Roivant Sciences Ltd.

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Good day and thank you for standing by. Welcome to the Roybent 2Q 2022 Earnings Conference. conference call. At this time all participants are in a listen only 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 1 1 on your telephone and you will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeffrey Comis, Head of Strategic Finance. Please go ahead.

Good morning, and thank you for joining today's call to discuss Roybin's financial results for the quarter ended September 30, 2022. Presenting today, we have Matt Line, our Chief Executive Officer. For those dialing in via 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.roymans.com. We'll also be providing the current 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 and Form 10-Q filed this morning, for more information regarding these forward-looking statements and related risks to Pound 13. We will begin with Matt Klein, who will review key business updates across Worthington and the Van and provide a financial update. We will end the call with Q&A questions. And with that, I'll turn it over to Matt.

Thank you, Jeff, and thank you, everybody, for joining this morning. It's been a really impactful quarter for us, and I'm excited to share some updates both from the quarter and more recent. Some of these updates we already shared last week as a consequence of the financing that we did, and some of them are new. And as I said, I look forward to sharing everything. So we're going to cover a few topics. Notably, I'm going to start with a discussion on the launch of VTAMA. And then we'll go through some clinical updates and some other updates from around the business, as well as a financial update at the end. So I'm going to start on slide six with just an update on the Vitamil launch and really a reminder that we are really, really pleased with how this launch is going. So you can see the script data here, including for the quarter itself, as well as for the more recent periods. And we continue to see great growth in scripts and We're very pleased with it. We'll talk a little bit more about the revenue, but also excited to announce that we did $5 million in net product revenue for the quarter ending September 30th, which is a 12% net yield, which given that all occurred prior to the signing of our PBM contract, again, a testament to the quality of our scripts and to the number of docs who are willing to go through the prior authorization process. So on slide seven, one of the most important updates here are is we have our first major PBM payer contract signed. We indicated that would be coming before the end of the year, and we're very pleased that it was effective as of October 1st. We haven't said which payer it's with, but most importantly, it gives us exactly the kind of coverage and access that we wanted, requiring only an automatic look back for steroid on the patient's chart, or if the physician prefers an e-attestation of prior steroid use, which is a really easy bar to clear. So this is better than what we had initially hoped for in terms of the quality of coverage, and it ensures because close to 90% of psoriasis patients use atopic steroid as first-line therapy. This gives us really access to all of the patients that we are focused on, and notably, as we said, we're so focused on becoming the mainstay of therapy and ultimately supplanting steroids, which means, of course, the simplicity of access here is straightforward. And as a reminder, as a consequence of this contract and our sort of copay card, any covered claim at the pharmacy should have a $0 copay for the patients. And so this should create a really positive experience for the patients covered here as well. So on slide eight, I'll also just remind everybody, we're obviously pleased with how the launch is going in absolute terms. We also, you know, we're pleased with how this looks relative to other psoriasis launches that we've observed. You know, we became the number one most branded topical eight weeks into our launch, and we've comfortably stayed there since. And we continue to keep pace with the launch of Opsalura, which is notable because Opsalura is an atopic dermatitis and has about four times as many scripts to draw from. We're now meaningfully over 50,000 prescriptions written, and we're over 6,000, about 6,400 unique prescribers since launch. So broad prescriber base and volumes that we're really happy with at this stage. I want to talk a little bit on slide nine about the P&L. So we're still not giving explicit long-term growth to net guidance, but we've said since our investor day that we are confident we're going to get to a commercially attractive P&L. And I think you can see in some of the metrics on slide nine, sort of why we had that confidence even before we knew what the sort of PBM contract looked like. You know, we had $5 million in net product revenue, which for this stage in the launch, we feel really good about and a 12% net yield. Again, this is a, a clear demonstration of prescriber enthusiasm for the drug, given the sort of work required before that PBM contract to get medical exceptions during formulary review. So we're very pleased with these metrics. And, again, we expect to give steady-state gross-to-net guidance after we've signed some additional PBM and payer contracts, but we expect to see this GTN yield improving from here as we execute on more of these contracts. We'll provide those updates as they come. On slide 10, I think it's just an important point to hit. We're really pleased with how the launch has gone and certainly the sort of weekly script numbers. But I want to point out we are really just getting started here. There are over 90,000 topical prescriptions in psoriasis alone, the vast majority of which are topical steroids. And there are over 320,000 topical prescriptions in atopic dermatitis, which will be a market accessible to us. after we get our data and approval there. And our data is coming in the first half of next year. And so no matter how well things are going at this stage, there's just a huge market to draw from as we work to replace steroids, top of steroids as the mainstay of care for these diseases. And notably, to get to a Blockbuster product, we need like 5% to 10% share here. So really modest relative to the quality of the product. So we've talked a little bit about sort of how the launch goes from here. And the one thing I'll say is We have a lot of useful tools and levers to continue to drive adoption, and we're excited now that payer coverage is coming online to continue to build the script volume and to grow into what we believe should be an important multi-blockbuster product opportunity. So excited to continue to share updates as we progress. You know, as important at this stage as the quantitative metrics, if you look on slide 11, you know, we've gotten just tremendous, tremendous high-quality feedback from early prescribers. We held on our Investor Day in September a panel of KOLs, which I recommend listening to if you haven't. And we got, I think, great representative indications from prescribers on that panel, including, you know, great feedback on onset of action. We're seeing, you know, docs saying that their patients are telling them they're clearing as early as a couple of weeks into therapy. You know, docs understanding that this is really potentially a first-line monotherapy topical treatment that cleans up the sort of use of steroids and use of multiple steroids. It's a real significant paradigm shift in how psoriasis patients can be managed. We've had great feedback on the feel of the cream itself and certainly have not heard any meaningful reports of tolerability issues that affect prescriber behavior. And yet, just a huge amount of tremendous support for V-TAMA from prescribers, a really fantastic base to build from. I want to highlight on slide 12 an update that is relevant for our upcoming atopic dermatitis data, as well as just a good reminder on sort of the quality of the safety profile for VTAMA. We reported earlier last week the results of our pediatric maximal use study in atopic dermatitis. And notably, this included subjects, pediatric patients with a body surface area of atopic dermatitis of up to 90%, with a mean body surface area of 43%. So here's a picture of what that literally means on a person. That's a remarkable body surface area to be treated with Vitama. So we were using quite a lot of Vitama on these patients, and we saw a really favorable safety profile with a very low incidence of adverse events, no SAEs, a PK profile consistent with what we saw in the adult psoriasis population, and really minimal to no systemic exposure, even under these sort of maximal use conditions. So, you know, we feel really good about the quality of this data and what it's going to mean for safety and tolerability. And I'll note that it has a real commercial benefit as well, because it gives us something that is differentiated, which is a single dose form. So in PEDS, in adult patients, in psoriasis, in atopic dermatitis, there's only one script for anyone to remember. It's a single dose of the product, a single sort of 1% spinner off the cream, Vitamix. where some of our competitor products have multiple doses depending on whether you're in psoriasis, whether you're in AD, whether you have a pediatric patient or not. And so really pleased with that simplicity and it is a direct function of the safety profile of the compounds. So very pleased with that data and think it'll be a useful fact as we get towards the AD data. And then as a final reminder on VCAMMA on slide 13, that AD data is coming, our phase three program enrollment is on track. We expect data in the first half of next year. There's a ton of patient and investigator enthusiasm for the study, and that's built, obviously, including on the safety data that I just described, but also on the very strong Phase IIb data that we've already sort of made public, as well as the positive outcome from our Japanese partners' atopic dermatitis study, which they reported over the summer. So overall, again, incredibly pleased with the quality of the launch in Furby Tama. Looking forward to continuing to provide those updates and looking forward to the improvement in GTN and other things that will come from the PBM contract as well as from other contracts that we'll be looking to do here. So enough said on VTAM, although I'm sure we'll come back to it in the Q&A. So I want to turn now and talk about a couple of other clinical updates in the rest of our pipeline. So slide 15, again, you can see a review of our late-stage pipeline with a number of really important therapies, many of them in inflammation and immunology, but also in some other areas as well. A truly broad late-stage pipeline with with some opportunities that we won't talk about as much today, like prepacitinib, where we've talked a fair amount in the past about that upcoming data set in SLE and in dermatomyositis, as well as botoclumab and others. So as of right now on slide 16, we have seven ongoing major studies, including at least four of them pivotal, and we expect three more to initiate in the near future as well. So we'll be up to sort of 10 pivotal or pivotal enabling studies which is a great breadth of R&D from our perspective across the portfolio. I want to spend a few minutes, and this was an update during the September 30th quarter, reminding everybody about an important development at Immunovans in our anti-FCRN franchise, starting on slide 17. What we announced is that we've got a new next-generation anti-FCRN antibody to complement Botoclumab there, IMBT-1402, which was developed in-house and which we've shown in animal studies delivers what we think should be, you know, deep, potentially best-in-class IgG lowering, similar to what we get from our first antibody, Botoclonab. Notably, however, also, and we'll talk more about this in the data, minimal impact in albumin and LDL. So, we think this could be the only anti-SCRN antibody to have both minimal or no impact in albumin and LDL, as well as that deep, potentially best-in-class IgG, and all of that in a simple sub-Q administration that is also differentiated versus our competitors. And one of the great things, and we'll hit this again at the end of this section about anti-FCR and antibodies, is that IgG lowering has been a really great biomarker across a range of indications. And so we feel like we have a real potential for accelerated development here, where we can use proprietary data from our own studies and well-known biology, as well as data from industry-wide trials in anti-FCR and antibodies to design our own pivotal programs. And so we think that immediately after getting our first in human data from IMVT 1402, which will come in the middle of next year, we'll be able to go through an accelerated path straight into Pivotal Studies thereafter, which is something that's unique to the class and sets us up to be really right in the pack with all of our competitors with a best in class run. So you can see the data as a reminder on slide 18, and I love this data because it shows so clearly, you know, we get the same IDG suppression As Botoclumab, we've got here this sort of supersaturated 50 mg dose, and you can see right on top of each other in terms of the level of IgG suppression, which is important because we think it's necessary to be able to get to that. In humans, as a reminder, Botoclumab gets to 80 plus percent suppression of IgG, which is more than some of our competitors are able to achieve and which we think will be relevant across disease populations and across patient populations within a disease. And then you can see on slide 19, as a reminder again, that were sort of right on top of placebo at therapeutic doses as far as albumin and LDL impact are concerned. And so we get kind of everything we need here in terms of in these monkey studies, minimal impact or no impact on albumin and LDL and the level of IgG suppression that we think will continue to keep us differentiated as best in class. So again, as a reminder, data coming in humans in the middle of next year. I get fairly often the question of sort of how did we achieve this? And so on slide 20, just as a reminder, we put the slide up before, you can see the crystal structures. You know, botoclumab, as with many of the full-length antibodies to FCRN, binds to FCRN in a configuration that's very good for suppressing IgG, but also you can see sort of interferes with hysteric hindrance of albumin binding on the FCRN as well. And so, you know, that sort of causes the impact on albumin. IMVT-1402 on the right-hand side similarly high quality binding from an IgG suppression perspective, but does not sort of interfere with albumin binding and so doesn't affect the albumin levels in there for LDL. As a reminder, and this is another question that we've got a little bit on slide 21, we wanted to summarize all of this in one place. Across all of the known anti-FCRN programs generally, including betoclonab, our own program, as well as many of the other antibodies that have published data. The translation from monkey data to clinical data has been very strong on albumins. So the impact on albumin observed in NHPs has generally been translatable to humans. And so I wanted just to summarize this data in one place so that people had a good reference for it. And we've got all the publications at the bottom there that demonstrate over and over again that monkeys are a good predictor of human data. for impact on albumin, and therefore we think impact on LDL. And again, we'll get the data from INVT1402 on this in mid-2023. So last thing I'll say on our NTSCR enfranchised before moving on to other updates. On slide 22, just as a reminder, this is very broad disease biology. There are many different diseases ranging from sort of ultra rare diseases to more common diseases. And we have a pretty unique ability, because we have both betoclumab and INPT-1402 in our pipeline, to tailor the development strategy for each drug to different disease populations and to be able to sort of compete in ways that I think our individual competitors will struggle, sort of differentially in, let's say, rare disease settings versus in more common settings, where we can take the profile of our drug and we can take the commercial strategy around each of these different compounds and optimize the choice of compound and the development strategy and the commercial strategy to the selection of indication. So looking forward to providing more updates on our development strategy for both INVICI 1402 and the Toconab in the quarters to come. You should expect continuous updates on those as we get programs up and running and as we sort of learn from our own data and from industry-wide data and think it's going to be an incredibly exciting opportunity. We are truly, in my view, the best-in-class NTF sharing franchise at this moment with sort of 1402 being a sort of clear best-in-class potential antibody. And we're all 1402 and betoclomab in our portfolio, allowing us to do some really interesting and differentiated things. Good. So I'm not going to cover many of the other sort of clinical updates at this point. We continue to make progress in a number of other programs, including grepacitinib, which is marching toward its SLE data, as well as namilumab and sarcoidosis and so on. But, you know, I wanted to stay focused today on some of the key new things. So I'm going to give just a couple of additional updates on other parts of the business now. including on slide 24 some data that we have not presented before. So we've not spent a lot of time talking about our discovery organization or our degrader discovery efforts. You know, those continue to chug along, and we're doing some interesting things there. It remains a small fraction of our overall burn and obviously a lesser focus. But given some of the high-quality data that we've seen recently in ER degraders, I just wanted to highlight that we have an ER degrader program, and this is some new data about that program. demonstrating either equal or better tumor volume reduction compared to the most advanced to greater known in ER. And you can see on the left-hand side, you can see the in vitro data on degradation. And on the right-hand side, you can see that our compound has either equal or better tumor reduction in tumor reduction mouse models. So exciting opportunity. It's early days there. We'll provide more updates on that program when we have them, but just wanted to highlight that we continue to believe we're going to be able, using our unique combination of platforms, to develop some interesting best-in-class degraders. And this is not a bet on the next couple of years. This is a bet on the future beyond, but excited for what we're going to be able to do with our pipeline as these programs mature. The other update I'll give briefly, because we get questions about it often on slide 25, is an update on GenEvans IP litigation. This is a relatively recent development that some of you may have seen, which is that on November 2nd, the federal district court in Delaware denied Moderna's partial motion to dismiss, which, as we've talked about before, they had filed on the basis of this U.S. contract in Defense 1498, which was an attempt by Moderna to shift liability for its alleged infringement, or at least a portion of it, to U.S. government taxpayers. And we were pleased to see that the court denied that motion And most importantly for the case, that means that we'll now move to this pre-trial discovery phase where we'll be able to learn more about the state of play and that we should be able to provide more updates on that as that phase progresses. So look, to round out the overall discussion on the sort of heart of the business here on slide 26, I'll just say I could not be more excited for 2023. It's an incredibly impactful year for us. First of all, It'll be our first full year of V-CAM on the market, and we look forward to continued prescription and meaningful revenue growth, as well as sort of watching early PBM impaired wins really translate into sort of approaching a steady-state GPN and the commercially attractive P&L that we've signaled over and over again at this point. We are confident we're going to obtain, so looking forward to be able to provide more guidance there, looking forward to watching that mature, and really think we're going to do some impressive things there. You know, on top of that, we'll continue to build on the VTAMA sort of franchise, if you will, with phase three data in AD coming in the first half, which opens up an even larger market for VTAMA that we're excited to get into. And we think the high quality of our safety data, the simplicity of our dosing, all going to be important in continuing to sort of grow into that market. Then, as I mentioned just a moment ago, we're going to get human data in IMV1402, which is expected to be in the clinic starting in the first quarter with the initial phase one data expected mid-year. That'll come together with, in the second half of next year, initial phase two data in Graves' disease with the ability to take 1402 straight to Pivotal's thereafter. And that Graves' data is in Tokamab, but will inform development strategy for 1402, which is a great example of sort of how we think we can move fast with 1402. And then finally, not a focus for today's call, but as a reminder, the sort of pivotal readout from our global phase 2b study now fully enrolled in SLE to be one of our two registrational studies if that data is successful in the second half of next year and reasons that we believe we have a possibility of being some of the best SLE data the world has ever seen. So really looking forward to that data as well. I'm going to round out today's call with a financial update. I'll use slide 28 as a partial guidance here. Some of these updates, including some of the updates I've already given on this call, we gave beginning of last week, because as I'm sure many of you saw, we did a $150 million follow-on offering with some great institutional investors that we're really excited about. It was catalyzed by a reverse inquiry that we were excited to take advantage of, especially in this market. Even before that offering, we had taken some important steps in our business to make sure that we could give, that we'd extended our runway, that we could give extended runway guidance. So our runway is now comfortably extended into the second half of calendar year 2025. And I will talk in a moment about what we've sort of achieved there, what that extended runway buys us in terms of additional catalysts. There are many, including some really important data sets. We achieved that in a variety of ways. We achieved it with some cost reduction and efficiencies. You may have seen an article over the weekend about an impactful, relatively modest round of layoffs that we've done that we don't think are going to have any meaningful business impact in terms of slowing us down or changing catalysts, but together with other changes we made in the business will give us the ability to really sort of drive length of runway, which we think is important given where the market is and given how choppy things have continued to be. Overall for the quarter, adjusted R&D expense of $123 million, adjusted G&A of $102 million, and notably the majority of that G&A expense relates to Dermavans and the commercial launch of Vitam at this point. So we think that's sort of an important position to be in. And then, you know, ended the quarter with $1.6 billion of cash or $1.9 billion in effect after our follow-on offering, Immunovans' follow-on offering and anticipated proceeds from the sale of the minority to Sumitomo Pharma. So a really strong financial position. continue to be pleased with our ability to generate cash from a variety of sources to fund the business, many of which are non-dilutive, and looking forward to taking advantage of this position in a number of ways, including, frankly, with some attractive in-licensing opportunities that we see that could bring new programs into our portfolio. So stay tuned for updates on that as well. So I'll finish my prepared remarks on slide 29 with just a reminder. You know, I said 2024, 2023 was a really impactful year from a catalyst perspective. As we sort of thought about extending runway and making sure that we sort of catalyze well into 2025, there's really a tremendous amount now within that window. Not only the data from next year, the hyperdermatitis data, the brepacitinib data, and so on, but, you know, additional important data from the TOCLNAB and multiple indications, including, you know, CIDP, including MG, including thyroid eye disease, the prepositive data in dermatomyositis, in addition to the prepositive data in SLE is coming next year, as well as continued data from RVT 2001, our program in low-risk, in transfusion-dependent anemia and low-risk myelodysplastic syndrome, and a number of other important catalysts, as well as what will then be multiple years of sales in Vitam and sort of a clear demonstration of what we think we'll be doing at that point, which is heading towards blockbuster territory on that product. Really, really excited for next year. Really, really excited for what our current capital runway allows us to achieve in a choppy market. And looking forward to continue to provide updates at each quarter and more frequently as they present. So I'm going to wrap up my comments there. And I want to thank everyone again for joining. And I'm going to hand it back over to the operator to open lines in Q&A. So thank you, everybody.

As a reminder, to ask a question, press star 1-1 on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from David Risinger with SVB Securities. Your line is now open.

Thanks very much, and congrats, Matt, to you and your team on all the progress. So I wanted to focus on... the good news on the Tama and just better understand the contracting. So could you provide more color on what percentage of lives are actually covered immediately with your PBM contract and what percentage required downstream contracting with employers to achieve paid for drug and to follow on what would the timing be for that secondary contracting and then, Separately, could you also discuss your pursuit of health plan coverage in addition to PBM coverage and how you're thinking about opportunities there? Thanks very much.

Yeah, thanks, Dave. Appreciate the question and appreciate your listening. And obviously, look, this is top of mind for us in terms of our overall strategy at this point on the VTAML launch. First of all, I think what most companies would say about this PBM contract is that the PBM covers about 30% of commercial lives. David, you and I have talked a fair amount about this. We've been a little bit more nuanced in how we describe this process. The PBMs have national formularies, and many lives are covered by that national formulary, and so we'll get access to a decent number. We haven't said exactly which because it would reveal a little bit more about which PBM we signed the contract with, but a decent number of lives immediately on the back of this contract. But also this now gives us a template for all of the downstream customers of that PBM that even for the ones that have their own custom formularies, they now have sort of a template. They understand the commercial picture. They understand the value judgment that this PBM placed on the product. And we're sort of confident and looking forward to continuing to sort of build into that. You know, this is true for all launches. Once you get the PBM contract, you then kind of work your way through the customers of the PBM. We've said probably three to six months to hit the tail of of what that looks like, but I think you can expect lives sort of covered under this PBM sort of turning on for coverage over that period as we continue to work our way through those customers. Notably, I'd say you mentioned employers specifically, and I'd say employers are probably less likely than some other payers to have custom formularies of their own, and so it's just going to vary by sort of which specific type of plan it is. And, you know, we're sort of every bit as focused on every covered live that we can get our hands on. So in terms of, you know, PBMs, which are obviously the overall keys to the process, and then the health plans and the employers, you know, I think we're sort of equally focused on all of these things. We probably will not provide specific updates as we get contracts with downstream customers of the PBM. We may comment on it a little bit, but it's just sort of at this point to us kind of routine from here as far as a as far as sort of continuing to build into these downstream plans. Great. Thanks very much. Thanks, Dave.

Please stand by for our next question. Our next question comes from Brian Chang with JP Morgan. Your line is now open.

Hey, Matt and team. Thanks for taking my question and congrats on the progress. My first question is on VITAMA. With your first PBM contract in place, can you walk us through the process, perhaps, from getting the script at the doctor's office to getting the VITAMA in hand? And how much read-through is there from the PA step that we see here for only prior steroid use from the first major PBM contract to other PBM discussions that are ongoing? And then I have a follow-up. Thank you.

Yeah, thanks, Brian. Thank you for listening. Thank you for joining and excited to have you on the call. So welcome to the group here. You know, I think it's a great question. So first of all, I think it's an important point. The patient experience from having a PBM contract in terms of like timeline and process actually isn't that different thanks to the copay card program that we had in place originally. So, you know, patient gets a prescription from the doctor. Many of these docs work with independent retail pharmacies. And so the sort of Doc gets the drug over to the pharmacy. The pharmacy works with the patient to get the hurt fulfilled. Prior to the contract, patients who weren't covered would then pay a $75 copay because of the VTAMA card. The rest would be covered by the copay card. And now those same patients, if they're covered by this PBM contract or by any other coverage that we obtain, would pay a $0 copay because that's sort of the design of our copay card. But again, we would then get coverage from the payer or the insurance company. So that's kind of the sort of process for a patient to get a script filled, and we think it's a good, straightforward process. I think in terms of the template here, I think this was a perfect outcome from a coverage perspective, from my perspective. It gives us everything we need. It gives us access to the patients we're really seeking, which are the patients who are on steroids now. It's what we said from the beginning. That's 90% of psoriasis patients. So it's over. We feel really good about the template there. You know, I will say as far as health plans are concerned, as far as sort of duplicating this model across other PBMs and across health plans, given the script volume, as you can imagine, we have a ton of inbound interest from health plans and active discussion with all the major PBMs on getting the product covered. And that discussion is very constructive given where we are in a volume perspective. I think you said you had a follow-up question.

And then maybe just one on SLE, since we're going to get top line data from the phase two trial for SLE in the second half next year. Can you remind us, you know, what you want to see in terms of the primary endpoint, which is SLI4, that you need to see in phase two to be deemed as success in the trial? And maybe just if I can squeeze in one more, you know, we noticed that there was a workforce reduction that was announced over the weekend. Just curious if you can provide a little bit more color, you know, whether that has any impact on this program. Thank you. Yeah, thanks.

So on the SLE question, we haven't given the numerical bar. We'll continue to talk more about what we expect out of that study over the course of next year as the data becomes closer. I'll just say we have a high bar for what we want to achieve there. We think the agent is – is a powerful agent, and we think the biology of the dual inhibition should be relevant specifically to SLE disease biology. So we feel really good. We'd want to see excellent data on SRI-4. We want to see meaningful improvement on key secondaries. We'll sort of talk a little bit more about how we think about those scales as we get closer. You know, I think we have evidence from other JAK1s and evidence from other TIK2s on what they've done in SLE, and we think we have a possibility of being more more impactful than either of those agents on their own because of the biology here. So you're kind of looking out for that. You know, on the question of the RIF, look, these are always tough decisions and they impact people's lives. So I don't want to sort of, I want to be a little bit careful, but I think in general, the answer is we don't expect any meaningful impact on any of our sort of major programs or any of our key projects. Nothing that we've talked about on this call should be affected at all by this. You know, we focused on Matt Ramey, DNA efficiency, we focus on sort of taking the most benefit we could from the model we focus on making sure that our early stage programs were. Matt Ramey, Really focused on the most important impactful that work and so i'd say that's kind of where we went there, and as you saw in the endpoints articles about 12% of overall of overall staff so not not something that we expect to have a meaningful business impact.

Thank you matt Thank you.

Matt Ramey, Thanks man, please stand by for our next question. Our next question comes from Corinne Jenkins with Goldman Sachs. Your line is now open.

Yeah, good morning, guys. So I guess it looks like the effective date for this payer contract went into effect in early October, so I'm just curious what portion of scripts written today are being written for patients that are under that recently discussed coverage agreement, and can you just give us a little bit of color on what the process looks for that patient population?

Yeah, thanks, Corinne, and thanks for Thanks for joining the call, and obviously, thanks for all your coverage. So, you know, we haven't given a specific sort of guidance for what percentage of our scripts are covered by this specific contract. I referred to the answer to Dave's question earlier in terms of the way these generally work. This PBM covers about 30% of covered lives altogether, and we expect to kind of percolate through those covered lives, starting with the bulk of them, the big chunk of them that we have now. percolating down through, we'll call it a three to six month period. So I'd expect to see continued sort of development. And I think as we get more payer contracts, that'll accelerate, but I think you can expect to see kind of resulting improvement in GTN starting in the current quarter, starting in the quarter that we'll announce, the December 31st quarter, because the contract was effective October 31st. But it'll take some time for all of this to percolate through and and to really sort of reach steady state.

Great, thanks. And then you mentioned interest in additional in-licensing opportunities. How should we think about the appropriate cadence for in-licensing deals for you all? And then what do you think about as your priorities for the kind of assets you'd be excited to bring in-house?

Yeah, thanks. It's a great question. I think one of the reasons that we're focused on making sure our runway is long is because this is a great market to be in a strong capital position. There are some really amazing opportunities available to companies like us. You know, we're really focused on high quality programs that can be impactful in the near and medium term. You know, I think if we, you know, we've said before, kind of one to two of those a year, we asked Rep Sitnib earlier this year, you know, I wouldn't expect any sort of major change in cadence there other than that in the current capital environment, the bar is really high and we want to do things that we can be very capital efficient in executing. And in terms of what we're looking for, You know, we remain pretty open from a therapeutic area perspective, but we're looking for things where we think we're going to be able to do an important job developing the drug or a differentially good job developing the drug. And, you know, we're looking for things that are, at the moment, kind of mostly later stage things that can add to the sort of bulk of our late stage portfolio while sort of fitting within our financial goals.

Great. Thank you.

Please stand by for our next question. Our next question comes from Robin Karnascus with Truist. Your line is now open.

Hi, congrats on the quarter. This is Alex for Robin. We wanted to know, as you continue discussions with physicians and payers, there's a lot of positive feedback. It looks great. The launch looks very positive. Have you received any pushback or any details of the discussions that might change how you view or approach the launch strategy? And then also for 1402, it's a very sizable opportunity there. We're really excited. How do you think about prioritizing which indications to pursue initially and then the cadence and going to different indications thereafter?

Thanks. Yes. Thanks, Alex. Appreciate it. Appreciate the question. Appreciate your listening. You know, on the VTAMR question, look, obviously we are constantly taking feedback from docs and from our payer conversations and so on and making sure that we're tailoring all of our messaging and tailoring our launch plans to that feedback. You know, in terms of pushback, honestly, I think the answer is we have not gotten very much here. I think the drug has been extremely well received. You know, you heard it in our KOL panel. I think you hear it in your own doc calls. I think patients are just excited and doctors are just excited to have a new topical option that really candidly works and works without many of the liabilities that steroids are widely interested to have. So, you know, I'd say no meaningful pushback. But obviously, we're constantly adjusting and reacting. And even if you think about this PBM contract, obviously, we had a bar that we had set for what we hope the quality of coverage would look like. I think this PBM contract represents extremely high-quality coverage that's going to work for patients and docs. And I think we're learning every day as we sort of see the patient and doc experience and as we see the quality of what payers are willing to do given the meaningful impact of the project. So on 1402... I think, look, our plan for 1402, which we've said a few times, is to focus on indications where look like deep and sustained IgG suppression are helpful. So chronic administration and in diseases where we think the LDL or the albumin impact might be more material to patients. So think broader market diseases, think chronic diseases. So I think that's kind of the sort of general framework. We'll get more specific with it as we progress. And then, you know, we think 14.02 and Botoclumab fit really nicely together because both can achieve sort of deepest possible best-in-class suppressions of IgGs. And so we can kind of go after any indication with either and expect to be able to deliver comparable or better efficacy to any of our competitors. And so we can really sort of tailor dosing strategy and indication selection by program in a comfortable way. So feeling really good about that portfolio as well. Excellent.

Congrats on the quarter. Thank you.

Please stand by for our next question. Our next question comes from Yaron Werber with Cohen. Your line is now open.

Hi, guys. This is Brendan on for your own. Thanks very much for taking the questions. Congrats on all the updates. Just a couple quick ones from us. First on the TUM, obviously, more PVM-impaired discussions are the big focus here, as you guys have all kind of outlined. But maybe I also just wanted to ask, maybe from a broader commercial competitive dynamic standpoint, I mean, what are the next steps you're all focusing on for the launch, maybe beyond payer coverage, just in terms of getting it in patient-physician hands a little bit earlier, maybe relative to competitors? And then just a quick one for the FTRN franchise. Can you just remind us if you need to or plan to run kind of a more traditional big phase one study, phase two with 1402 before moving into pivotal studies, or would you be able to move more or less directly into some of these larger registrational studies? Thanks.

Yeah, thanks. I appreciate the question. Thanks for listening. You know, I'll take the second question first because it's an easy answer, which is we believe that our sort of our plan phase one is that we'll get initial data from the middle of next year, will be sufficient together with the data that we have on IgG suppression to go right into pivotal studies. So we think there's a clear path to go straight from sort of the planned phase one into pivotal studies. And I think what we said is there's sort of six months after that data, we should be able to be in a pivotal study, which is really, again, sort of unique and interesting about the FCRN class, given the quality of IgG as a clinical biomarker. So I like the first question a lot, because to be honest, To me, given the quality of the early payer contracts, we feel really, really good about where we are from a coverage perspective. And then if you just think about that slide that I had up earlier about the fact that we're just getting started and sort of the depth of these markets, I think the next question is 4,000 scripts a week is great and we feel really happy about it. How do we get to 40,000 scripts a week? And that obviously requires continuing to work on changing prescriber behavior, continuing to educate patients on what the camera has to offer that is completely different than what they've been able to get historically with topical steroids so with a lot of different plans for that obviously dgc is a component of that that we've started to we've started to deploy in a very targeted way um and we'll continue to ramp that up as sort of payer coverage sort of matches it but again sort of very targeted uh sort of precise focused on sort of that uh that process and then yeah look we have a a large and highly capable MSL force that is out there sort of doing physician education and scientific communication that we think is important here because, again, this really is a paradigm shift in the treatment of psoriasis. You know, obviously, we think our atopic dermatitis data is going to be impactful here, the simplicity of the product you prescribe in the AD setting, the fact that we have such a young cohort in the pediatric study with the same drug on the same dose, same product. You know, I think all of those things are going to individually matter. And we're focused on taking maximum advantage of each of those opportunities to get our messages out there and to help people understand what Vitama can do. And again, the nice thing is the product really does deliver on so much differentiation from topical corticosteroids in terms of ease of administration, no duration limits, no body surface area limits, none of the really severe tolerability issues. We have a particularly clean label in terms of safety and tolerability, even relative to other novel topicals, no concomitant med notices, nothing like that. So just a really straightforward setup, and we want docs and patients to think of that as they reach for the drug. So lots of strategies to deploy, and excited to keep working on that sort of bigger goal there, and I feel like we're really well set up for it.

All right, great. Thanks very much.

Please stand by for our next question. Our next question comes from Luis Chen with Cantor. Your line is now open.

Hi, congrats on all the progress this quarter and thanks for taking my questions. So I had a few for you. First one I wanted to ask you about was how do you think about pricing for your first and second generation anti-FCRN? Will this be a competitive advantage for you? And then secondly, the opportunity for Priobant and SLE and also DM and how the economics work with Pfizer. And then last question I have for you is, how are you thinking about or framing the AD data readout in 2023, especially in light of what we saw with Japan Tobacco and then say versus Eucrisa and prior phase two data you've shown? Thank you.

Yes. Thanks, Louie. Thank you for listening. And thanks for the great questions, all three of them. So starting at FCRN, You know, it's probably premature to comment on either the Oakland AdWords 1402 specifically, but I'll just say it sort of has to be a competitive advantage to have both drugs available in terms of being able to think about price points and being able to think about other commercial levers that sort of deploy a franchise strategy across the two programs. So I'd say, you know, premature to have a specific comment on price for one or the other. but definitely has to be an advantage to have the franchise for that and all the other reasons that I've shared. On DM and SLE for Brepo, we've given a little bit of guidance on the size of the DM population. I think we've given a little bit of information on the size of the SLE population, although I think that's obviously a very well understood population at this point. These are huge commercial markets where success in either of them on its own would be sort of a comfortable blockbuster product in our view. And obviously across the two of them, just a huge opportunity. And there's obviously room to go beyond those with Brexit and other indications as well. So yeah, a very large commercial opportunity. You know, from an economic perspective with Pfizer, you know, we, we have a, effectively U.S. and Japan as our focus. We pay Pfizer sort of relatively modest royalties. I think what we've said publicly is sort of high single-digit, low double-digit tiered royalties. And we pay them that on our territories. They pay us that on on their territories, and then Pfizer owns 25% of Pride Advanced as well. And then you asked about how we were thinking about the AD data and sort of positioning. First of all, as you mentioned, I think we have great comfort here in part because of the quality study run by Japan Tobacco that was successful in part because of the mass use PK study in young pediatric patients that we just announced last week. So we feel really good about kind of where that program is headed. We think it should be a major event for the drug to have that data. Obviously, AD is also a really important market. And, you know, you mentioned Eucrisa. I think it's a market that has had a little bit more in the way of novel topicals. There's obviously Eucrisa, there's Opsalora, but none of those drugs either from an efficacy perspective or from a tolerability perspective or from a label perspective, afford the kind of clean steroid replacement potential that Dekama affords, you know, given the safety and what we believe is the potential efficacy profile of the drug. So we think it should really fit in a similar place in AD that it fits in psoriasis as a potential mainstay of therapy. We like the facts. that some of the other topicals, and especially some of the more recently launched ones, the more recently launched one, has done such a good job of highlighting demand for a novel topical in atopic dermatitis. And it's clearly a popular drug, and it's clearly doing well, in spite of some pretty meaningful limitations on its label. And they've done a great job with commercial coverage now, and their gross net yields are progressing. So we feel really good about that. about what that means for our potential NADs where we think we'll have an importantly differentiated product.

Thank you.

Thank you.

Please stand by for our next question. Our next question comes from Nina Petritogard with Citi. Your line is now open.

Hey guys, thanks for taking my question. Just on the last question on atopic dermatitis, I'm just curious what you're hearing from dermatologists and physicians that are prescribing Cipiniraf currently about their desire to prescribe it for atopic dermatitis and whether or not they have actually tried that. And then also regarding the LNP patent update, just wondering if there's any potential next steps that Moderna could take to actually try and push the partial motion to dismiss again, or if you are confident that there really is no other recourse that they can take at this point.

Thanks. Yes, thanks, Nina. Thanks for the questions, and thanks for listening. On the AD study, in terms of position feedback, don't get specific evidence of off-label prescriptions and things like that, so we don't sort of have a specific view on how it's being used, but we get a ton of prescriber enthusiasm for the drug, and we hear a lot of enthusiasm for it, not just in psoriasis, but in AD and in other settings. For starters, we have a ton of enthusiasm from the investigators in our AD study who are using the drug actively as a part of the trial process and who are clearly sort of super enthusiastic for what comes next. So, you know, I think from that perspective, you know, enrollments on schedule, I feel like we have the sort of promise there. And as a reminder, you know, our Phase 2b data, we have 49% sort of IDA clear or almost clear and a two grade or grade improvement at week eight compared to 13% on vehicles. So a really meaningful opportunity there in our Phase 2b study. um and yeah great feedback from our from our face-to-face investigators uh on that study as well um so uh on the on the lmp question uh the judge uh ordered moderna to file an answer uh by november 16th the original complaint uh and uh we expect that they will file an answer uh they've asked for a modest extension which uh which gentleman granted so we feel uh pretty confident um that we'll hear back from them, and then we'll be able to move on, as I said, to the discovery phase in the process.

Got it.

Thank you.

Please stand by for our next question. Our next question comes from Douglas Al with HC Wainwright. Your line is now open.

Hi. Good morning. Thanks for taking the questions. Just, Matt, in terms of, and congrats on the progress, and in terms of the PBM contract, at what point do you think operationally we should see that reflected in terms of the script volume trend, presumably as it gets easier for patients, or for docs to write it, they'll be more inclined to do so, or do you think one contract isn't enough and that we need to wait a little bit before that becomes a real driver of volume? Thank you.

Yeah, thanks, Doug. Appreciate the question and I appreciate your listening. So, you know, I think there's a lot of different things sort of conspiring towards the quality of our script volume trajectory with the camera. I'd say ease of payer coverage is one of those things. I think that the copay card has helped in simplifying that process even before we had the contract in place. I think the contract will help, too. And I think as docs have confidence that their patients will have a good coverage experience, we'll continue to see Scripps build. To be honest, again, I think the high prescribing docs already have a lot of that conviction just because of the way we handled the early commercial launch. But I think coverage will certainly help continue to build that out. I think you will continue to see Scripps building over the coming months and quarters. And that's important. I'd say we expect to see some stair step of prescriptions over time for a variety of reasons. Coverage is one of them. The holidays obviously affect prescriber behavior. There's some seasonality to some of these populations. So I'd say it may not be kind of literally linear from a trip volume perspective, but I do think all of these things are going to add up to consistently growing demand once you take sort of one step back from the week-on-week numbers. And again, we feel really good about what the contract lets us do there. and what the market is sort of guiding us towards at this point from an enthusiasm perspective.

Okay, great. And then, Matt, as a follow-up, I'm just curious, have you given thought about how the IRA might affect your development of certain assets? Because that's certainly something that we've started to hear from companies and certainly sort of rationalizing some of the opportunities that they were planning to pursue just given the potential impact? Thank you.

Yeah, thanks. It's a great question. Sort of obviously, look, we, like the rest of the industry, are watching really closely as this evolves, and it's already factored into how we think about allocation of capital across the portfolio. So you can see, you know, we think differently about small oculus than we used to think. We sort of think differently in general about specific programs. You know, we are obviously compared to some of our bigger peers less impacted in the near term than some of them might be. And so we've got a little bit more time to kind of watch and learn. And it's just, it's a pretty rapidly evolving situation, but absolutely affects our capital decisions today.

Okay, great. Thank you. Thanks, Doug.

As a reminder to ask a question, press star one, one on your telephone, please stand by for our next question. Our next question comes from Dennis Ding with Jefferies. Your line is now open.

Hi, thanks. This is Ichian for Jefferies. Two questions on our end. The first on EU launch and efforts. Could you just tell us where you are and when you would expect any updates on the EU process and what commercial preparations you have made in advance of the approval? And on the second question on the MRNA patent litigation. It's nice to hear the judge deny Moderna on the motion to dismiss, but factually, what are the next steps here, and what specific dates do we need to know, and when do you expect us to move to discovery?

Thanks. Both good questions. On EU for VTAMA, we don't have a new update to provide right now. We continue to work towards that opportunity and to think about different approaches for commercializing in Europe. It's obviously a big commercial market, especially given the number of patients. We'll provide an update when we have one that's more specific, but I don't have a specific date or timeline to provide today. And just as a reminder, by the way, the Japanese program is now on a path to approval after the positive study there, and we'll get some commercial economics from the launch in Japan. As far as the Moderna question is concerned, I said in November we expect Moderna's overall response And again, we expect to move into discovery kind of just after. So I think, you know, you can expect there'll be a calendar set for discovery that'll be the subject of some discussion with the judge. And perhaps once that calendar set, we'll be able to provide a little bit more of an update, whether that's sort of end of this year or early next year or something like that on timing. But I'd expect, you know, the discovery process will take some time and, you know, perhaps more updates kind of over the course of next year as that progresses.

Okay, great. Thank you.

Thank you.

Please stand by for our next question. And our next question comes from Dennis Ding with Jefferies.

I think that was our prior question.

One moment, please. I am showing no further questions. I would now like to turn the conference back to Matthew Glein for closing remarks.

Thank you very much. Thank you to the operator. Thank you to everyone who worked to get us through a pretty impactful, important quarter. And thank you everyone for listening this morning. I look forward to continuing to provide updates at upcoming investor conferences and with our next quarter. And yeah, everyone have a great day. Thank you so much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

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