Roivant Sciences Ltd.

Good day and thank you for standing by. Welcome to the Roy Bent Third Quarter 2022 Earnings 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephanie Lee. Please go ahead.

Thank you. Good morning, and thank you for joining today's call to discuss Royvan's financial results for the quarter ended December 31, 2022. Presenting today, we have Matt Klein, 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 news results on our IR website at www.investor.rogan.com. We'll also be providing the current slide numbers as we present to help you follow along. I'd like to remind you that we'll 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 filed with SEC, including the earnings release and the Form 10Q file this month. For more information regarding these forward-looking statements and related risks and guarantees, we will begin with Matt Glines, who will review key business updates and provide a financial update. We will end the call with a Q&A session. And with that, I'll turn it over to Matt.

Thank you, Steph, and thank you, everybody, for joining this morning. I'm pleased to present our third fiscal quarter financial results for the quarter end of December 31st, 2022. Yeah, thank you. I'm excited to be able to get together. This will be a relatively shorter update because, frankly, we've had a very busy quarter, and so we've taken a few opportunities to get together. It's hard to believe, but actually it was after we last had a quarterly update call that we in-licensed and then published data for RBC 3101 as well. We pre-announced certain of our fiscal results last week when we did a financing update. or two weeks ago. So again, thank you, everybody, and looking forward to hearing some updates, and in particular, have some interesting updates to share around the commercial launch of the TAMO. So I'm going to start out just quickly on slide five, reminding everybody, because it's still early in 2023. We are very excited about this year. You know, the year started off strong for us with the announcement of our RBT30-101 data, the data for our NCPO1A antibody from the induction phase of our ongoing phase 2 study. We expect a number of really important updates from across the business, including we'll talk more literally today about continued reach and payer coverage of the CAMO, which we expect over time to translate over the course of this year into continuing to improve gross net yields and SRIPs. We can now say both the ADORING-1 and ADORING-2 atopic dermatitis studies are fully enrolled, and we expect to share top-line data from those studies from ADORING-2 in March of 2023 and ADORING-1 in May of 2023. important data from our AD program coming very soon, which is exciting because it opens up a market. We'll talk a little bit more about this, four times the size of the market where we're currently in psoriasis. We expect data in the first half, right closer to the middle of the year than the beginning, from RVG3101, our NGTO1A antibody, from the chronic dosing period of that trial, the 52-week data, which we think is important data. We think the first time anyone's reported meaningful 52-week data for an NGTO1A antibody. So we're looking forward to sharing that whole data set when it's available. In the middle of this year, as I know many are watching, we will have human data from our next generation anti-FCR and antibody IMGT-1402, which will, if successful, leave us with, we think, the best anti-FCR and franchise in the category, at least potentially the best with two drugs, both with maximal suppression of IgG, as well as with IMGT-1402, potentially no impact on albumin or LDL. And then finally, among the major announcements in the fourth quarter of this year, we expect to produce pivotal data from one of two potential pivotal studies in brevisitinib and SLE, our dual inhibitor PIK2 and JAK1, which we think has the potential to be some of the best data, as we talked about before, that the world has seen in SLE. So excited to share that data when we've got it. So with that, I'm going to start today with an update on the commercial launch of BCAMA, which we continue to be just incredibly excited for. And I'll start on seven with just a brief review of financial results. Some of this, as I mentioned, we disclosed last week. A near doubling of revenue for the quarter, with revenues now at $9.2 million in our second quarter of launch. And one thing I'm particularly happy to report, we've seen already early improvements in our gross net yield from 12% in our first quarter of launch up to 18% as the quarter just ended. And, you know, I think, and we'll talk about payer updates in a moment. I think with continued payer updates, we expect to see that number continue to improve over time here. We are really happy with the continued level of patient and physician demand for the product. We continue to get great feedback more or less across the board. And the demand's really had a, as you'll see, a positive impact on our ongoing payer conversation. So, yeah, really excited about how that launch is going and excited to continue to share updates as we get into, you know, the calendar year. You know, on slide eight, we continue to be the number one branded topical. We have been since our eighth week of launch. After a little bit of choppiness around the holidays, we're excited to see Scripps return to growth, and we are optimistic for the trajectory from here as we look forward. And, yeah, just really excited with what these Scripps volumes mean for patient and doc enthusiasm and payer enthusiasm. But perhaps equally, and I show this slide pretty often on slide nine because I think it's a great slide, This is really just the beginning for us, right? In the most recent disclosed IMF suite, we did about 3,800 scripts, which is a great number for this stage of our launch. But remember that even in psoriasis alone, there are 90,000 topical prescriptions every week, of which the vast majority are topical steroids. And once we get our atopic dermatitis data and have access to that patient population, there are well over 300,000 atopic dermatitis prescriptions every week. again, the vast majority of which are topical steroids. And in psoriasis, our data conclusively, in our view, establishes us as both more efficacious with a limited benefit than topical corticosteroids, as well as meaningfully safer and better tolerated. So we're looking forward to sharing that profile on atopic dermatitis and looking forward to, you know, continuing to push the dials and levers that will allow us to grow into those very, very large opportunities. a quarter of solid execution for the DERMAVAN team. As I mentioned before, both atopic dermatitis trials on slide 10 are fully enrolled. And again, with those readouts expected, the first one, adoring two, expected in March 2023, and adoring one expected in May. So important clinical data coming. And we continue to expand high-quality formulary access. And maybe I'll just provide an update on that on slides 11 and 12. First of all, I'm pleased to say at this point, we have 57% of commercial lives covered for VITAMA that's close to 95 million lives. That includes an addition of a national PBM formulary, two national health plans, a regional PBM formulary, eight Blue Cross Blue Shield plans, and one national PBM that actually lifted its new-to-market block ahead of a review so that we have good coverage across those lines. So these, in many cases, are decisions being led by the medical teams of these payers who are so enthusiastic about the medical profile of the TAMA and what it offers to patients that we're making really, really good progress on coverage. I have a couple of examples on slide 12 that I think sort of drive home the point around quality of coverage. And I'd say, look, multiple factors have driven this progress, including a ton of patient and physician demand Payer judgment, as I mentioned, in the medical teams on fundamental clinical value. Overall prescription volume is a lot of hard work from our team. Some representative examples, you know, one of the major PBMs lifted the new-to-market block and requires only a single step at it through a topical or a vitamin D. Another major PBM added us to formulary and requires a step from two, either a topical, steroid, vitamin D, or a combination. A regional PDM has added Vitamma with no restrictions, edits, or steps at all. So in effect, sort of on parity with generic steroids. Two national health plans cover Vitamma with a step through any one of, sorry, any two of the four most common tablet therapies. And many regional plans cover Vitamma as completely unrestricted or with a simple steroid look back. And I'll add, and this is a small plan, a small regional plan so far, but there's one small regional plan that actually covers us ahead of other recently launched branded topical competitors and has this as a preferred product. And the last thing I'll say about sort of how pleased we are around the payer discussions here is, you know, we're really, not only are we happy with the coverage overall, we are consistently covered at parity or better than our topical competitors. And that's important because you'll remember there was a fair amount of discussion early on around different pricing strategies and a question around which pricing strategy was going to drive better access. And we are now very happy to report that our pricing strategy and market access strategy has achieved really high quality coverage. And we are definitely plan by plan, PBM by PBM at no disadvantage, and in some cases are at an advantage overall. So really, really happy with the payer progress here. As far as how this progresses, some of our competitors have shown good progress in analogous indications from a GTN yield perspective over time. I expect to show the same. Candidly, the first quarter of the calendar year is sometimes a little bit more difficult because of deductible recess. So I think you'll start to see more progress coming, you know, second quarter and beyond. But really excited for those developments and think that we're going to head towards an attractive commercial P&L, as we've said before, and that can now back that up with broad coverage and an understanding of the economics of those contracts. So I'll stop there on the camera, but I'm sure I'll get some questions on in the Q&A and move on to clinical execution. First of all, just as a high-level sort of observation on slide 14, we are really excited about the inflammation immunology franchise we're building here. We didn't set out to build an INI company. And in fact, we have a number of interesting opportunities that go beyond INI. But at this point, we have multiple new approvals and 10, more than 10, phase two or three data readouts coming each year. multiple data readouts, including readouts, registrational readouts coming each year between now and 2025. So massive progress over the next couple of years. Obviously, we talked a lot about the 2023 data earlier. That leads from 2025 beyond to a wave of potential additional approvals across large I&I indications with high unmet need. And we think building towards an I&I franchise that has $15 billion or more in aggregate peak revenue potential. So just a huge opportunity for us. And remember, this spans FCRN and TL1A and our TIC2 JAK1 franchise as well as VCAMA and other programs behind that. So we think this is one of the most exciting biotech INI franchises, and we're excited to build this forward, and we're excited to see lots of interest from many different borders in what we're building here. You know, you can see the late-stage pipeline on slide 15. more familiar and have discussed many of these programs before. We talked about VTAMA earlier today. We'll talk about RBT 3101 as we review that data in a second. I'm not going to spend too much time beyond that in the portfolio today, but I will say we're excited for all of the updates coming this year and looking forward to sharing them as they come in. And it is really unprecedented, at least for Royvind, in terms of the amount of high-quality important clinical data coming in for us. What I am going to do briefly, and I know many of you have heard this before, but it's an area that's been closely watched and we're really proud of it. I'm just going to review the data for RVT3101, our anti-TL1A antibody, just because it's actually, it's hard to believe this, but we first put it out only a little bit over a month ago. And so it's still new to us and still new to our story. So as a reminder, RVT3101 is a phase three ready anti-TL1A antibody, which we are currently developing for ulcerative colitis and Crohn's disease and plan to develop in other indications. This class and our agent in specific has delivered some data that we are really excited about. It's extraordinary data. It's some of the highest-end efficacy in an all-commerce population that we were statistically meaningful with meaningful clinical benefit across all the doses we tested. We further were able to enrich response rates in a prospectively defined biomarker subset. Remember that Our partner Pfizer had run a phase two study that had explored different biomarkers and prospectively identified a specific biomarker, was able to use a lot of data to sort of optimize this choice of biomarker, which covers 60% of the UC patient population. And overall, we have a great safety and accountability profile as well. We think this should be the first in class agent potentially in large and well validated markets. This was one of the largest phase two B studies ever run in ulcerative colitis. We have 300 patients dosed between this phase 2B study and our phase 2A study. And we have an important near-term catalyst that I mentioned before, our phase 2B data coming in the first half of this year for the chronic dosing phase. You know, T01A on slide 17, as a reminder, is a really cool mechanism. It's got a pretty different mode of operation where it's sort of a signal amplifier for a whole bunch of different important pro-inflammatory and fibrotic cytokines. And so it's got a sort of multiple mechanism of action across that pipeline with impact on these different parts of the inflammatory pathway, which frankly both supports a little bit of the sort of quality of the clinical data and the unique quality of the clinical data we've seen as well as the safety profile. And given the quality of our data in UC, it encourages some real blue sky thinking with opportunities that are well beyond UC and Crohn's. It's a multiple inflammatory diseases as well as other fibrotic diseases, intestinal fibrosis, pulmonary fibrosis. liver fibrosis. And as a reminder, Pfizer, in their Phase IIa publications, showed a meaningful impact on fibrotic markers associated with the drug. So I'm just going to remind everyone of the data on slides 18 and 19, starting with just incredibly compelling activity, both for our agent and supported by data from a competitor across the class here. Again, some of the best gross efficacy seen and the best placebo-adjusted delta seen across any class. We showed a 31% gross clinical remission rate or 20% placebo-adjusted delta in all comers at our expected phase three dose, or a 40% gross efficacy with a 30% placebo-adjusted delta in that biomarker population. Great data on endoscopic improvements as well. And then one of the data sets that we are most excited about on slide 19 is that we were able to preserve that efficacy in the biologics-experienced patient population with our biomarker. which is always a very difficult population. Most other classes of drugs fall over or have significant degradation of efficacy. Once you get into that patient population, placebo populations no longer respond in second line. And this is, in many cases for patients with multiple second line therapies, this is a sick patient population. This data opens us up to some really extraordinary possibilities, including, given the breadth of our biomarker, an opportunity to become a real second line agent of choice. so we're going to develop the drug for all comers we're going to see nothing from a label perspective but we are excited for an opportunity to develop this uh to help uh patients with albino marco in second one basically and all of this couples on slide 20 uh with just a a really sort of remarkably clean safety profile with almost every category being uh frankly less than placebo or certainly placebo-like at both the pool and our expected phase three dose and so you can see to hear a lot of data. We've talked about it before, so I'm not going to talk about it now. We'll have to take questions on it. We continue to be confident about the fact that that profile will hold up, both based on the preliminary internal analysis and maintenance data we've seen, as well as looking at the relationship between immunogenicity and our safety and efficacy, and we've seen a relationship there. So with that, I'm going to end the clinical and business update portion of this. We're not going to talk more about other programs today. I'm just going to give a brief financial update, and then we'll open the line to Q&A. So we had a good quarter financially as we discussed. We had adjusted R&D expense non-GAAP of $117 million or GAAP R&D expense of $126 million. We had SG&A expense, again, adjusted of $116 million or GAAP of $168 million. And notably, the majority of that SG&A expense comes from government and associated with the launch of the TAMA. And then we have a very strong cash position that we continue to develop. We ended the quarter with balance sheet cash equivalents of $1.5 billion, or about $1.9 billion, giving effect to the financing we did two weeks ago, as well as expected to see the proceeds from the sale of the minorities who become a pharma, which we expect to complete this quarter. So that gives us, as we've discussed before, cash runway into the second half of 2025. We are producing a tremendous amount of important clinical data during that period across all of the programs I've just mentioned. The financing we did a couple weeks ago gives us the ability to run full speed at 3101, including across multiple clinical programs, and I'm confident we will produce some important data for 3101 along with the other programs during that window. So really looking forward to hearing those updates. I feel happy with the financial position that we're in, proud of all the work the employment team has done over the last quarter, and looking forward to taking your questions and continuing to provide, obviously, a bunch of updates between now and when we file our 10-K later this year. So thank you, everybody. Thanks for your time this morning. And with that, after that brief session, I'll turn it over to the operator to go to Q&A.