Roivant Sciences Ltd.

Good day, and thank you for standing by. Welcome to Roy Vance's fourth quarter and fiscal year 2021 earnings call. At this time, all participants are in a listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Paul Davis, Head of Communications. Please go ahead.

Good morning, and thank you for joining today's call to discuss Roy Vance's financial results and business updates for the fourth quarter and fiscal year ended March 31st, 2022. I'm Paul Davis, the head of communications at Roy Vance. On the call today, we have Matt Klein, our chief executive officer, Richard Pullock, our chief financial officer, Frank Torti, our Vance chair, Eric Banker, our president and chief operating officer, and Mayuk Sukapme, our president and chief investment officer. For those dialing in by phone, you can find the slides being presented today as well as the press release announcing these updates on our IR website at www.tobester.royvance.com. We'll be providing the slide numbers as we present to help you follow along. I would like to remind you that we will be making certain forward-looking statements during today's presentation that reflect our current views and expectations, including those related to our financial performance and the potential attributes of our products and product candidates. We strongly encourage you to review the information that we have filed with the SEC, including the earnings release in Form 10-K filed this morning, for more information regarding these forward-looking statements and related risks and uncertainties. Mack Lyon will review key business updates across Roybent and Vance, including the commercial launch of Vitama at Dermavant, as well as Priobant, a new Vant we unveiled today, and he will provide a financial update. We will end the call with a Q&A session. Without further ado, I'll hand it over to Mack.

Thank you, Paul, and thank you, everybody, for joining this morning. It's an exciting call for us. It's our first 10K as a public company. It's our third earnings call, so we appreciate everyone being here this morning. So I'll start just briefly on slide four and talk a little bit about sort of what's going on in the business. You know, starting with, and I think everybody is familiar with this, but we have, as of this month, really, the commercial launch ongoing of Vitamacream, and we'll provide a a brief update there, although it's still early days. Behind that, we have a really exciting differentiated pipeline of clinical programs, and we'll talk a little bit about some reprioritization we've made there, in part to make room for Priavant, a new event that we've announced this morning that's developing a drug that we'll spend a fair amount of time on today. We also have our chip to clinic discovery platform with our proprietary tools, including Quasar and Vant AI, working on a pipeline of preclinical programs against challenging targets. I'll talk a little bit about some collaborations during the quarter. They are And there are a number of sources of asymmetric potential upside, including the ZMIP portfolio and others, all backed by a strong capital position with, as of 3-31, $2.1 billion in cash and cash equivalents on our balance sheet and a significant portfolio of public equity stakes. So we won't spend a ton of time on slide five on VTAMA today because we just provided the update call a few weeks ago on the approval, and it's too early to say much. I'll say we see strong early prescriptions recorded to date. The IMS numbers are here. We've got some really good feedback from physicians on the label, and we're really excited about what that looks like. And then, obviously, we're still focused on the atopic dermatitis program, which will read out in the first half of next year, which we expect to help us get to a blockbuster in both indications, frankly, in each indication. The one thing I'll say is it's really early days here, so while these numbers are exciting to us, it's hard to make any forecasts for what it means Over time, we'll provide a more fulsome update when we can. I would, for example, expect this week to be a little flatter because our field force is out of the field for their sales meeting. So we'll see it as it goes. But, again, really promising early signs and something that is an obvious and important area of focus for us and a major milestone that happened during this period where we've got our first commercially launched product now. So excited about that, excited about the team doing that work, and looking forward to seeing how it develops. So moving on to slide six. I'll just reiterate something that's always been true for us, which is that we intend to operate from a strong capital position. We have, as I'm sure you've seen, $2.1 billion in cash and cash equivalents as of 331. We always sort of work to run the business generally with over two years of runway, and we're confident we're doing so right now, and we continue to focus on that. As part of that, in response to the current capital markets and in response to some of the opportunities we see outside, including at Pride Advance, which is now a program of ours. We've continued to watch our portfolio, and we've implemented some company-wide cost optimization and portfolio reprioritization projects. And you can see on the right-hand side here, we've deprioritized some programs, notably among them probably Aravant, our program in sickle cell disease, where, you know, we were just looking at the field there and trying to make sure we felt like we had a portfolio of truly differentiated offerings, and it was hard for us to know whether we were going to meet our squeaky clean efficacy bar. So if you move forward to slide seven, I guess one other point I'll make about capital for us is that we have always run our business with access to capital sources that go well beyond just equity. And, in fact, if you look at our history, more than half of the capital that we've raised and deployed since inception has come from sources other than equity. And we've just listed a few of them here as a reminder that we feel that very independent of the capital markets. You know, one obviously is revenue from the cream. I mentioned again, we expect this to be a potential blockbuster and multiple indications. Uh, we've shown in our history, a number of important, uh, cash generating partnerships, uh, including out licensing deals like the Japanese rights to pin her off to three pharmaceutical, including discovery stage partnerships, which are the ones that we've announced with Jansen, with blueprint and with BI. Um, and obviously for example, the DSP deal of a couple of years ago, uh, We have Genovance IP Estate, which is something that we know people are focused on and which we expect has the potential to be a source of significant capital, depending on how that situation plays out. And then we have monetizable ownership of our Vance and other assets, and I'll call attention to DataVamp, which we are a 12% owner of today, which is something that obviously we will be watching as that company continues to grow and evolve. It's something we've talked about a few times. So jumping ahead to here, to slide eight, it's been a really exciting period for us just from a, from a pure clinical execution perspective. We have 10 or more pivotal or pivotal enablement trials expected to be up this year. Seven of those are ongoing, including at least four pivotals. And we'll spend some time today talking about the programs in, in represent and at private event and the three, three or more additional trials expected to initiate this year. So we have a, we have some really exciting work to go in and we've mentioned a few times. This really is, an important period of clinical execution for us. So on slides 9 and 10, and especially I start on slide 9, you know, we have programs that go beyond what are shown on the slides at this point, but we're really focused on the opportunities in our pipeline and currently outside of our pipeline that have the opportunity to be really sort of differentiated and that are uniquely available and interesting opportunities for us. And so we've got, you know, obviously Vitamil at Dermavant where we continue to do both commercial and development work. We have Botoclumab, but we've talked about a fair amount at Immunavant. We have Reprocitinib at Priavant. We have a list behind that that includes Namilamab, our anti-GM-CSF antibody on slide 10 at Kindavant that includes our SF3B1 modulator at Hemavant for transfusion-dependent anemia and low-risk myelobus plastic syndrome and so on. So a number of programs in our pipeline that we think are differentiated and interesting and really sort of focused on the biggest value opportunities. So with that, I'm going to switch gears a little bit, and I'm going to talk about something I'm excited to talk about. I've been waiting for about six months to talk about this publicly as we've been sort of getting it ready. But that is I'm excited to unveil Priovant, a Vant built in partnership with Pfizer to develop a potential first-in-class dual selective inhibitor of TIK2 and JAK1. So if you start on slide 12, you know, I just wanted to, before we go into private itself, I just wanted to note that, you know, I think we've quietly built a portfolio of really high potential first-in-class or best-in-class, in some cases only-in-class programs in immunology across the Reuven portfolio that includes, you know, many that I think people on this call are already focused on. You know, it's broad characterization. We're looking for programs where we have a clear swimming lane, the differentiation area of unvet need. And sometimes that clear swimming lane is, is in the biggest volume segment of the market, as with the Pinaroff, where we saw a need for a novel topical and inflammatory skin disease, where otherwise systemic agents have been the primary focus of the field. And then sometimes it's in a specific indication or a set of indications where, you know, we understand the biology well and there's a clear potential bad actor, as with many of our FCRN indications or with GM-CSF in sarcoid. And then sometimes there's a disease that requires an agent that has a more pleiotropic effect, and we want to attack it accordingly. And that's, I think, what you'll see with our approach to development at PriEvent, which I'm excited to unveil here today. So we closed this deal last fall, and we've been sort of diligently working to get ready to make this announcement at such a time when we could say confidently that our phased-through program and DM was underway, which we can now do. We built a really phenomenal – I want to just lead off by saying we built a really phenomenal working relationship with Pfizer. They're a repeat partner of ours – and they've been really good partners to us here. And so we're thrilled to partner with them to create Priyavant, and I'm excited to talk about it right now. So on slide 13, you know, we're spending most of our time today talking about Prevacitinib, which is the lead program at Priyavant. It's a first-in-class dual inhibitor of TIK2 and JAK1, which we're developing for specialty autoimmune diseases with high mortality and morbidity and with limited treatment options. So we'll go through each of these points in greater detail during the call. But first of all, the molecule has all the sorts of characteristics that we have generally really liked. First of all, it's got a unique dual targeting mechanism, and we'll go into why that's important from a biology perspective. Second, we know that it is a highly active agent. We have a very robust efficacy data set covering a wide range of indications and successful phase two studies already under our belt. We have a distinctive development strategy and specific indications that play to the strength of the drug. and elegantly work around some of the well-known current limitations in the JAK pathway. And we have two ongoing registration programs with the first readout expected in the second half of next year. And finally, as a long-tailed asset, the composition of matter going through roughly 2039. So, you know, an exciting program to have in our hands. On slide 14, I just want to start with a little bit of a review of the relevant biologies. So the JAK family, JAK1, 2, 3, and TIK2 family, generally signals via pairwise combinations. So a dual inhibitor of TIK2 and JAK1 allows you to mediate the signaling of a number of inflammatory cytokines represented by the boxes shaded in yellow on the left. And particularly and importantly, it's expected to more robustly suppress the cytokines in the upper right-hand corner, namely interferon alpha and beta, most importantly. As such, the specific dual TIK2 and JAK1 inhibition is relevant to a signature of autoimmune disease, We can suppress interferon alpha and beta strongly and also hit interferon gamma IL-6, IL-12, and IL-23, which are particularly relevant in the diseases we're pursuing. So it's worth noting, again, this is not simply another TIK2 or another JAK. It's a unique small molecule with a profile that allowed us to tailor a customized precision clinical development plan. And it's also worth noting, this is the only dual inhibitor of TIK2 and JAK1 in any kind of late-stage clinical development. So we think it's a really interesting opportunity. So on slide 15, and some of these studies have already been made public and some have not, but one thing that we're excited about, PrEPO has a really robust set of efficacy in a range of autoimmune indications. We know that it's a highly active agent. It's shown P values in multiple studies run by Pfizer in every indication that Pfizer or PrEP has shown P values in every indication tested by Pfizer so far. And we have an extensive safety database as well with exposures in over 1,000 subjects and patients. that shows a profile that's consistent with approved JAK inhibitors, just as you'd expect. So then if you jump to slide 16, kind of what's our strategy here, right? What are we doing? And obviously the world is sort of watching what's happening with JAKs. Where do we think we have an opportunity? You know, we talked to Pfizer about our interest here, and that we were particularly interested not in sort of the typical JAK markets where there's more competition, both from small molecules and, frankly, from biologics, but to go after a set of indications where we felt there was a a clear differentiate opportunity. One, where we felt the biology of the disease indicated that both TIK2 and JAK1 would contribute to efficacy. Two, where the diseases had high morbidity and mortality and an urgent need for novel therapies. And three, where there weren't a lot of therapies, including in all of our cases, no approved oral therapy. And this led us to a series of indications, some of which you can see on this slide, where the overall opportunity was high, we felt, for a new leading treatment option in orphan disease markets that are largely uncrowded. So let's turn and we'll talk about the first couple of these more closely and obviously more to come in terms of additional indications over time with this program. So I'll start on slide 17 with dermatomyositis, which is a rare chronic immune-mediated disease of muscle and skin. It affects about 37,000 adults in the U.S. alone. Hallmark symptoms are on the skin and muscle, painful skin rashes, muscle weakness, often with disfigurement and disability associated with them. The cycle of inflammation with damaged muscle and damaged vascular endothelium tends to lead to damage in multiple organ systems, including pulmonary and cardiovascular systems. There's significant mortality. A majority of cases are chronic and demand chronic steroid therapy and aren't well controlled even with that. And the only approved therapy, apart from steroids and corticotropin, is IVIG, which has just got approved recently. Uh, it's an advance in the field. Uh, it's not a perfect solution. It's IV with a cumbersome administration. It gets dosed, I think for like two to five consecutive days each month, uh, with infusion times that are pretty long on each day and with a number of side effects, including an elevated risk of thrombosis. Um, so there's a high need for, for novel targeted therapies that address, uh, underlying DM pathobiology in a chronic refractory patient. So if you jump to slide 18, uh, There is some evidence already that JAK inhibition alone has efficacy in DM. So on the left-hand side, there's this STIR study in refractory dermatomyositis where a JAK1 inhibitor was studied in the disease, notably the endpoint here, total improvement score, TIS, was the primary endpoint in this study. It was an open-label study. It was the primary endpoint in this study and is the scale used for regulatory approval. And you can see the blue line is the median improvement there. This JAK inhibitor got to a roughly 40-point improvement. It's worth noting that every single patient improved. It's all the hashed lines on here. The secondary endpoint analysis also showed robust improvement in other relevant scores, CDASI and steroid sparing ability for those patients that are steroid-dependent. As worth noting, the median improvement in TIS here was similar to that which was seen in IVIG, leading to its recent approval. Of course, this JAK study was an open-label study. We also compiled a bunch of case reports where we had seen documented and published in literature about 145 cases of DM and juvenile DM that were treated with various JAK inhibitors. And of those 145, 137 were considered clinical success by their respective investigators. Again, this is not a controlled study, but this is just supportive evidence for JAK inhibition as being relevant to the field. And many of those case reports noted objective and subjective improvements, including in the muscle, skin, and lung. So I think back to the point that I made about sort of why we are in this field at all or why we're excited about brevacitinib on slide 19, you know, I think it's important to think about where the disease biology fits in here. And again here, dual inhibition of TIK2 and JAK1, as a reminder, provides optimized suppression of type 1 interferon, which is the key pathogenic cytokine in dermatomyositis. I won't cover all of them in this slide, but there's a couple of lines of evidence for that. One is that elevated levels of type 1 interferon are found in the relevant organ systems of DM patients. The second is type 1 interferon gene signatures correlate with DM disease activity, go down with successful therapy, and go up as disease worsens. Direct exposure of type 1 interferon to myotubes elicits a pathogenic response. We know that hitting both TIK2 and JAK1 seems to be required for maximal type 1 interferon suppression. And finally, in whole blood assays, we see evidence that BRPA does exactly what you'd think it should with greater type 1 interferon suppression than TIK2 inhibitors or JAK inhibitors. So on slide 20, in addition to type 1 interferon, dual inhibition of TIK2 and JAK1 also uniquely suppress other DM-associated pathogenic cytokines, specifically interferon gamma, IL-23, and IL-12. And this signature is important. And, again, you can see in these whole blood assays the prepositive and defensive suppression that compares favorably over TIK2 inhibitors and JAK inhibitors. So on slide 21, here's a schematic of the program that is currently underway. We've gotten regulatory alignment of the design. And we believe that if these data are robust, that this single phase three, along with all the other supporting evidence around the compound, should be sufficient or could be sufficient for approval. So, you know, moving to lupus now on slide 22. So this is obviously a pretty well-known disease among the investor community. It continues to be one of the biggest autoimmune markets, obviously, and it continues to have enormous unmet need. The classic hallmark is this sort of butterfly rash, but it can result in symptoms in basically all major organ systems, and it has elevated mortality. And there's no question there's unmet need here. It's widely recognized by patients, by physicians, and by regulators. Benlista is an approved therapy. It was approved back in 2011, which was a huge achievement. It was the first drug approved in decades in the indication. But it's approved in spite of a relatively modest effect of placebo-adjusted delta, somewhere between 10% to 14%. Anafrolamab was approved last year. with really one positive study. The other study outright failed and looked worse than placebo, but FDA kind of looked at the totality of data. Again, there was significant unmet need, and the Phase II also looked supportive, and so it was approved. And so clearly, lupus is not a solid issue. I'd say a common conclusion is that almost nothing ever works, but actually, you know, we think that a lot of study failures have resulted from an attempt to improve upon what's already been successful rather than repeating what's worked and that we can learn a lot from Ben Lista in particular, which was positive in all of its phase three studies, despite some challenges on the efficacy side. And so, yeah, I think it'd be fair to conclude, we view this as a pretty high risk proposition and we have some humility in tackling it, but also there's some important lessons in what's likely to work. And we think we can design a study that maximizes chances for, for success. So, you know, on slide 23, For starters, we do have recent data for what happens if you inhibit JAK1 or TIK2 in lupus in these patients. And the good news is there are signs of efficacy with the JAK1 inhibitor, as you saw in the phase 2s and one of the phase 3s, baricitinib. And then also, you know, with the recently announced phase 2 of ducravacitinib, which showed some noisy dose response, but again, separation of each dose arm over a placebo that we think is a good supporter of drug efficacy and You know, there's obviously nuances in these study designs, and some of them we think made the data look more noisy than it really was. So, you know, on slide 24, I won't belabor this point, but we did just want to show your cross-study comparisons of BREPO versus those couple of drugs. It's worth noting all these diseases have very different biology from lupus, but just looking at the slide, you can see that BREPO is a really big gun. and it compares favorably to Ducra and barium, each of these indications. So we think we have an opportunity to differentiate. And look, the biology ought to even play further in our favor, again, given the unique signature of our drug. Like chromatomyositis, lupus is known to be a type 1 interferon-driven disease, and BREPO may provide sort of best-in-class suppression of type 1 interferon signaling. There's other cytokines implicated, such as AL-6, AL-12, and AL-23. So our strategy here builds on evidence in the last 20 years that SLE has specific pathways that are relevant and also underscores that you can't go after just one axis for efficacy if you want robust efficacy. Afrolimab provides evidence that PEG1 interferon inhibition provides activity in SLE. We're the only oral drug to hit this axis as robustly. And then Barry provides evidence that JAK1 inhibition provides modest activity in SLE, which includes IL-6 and interferon gamma inhibition. Ducrava and Stelara provide evidence that TIK2 inhibition or reductions in IL-12 and IL-23 also provide some activity in SLE, and we're the only drug to hit this full unique signature. So, you know, on slide 25, here's the lupus study design. It's a large global phase 2B study. It has all the design features you'd want for a pivotal. It's close to fully enrolled, actually, so that's an important piece of news. And we're using a 52-week endpoint, so we expect top-line data in the second half of next year, so quite soon. And then it's important to note here, a feature of our collaboration with Pfizer is that Pfizer is sharing in the expense of this study. It was already in flight when we launched Privant, but in total this ended up being a really highly capital-efficient bet for Roivant to make relative to running an entire lupus registration quality study from start to finish. And obviously we're excited to partner with Pfizer on it. And then on the back of this, if successful, we'll just be one study away from approval in a quite large market. So I'll wrap up on Privant on slide 26 with just a recap of partnerships. So Pfizer, as is sometimes the case with our really important partners at Vance, owns an equity interest, a 25% equity interest in Privant. Privant develops the drug and owns commercial rights to prepacitin in the U.S. and Japan. And we also have similar rights to a mid-stage TIK2 inhibitor. This was a capital-efficient deal for us. So there was a nominal $10 million upfront, which actually included the purchase of inventory of drug in hand. There's no regulatory milestones at all in a single commercial milestone. There's a tiered sub-teams royalty on net sales in our territories and sales that are booked by Pfizer outside of our territories at a slightly lower but conceptually similar single milestone royalties flowing back to us. So, yeah, we are thrilled to unveil this program. It's emblematic, we think, of our ability to work with partners, often repeat partners, on high-impact therapies with creative development strategies and with some capital efficiency. And I'd say, obviously, a little bit of contrarianism in moving into this area with what everyone else is sort of focusing on. But we think it's going to deliver a meaningful therapy to patients in a range of diseases with high-end needs. So we think this will be one of the anchor programs in our portfolio in the years ahead and looking forward to providing further updates as we continue to execute. So I'm going to go quickly through a couple of other updates. That was the main new item for the period. But I just wanted to give a couple of quick updates on some other things going on around the portfolio, and then we'll wrap up with a brief financial update and then open the line for questions. So jumping ahead to slide 28, we've talked a little bit about this on earlier calls and the press release, but I'll just point out, At this point, we've done multiple strategic partnerships that validate the quality of our discovery pipeline and our discovery platforms, our discovery tooling, including a partnership with Janssen focused on Vance AI's deep learning platform, looking at generating novel molecular glues and hetero-bifunctional protein degraders, a collaboration with ProteoVant and Blueprint to advance novel protein degraders to address important areas of element need, and then an early discovery collaboration with BI. And we think there's sort of more of this to come when we see a lot of enthusiasm for what we're doing on the discovery side with former partners who are interested in using the kind of tools and modalities that we've been heavily on. And I'll note that these three deals together have contingent milestone payments of well over a billion dollars in addition to potential product royalties. And then not too much new to say here on slide 29, but, you know, litigation surrounding Genovans IP portfolio, this situation continues to develop. Since we last provided a detailed update on it, Moderna, as many of you may know, on May 6th filed a partial motion to dismiss our claims, which we responded to, and Moderna actually filed its reply just a few days ago. So the briefing on that motion to dismiss is now complete, so we'll get the court decision when it comes. And I'll just say that rather than respond to the substance of our claims, they filed a motion to dismiss an unidentified portion, but not all of our lawsuits. in an apparent effort to shift responsibility for potential patent infringement to the U.S. government. And then the only other sort of ongoing relevant litigation is that Acuitas, an L&P company, on March 18th filed an action against Genovant and Arbutus looking for a declaratory judgment, basically looking for a statement that we are not infringing, that they are not infringing on our patents. So we told the court last week that we intend to file a motion to dismiss Acuitas that lawsuit for lack of an actual controversy. And so we'll hear back from the court there as well. So wrapping up today with just a brief reminder of some of the financials of the period on slide 31. Yeah, I think we're, we're pleased with where we are from a capital perspective in the three months ended three 31 22, we had R and D expense of $135 million or adjusted non gap of 118 million. We had minimal IPR&D of $2 million. We had $139 million of G&A or adjusted non-GAAP of $77 million of G&A for a net loss of $291 or an adjusted net loss of $188. And then we've also got metrics on this slide for the full year. And our balance sheet, most importantly, remains really strong with $2.1 billion of cash and cash equivalents and $210 million of balance sheet debt, which is a sort of a credit facility of $33 million, and then the rest of that is effectively the present value of milestone payments, mostly at Dermavand, associated with the NovaQuest financing there. Yeah, and then, you know, finally on slide 32, I'll just say we have a period of really exciting news flow and information and catalysts that we think are things we're watching really closely. That includes, obviously, continuing to follow closely the commercial launch of Vitamma, That includes topical data for vitamin A, topical dermatitis, a second potential blockbuster indication there in the first half. That includes multiple readouts and additional program initiations at Immunovance. It includes top-line data coming next year for lupus. It includes sort of upcoming readouts at Kynavant and Humavance, and all that in addition to potential output from our discovery apparatus and other things going on around the business. an exciting period of execution for us, an exciting period of upcoming catalysts. And they're really pleased with where we are as a business. And with that, I'll wrap up the formal presentation. Slide 31 is just a non-gap. Sorry, slide 33 is just the non-gap disclosures, and then slide 34 is a summary of our grant ownership. And so I'll end there. Again, I'll say thank you for listening this morning, and I'm excited to take your questions. So I will turn it back to the operator to open the line.

Thank you. As a reminder to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Dennis Ding with Jefferies. Your line is open.

Hi. Good morning. Thanks for taking the questions, and congratulations on the progress and the partnership with Pfizer. Two questions for me. One on PrioVantages. Talk about the decision for Pfizer to out-license these assets. I think there's clearly a lot of interest in the class and these trials seem relatively late stage having enrolled already or close to fully enrolled. So perhaps why do you think these assets are in better hands with Voivant versus Pfizer whose cost of capital is presumably lower? And then my follow-up question is on the TAMA. and script volumes and, you know, whether these have been tracking in line or better than your expectations thus far. And I guess especially on pricing, if you can right-size the street on close-in, that would be really helpful. Thank you very much.

Yeah, thanks, Dennis. Appreciate the questions. Appreciate your listening this morning. I'll probably take those in reverse order, and I'll take the VITAMA question first, and then I'll give some thoughts on the private question and also ask you to work closely on that collaboration to chime in. You know, on VTAMA, in terms of, you know, script volumes, we haven't said exactly what our expectations were. You know, I think what I'll say is we're pleased with the early demand. We're very pleased with the response from the docs that we're out talking to. It is very early days, and so it's hard to look at this and say that we're ready to draw any conclusions. We are excited to see where this goes, and we're looking forward to providing some a more fulsome update. And then, you know, on gross to net, I guess I'll just go back to what we said on the launch call, which is we are focused very hard at this stage in the game on getting credible high-quality coverage, which includes the right formulary, which includes the right rebating strategy, and so on. You know, I think until that happens, we're not providing specific guidance, but I would expect, you know, deep gross to net discounts just because of the way the market works, and then I expect that will normalize once we have credible coverage. And what we've said is that's going to be about 12 to 18 months. So that's kind of what I would say on the TAMA. You know, on the private Pfizer question, the first thing I'll say is, yeah, I think you can see it in the partnership terms. Pfizer remains excited about this program. They continue to invest in the lupus trial alongside us. They own 25% of private and they have economics flowing back to them. And they have a large portfolio of drugs in this general sort of area of the world. And so, you know, I think even companies like Pfizer need to pick and choose and make strategic decisions. And I think this was, if I had to guess, a tough one for them to, quote, unquote, let go. And it has to do with the quality of our relationship that they thought it was in good hands with us and that it was going to generate good value for them in this construct. So that's sort of my high-level answer. Mayuk, I don't know if you would add anything to that in terms of how you think Pfizer was thinking about it.

Yeah, I think that's right. Thanks, Matt. So, I mean, I think, as Matt mentioned, obviously, you know, we view Pfizer as really the world leaders in, you know, in this specific biology and has, you know, a number of other programs, both marketed and late-stage development in these areas. And I think, you know, we're looking at, you know, the data for PREPA that evolved and had largely been developing it in, you know, the sort of the bottom-up communications areas. And I think that they saw in our proposal sort of a way to develop it in, you know, a unique set of indications that, again, really play to the strengths of this molecule. I think, as you guys probably all appreciate, you know, Pfizer has got a long history now of partnering assets with new codes. They've done it with CeraVel, with Allogene, with SpringWorks. We're really excited to move forward with this. It's been a great partnership. Thanks.

Thank you. Our next question comes from Yaron Werber with Cowan. Your line is open.

Yes, hi. Thanks for taking my questions and congrats also on this deal. I also have a couple of questions on Breppo. Number one, I guess I have three questions. One, is the collaboration open-ended in terms of indications or are you sort of restricted to lupus and dermatomyositis. They're retaining to develop any other TIK2 or JAK1 independent of you for any indications including these two. And then finally, When we look at the prior data, kind of two things jump to mind. You're right, the data you showed us looked pretty good. The topic dermatitis data was a bit weak on efficacy. And then infection, there's obviously some infections, but nothing overly concerning on the safety. Let's address those two as well. Thank you.

Yeah, thanks. I'll hand it to Mayuk to cover these things. First of all, the collaboration is definitely open-ended with regard to indications. And I would say not only are we not limited to these two, but given the quality of the compound, I think you can imagine we are considering a whole range of things we might do with this. So definitely not limited. Mayuk can comment a little bit more on the specifics of what Pfizer might be limited to. But in short, I think you can imagine for a company like Pfizer with a portfolio like theirs, they don't have – they don't have a lot of limitations on what they can do. But Mayuk can comment on the specifics there. And then on the safety side, and then I'll hand it over to Mayuk to comment on any of these topics. You know, I'd say broadly, first of all, remember this compound has been developed extensively. It's been exposed to over 1,000 subjects and patients. And, you know, we've observed rates of, let's say, JAK class-specific adverse events that are in line with those observed in other programs from a tolerability standpoint has generally been well-tolerated. I agree with you that things like infection numbers are not particularly problematic. You know, I think we feel like the safety profile is consistent, is favorable for the development strategy we have in mind, and is something we're mindful of. And I think, frankly, the focus on tolerability for JAK inhibitors is part of what has given us the opportunity to do something unique and different here. So, Mayuk, I don't know if there's anything you'd add on any of those points in specific if you want to comment on the AD data or on any limitations that Pfizer has.

Yeah, nothing really to add here. I mean, I think, as one might expect, I mean, I think that we We're committed to, you know, to these programs as our sort of, you know, expression of our interest in this particular biology. I think, as Matt noted, we don't have limitations in what we can pursue. And I think, as one might expect, I think sort of some of these core indications that we've highlighted today, you know, it was important to us, you know, to kind of have prior to that be the way in which Pfizer is expressing interest in these indications as well.

One comment on the AD data. I think you're referring to the published data. They published some data. The published data was in topical brepacitinib. So our lead compound here is the oral formulation. We have rights to the topical as well. We're sort of deciding what to do with it. Obviously, it's an area we have a fair amount of interest in. But I would say the activity data that we have that's most relevant to us is the data from the oral program. Thank you so much.

Thank you. Our next question comes from Robin Kornoskis with Trual Security. Your line is open.

Hi, this is Alex. I'm for Robin. Yeah, congrats on the partnership. Quick question on our events and wanted to know if you could provide a little more color on what factors led to the wind down of the Sickle Cell Program and also how should we think about the approach to future resource allocation for existing events versus interest in additional initiation of subsidaries?

Yeah, thanks. Look, it's always a tough decision to wind down a program that you're potentially excited about. And so, you know, there were a lot of factors. I would say, you know, chief among them from my perspective, other than a broad desire to be sort of careful about how we're allocating resources in the current environment, is the clinical bar for curative therapy in sickle cell disease really is curative. And I think as you look at the development of that field with the other programs that Uh, we felt like that, that bar was really high and, uh, we got nervous that we might not quite achieve this weekly clean clinical bar there. Uh, and you know, look, these are, these are patients with few options, but actually the, the pipeline across biotech is, is pretty broad. Uh, it's obviously been a little bit of a challenge area, uh, but, but, but we still feel, we still feel good about the high likelihood that curative therapy using genetic medicine are going to make it to sickle cell patients. Uh, we're obviously disappointed to bow out, but, uh, but we're incredibly appreciative of the patients that have worked with us and obviously the investigators that have worked with us as well as our whole team, and it's something that we took a swing at. So, yes, it's a tough decision. I think what it enables for us is to continue to be broad-minded in our portfolio. We have to make decisions like this, and we have to make them quickly and decisively in order to be able to do things like this partnership with Pfizer opportunistically. And we think the current capital markets are going to give us even more opportunities of that kind. And so, you know, when we have, when we have the ability to make these decisions, it's just something we have to, we have to do quickly. So, so it's something that it's always disappointing, as I said, but it's just the kind of decision we have to, we have to make.

Gotcha. And yeah, you mentioned that you've got some initial physician feedback on the Pinteroff or the Pinteroff label. Can you elaborate on that a little bit?

Yeah, I would say just generally as we've been out to docs, as our field force has been out to docs, as our leadership team has been sort of out talking to the medical community, I think it's just a lot of excitement and enthusiasm for the label. We obviously were excited about it when we first saw it, but what you heard on the call a few weeks ago was really our and the management team's first impressions of what seemed to be a very clean label. And I think as you get out there, just all the things that we would have hoped are resonating with prescribers. And so, yeah, we're really excited to watch the progress there as that team gets out and does what it does best.

Great. Thanks so much.

Thank you. Our next question comes from Elise Chen with Panther. Your line is open.

Hi. Thank you for taking my questions here. So I wanted to ask you a few things. First one, if you could talk about the market opportunity for batoclumab and myasthenia gravis, and where you think your drug would fit into the treatment landscape if it's approved. The second question I have for you is, how do you think about tapenoraf or vitama and the potential opportunities to rise this and in atopic dermatitis? What gives you confidence in the positive data or positive data readout in 2023 in atopic dermatitis? And then can you talk about the pushes and pulls on your cash runway? Thank you.

Yeah, thank you. I will, I'll take those questions in some order here. I'll start with the Vitama question, with the DePinteroff question. You know, we're looking forward to that readout. We like the biology of AHR modulation very much. It's something you've heard us talk a fair amount about. And we think it's important to inflammatory skin disease generally. And then I would say the thing that gives us most confidence about our readout in the first half of next year is that we have compelling phase two data in atopic dermatitis that has guided our development strategy. And we feel like we've designed the trial to maximize the opportunity there. And in terms of the opportunity, look, we think it's really, really big. We think we have an opportunity for a blockbuster program in both indications or in each indication. And we're hopeful that our data next year is going to support it. So, you know, on betoclumab in MG, you know, we've talked a bit about this before, and I think the Immunovant team will continue to talk about it as well. We view that market as large and interesting. We view the evidence for FCRN modulation being effective is obviously robust at this point across multiple programs. And we think that the specific trial design that Immunovant is employing there with induction and maintenance and rescue therapy and with all the flexibility that comes from the subcutaneous administration, from the trial design allowing docs to move patients between doses at various times and randomizing across different doses is going to give us a really differentiated profile relative to any of the other FCRNs in development. And obviously the details of those programs, including the label on VivGuard, is well known and frankly doesn't have the same level of flexibility. So I think we feel a big opportunity in MG for a differentiated program. And we think we've got a development strategy. And frankly, maybe this is another important point, we have the ability to suppress IgG. We think deeper than roughly we believe any of the other anti-F-serum antibodies in development will do. That's a combination of the actual molecule and the way we're developing it. And look, we think that has the potential to drive maximum overall efficacy in addition to the flexibility of the treatment paradigm. So we think we have a chance to win competitively on multiple axes there. And we think the F-serum class is going to matter a ton for those patients. And then finally on cash runways, You know, I'll reiterate, we have over two years of runway. We try and generally run our business to be confident in over two years of runway visibility. It's easy for us to do that because we have a very broad portfolio with lots of push and pulls. And we have over two years of runway, assuming everything succeeds, we move a whole bunch of discovery programs forward. So there's a lot of flexibility as things evolve to modulate that. We just feel really lucky to be in the capital position that we're in. You know, we think... You know, in terms of polls, sort of the obvious things, the VTAML launch, late-stage clinical development programs, those are all expensive. But in terms of pushes, and I mentioned this at the beginning of the call, and I think it's a really important point, we have a lot of flexibility for sources of capital that go beyond the capital markets. Obviously, we're watching the capital markets closely, but we have a number of other opportunities, partnership, obviously, Genovant, monetization of stakes, just a number of tools to allow us to modulate our cash balance. even outside of the capital market. So we feel, as I said, very privileged both about our business model and about our cash balance capability there. So, yeah, I appreciate the question. It's a good question in the current market for sure.

Thank you. Thank you. Our next question comes from Nina Beatrizogar with Spiti. Your line is open. Thank you.

Hey guys, thanks for taking the question. So for the private partnership with Pfizer, I believe there were actually two assets as part of that deal. Could you maybe talk a little bit about the second asset and kind of thoughts on that? And then on the updates on the LMP patent litigation, I guess any update that you can give in terms of timing for when we could hear the court's decision on the motion to dismiss would be great. Thanks.

Sure. So, you know, the other asset in the Pfizer partnership was a selective TIK2 with its own unique signature. We wanted to use this call to focus on Repo, given the fact it's a lead molecule and it's already in registrational studies. We don't have plans to share right now for Ropsacitinib, which is that selective TIK2. We're most focused on the combination. I'm sorry. And then on the IP question that you asked, I don't think we have a specific comment on the court's timeline for response there. I think it's ultimately up to the court. I don't think there's a prescribed timeline for it. So they have discretion to decide when they want to. So, you know, we're watching for it in the coming months is what I would say.

Awesome. Thank you.

Thank you. Our next question comes from David Reisinger with SVB Securities. Your line is open.

Yes, thanks very much. And I wanted to add my congrats on the submarine Pfizer transaction. So my questions are as follows. First, could you talk about the expected payer access ramp or to pin her off? And then how... we as investors should think about net sales in coming quarters since it's going to take a while for payer access to actually take hold. Then second, with respect to court action on the LNP litigation ahead, could you just talk about potential timing and how we should think about developments to watch? And third, I don't know if Richard's on the call, but it would be helpful to understand how we should be thinking about cash flow in the upcoming fiscal year, specifically operating cash flow or operating cash burn, I mean. Thank you.

Thanks, Dave. Those are all great questions. I appreciate it. You know, to pin her off to pay her ramp, you know, I think we've commented a little bit in response to some of the other questions here. You know, we've said our main focus is on high-quality coverage. What that means is we're prepared to do the work to get the covered claims through to get payers to pay attention to the program, and that's what we're doing now. So we are most focused on, as I think we've said a few times, script volume during this period of initial launch and, you know, expect that to last for a little while here. And then what we've said is that we expect to have that coverage online kind of in the 12 to 18-month timeline, and that's when we would expect gross to net to to ramp up and normalize and I would say we'll be prepared to provide better specific guidance on what we think normal gross net will look like for us once we have a little more visibility into those contracts and so on. So I think stay tuned on that topic. Then on the LMP litigation, I think a similar answer to the prior question here. I think the district court has discretion on when they respond. The next major action there is the district court's response to Moderna's motion to dismiss. The district court has some discretion there, but in general they tend to respond within months, so that's something to specifically watch out for. We think the Acuitas situation is of less direct interest, but that's obviously also ongoing, and we'll get some feedback from the court there. And then beyond that, I don't have a lot to comment on right now or on any other, you know, possible movement there, but those are the things we're watching most closely. And then, you know, Richard is on, so I can hand it over to him for any additional comments on operating cash flow. But I think, you know, while we haven't given specific sort of cash flow statement metric guidance, you know, I think you can look at where things have been and you can look at the sort of runway guidance that we're giving overall and back in a little bit to kind of what we think what we think things are going to look like from an operating cash flow perspective. Richard, I don't know if there's anything you would add to that.

Thanks for the question. Look, we haven't provided guidance for the year specifically, but I'm very pleased with a lot of the we've done, you know, this quarter. And as we think about the portfolio, I think we have a really high bar here as we move things forward. We'll have data emerging from us from competitors. and we'll put the same laser-focused lens on taking additional programs forward as data emerges from our programs and externally. And, you know, certainly as we ramp up the VTAMA launch, you know, and the AD data comes through, you can think about some of the additional spend for launch down the line. And then, as we said, for Medivant, we have the additional Phase III trials that will be coming through that you'll see kind of by the end of the year. And some of the other savings that we've talked about should confidently land us at the two-plus-year runway. But, you know, we're not providing one-year guidance.

Thank you very much. Thanks, Dave.

Our next question comes from H.C. Wainwright. Your line is open.

Hi, good morning. Thanks for taking the questions. Matt, maybe to start, I know you highlighted that you've gotten some positive feedback on VITAMA in the early days. I'm just curious, when we think about the sort of selling points that you've had to pin her off for VITAMA, is there anything in particular that is resonating with physicians or sort of really standing out to them in the early conversations?

Yes, so in the last couple weeks, we've actually done speaker trainings. We've been out to sort of top thought leaders on psoriasis. I think in general, you know, what are we getting? People were excited about the remittive data. Obviously, that's something we expected. I'd say, you know, the cosmetic elegance of the cream itself, that's the kind of thing that people can tell immediately on use. I'd say we've gotten good feedback on that and on tolerability right out of the gate. It mostly confirms the survey data that we previously shared. And, you know, we're excited to see the patients want to use it again. And then the other thing I'd say, early indications from the field, onset of action, it's benefit, efforts to benefit. I think these are the kinds of things that you would expect to hear in an early launch, but we're pretty encouraged by it.

Okay, great. And then just as a follow-up, and I might have missed it, Can you just maybe talk a little bit about the origins of the Beppo transaction with Pfizer? Was this an asset that you had identified and reached out to them, or did they reach out to you to discuss it?

I will hand over the origin story to Mayuk.

Sure. Yeah, I mean, I think that you should assume that, look, I think we – We have a great working relationship with Pfizer. We have, you know, great working relationships with other pharma companies as well. And it's almost more of an ongoing dialogue than a, you know, an outreach or a specific outreach in either direction. But this is obviously, you know, a striking, I think, really unique drug that I think we had seen their data evolve and emerge, you know, for a period of time. And, you and we're excited that we're able to kind of have a win-win collaboration, and we're just getting started.

And I guess just maybe, Matt, final question on that, but when you think about sort of prioritization, obviously you're starting in dermatitis and lupus. I'm just curious, how are you thinking about some of the bigger indications that we already have some proof-of-concept data on or sort of some early clinical data? You know, are those worth pursuing or something that you think about down the road?

Yeah, thanks. It's a good question. And obviously, the data that we have are highly compelling across a range of indications. I think they highlight just how strong a molecule it is. You know, I think right now we're focused on the development strategy that we've laid out here, not just in these indications, but frankly, in other indications that rhyme with these. I think there are many. And so, you know, I say that's our our initial focus, and I think you can expect us to continue to pursue that line. That said, we're watching the field closely and looking forward to continuing to provide updates as we get going. You know, we think we can generate, yeah, go ahead. That's perfect, yeah.

And I guess it matters, Paul, I mean, should we think about this as sort of an asset similar to what we've seen with the Taplumab in terms of just a rollout of new indications and or do you think that these two are going to be the ones that we should focus on for some amount of time?

I think you should focus on these two first, but you should expect us to continue to announce some further opportunities as they crystallize. Obviously, it's a competitive area, so like the documab, we're focused on making our decisions, executing on them, and talking about them in the right order. But I think you should expect us to continue to pay attention. Look, we think that this should work in indications of high morbidity and mortality with few approved therapies, and we're looking at areas where there's highly inflammatory pathobiologies where specifically dual inhibition of TIK2 and JAK1 would be expected to provide greater efficacy than either alone, and we think there's multiple to choose from in addition to the two that we've mentioned today.

Thank you.

Thank you. Our next question comes from Ren Jenkins with Goldman Sachs. Your line is open.

Good morning. You highlighted at the end there that you have this increasingly broad immunology portfolio, and, of course, these are across different bands. So I'm curious, could you talk about any potential synergies across the set of bands, whether that's an area we should expect you to continue to focus on as you expand the portfolio?

Thanks, Corinne. It's a good question. I appreciate your listening. I would say a couple things. First of all, you know, we continue to – to not want to pigeonhole ourselves through specific therapeutic areas. So I think you'll continue to see us taking opportunities more broadly than just immunology. There are obvious benefits to having a concentration or some elevated expertise in an area. I think we see it in our diligence. We see it in our track record and people's understanding of our ability to execute these kinds of deals and these kinds of programs. Ultimately, If there are overlaps in commercial footprint, we have the ability to do interesting things through the Vant family and working with Vant management teams to maximize synergistic value. But we also have the flexibility to treat the programs as separate. So I would say we get benefit from talent mobility. We get benefit from leadership. We get benefit from sharing ideas across the family. And I think down the line as we get closer to commercial in some of these programs, we have the ability to think creatively about collaborations and the flexibility to do what makes sense across the family. And I'll highlight one of the things in particular, which is talent mobility. You know, we talked about deprioritizing some programs today. I think one of the great things about the VAMP model is that we have the ability to take, to offer top talent from VAMPs, from programs that we deprioritize opportunities in other places around the organization. And that's something that's always been core to our model. And it's something that a concentration in a given therapeutic area makes even easier. And so I think it's something we're excited to have. Thank you.

Thank you. And I'm currently showing other questions at this time. I would like to turn the call back to Matthew Glein for closing remarks.

Great. Well, thank you, operator, and thank you to all who were listening today. Appreciate all the really good questions. Obviously an exciting combination of announcements for us. So, yeah, looking forward to continuing to provide updates over time. Thank you for listening, and have a good summer. We'll be back out on a call like this in a couple months.

This concludes today's conference call. Thank you for participating.