Roivant Sciences Ltd.

Good day and thank you for standing by. Welcome to the Roivant Q2 2023 Earnings 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 that session, you will need to press star 1-1 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Ms. Stephanie Lee. Please go ahead.

Good morning, and thanks for joining today's call to review Royvent's financial results for the second quarter ended September 30th, 2023, along with a business update. I'm Stephanie Lee with Royvent. Presenting today, we have Matt Klein, CEO of Royvent. 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.royvent.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. We strongly encourage you to review the information that we filed with the FCC for more information regarding these forward-looking statements and related risks and uncertainties. And with that, I'll turn it over to Matt.

Thank you, Stephanie, and good morning, everybody. Thank you for joining us on this call this morning. It has been a highly eventful quarter But comparatively, an uneventful call, given that most of the major updates, including the Immunovant data from September and the sale of Telovant to Roche, have already been discussed. But I'm looking forward to giving everyone our normal business update and taking questions and answers. The plan here is to talk a little bit about where we are as a business. I'm going to remind everybody of the parameters of the sale of Telovant. We're going to give a brief overview of the data that Immunovant presented back in September. a little bit about the VTAMR launch, a brief reminder of the upcoming representative data, and then we'll wrap up with financials and Q&A. So I'm going to start on slide six in the presentation, which is a slide that's fun to put up. So we're sitting here in November of 2023, and I keep saying on these calls, but it's true, it's been a pretty wild year. We said this was going to be our biggest year yet. And at this point, it has surpassed certainly my expectations. We've delivered some really great phase three data for VTAMA in atopic dermatitis, as well as continued progress on that commercial launch. We'll talk more about that a little later on this call, but those, believe it or not, were the first clinical data sets this year. We delivered some extraordinary clinical data for RVT3101, our anti-TL1A antibody in ulcerative colitis, both at the beginning of the year in the induction phase and in June in the maintenance phase. Obviously, we announced the culmination of that journey a couple of weeks ago with the planned sale of that program to Roche. We announced the first cut of the IMT-1402 Healthy Volunteers SAD and MAD data in September and showed a profile that we believe sets us up to have a potentially best-in-class anti-FCR antibody with betoclumab-like IgG suppression, and at least in the cohort shown so far, no impact on LDL or albumin. And that's all sort of up until now. And believe it or not, there's still more data coming through the rest of this year, including the final 600 milligram multiple sending dose cohort from Immunovant, the SLE data for the Phase IIb study of brepacitinib, we'll talk a little bit more about, and the GRAVES data at Immunovant also coming this year. So just a year really chock full of clinical data, and I could not be more proud of how it has gone so far. and of the Roche and Levant teams for delivering on it. So on the next slide, I just want to talk a little bit about the acquisition here that we've already messaged, which is that the plan here is for us to sell T-Levant, our NTTL1A antibody program, to Roche. We previously discussed that a couple weeks ago. The sale is for $7.1 billion up front with $150 million milestone. As a reminder, Roivant owns about 75% of that business, so our cash proceeds will be about $5.2 billion on close, as well as $110 million from that milestone, which we expect next year. At the close of this transaction, including the proceeds from that transaction, as well as the unit of follow-on offering, we expect cash and cash equivalents consolidated for Roivant of $7 billion. which is an extraordinary capital position. We will talk a little bit more on this call and a lot more in the future about what we plan to do with that capital. And, you know, Pfizer will keep commercial rights to the program outside of the U.S. and Japan and will continue to partner with Roche on the program. As a little bit of a reminder of the why on slide seven, you know, first of all, we think for the program, Roche will continue to do great things. Obviously, we were proud of the work that we had done and would have been excited to continue developing the program, but Roche certainly adds the resources and expertise of a large global pharma company to maximize access for patients across indications. For us, this is tremendous near-term value generation with proper value to a large opportunity and with a lot of capital efficiency relative to the modest amount that we had so far invested in the program. And this is a transformational capital opportunity for us. We, as we've said on the previous call, are going to be patient and thoughtful. I know, and I've heard it from a lot of investors, people are looking for a sense of what we're going to do with the capital. I'll just remind people, we have a phenomenal pipeline already between Immunivant and our FCRM program and a number of others. We're excited to put some of the capital to work there. We see transaction opportunities in the relatively near term that are as large and exciting as anything we've ever done before, TL1A included. We expect to continue to be capital efficient in those business development transactions, and while I'd never rule anything out, I think it is more likely that the deals that we do will continue to look like the ones we've done before with relatively smaller upfront components. But again, we're taking stock of the full opportunity side, and it is a great opportunity. And we have the potential to return capital to shareholders above and beyond that, given the significant sum. So we'll talk more about all three of those things in the near future and over time. As a reminder on slide eight, one of the questions I've gotten frequently from investors is, what does the catalyst roadmap look like now that this deal has happened? And my answer is, well, it looks much the same as it did before. And, in fact, the TL1A program, with the exception of the Crohn's data at the end of that year, didn't have an interim catalyst. Our pipeline is tremendously rich today, with VITAMA, obviously, a commercial program with a significant amount of data coming at both prepositinib and especially in our NTFCR enfranchise in the next 12 months. And we look forward to continuing to generate important clinical data from those and other programs in the months to come. So, with that, I'm going to do a brief review. of where we are at Immunovant and some of the other programs. And I'll just start on slide 10 with a reminder. We are very proud of the NTF-CRN franchise that we have. We believe we have two great programs, both of which are capable, as best we can tell from the data we have available, of suppressing IgG as deeply or deeper than anybody else. And, you know, one of them, Botoclumab, we've generated a lot of data and are continuing to generate mid-stage clinical data in indications that matter, where we think we're going to be able to prove out that deeper is better IgG hypothesis. And the other one, IMVT-1402, coming close behind, now looking like it delivers that same IgG suppression, but without an impact on LDL and albumin. So a really exciting opportunity for a franchise of these programs. As a reminder on slide 11, 1402 is in the late innings of this single ascending and multiple ascending dose healthy volunteer study that was designed to to reveal the clinical profile of that program. It had both multiple single ascending dose cohorts that were IV, from 100 milligrams all the way up to 1,200 milligrams IV. It had subcutaneous single ascending dose cohorts at 300 and 600, and then multiple ascending dose cohorts at 300 and 600 sub-Q. And at this point, we've delivered all other than that higher dose 600 milligram multiple ascending dose sub-Q cohort, which, as a reminder, immune advantage signals they expect this month and that is fully on track um i'm not going to share all of the data here obviously everything we believe that we shared in september was fully consistent and painted a pristine picture as far as we were concerned of what this drug could do on slides 12 and beyond i just have the multiple ascending dose data which as a reminder shows uh On slide 12, very much the toclamab-like IgG suppression with 300 of 1402 suppressing IgG by a very similar amount to 340 milligrams of the toclamab. Sorry, 1402 similar to the toclamab 340. And then on slide 13, you can see that that's achieved with really no time course impact on albumin at all. Albumin wound up at the end slightly above... baseline and slightly above placebo. Remember, down is the direction to be concerned about. Unlike betoclumab, which in the multiple sending dose data showed a clear dose-dependent, time-course-dependent impact on albumin. And then you can see in the LDL data, which unfortunately we don't have in the same study for betoclumab, but you can see, again, really no time-course impact of note on LDL, with LDL in this case winding up slightly below baseline. So as a reminder, there was variability in these data. We always said we expected variability in LDL to the plus or minus 10% tune, but we believe the consistency of it across all of this suggests that we have a strong profile, and we're looking forward to sharing the 600 milligram MED data once we have it. And then as a sort of final reminder on slide 15, just to note, This is an incredibly broad target. Even since September, when we shared our data, we've continued to see developments in this field, including the full J&J CalMEB RA data. We've continued to make progress on our own studies, Graves data coming later this year. Graves is an indication that I think is significantly underappreciated for the commercial potential and the number of patients that we can help. And it's just a really broad target. with at this point great clinical validation across multiple indications that FCRN is active and that it matters clinically in a number of these diseases as well. So really excited about what's to come there. A very, very data rich set of months and really a full year ahead. Excited to generate that data to continue to evaluate strategic options that I believe will present themselves and to continue to communicate about where we are as that plays forward. So, next up, I'm going to provide a brief update on the camera launch, starting on slide 17. So, I'd say, overall, we continue to be pleased with how this launch is going. It continues to, you know, script line continues to grow at a steady clip, probably not a quite as fast as we would like at this stage, but we're overall pleased with the reaction from physicians and the reactions from patients. And we see continued uptake of the product, so we're hopeful that we're going to be able to continue to bend the curve and generate more volume in psoriasis. This remains the best launching topical in history. And we're in particular excited for the atopic dermatitis launch in the second half of next year, where we have terrific data and with a significantly larger patient population. On slide 18, we just got the financials here. Revenues continue to build. We did about $18.4 million for the quarter. GTN yield accreted, I'd say, modestly up to $27.6. We're sort of through the contracting process at this point, so I would expect GTN yield to continue to improve modestly and at a steady clip over time as we approach the steady state of which we think long-term will get to the 50% that we've talked about and will take some time to build up to there as we've communicated. Finally, just a couple of notes about where we are from a data perspective. There's actually been some additional data generated or published in this program in the last month or two, including on slide 19, One of the things that at least one of our competitors has talked aggressively about is efficacy in interterigenous psoriasis. This is psoriasis inside the skin fold, inside the elbow and the groin, etc., where psoriasis is pernicious and where some of the other, especially the most potent steroids, are not permitted. And you can see we have really phenomenal data in interterigenous psoriasis. as good in our view on a cross-trial comparison as anybody else here, so we feel very good about what we deliver in endocrinitis psoriasis. We also put out some additional data, which is super important in the atopic dermatitis area, which is the speed of onset for itch. As you can see on slide 20, we had a statistically significant separation from placebo as early as week one, and just a clear, visible separation really within 24 hours and a meaningful reduction in itch within 24 hours. So we feel very good about the speed of onset, and that's something that matters quite a lot to atopic dermatitis patients. So it's data we're excited to continue to put out there as we get closer to that NDA filing and eventual launch. And then as a reminder on slide 21, we just couldn't be more excited for the clinical profile of this agent in ADE. with some really phenomenal data when you look across mechanisms. This is, we just picked one endpoint, EG75, we've published before. But across mechanisms, some of the best data that's ever been shown with safety profile that is about as good as any. In fact, an efficacy profile that looks numerically differentiated from even some of the systemic therapies. So really exciting and looking forward to that. Progression as a reminder, expect that SMDA to go in early next year and expect the launch sort of later next year. Finally, on the program side, I just want to give a reminder of the upcoming data in brepacitinib. So brepacitinib is a really exciting drug to me. In some ways, it had been sort of sitting in the shadow of, I'd say, the TO1A and FCRN programs, but it's an incredibly effective agent. We have now six positive phase two studies with some of the best data that's been shown across the JAK or TIC2 classes. I think we have the single best numerical remission rate in Crohn's disease, for example, that we talked about on the last call. So just a very potent, kind of a big gun agent for inflammatory disease. We are really excited about what our plans are for the program, which include the sort of main program for which we set up here, which was the registrational study that we're running from MISitis at REIT in 2025. But more importantly, near term, we also have this phase 2B study that would be one of two pivotal in SLE. Reading out this quarter, you know, we've talked a lot about some of the challenges in SLE, and that's not the sort of main or at least the sole focus of the program. But if it works and if it generates what we think it should be capable of as an agent, That's an indication that is in need of highly effective therapies, and we think if we can beat the sort of the equivalent bar that we've set for ourselves, we will have a really big opportunity to benefit patients. So, we're looking forward to it. There's obviously potential beyond that, including another data set. We have a proof concept study in non-infectious uveitis reading out in the first quarter of next year, as well as the possibility to run a study in hydrodentita suppletiva, which is an area that's attracted a lot of attention recently. So really excited for Brexit. On slide 24 and 25, we just have a reminder of the study designs in each of SLE and the NIU study reading at the beginning of next year, both of which we're really looking forward to seeing that data and sharing it with the world. So I will wrap up here as a relatively quick update. Just a reminder of the financials on slide 27. I won't read all of the numbers on here, but You know, relatively straightforward quarter and excited again for that $7 billion consolidated cash balance, giving effect to the closing of the deal, which would put us in a very strong position to do lots of great things in this next phase of our life. So I won't go through the full catalyst roadmap again on slide 29. other than to say 2023 was a huge year for us. It will be hard to top in 2024, but we are definitely going to try. And we're excited for quite a lot of data that's coming our way to help us out. So with that, I will say thank you to everybody. Thank you to the entire team at Roivant, to our investors, to everybody who helped make this quarter possible in this year of date. And I will hand it back over to the operator for Q&A.