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

Good day, and thank you for standing by. Welcome to the Roivant's CLARITY Phase III Study Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Stephanie Lee. Please go ahead.

Good morning, and thanks for joining today's call to review the CLARITY Phase III results. I'm Stephanie Lee with Roivant. Presenting today, we have Matt Gline, CEO of Roivant. For those dialing into your conference call, you can find the slides being presented today as well as the press release announcing these updates on our IR website at www.investor.roivant.com. We'll also be providing the current slide numbers as we present them. I'd like to remind you that we will be making certain forward-looking statements during today's presentation. We strongly encourage you to review the information that we have filed with the SEC for more information regarding these forward-looking statements and related risks and uncertainties. And with that, I'll turn it over to Matt.

Thank you, Steph, and thank you, everybody, for joining this morning on short notice. We really appreciate it. It's obviously an exciting moment to get together. So I'm going to do a little bit of frame up here, and then I'm going to take you through what are some obviously really exciting data that we're putting out this morning. So starting on Slide 3, just as a reminder, and this was from our Investor Day last year. And by the way, we're announcing today that we're doing another Investor Day in December of this year. So we'll come back to more of that in a moment. But it's obviously -- it's the middle or sort of early innings of a really busy period for us, and we're excited about continuing to add green check marks to this slide, such as it is as we advance multiple among these programs, but just want to highlight lots more to come, including LPP, CS, other brepocitinib indications and well beyond. So just a tremendously exciting moment. As a reminder, on Slide 4, our overall hypothesis around brepo was always that we could find a constellation of diseases where there was a sort of orphan prevalence with a large unmet need with pathobiology specifically aligned to the unique mechanism of brepo and where we thought we could make a big difference. And I think DM was obviously the first proof point for that, and now LISRAYA is out in the market. By the way, one comment, we're not going to be talking today about the LISRAYA launch. We're excited to do that on our call on November 9 with our quarterly earnings. So today, we're focused on the NIU data. But now with NIU, we've added another leg to that stool, such as it is another proof point, which hopefully will become a commercial product here that we can deliver this kind of transformative data in these high morbidity indications, there's a lot of need. And on Slide 5, look, NIU is a high morbidity indication. It is the third leading cause of blindness in the U.S. There's not a lot that works here. The only really sort of approved non-steroid therapy is HUMIRA. And both in the clinical data as well as you look at the claims data, it looks like half of NIU patients on HUMIRA either fail or worsen while they're on the drug. So there's a high unmet need. And you can wind up in addition to blindness, obviously, wind up with pain, with redness, with distorted vision, with floaters, headache, fatigue, just a really tough disease. It's a fairly prevalent disease as well. Obviously, many of these patients have front of the eye inflammation, but even among sort of patients with back of the eye or sort of all over sort of inflammation, there's somewhere between 70,000 and 190,000 of those patients from a variety of different etiologies. And it's just an indication with a huge amount of unmet need in the world. One highlight on Slide 6, and we're going to talk much more about the marketplace for NIU, how it is evolving, how we see the patient numbers, et cetera, on our Investor Day in December. But in the meantime, just as a reminder, we are in a moment of evolution for the treatment of NIU across a couple of different axes. First, over time, more and more of these patients are getting treated by uveitis specialists, often at uveitis referral centers. These are docs with either a specific uveitis fellowship under their belt or they're double boarded or whatever. These are docs who are like really specific to treating these patients and who are highly comfortable with systemic therapy. Often they have a general medicine training as well and away from the retina docs who are more sort of procedure-based in their approach. And part of that is coming with an increasing understanding that this sort of systemic -- the sort of local saw-tooth flare and treat cycle, which sort of localized therapy and high-dose steroids lends itself to is just not good for patients or their eyes. And so there's a goal to get much more stable, long-term sort of properly controlled disease. And bluntly, given the quality of data we're putting out today, Roivant couldn't come at a better moment for that transition. So we're excited to talk more about that. And I think as you speak, especially these uveitis specialists in your own research, you will hear something similar reflecting back to you from the field. We're now going to get the data. By the way, Ben Zimmer from Priovant is on the call, too. I'm going to present the data, but he'll be available for Q&A as we get into it. So look, on Slide 8, before we get to the headline, just a reminder, we chose NIU on a pretty directed thesis that it's understood that a number of the key pathogenic cytokines involved in NIU, IL-23, interferon-gamma, IL-12, IL-6, all of these are signaled by either JAK/TYK2, JAK1 rather or TYK2 and the brepo will therefore, get us good inhibition across this whole inflammatory cascade. And so that was the hope. Obviously, the NEPTUNE Phase II data was highly suggestive, albeit with small n. And I think, look, the headline here, and we'll get into it now on Slide 9, is I feel like largely, we recapitulated the really, really exciting data that we had seen in NEPTUNE in Phase II in much larger N, and we introduced a placebo arm that looks comparable to what the placebo arm in other studies, including the HUMIRA study showed. So just a really, really great outcome. We got the largest efficacy benefit ever seen for a nonsteroidal therapy. Our time to treatment failure which was the primary endpoint here was over 48 weeks. So it was a 48-week study. We'll go to the study design. More than half of the patients had not yet failed by the end of the study. So the median treatment time was -- median treatment failure was, in some sense, indeterminate or not reached by 48 weeks versus about 12 weeks, 12 weeks in one of the studies and 13 weeks in the other study with obviously a really great p-value. We met the primary endpoint and every secondary endpoint in each study on a separate basis as well as on a pooled basis. We had over 60% of patients got to steroid-free quiescence that is a steroid-free quiet eye at the end of the study, which is really a key treatment goal for physicians. It's something that docs are really working towards. And it was consistent across all subgroups. We had statistically, clinically meaningful improvement in vision-related endpoints, structural and functional benefits, including on fluorescein angiography, really great resolution of macular edema. We'll talk more about that. Just a phenomenal outcome. And the safety profile, which we'll go into, but which is well tolerated and entirely consistent with everything you'd expect, both from our own prior data and from the JAK inhibitor class and other JAK inhibitors. On Slide 10, as a reminder of the study design here. So this was an event-based study. It was a 48-week treatment period. CLARITY-1 and CLARITY-2 were identical studies. You can see on the N's on the slide. And the way these studies work is you start out with a very high dose burst of steroids, 60 milligrams starting for 2 weeks and then you taper. And as a reminder, we had, I think, the most aggressive steroid taper certainly in any big NIU study, and we were tapering over 6 weeks as these patients were fully tapered by week 8. And so our data is particularly exciting in the context of having achieved it even against the backdrop of a more aggressive taper than in the other studies for approved drugs. And that's sort of the design of the study. And then these patients, once they failed treatment along a variety of different axes, they were then taken out of the study and put into an open-label extension. So -- or a long-term extension, I should say. So that is -- that's the design of the trial. This was a representative NIU population on Slide 11, good range of patients, good disease severity. Notably, about 1/3 of the patients across the studies were exposed to prior TNF. So that's really nice to have that data set, and we'll talk more about what it looked like in that group specifically. Obviously, this is one of the first studies where that specific population could have been evaluated. And so exciting to see that. But overall, a severe sort of high rate of macular edema in the patient population, a good group of patients for the study. We're happy with how that shook out. I won't go into them all here, but on Slide 12, just again, we hit really terrific p-values in both studies on every -- on the primary and on every secondary endpoint, and that's across a variety of both functional patient reported, et cetera, a variety of outcomes. On Slide 13 -- so we -- most of our trials thus far have not been event-based studies. So we have not had a lot of opportunity to put out Kaplan-Meier curves. These are, from our perspective, just absolutely beautiful curves from a variety of different axes. One, just in absolute terms, you look at these patients, the rates of treatment failure, again, placebo, 12 and 13 weeks depending on which study in both studies, brepo didn't hit 50% treatment failure by the end. But also frankly, it just like the flatness of this curve in the back half of it. Not only are we not hitting 50%, but it really looks like these patients are stable leaving the study, which is a phenomenal outcome given the quality of the treatment effect. Notably, on Slide 14, on the left-hand side here, you have the pooled Kaplan-Meier curve for both CLARITY-1 and CLARITY-2. On the right-hand side, you have the equivalent curve from the VISUAL 1 from the HUMIRA study. Obviously, a cross-trial comparison with all the appropriate caveats. Obviously, on the right-hand side, VISUAL a less aggressive steroid taper. But overall, just -- I think it highlights in pretty sharp relief that this is field changing, that this is a really different qualitative option for these patients that will, we hope, help a lot of people. On Slide 15, this is another version of effectively the same cross-trial comparison. I just want to highlight not only did we blow it out of the water in terms of time to treatment failure, but because we did it against a more aggressive steroid taper, the overall time from the end of steroid dosing to the median treatment failure is even more exaggerated to our favor in a way that feels really great. These patients are getting long durable responses or long durable stability, I should say, without being on background steroids, which is just -- it's just awesome for this patient population. I'll go through a couple of the subgroups and secondaries now, starting on Page 16. We -- this is a comparison on the left-hand side of the pooled data in the overall population for the treatment failure rate at the end of the study. You can see, again, 33.5% on brepo, 78% on placebo. And then on the right-hand side, we have the data specifically in the subset that had prior TNF experience. This is data that has already been pretty head turning in the community of docs here, and it looks pretty similar, to be honest. We're able to deliver a highly comparable rate of treatment failure on drug for the TNF failure patients as in the overall population, which feels really good. I mentioned on Slide 17, this like change in paradigm where we're going away from sort of saw-tooth sort of flare cycle treatment to trying to get this like sustained steroid-free quiescence, trying to get these patients to a stable place. You see a quote here from an important doc in the field. And I think that change is particularly good for us in this moment because of what we've been able to show. And on Slide 18, this has been another really well received early with efficacy data point. We're getting very high rates of steroid-free quiescence at the end of the study, up to close to 60% or above 60% in one of the studies versus about 20% on placebo. A very high proportion of these patients are stable with quiet eye with -- and I think notably, this is quite a strict definition for steroid-free quiescence. If you show this definition to docs who treat these patients. This is a really good bar to hit, and we cleared it very comfortably. I'm not going to go through a lot of great detail about what this is, but docs now manage these -- obviously, treatment failure is a very clinical trial endpoint. It's not something that docs are like thinking about on a day-to-day basis. A lot of these docs use fluorescein angiography as a technique to monitor and manage these patients. And we have an endpoint in the study, it's on Slide 19 defined where we had a scale using fluorescein angiography to evaluate these patients. And that's notable again because it's a lot of how these patients are managed in the field. And on Slide 20, you can see as a matter of separation from placebo, this again is in the pooled data, just tremendous separation from placebo on this measure, which again is something that I think docs are going to find really valuable because it fits much more closely with a relatively rigorous benchmark against which how they manage their own patients. A couple of more data points here to share. Again, we're just excited about the totality of it here. So we're putting a lot out there. One, on Slide 21, macular edema. So we said about 1/3 of the population, I think, came in with macular edema. The exact numbers are in the earlier slide. Of those patients, 40% of them in CLARITY-1 and a little bit more than that in CLARITY-2 saw resolution -- clinically meaningful resolution of their macular edema by the end of the study compared with very low rates on placebo. This is something that generally you don't achieve with systemic therapy in other studies. So the fact that we were able to get quite high rates of resolution of macular edema, again, very exciting here in another way in which brepo has the potential to be important for this patient population. Lastly, from an efficacy perspective on Slide 22, there's a variety of different ways of measuring efficacy from a functional perspective. And frankly, everything we studied looked good. This is one of the secondaries is a visual function questionnaire. It is a patient-reported outcome with a bunch of subscales include general vision, pain, near activities, distance activities, mental health, difficulty with role, dependency and driving. And we saw starting with week 6, meaningful separation with very good benefit for brepo 45 relative to placebo in both studies. So again, not only delivering sort of the kind of things that ophthalmologists care about managing the disease, but kind of thing that patients care about and living with the disease, which feels really, really good. The truth on Slides 23 and 24 on safety is not much new to report. Consistently well tolerated and consistent with prior brepo studies and with the JAK class. We lay out the rates of AEs on 23 in a little bit of detail on Slide 24. I'm happy to take questions that come up, but our overall view of this is it's consistent with the label on LISRAYA already and consistent with what people will expect for the drug. So look, to summarize the data on Slide 25, just a really terrific outcome. We could not be happier here. The steroid-free quiescence sets us up for the sort of present and future of treatment of NIU. The imaging biomarkers will appeal to docs who use those techniques to manage these patients on a daily basis. We're preserving acuity and function, and we have safety that is consistent with JAKs and certainly, in our view, a good trade-off for benefit for patients with a disease that can lead to very bad morbidity in the eye. And remember, many of these patients are otherwise on quite high doses of background steroids, which are not safe or well tolerated over long periods of time. So against that backdrop, just a really nice finding. The Priovant team is going to get this sNDA in the first half of '27. And hopefully, through everything that will lead to a relatively quick approval. So taking a step back before we head out and open the line for Q&A on 26. We've said all along that we are just getting started with brepo, and we're starting to sort of climb the hill or build this wall one brick at a time. NIU, obviously now, hopefully, the second registrational indication. We got 2 more already in the pipeline with CS and LPP, both well underway, enrolling patients looking promising from that perspective. We have a ton more we want to do. I know Ben and Priovant team are raring to go getting additional studies up and running. And we think this just has the potential to be a huge opportunity across lots of diseases where consistently very high unmet need and not a lot of other options for these patients. And as a reminder, on Slide 27, this is just one of multiple among our programs now with [indiscernible] in pivotal studies after the great data we had earlier this fall and obviously, 1402 with a huge year -- huge next year with data coming in MG and Graves and a number of other studies ongoing as well. And still to come this year with further updates on the Period 2 of the difficult-to-treat rheumatoid arthritis study, another really exciting indication for us with a high unmet need. Lastly, on Slide 28, on December 9, we'll have our Annual Investor Day or Investor Day this year anyway, in New York City. Looking forward to seeing many of you there. One of the things we will definitely do is talk more about the NIU market and get into what we see as the opportunity and the unmet need for patients in clear relief. Frankly, I think this is an area that has been understudied by our investors over the last, call it, 12 months as people have been more focused on the present commercial launch in DM. And as a reminder, as we get to Q&A, we're not going to take questions on the LISRAYA launch today. We're looking forward to taking them and talking more about how that's going, which we're very excited about on the Q in November. So that's it for the presentation today. Before we head out to Q&A, I just want to say thank you to a bunch of people here, obviously, most importantly, to the investigators and patients who have trusted us. Thank you. We wouldn't have the science without you. And obviously, it's an interesting thing to give yourself over to a clinical trial. We're happy in this case to have been able to make it worthwhile. Secondly, I want to thank Ben and the Priovant team who did a phenomenal job again with this study. I'm really proud of the quality of clinical execution that Roivant has been putting up here, and this is another example of an indication where I think first pioneered by Roivant by the investments of the governance team by Mayukh, Frank and everybody at the Roivant side and then put it into a Phase II study and then a Phase III study. It's just nice to continue to see this execution. So I want to thank the Priovant team, the Roivant team, just a huge effort. So thank you, everybody. And with that, I want to say thank you all for listening, and I will turn the call over to Q&A.

[Operator Instructions] Our first question in queue coming from the line of Yaron Werber with TD Cowen.

Congrats on a really fantastic data set. So my question is, the data is so clear pretty much all across the board, whether you look at TNF experience, you look at macular edema, oral, very well tolerated, very fast onset of action and obviously, very good durability. HUMIRA is cheaper. Do you think you'll need to go through a HUMIRA step edit? I assume you'll get a broad label. And is there a chance you can get used before HUMIRA?

Yes. Thanks, Yaron. Look, thank you also for the commercial on our own data. We agree with everything you just said about it. It's really great data. I appreciate the question. Look, I think -- the truth is we obviously don't know the answer to that question. Our data is really, really strong. And HUMIRA has some real liabilities in this area. So there's certainly a chance that docs will be excited about the data and will want to use it earlier. And I think that opportunity exists. As a reminder, in general, the FDA stance on JAK inhibitors is in a TNF-approved indication. There's some labeling that suggests the use of a TNF first. And I think your payer point is reasonable, although there are plenty of plans where more expensive therapies are allowed without first stepping through HUMIRA in indications where is approved. So there are certainly examples of earlier line therapy is possible. I think the only thing I'll say is there are -- I think we put out a number for like 37-ish thousand at least NIU patients on TNFs. Even the TNF failure population or the population of people who could be better controlled despite use of a TNF is a large and exciting opportunity and one where there's a lot of unmet need. So I think we certainly have an opportunity to go earlier, but also I think we don't need to.

Our next question coming from the line of Brian Cheng with JPMorgan.

On the data this morning. Maybe just to -- when we look at the treatment failure, I believe that there are 3 criteria that goes into defining treatment failure. So I'm curious how the response you're seeing, how does that break down compared to HUMIRA treatment failure is what we're seeing driven by a specific component? And then second is, can you frame how we should think about the resolution in macular edema this piece? Do you expect that benefit to be on the label? And just curious how important that is from a commercial perspective?

Yes. Thanks. So on the first question, I can say there are 4 criteria for treatment failure. the new vascular lesions, a change in ACC or VH grade or BCVA worsening. And I'd say like overall, across the population, treatment failure was driven by all of the different components. So there was nothing that like stood out specifically. It was pretty well balanced. Ben, do you want to take the macular edema question short?

Yes, sure. I think we'll -- TBD won't get on the label. I think that it is an exciting add-on and differentiation, particularly from adalimumab or any off-label other TNF inhibitors or biologics that are used. As Matt mentioned before, it's generally both from clinical trial data and clinical experience of view that these patients are not able to address their macular edema through those therapies. I think what's really exciting about this data overall is the opportunity to combine benefit on macular edema and CST with a therapy that could provide overall sustained disease control around inflammation and uveitis more broadly. And I think that -- I think it will be an exciting point of differentiation in the context of the overall data set, but I think that there's a lot here that is going to be really exciting to doctors.

Our next question in queue coming from the line of Yasmeen Rahimi with Piper Sandler.

Congrats to the outstanding data. Gline, it would be wonderful if you could kind of educate us. I think you did a great job with brepo and DM on kind of helping us understand that these patients are in concentrated centers. Maybe just talk about sort of the heterogeneity or the -- like where -- is there a cluster of these patients under these community retinal docs? How do you envision that? And maybe to the extent you could talk about how much that would involve expansion of your sales force that would be dedicated to the NIU launch? And I know maybe many of these things may come up at the R&D Day in December, but to the extent you could give us some broad color, we would be very grateful.

Thanks, Yasmeen. I appreciate it. It's a good question. And we will hit a lot of this in more detail on our Investor Day in December. I think, first of all, there's just an increasing trend towards more of these patients being treated at these centers. I think the centers make excellent early relationship points for us here because they are equipped to manage systemic medicine and are already big users of systemic medicine. We'll talk a little bit more about number in the future, but I think they will be among our earliest and most important call points. There are obviously also retina docs and docs in the community who partner with rheumatologists and so on to use systemic medicine. You can see where they are. They use HUMIRA and so on. So I think we're going to be able to call on a variety of different physicians. I'll say, I think the correct expectation here is this is a different commercial organization than the one largely currently launching in dermatomyositis. So I think it's not, it's not -- it's going to be a new commercial effort. Obviously, the patient support work, a lot of the other things that are going into making those trial successful will be reusable, but the field personnel will be different. Look, I think the truth is these patients are often going blind. They're not hard to find, right? They're out there. They're engaged with their docs and the doc tolerance in general for eye disease is poor for eye inflammation is poor. So docs are reaching for the most aggressive things they can find. And so they are -- tens of thousands of these patients are treated in these specialty centers, more and more are getting referred there. And I think the goal is to treat them very aggressively.

Our next question coming from the line of Samantha Semenkow with Citi.

Congratulations on this really great data set. I'm wondering if you could talk a little bit more about your appetite for potentially expanding indications for brepo, specifically within ophthalmology, maybe even for diseases with macular edema given the data this morning relative to the expansion opportunities for other therapeutic areas because I know that there's potentially a long list that you're evaluating.

Yes. It's a great question. Look, I think the short answer to our appetite for expanding indications for brepo is high, and we're doing a lot of work on that. There are ophthalmology indications on our list. There are other indications on our list. I'm not prepared sitting here today to commit to any particular sequencing or pass of those, but I'll say we're living with this data fresh. We've only had it for a few days. So let us continue to study it and see what avenues it suggests, but lots of great places to go, spoiled for choice and definitely hoping to do more fast.

And our next question coming from the line of Alex Thompson with Stifel.

Congrats as well on the data. I guess one of the other differences versus VISUAL-1 was that you didn't require patients with baseline OCS use. I guess could you comment on sort of how those patients did? And maybe to Yaron's question earlier, sort of what that might mean for how brepo could be positioned within the broader NIU population?

Yes. Thanks. It's a great question. I appreciate it. And Ben, I'll ask you to comment, too. Look, I think in general, first of all, it's a severe patient population. We have similar efficacy regardless of whether baseline OCS were involved or not. Obviously, a unique thing about this patient population is that there are also TNF experienced patients in it. So there's some pretty sick patients who have gone through a lot of things. So obviously, like, for example, the VISUAL studies obviously couldn't have included TNF refractory patients. So we wanted a broad population. I think that will be helpful in the sense that it opens up the broadest possible opportunity for NIU patients sort of regardless of where they are in the treatment cascade. But again, no sort of significant differences in effect across those subgroups. Ben, anything you'd add to that?

No, I would just say that the VISUAL study was conducted a while ago. I think there are more heterogeneous therapies used today to control patients with active disease, including systemic therapies, obviously, TNF inhibitors, which were not used at that time, being the major other off-label therapies, DMARDs. And so what we really wanted was a population that matched the real-world population. And I think that's what we got, which includes a lot of patients who were on background steroids, some who had been on in the past but weren't at the moment, patients who have been on other therapies. And yes, that's what the baseline criteria or the baseline demographics, I think, capture well across a variety of ways in terms of percent of patients with macular edema, percent of patients with posterior and panuveitis, percent of patients who had prior TNF therapy, I think, captures this broad-based active population. And I think that's really kind of where we would expect to see the drug used in the real world as well.