the key milestones that we should expect in the upcoming months?

Great. So we celebrate our 10-year anniversary last year. We have roughly a little bit over $8 billion market cap, over $5 billion in cash. We own over 50% of Immunovant, which is a publicly traded company. And we have a JAK1/TYK2 in the clinic, brepocitinib for dermatomyositis and non-infectious uveitis. We're obviously considering other indications there as well. And then we did a deal with Bayer in PH-ILD for Mosliciguat. And then we historically have been very acquisitive, obviously, as we generally get our programs big pharma and have pretty strong relationships across the board with those companies.

Thank you for that. And as you were saying, like this is a big year for Immunovant for sure. Like we have a series of upcoming catalysts this quarter and before we jump into the specific of the programs. So I'm thinking about the 2 key catalysts of this quarter, MG and CIDP. Previously, Immunovant has guided for the MG data to come first, but we don't know if CIDP data will be released at the same time or later. Any update on that? And would be helpful also to understand your reasoning behind that time line.

So look, as we said the data should come through by the end of March of this year for both studies. In terms of the exact timing, I can't really say specifically, but that's obviously around the cornerstone of February. And then as soon as the data comes through, we will disclose it as appropriate.

Got it. And let's start from the trial in MG. So this is a program with batoclimab, which is the first asset Immunovant developed anti-FcRn, but my understanding is that you are not planning to commercialize batoclimab in MG. But this is -- this will be an important readout, mainly to somehow set the expectation for the pivotal program of 1402, which is the next-generation anti-FcRn so how should we frame expectation in that regard? Like what's your internal bar of success for the MG trial?

Yes. So obviously, VYVGART is approved in MG and also CIDP. So minimum bar is always for -- to at least get where VYVGART is, we have 2 different doses in the first period of the MG trial. So you have a 680 and 340 dose. That's for 12 weeks. The idea is really to see if there's an efficacy delta and if at the 680 dose, which generally is a little over 80% IgG suppression whether we get better efficacy, when we look at other individual patient data from other FcRns we've seen those signals and this is actually a very large meaningful Phase III study where we can finally address that question. And of course, we've developed subcu from the beginning with a standard out injector. So that will -- there's a convenience factor here as well based on what's available in the market.

That makes sense. And thinking about the 2 assets, is there -- like when you consider the PK/PD of the asset of pharmacological properties, is there any expectation that 1402 can even show superior efficacy than batoclimab or would be like in line according to what we know so far.

Yes, we would anticipate similar efficacy. I think given in 1402, we didn't see any impact on albumin or LDL. You can see on the higher dose longer, since where the better trials were designed so that you dose reduce to the 340 dose given the LDL liability. So as the data emerges and we think about how long we keep patients on the high dose then that certainly could tease out some more efficacy. When we designed the Grave study, you can see that's actually at the 600-milligram dose, and that's the only dose in that study and we keep patients on high dose throughout because of the safety -- much better safety profile we've seen in the second generation lead asset, the 1402 antibody. But otherwise, I think that's being able to do the maintenance therapy at the high dose could drive better efficacy.

Got it. And in terms of how we are going to design the pivotal trial for 1402, can we expect the same trial design as this Phase III? And when are you planning to start that trial?

So we've said that we should -- we anticipate to start that as soon as that reads out. Obviously, given the breadth of that data set, let's look at it and see if we want to make some tweaks there. But I largely expect that to be similar. And then we can obviously reflect on it and see whether we want to do something different there.

Got it. And so just to sum up the MG readout what's your -- how are you seeing the commercial positioning of the asset? Let's say, you show similar efficacy as VYVGART I guess, is your expectation? And how do you see navigating the commercial landscape.

Yes. So look, I think there are a couple of different scenarios here. At the low dose, we have similar IgG suppression to VYVGART. So that should translate to similar efficacy. I think the opportunity is really at the high dose where we could potentially show better efficacy and it certainly would create a best-in-class profile and also the most convenient profile given the subcu. So that would really be the opportunity to come up with a best-in-class product.

Yes. I see. Okay. So moving to the CIDP program. Here, it's even more complicated to benchmark possible outcomes. We like to compare and try to analyze, but there is an issue. Like you have adopted a few changes trial design compared to VYVGART. So can you summarize what are those changes like these differences? And how do you expect those differences to affect possible efficacy outcome there?

Yes. Look, it's a heterogeneous disease. And so I think when Argenx first had that data, you said I think our Argenx market cap went up by $10 billion, pretty remarkable. The launch has been going very well. We know we have 4 different cohorts in that trial. There's a washout period and a lot of it is driven by sort of steroid use and also IVIG and sort of prior therapy and following that through, we'll look at all of those different cohorts pretty closely as we think about design of the 1402 study. Obviously, this is also around the corner. So we can look at that and think through how we can win in that indication as well and be best-in-class.

Makes sense. And just logistically, so I guess you're having already patients from the Part 1 of the trial moving into Part 2, and this is with batoclimab. As you close, let's say, the batoclimab program, will you show data also from the patients that are already enrolled in Part 2? Or like what are you thinking about that? Or will you just close the trial?

So we've said that the CIDP really would be focused on the period 1 data by March.

Like thinking if at some point...

And then we can certainly think about whether we want -- what we want to do with the later period and when we show that. And if -- how are we approaching but right now, the commitment is to show the period 1 data.

I guess depends also how it turns out, makes sense. And how are you thinking to the trial design for the pivotal program? Like I guess it will depend on the data you get -- but we were discussing with Pete about the possibility of removing the withdrawal period, doing some adjustments like the washout. Have you considered.

Yes. I mean, look, I think Argenx, it's a pretty long washup period that is always stressful for patients. And we stretched this trial a little bit for that, given the dropout Argenx have the same issue. So I think it's something we always have to think about as we design what's best for patients and have to be attuned to sensitive to what happens there. Certainly, you can just make a bigger trial and correct for that. But that is something to think through as a potential change .

Okay. Got it. And VYVGART had a stellar launch in CIDP, which clearly shows that despite having IVIG approved in this indication, there is unmet need. But you have also new competitors coming up like from complement, Sanofi and Niantic that are emerging. How are you thinking about positioning of another anti-FcRn in the CIDP space?

So first, it's potentially best-in-class given with the IgG suppression. I think the first question we want to sort of think through is in this disease does better IgG suppression for longer matter and drive better efficacy. And so then you have an opportunity to be best-in-class, at least in the FcRns. I think, look, at the same time, we've already -- we're going to be first and best-in-class in Graves. We were the first to also start the TED study, and it's a Phase III that's reading out fro batoclimab in the second half of this year. We know for rheumatoid arthritis, difficult to treat. We have a unique study design and a unique study population, compared to what those are doing. And again, you have the auto injector, which I think is going to be important for lots of patients. So I think there's a mixture of indications here where we're clearly being the first and where we'll soon get answers whether we may be best on the CIDP side, for example. Look, we get a lot of questions about other mechanisms that are coming through either from the degrader side, et cetera. Look, I want to be humble there. And some of those are early. I think what -- some exciting and interesting approaches, but we haven't seen a lot of clinical data yet. So let's see how that comes through.

Got it. And you were mentioning Graves, Graves' data there from the Phase II. And there will be an update also this summer. What can we expect from that new data set?

Yes. So we -- I think we're looking at 6 months treatment remission, so essentially seeing what happens, how well controlled the diseases once you go off the drug, which would be another very exciting thing for these patients.

Got it. Okay. And related to Graves, there is a possibility of expanding that study, including TED. That's something that Immunovant has been discussing about. What's your like bar for doing that? Like you have the readout in the second half with the 2 TED studies. So what are you expecting to see even if you are not continuing the batoclimab program there? And how will you integrate a possible study with TED inside the Graves program?

Yes. So the first Phase III study is up and running, and there's 2 studies there. there's an opportunity here to really think, given the Graves and TED to think about how we include those patients and get sort of a broader label, as we design the second study. We haven't released the study design specifically yet, but certainly, you can imagine that's something we're thinking through and how we could sort of elegantly include with 1402 also some of that subset. Obviously, we'll see what the Phase III batoclimab data looks like. That's a viable study in the second half and can make a decision on that separately as that data emerges.

Okay. Got it. Okay. So before moving to the other programs, one last question on Immunovant, so to sum up. There are 5 INDs that have been cleared. I guess Immunovant will disclose also soon the 50 new indication. How are you thinking about priorities among these different indications? You have already programs that we didn't discuss, but it's also a huge opportunity there. What -- by Roivant point of view, what are the priorities there?

So look, I think we have a very high bar for investment. You saw that right before JPMorgan, we invested $450 million with 2 other investors in Immunovant at $20. I -- we are very closely aligned. And I think there's -- these studies really are not that we're going to -- we said we'll start 10 studies by March of 2026. Usually, they're placebo-controlled, so we're not talking huge amounts of dollars, but it's still 10 studies, and we look at those indications all very closely, and I think we're excited that where we're not first, we can still potentially win on efficacy. So very happy to support those studies. And then places where certainly, like there's a lot of other FcRn. So we're, of course, watching closely. There's a lot to learn from other programs and data to think about how we can be better. So there's some parks reading out as well.

And I just want to poke there a little bit more because we received this question a lot from investors. Like if you can rank in your priorities list, where would you put MG and CIDP?

So look, I think Graves in my -- look, this is -- when I just look at the number of patients who are not controlling ATDs, the prevalence there is over $300,000. There hasn't been really -- there's been no real development for these patients for decades. And so I think that's -- and also given the overlap with TED, that's just such a large market opportunity and no one's gone there that I thought that was a very unique. We obviously developed a proof of concept there. . We showed pretty incredible data across the 2 different doses. And I find that very exciting. I think it's very much underappreciated. Look, in TED itself, we did a show -- we showed almost doubling of response rates with batoclimab as we went to the high dose. So again, that's -- there's a clear comp here that's sort of approaching a multi-blockbuster, and that has its own limitations and a lot of patients end up not responding after 6 months. So was quite excited about that as well. Depending on where we'll end with MG and CIDP, there's -- I can provide more excitement based on what that data looks like. But we have pretty validated data that we see on an individual patient basis. at least for MG that shows -- this should behave in a similar way to some of the indications I talked about where we could get the best efficacy as well.

Got it. And another question is like at which point Roivant will bring completely now is Immunovant asset? How are you thinking about that possibility strategy?

Look, we'd like to set up that we have currently. We -- obviously, with the recent raise, we participated to prorata. So we increased our ownership stake a little bit. We thought that was a great price. I -- but I do -- look, there's a broad development plan here. And so I like having the current setup where other investors help support this R&D plan. And then obviously, the more success you get, you also then think about launch costs and supporting DTC. So I think the current setup makes a lot of sense for us and very happy with that. If the market doesn't support, certainly we can continue to increase our share.

And linked to brepo program.

A very quick clarification, before we move on. So the upcoming readout of GMG bato is the same also for CIDP, is it also bato, is that also...

Yes. Yes, it is. It's the first generation of -- it's batoclimab.

So I guess moving to brepo. This will offer you the opportunity to be -- to have the first commercial product this year, if successful. So first of all...

Well, data for the first commercial product.

Of course. Yes. And so first, what are your expectations from that readout in the second half of this year, and we will discuss about commercial opportunity after that.

So look, this is JAK1 TYK2. This is a very severe disease. We know that the skin is implicated. A lot of these patients have rashes all over the body. It's multi-organ. It has high morbidity. And we've also seen data from JAK here in multiple studies that shows efficacy from -- obviously, none of them are approved. But that got us very comfortable to move into a Phase III study. And we're well ahead of other mechanisms here. So at least 1 to 2 years and as an oral. So I think that will be quite exciting. I mean, it's almost 50,000 patients, rare disease. Obviously, that will help with the price point as well and high morbidity and that data will be coming out in second half. So assuming that goes well, we can have a launch year 2026.

Got it. And have you started already launched preparations or...

You can imagine we're thinking about that, of course. .

Okay. Got it. And so yes, and -- what is interesting about brepo is also the breadth of opportunities that you have because, as you said, the risk mechanism, so you can move into many indications. Are you considering any specific indication so far? And when are you planning to disclose that?

So very similar with almost the thinking -- very similar to the thinking we had with FcRns we'll typically think through an indication and then do a POC study. So for noninfectious uveitis, we had some data at the beginning of last year that showed -- HUMIRA's obviously improved in the class. I think there's roughly in the U.S., 30,000 patients or so on that, and our data was -- like if you look at Edema and all of sort of the critical symptom size that could potentially lead to blindness, I mean this leads to blindness in a large number of Americans. And we had response rates that were sort of 3x better than HUMIRA and it's oral. So I think pretty incredible that obviously, then we had maintenance data year out. Again, this is very consistent. And so of course, we immediately moved to Phase III and that will be reading out in 2026. So you have this cadence of you have DM then you have NIU. And then you can imagine we're also thinking about other diseases sort of orphan rare diseases that would have a similar profile as for POC studies.

So in these last few minutes we have, I would like to make sure to check about your plan for business development. It's another of the recurring questions we get. You have a very strong balance sheet, over $5 billion. And how are you thinking to cash deployment? Any change in your previous strategy you have discussed before? Anything, any color you can provide there?

Yes. So maybe just very briefly, we did a deal with Bayer on mostly Mosliciguat. So we're running a Phase II study there for PH-ILD. We had some of the best PVR data we've seen in PAH. So again, we want to validate that in PH-ILD. There's obviously one approved drug there, which is doing very well and stay tuned to that as that enrolls and reads out. We -- look, even though we have over $5 billion of cash, we think it's really important to continue to have the same standards across these deals. And so we -- JPMorgan was obviously very busy and we engage with a lot of companies. But generally, we kind of think about doing 1 to 2 deals per year. And so there's a lot of exciting stuff out there and stay tuned.

So you are not targeting any specific type of asset or in any indication what's your current...

Yes. Look, I think it's -- the beauty about Roivant like we're agnostic here. So it really depends on the data -- generally, we look at things that have data. So we're not taking very meaningful biologic risk. And then we don't want to really go immediately into Phase III. We usually end up doing a small Phase II and if that doesn't work, then it's not a ton of spend, right, because Phase II are roughly $50 million or so. And then upfront is -- historically has been sort of $40 million for us. So you can kind of do this, and again. But look, it obviously takes a lot of time, and you have to go to the agency and as we think through this. So the capacity is really sort of like 1 to 2.

Got it. Makes sense. Okay. Thank you so much, Richard for the update, and we'll stay tuned.

Great. Thank you so much.