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

Good afternoon. Welcome back from lunch. To introduce myself, my name is Richard Wagner covered with Jason Gerberry on the U.S. large cap pharma names based in London. On behalf of my colleagues [indiscernible] Dina Ramadan, covering analysts for Roivant and Immunovant, respectively. I'm pleased to welcome Matthew Gline, CEO of Roivant for a 40-minute fireside chat.

Thank you.

Roivant has achieved several key milestones this year, including a positive Phase II readout of your once-daily inhaled SCG mostly salon in PH-ILD and approval of your TYK2 JAK inhibitor, repolasitinib in dermatomyositis. We still have multiple readouts coming up before year-end. -- to help level set the discussions, what would be the company's top priorities in the next 12 months?

Yes, perfect. So look, it's been a period of A lot of progress for us. It's been a great 12 months behind. And -- we just, as you mentioned, got Resin Melisa moved, and we're making some real progress on the STC on the hypertension franchise. -- coming up to the next 12 months, very busy 12 months ahead. Obviously, one of the most important things for us is with Brexit the market. We're in the early innings of that launch, what we want to do as well as we possibly can have it. And so there's a lot of work going to make that successful. We have some major clinical data coming in repricitinib, including between now and the end of the year in noninfectious uveitis, where we haven't given specific guidance on when, but relatively soon, we'll have data from that Phase III program that successful we then file for inserter that will be a second potential indication for forestry from brepocitinib. And then after that or in addition to that, we have a bunch of data and are going down as it were for our FcRn program at including later this year, updates on both the CLE program as well as probably more importantly, to TTR latinorthritis program where talk about our development plan there and our path forward are actually putting out some good early data earlier this year. And then next year from [indiscernible] huge year with registration data less importantly, myasthenia gravis and much more importantly than the greatest disease major education for -- those are upcoming data. And then other than that, I'd say major priorities here are getting everything else up and running to sort of start new studies on our hypertension program and to initiate new indications for all as well.

Thank you. That's a great introduction. So I'd like to start with brepocitinib or brepo. You mentioned 1 month into the launch in dermatomyositis. What can you say about the launch experience? How is it tracking with your internal expectations so far?

Well, our both internal and externally disclosed path there is slow and steady. That's what we said over and over and over again. This year there were 3 weeks in. So there's really very little to say that's productive. I'll say what I think most investors know, which is if you talk to trading physicians, at least the KOL community, there's a ton of enthusiasm that has certainly translated into our experience. But what that means in terms of scripts and coverage, everything else, it's just too early to know, but we feel great about what we're doing and optimistic that we're going to have a good outcome there. But on stay remains in the guidance. Look, first time there has been a novel therapy launched in dermatomysitis in a very long time or ever. And so it's hard to know you.

You mentioned in your scripts. So what type of launch metrics can investors expect on the earnings call where you present ration numbers, enrollment forms?

Yes, we've mostly said about this is that we're focused on the launch itself and focused on net sales is the ultimate judgment. I don't -- we have not given specific guidance on what metrics we're going to provide. I'm sure we won't be able to help ourselves from providing some subset of that stuff. But the honest answer is it feels like companies have notably not been rewarded for providing a lot of detail and guidance on this. So I think mostly, we're focused on having the launch itself well, have innovation experience to be positive, having the reimbursement used to be positive and letting the sales speak for itself or current.

Do you see any read-through from the evolving competitive landscape for the commercial opportunity for Brepo and [indiscernible]?

Mostly no. I guess the sort of most sort of obvious version of that question is argenx put out their [indiscernible] data, whatever it was late in the summer. I think prior to they're seeing that data set, my sense is that their expectations for DM were relatively muted, and they had more hope in IM&M indeed, they hit a p-value in the IM&M soothe patients rose for the study overall and did not get a p value in rooms subset. That said, I think their data in DM probably exceeded their own internal expectations. And it's clear from their body language and their voice ability would like to see the product approved in DM ultimately. I think they've been a little bit of clinical on whether -- on what that's going to take from a clinical development perspective. like a reasonable expectation is to have to run a study in dermatocytosis, potentially some sort of small merging study, so more to what to do through a negative MG, but we'll we have to say our view, commercially all along has been. Look, this is an orphan indication with very high morbidity, reasonable mortality, a lot of unmet need. I think a rising tide is going to lift all both here in the sense like my hope is that they get approved. I think their approval will be good for us. I think BREO remains in DM specifically the drug in pulse addition. But I think it would be good if they got approved as well over time, and I think their data was reasonably impressive for what they gave was the secondary indication of myositis.

Okay. Good. So turning to noninfectious uveitis, what outcome would you define as a good outcome for brepocitinib?

Yes. So this is another indication where there hasn't been a lot of medical innovation, and so there's a lot of unmet need. This is the third lead because of blindness in the U.S. It's a pretty devastating disease and tolerance in the ophthalmology terrain is very low, because it can lead to blindness and permanent damage. The only sort of approved noncovaleneration therapy is HUMIRA. And there's about 50,000 -- a little less than 50,000 NIU patients currently on [indiscernible]. Our Phase II data was very great to rural comparison. The primary endpoint of these studies is tight to treatment failure, which is what it sounds like. And in the HUMIRA studies, placebo was 3 months and change. and HUMIRA itself, like I think, 5.6 months time to treatment failure. In our Phase II study, we didn't have a placebo arm, but our high dose was greater than 12 months on average treatment value that was as far as we measured. So a pretty significant difference between our big period. And I think that leaves a lot of room. I think even if we do not wind up being in the Phase III program sort of better than cross rock comparisons, it may not matter that much in the sense the HUMIRA has a pretty hydrofailure rate and these patients and really looking for new options relatively early into treatment. So I think we're going to have as long as we're statistically significant, we should have a drug and a good commercial opportunity. And then within that, the better the data, the better we look comparatively, I think the better our chances are of earlier adoption -- earlier in the treatment as...

Yes, that was my next question. Where would you see a position commercially given that TNF biosimilars are available?

Yes. Look, I think you've got to assume that the default expectation here is that we liver-refractory or TNF refractory population, both from an access perspective and frankly, the FDA's general stance on JAK inhibitor and JAK inhibitor related mechanisms in TNF approved indications is that TNF is the right first bet. I think there's 2 important caveats to that. One is until we've seen the data, it's just impossible to know. And I think because this indication, you can redeploy this because [indiscernible] information is very low. I think it's possible if our data is good enough, but not we push aggressively for earlier line use that may help both with the FDA ultimately and with payers. And I guess a reminder of the question were TNS, et cetera, in a world where docs feel like they need to get patients through a TNF in order to get them on to an fiction therapy reduces very good. I think you could just see TNF, you see increase as docs are trying to cycle patients on debris times. So I think we'll have to sort of see how that plays out. I think a reasonable lease expectations that we live in certain that refractory world. Again, there's 50,000 NIU patients on TNFs. Many of them have inflammatory comorbidities like an RA or an ID or something like that. But anyway, if you're on a TNF or any of those indications and new development by definition, is one to go, which patients on something else.

Okay. You mentioned soon in the Phase III soon narrowed it.

We have not given guidance beyond second half is the official guidance on it. We announced that the 52-week study at Pollo sometime prior to November of last year. So that was in the second half of the period, the second half has I have not seen any data.

Okay. No data comes. So turning to 1402, the FcRn, you mentioned. -- and you set up the different readouts very nicely. So starting with difficult to treat RA connecting the randomized period 2 data in the second half of '26, you've guided to sharing a comprehensive update. I also caution that periods you may not look as great as the open-label period one data. So can you speak about the potential data scenarios if you had were not a period 2? And what would be the implications for [indiscernible]?

So as a reminder, this is sort of an interesting study. So this is a study of our NTM in late-line trubanrefractory RA. So these are patients who have failed at least 2 sort of biologics classes that are I think IL-6s TNS, JAK inhibitors, et cetera. Many of them think 60% have failed in JAK. So these patients have a few other therapeutic options and are quite sick. And the study we ran was an open -- was a randomized withdrawal trial open-label run-in period, followed by -- for those who had achieved an ACR20 response in period 1, they were then rerandomized that at the lower dose or they stayed on drug went to a lower dose or dropped off altogether on the placebo, and that was sort of a blinded randomized draw period. Now the Period 1 data that we generated, the open-label data was very striking. So of the patients in period 1, about 70% of them achieved in ACR20, about 50% of them achieved an ACR50 and about 35% of them which used an ACR 7. Now you think about the 2 population that's denominated in that 70% ACR20 responders, that means like almost 2/3 of the period 2 patients and an ACR50 or greater response and almost half or about half at an ACR70 response. The primary endpoint in period 2 was loss of ACR20. So you've got all these patients who have achieved an ACR70 or an ACR50 who in order to be primary endpoint responders have to drop down below ACR20, it just feels like a pretty high bar to imagine hitting typical significance in period 2, given the depth of response in period 1. So what that means is what we said at the time of the 1 data. I think period 2 from like a data perspective is probably less informative than it could be because the period 1 day was [indiscernible]. Now the good thing is the likelihood that we're even an open-label study, ACR70 spontaneous remission is ACR70 responses don't like occur in this RA population very often so that we look at period 1 really, okay, we have a drop. Like this is very likely signal here I think we'd like to see some amount of separation of grade data, Phase II placebo lose response, ideally faster than the patients who are still on drug -- there is some tail pharmacodynamic effect with the drug in the first few weeks of that period is still working. The brand most broker is only 12 weeks long. So it's hard to know exactly like to see some separation or just like make us confident about Phase III Other than that, I'm not sure we're going to learn that much from a clinical data here, given what we saw in period 1. So I think like success here looks like no red flags that we stoping a Phase III study. And then the real question mark isn't so much what is the period 2 data? The real question mark is, what is the development path forward for the drug in this subset of RA patients. It's a subset of our inpatient force that have been managing the few clinical trials run there's 1 or 2 ongoing now, mostly in like T cell engager or TRT kind of therapies where there's cell depleting therapies where the risk profile looks pretty different. I think the question for us for the agency is what are you going to try and make us do? What are we going to be comfortable with. And they're pretty wide envelope from relatively small hundreds of patients -- 200 patient studies to -- the typical thing in RA development will be multiple 1,500-plus patient RA size. It would be surprising to me if FDA in this late line population want us to run something more like that program, but we won't know until we talk to them. But I think the big update leader is going to be what are we aligned on with FDA. I think it is imaginable that FDA could dig their heels in, in a way that would make us question the program overall, but the most likely outcome as we get comfortable with [indiscernible] and we go forward.

Do you think you could file on a single Phase III?

I think that is a question we want to discuss with FDA. The room division is historically relatively conservative on that point. But again, this is a patient population with few options. And the data from the open period at least here, it was impressive enough, but it's certainly a conversation worth having. But I'm not sure as -- I do think we will see other drugs in this patient population approved with comparatively small and comparatively few studies. because some of those drugs will be CAR Ts and T-cell engagers, where there will just be a preference to expose as few patients as possible in the clinical setting without an obvious risk-benefit discussion to that kind of risk. I think we have that going for us as we go to the agency. We're like they're clearly going to be focused on streamlined studies in this patient population, which I hope we continue to manage of.

There's also the cutaneous lupus or CLE, POC headline data at the end of the year. You've described CLE as a commercial hurdle as well as a scientific one. What would 1498 need to demonstrate for the company to commit capital behind a Phase III program?

That's a good question. And we've always described and frankly, we scribed TRA the same way as well before we had the day ahead. CLE really is an option be that is like it was never intended to be a heart of the thesis kind of a thing. It was about the upside SKU and to your point, that's in part because, look, CLE is not just about the state of the field. There's a lot coming. There's the BDCA2 from Biogen. There's TLR78s including from RK like a bunch of other mechanisms, a lot of those mechanisms have the advantage of being less frequently dosed than an FCRN. And so I think we have to not just think about what a successful study looks like, but like how do we convince ourselves that will be commercially valuable and over all those programs are coming a little bit of like we know we see it on the answer to that question. I it's got to be like pretty good data. And longly, I think -- it's not very likely we're going to clear that far, but that was the point all on if we clear the bar, we've opened up a new swim lane for FcRn and that would be really exciting if we don't grow the bar we spent very little money on a small study, and it didn't work out and that's sort of fine. That's part of the portfolio that we're taking forward with FcRn have to do those [indiscernible].

Yes, you mentioned I think clearing lanreology. So would you see this then as a broader validation about FcRn inhibition across the spectrum?

Won't know in the following sense. One is specifically within lupus Look, we know that FcRns can deliver some benefit in Lucas now nipocalimab, for example, has generated positive data in a properly powered much larger study in SLE. And so things like there isn't really a need to validate the idea in leucospectrum diseases. And so I think there's more of a specific refrendum on CLE. And again, the study is fundamentally underpowered at some level in a way that makes it like hard to treat it as validation in either direction, either affirmatively or negatively. So I think the answer to that question is like it's not that relevant. The other thing I'll say is insofar as an important question about FcRns is how do they work more broadly in sort of multifactorial immune complex kind of diseases that involve for RA, if it's in this bucket, Sogram fits in this bucket, CLE fits in this bucket, SLE fits in this bucket. I think the amount of data that has now been generated across these diseases is supportive of the nonplay role in the treatment in a way where, again, I think whether this trial has failed or successful, it's not going to like radically alter at least our view of what FcRn can do with those kinds of diseases. And look, we picked CLE over SLE because SLE is tough and should be slightly less tough, but it's tough. And I think it's like hard to overread a single small CLE study. And again, I think the main question is just do we see enough signal in this study to want to run. What will be -- it gets off a relatively risky registration program, just given the nature of lupus.

In 2027, you have the Phase III grade disease rep. So what keeps you up at night operationally about the Phase III grade study?