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

Sam Semico, one of the senior biotech analysts here at Citi. And it is my pleasure to be hosting Roivant at Citi's 2026 Biopharma Back-to-School Summit. I'm joined by Richard Pulik, CFO of Roivant. Richard, welcome, and thank you so much for being here.

Thank you so much. And it's official, I think also the first day of school in York School. So perfect timing with the conference.

Yes, it is. And then we will go to school today on Roivant. So why don't we just start off high level, Richard. Obviously, you've made a lot of progress on the pipeline, lots of great data that you shared with us this year, and you've had your first FDA approval for brepocitinib, maybe just level set all of that and what we can expect throughout the rest of the year, where Roivant stands and where Roivant aims to be in the next several years?

Look, we've had an incredible year so far. As we think about Roivant, look, we're approaching $30 billion market cap here. We have $3.9 billion in cash, which doesn't include the $700 million plus that we received in July on the Moderna settlement. And we have now, I would say, with the Mozy data that read out a couple of days ago, really affirmed the third leg of the stool into a place where that can be another big pillar for the company, adding to brepocitinib, where as you mentioned just had our first approval for LISRAYA, is the drug name in dermatositis, which look, I think if you look at the label, it's pretty incredible in terms of the indication statement. No research in the concomitant use and then also covering the skin and muscle manifestations and breadth of the disease of the study that we had in the Phase III data, which was a disease that's been largely ignored, and it was the largest DM study the [indiscernible]. And so to kick off and going into this patient opposition has ignored for a long time, I think it's a very Roivant move, right? We -- as we formed the company and thought about areas where to go, it was really to think about disease areas where there's high unmet need that have been ignored for a long time, that are severe in scope and also where we had a bit of validation, right, where certainly, there was either data that was driven by investigators or that we had seen from other JAKs that to work here. So look, it's a very exciting time for brepo. We certainly have three other indications that are late stage there with NIU reading out this year. in a Phase III study and then CS and LPP ongoing. And then the third leg of the stool is really Immunovant 1402, where we also had some exciting data. And I think data that surprised a lot of the investment community, especially in difficulty RA. Certainly, nipo paved the way a little bit with NRA certainly -- but in a much earlier population, but we saw that FcRn had activity there. And then we, again, thought in the Roivant way, where do we go here? Where is the underserved population, and that was in patients who are very late line where JAK and TNS have failed and where we can deliver strong efficacy. So we saw very strong efficacy rates there with ACR70, 50 and 20 and that was period 1 and period 2 is reading out later this year. And then along with we have CRE data, right, which is again another Roivant-type indication, where we could potentially be first. Certainly, I think that's a flyer, right? We're really trying to see if this is an area where we hit a bar that makes sense from a commercial perspective. And I think there's a little bit more competition there. But we have seen a little bit of data in some patients, and you see that sort of help validate this, and we'll see what that looks like. And then we have four other indications with MG and Graves, potential approvable data sets next year. And other indications that we can go into, but that's really the third leg of the stool here. Certainly, we're very active as well on BD, given our cash balance and the breadth of resources we have.

It's a great overview. Well, let's dig into. So maybe we do start with the mosli data that you shared earlier this week. Excellent data, clear proof of I think it exceeded the expectations you've set for the Street by far and even the expectations I had in like a bull case scenario. So maybe just talk a little bit about the data set, what the reaction has been from KOLs in the few days since you presented it at DRS. And just frame the market opportunity for us for PH ILD.

So maybe to back up a little bit. So we -- mostly as an SEC activator that we got -- we did this deal with Bayer. We paid, I think, the roughly $15 million or so is the upfront and then there's milestone payments under $300 million and then high single-digit royalties. This is an area where, look, SGC activators have been looked at systemically for quite some time in pulmonary hypertension. And then we showed data about a couple of years ago at ERS that showed the highest PVR reductions we've seen in PAH. PAH was a market that had what, 6 or 7 therapies, I think at the time when we showed the data, so lots of breadth of available therapies. Mosli was a once-a-day inhaled DPI and then -- so it doesn't -- and then with a differentiated mechanism with the long half-life, and we delivered NPH. Then as we were thinking about where do you want to go, going back to what I said before to a place that doesn't have a lot of addressable and really a lot of scientific development is right -- obviously, we have Tyvaso and we saw the great data, and I would say, innovation there for PH-ILD patients. And so we ran the study. And then what happened and happened a couple of days ago, we saw the highest PPR reductions we've seen in PH-ILD. We surprised people because we -- look, we didn't power for the 6-minute walk test, but we delivered with 35 and then we saw this week 16, and we saw continued improvement at over 50 placebo adjusted. So -- and then if you look at across all of the key measures we had, we saw that they continue to improve. So these are very smooth curves where you actually continue to improve after week 16 and as you're a dose escalating? And then on the safety, right, we had very good safety data. No, I would say the [indiscernible] obviously of cough is an on-target effect. So again, an easy to use once-a-day molecule that has delivered really the best efficacy markers we've seen so far and even on 6-minute walk, which is which we were powered for. So I think that's really opened up a lot of excitement for these patients. And then that data was presented at ERS a couple of days ago. So on short notice, I think the room, as I was told, was very full. There was a lot of excitement from KOLs. And this is a really severe disease where people really have trouble just walking across the small room. The morbidity is is very high with a lot of people dying within a couple of years and have a terrible quality of life. So this is to deliver this kind of data is very exciting for the field.

Yes, absolutely. And you maybe anticipated some of this in some sense because you started the Phase III at risk already. So that is well underway. The only major difference might be just -- and correct me if it's wrong, but background of Treprostinil is permitted here. And -- but you have in Phase II combo study ongoing. So you're going to learn a little bit more about that in the coming, going forward. So could you speak to how that data will inform how you're thinking about how much background Treprostinil do enroll? And just overall, if you replicate the Phase II data that you have today, would that be more than sufficient for you to take this to FDA, and that would be quite competitive. I think the answer is probably yes.

So in the Phase III study, that's ongoing. Yes. So look, I think we did take a flyer here, right, moving directly into pace. And I think that's another place where we surprised people Certainly, we obviously didn't really know the breadth of this data and took a little bit of risk on there. But look, I think the other thing that's been at the core of the company is to really to get look, when you have the page data, when you have powerful and how unique this drug was and to be able to get this out to patients quickly, that seems like Arista we should be taking. And then in terms of the study, look, I think the titration is a little bit faster. It also allows Treprostinil as we're -- we have another study that's ongoing that you mentioned, which is pretty small. That was really driven for safety, so that will kind of help us inform the cap we want to have there Treprostinil use. I think one consideration, there's obviously given Tyvaso approved ex U.S. That certainly is something we need to think through as well as we're thinking about that, but it will help us as we go to the FDA here to help validate the Phase III thinking and then also, look, as you see the data, you see this data on top of other therapies, right? So this was -- this is an indication, just like we've seen on page that could be used on top of other therapies that can be potentially additive. We'll see what that looks like on the combo. And then this could be one of those diseases that's treated multifactorially.

And the way we think beyond PH-ILD into expansion opportunities, you mentioned a few of the obvious ones that are on the table for [indiscernible], but maybe just talk about those and how you're thinking about prioritizing what the next indications for mosli are? How many can you maybe go forward with at once to maximize this opportunity? Or is it more one at a time as you triage through them.

Look, I think, certainly, what I said is in our initial thinking, we thought PAH was potentially too competitive. But we now really have proven with this data set that we have really delivered the best PVL reductions we've seen across pulmonary hypertension and maybe that gets us back to thinking around whether we go there. I also think as we look at these data a little bit more fully, there's certain subtypes of patients here that can help us inform where we want to go. And -- but look, I think it's -- with the data came out a couple of days ago, I think this is really, like I said, created and firmed up the leg of the stool here, and it's really all hands on deck now to think very broadly about developing this to like we did with brepo and with 1402, and I would say the beauty of our setup is that we really think given the demand structure, we can really move quickly here and do this in multiple ways. Of course, right now, the -- we're going to go to FDA. We're going to talk about the pathology data and really push that forward. And I think simultaneously, the team will be doing quite a lot of work to think through where does it make more sense and working with the big inbound patients across some of these other disease areas across pulmonary hypertension.

The great data has created a lot more work for you. So looking forward to hearing more about that in the future. Maybe just switching over to DM then and talking about the approval of LISRAYA. Maybe can you speak to any of the early engagement that you're seeing from physicians since the approval.

So look, I think -- so first of all, this is the biggest DM study that we've seen this -- these patients are treated on very high dose steroids and then also IVIG. And this is a disease where that has muscle and skin involvement. If I think about -- and so we deliver data across all of these different areas, the thing that got physicians excited. And then we have, like I said, captured a lot of that data on label. Certainly, we anticipated a black box given it's a JAK, and I think that's -- that was always in our hypothesis here, and it hasn't really stopped much of the broader indications that JAKs are going after either. And so given the survey of the disease, I think that's all, again, very manageable. But I think physicians are very excited here. We -- the reality check is that we're going into disease area that's been ignored for a long time. And so to change behavior, look, there's the sort of ire tower that we all sit in and then there's the reality of the physicians and changing behavior. And so I think that's the work we have to do now I think we're well set up with my compass. We thought through the dynamics here. And then we have the real -- there's a lot of breath here for brepo, so it's sort of a long haul to make sure that we're maximizing the value across these other indications as well. But look, I think there's a lot of excitement from patients and also physicians. But certainly, we think this will be a slow and steady launch as we really develop this [indiscernible] molecule [indiscernible].

Maybe we can dive a little deeper on the breadth of where brepo can be used. We've heard physicians say they're excited to switch their patients off IVIG, if they're not fully controlled. Some physicians are heavily using off-label JAKs, others don't have any. So perhaps there's an an off-label JAK switching market, or physicians have even said first line to us. So when you think about what that initial addressable population is in DM, like how should we be thinking about that?

I would think all of the -- I mean, you can use it with IVIG. I mean -- so look, I think the reality is these are kind of younger patients who -- if you're an IVIG, you have to go in a fusion center 4, 5 days a week. Obviously, in a month. That's a pretty big burden for some of the working age. And -- but look, if they're doing well on that, they can obviously also go on brepo. So I think there is a -- I would not think about this as exclusively across these different segments. I think the data that we certainly delivered was also -- you can think about it as first line in some of the KO discussions, also some of these patients are on off-label JAKs. So to have actually real data in hand for -- with the breadth we have, I think we're very well positioned, and you can think through it across all of those different segments of the market.

And I think slow and steady has been your guidance for some time now, you reiterated on the approval call, and revenue is really the metric main metric you're going to provide to the Street. This is perhaps maybe a little unfair. But as we go to 3Q earnings, you've already had some -- I think you mentioned like some engagement on even day 1, post approval. What is -- how should we be thinking about that? Like is that something that's a couple of million or any guidance you can really like not guidance, any framework you could share?

Look, I just think it's so early that -- and I'm -- I'm not -- this is not to sort of -- it's what August 27, [indiscernible] was when we had the approval. So look, it's super early days. I think, like ultimately, you can think about various different -- because of specialty pharmacy, it's going to be hard to sort of see scripted, et cetera, right? I mean this is like a typical rare disease launch. And so as the CFO, what matters is net revenue ultimately, and I think that just takes quite a bit of time to build and do well, especially as we focus on making sure we get the medicine to patients, we have the bridge program in place, and we have a good patient and physician experience here. And then given the breadth of data that we have, the revenues will come, and I'm confident that since given the data set. And then even as potential competition comes, that really helps with new approved therapies and awareness for the disease to get these patients on much better drugs.

Got it. And on the side of competition, I think it's picking up in India. I think people have looked at your success, looked at the market. There's a lot more interest that we're seeing from a range of companies under a range of mechanisms. How should we think about the longer-term opportunity for LISRAYA as the DM market matures with multiple novel therapeutic options, particularly given this is a polypharmacy market currently?

So I'd just like to remind people, there were many failures in this disease area. 6 or 7 of them with very smart, very large different trials, and we are very uniquely positioned here because it's a tick to JAK1. When we look to the data when we did this deal, we had roughly 1,500 patients of data across. And we compare that to different JAKs alone or [ TICTUZalone ] and outperformed across all of those different data sets. I mean, this is for a much broader disease, right? But that there is a unique mechanism here where where we're first. And then we also have the data in hand. Look, I think when -- as you're thinking about where you go and as you're thinking about mechanisms, I mean, sGC activator, sGC stimulator, there's sort of stories we say to try to think through, but the data that really matters is the patient data. And given that this is the largest DM study we've had and the breadth of data and endpoints, I think we're very firmly positioned here and also given our mechanism, and it's once a day oral. So being able to really replace -- most of these patients are really on high steroids. I mean the sort of 70%, I think, of the market. And so switching those patients and getting them off of a pretty bad being on these high stars is pretty bad, not just from a lifestyle perspective but also from a side effect profile perspective as we have seen in the DM data. So I think we're very firmly positioned, and it will be great to have other Americanisms come here to help these patients.