Roivant Sciences Ltd.

Hello. Thank you for standing by. Welcome to ROYVET Third Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Stephanie Lee. You may begin.

Good morning, and thanks for joining today's call to review Roybent's financial results for the third quarter ended December 31, 2023, along with a business update. I'm Stephanie Lee with Roybent. Presenting today, we have Matt Klein, CEO of Roybent. 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.roybent.com. We'll also be providing the current site numbers as we present to help you follow along. I'd like to remind you that we'll be making certain forward booking statements during today's presentation. We strongly encourage you to review the information that we have filed with the SEC for more information regarding these forward booking statements and related risks and uncertainties. And with that, I'll turn it over to Matt.

Thank you, Steph, and thank you, everybody, for joining today. I appreciate it. It's nice to be able to talk about our third quarter results here. On slide four, just a brief overview of the agenda. So we'll talk a little bit about a recap of last calendar year, and then we'll spend some time on the recent data coming out of Univant during the quarter, some time talking about the upcoming proof-of-concept readout at PREPA-CITNIB in NIU. We'll do a review of performance of VITAMA, highlight some upcoming catalysts and a financial update, and then turn it over to Q&A. It should be a relatively short presentation today. So we've talked a fair amount about last year, and this will be the last time that we take a victory lap for it. But on slide five, I just want to remind everybody of the year we're coming off of, during which we continue to both commercialize and maybe even more importantly develop VTAMA with positive phase three data in both of our studies, setting us up for an atopic dermatitis approval that we hope will come later this year following an NDA filing that we hope will go in, SNDA filing we hope will go in very shortly. We have the sort of full round trip of our NTTL1A antibody, which you're all quite familiar with at this point, culminating in the sale to Roche that closed during this quarter. We generated both, at this point, proof-of-concept data, or I should say initial human data from IMVT-1402, showing that our next-generation anti-F-serum antibody suppresses IgG, we believe, as deep as any other and without any impact on albumin or LDL and in a convenient sub-Q format. And also, we've shown data from our Phase II study in Graves' disease that meaningfully exceeded our expectations. We'll talk more about that on this call. And finally, we read out brepacitinib, our TIK2JAK1 data in SLE this quarter as well. Unfortunately, it did not meet our bar or the primary endpoint, so we've discontinued development in that indication and are looking forward to multiple additional readouts and programs from brepacitinib to come. I talked about this a little bit in my JP Morgan presentation earlier this year, but on slide six, one thing I think we're really proud of looking back is our model is built to develop data for important clinical programs that matters to patients in as efficient a manner as possible. And I think if you look at our track record here, this is a list of the largest global pharma companies, including the number of late stage readouts they had last year. and the R&D expense sort of over the period, although obviously that's not a perfect comparison. And we are very proud of the extent to which we stand out for being included on this list at all, given the amount of data we generated, and at a obviously significantly lower, generally order of magnitude lower cost, which just gets to the model of capital efficiency with which we bring programs in and which we develop them. And we're excited to continue to do that in our strong capital position. 2024 for us on slide seven is really about growth and expansion. It's about maybe first and foremost delivering clinical data and strategic updates for our anti-FCRN franchise. We are already making progress in laying out an aggressive, expansive development program for that franchise, and Munivant provided some updates yesterday. In short, we're looking at 10 indications over the next couple of years with four to five potentially registrational programs starting in the next fiscal year, so something that we think will help us to fully realize the value of that, we think, potentially best-in-class anti-F-serum antibody. We expect to advance clinical development for a range of underappreciated pipeline opportunities, including in brepacitinib, in the milimab, and in a program that's underappreciated because we haven't talked about it at all, a program that we unlicensed in the second half of 2023. We expect to shortly ahead file our SMDA for vitamin atopic dermatitis. We hope to continue to accelerate revenue growth in psoriasis, and we are really looking forward to the launch in atopic dermatitis. I think it has the potential to continue to change the trajectory of the program. We know there's a lot of focus on this next point. This is one of the or probably the best environment we have ever seen for business development. and we are actively looking at some pipeline expansion opportunities that I'll just call transformative in sort of mid to late stage development stage areas. We don't have an update on specific programs to share today. I can't say exactly when we will, but I am enormously excited at some of the things that we have our eyes and potentially hands on. And then we expect in the relatively near term here to finalize our capital allocation strategy across our various opportunities. and to be able to provide significant updates. To that end on slide eight, you know, when we did the deal with Roche, we asked all of you to be a little patient with us as we sorted through our best options for allocating what is now a $6.7 billion consolidated cash balance. And we expect to use it for three things, as a reminder, ensuring that Roivant has capitalized profitability, expanding our pipeline, as I mentioned on the previous slide, and then to return capital to shareholders in an amount and form that makes maximal sense. And, you know, in short, we think that the time for patience here is coming to an end. We think we'll be able to provide meaningful updates on this in the near future, and I expect this will be the last earnings call on which we're calling for patience as we work things through. And, yeah, we're looking forward to continuing to crystallize that plan. On slide nine, as a reminder, we are very excited about our late-stage program. It includes a number of drugs, substantial drugs, that we will talk about today, including Vitamma, including the FCRN franchise with Botoclumab and IMBD-1402, including Grepacitinib and Imilimab. It also includes that undisclosed phase two program that I've mentioned a few times here that we will definitely be providing more detail on a little bit later this year. I want to highlight up front, we had told the world that we were going to develop or generate some data in RVT 2001, our SF3B1 modulator in transfusion-dependent anemia for low-risk MDS patients. I want to report that, unfortunately, the data generated in that Phase 1-2 study did not meet our bar for progressing, and so we've decided to discontinue development of RVT 2001 after an interim analysis of that data. I'm happy to share some more color on it. We spent a reasonable, modest low double-digit million-dollar sum on the program. And, you know, I think just sometimes these things don't work out the way you want scientifically. And so, we're trying to be efficient in making those decisions. So, I want to turn now to Immunivant. You know, I mentioned before we are very focused on an exciting broad development strategy there that sets up the program for maximum value across the range of strategic options. As a reminder, we are very excited about the next-generation antibody there, IMVT-1402, which we think offers deep IgG lowering, similar to Botoclonab. We think as deep as any NTSC or an antibody that we are aware of, with a clean analyte profile with no or minimal effect on albumin or LDL, formulated for a simple subcutaneous injection designed to hopefully enable self-administration with an auto-injector, and with patent life that goes out on a composition of matter basis, not excluding PTEs until 2043. So a tremendously exciting drug. That's against a backdrop on slide 12 of continued and growing evidence that deeper IgG suppression in general yields better clinical benefit across a variety of indications. As a reminder, that includes data at the patient level in myasthenia gravis, showing that in individual patients, those with greater IgG declines had better MGADL improvements. That includes data from both our TED study, which we've made fully available, and our GRAVE study, which we have not. In both of those studies, we were able to see significantly better efficacy at our higher dose, 680 milligrams of Botoclumab equivalent to 600 milligrams of IMVT-1402. In the ITP data generated by UCB, we saw greater IgG reduction yielding greater platelet responses, And in Janssen's RA data put out earlier this year, J&J's RA data, they showed that greater IgG reduction correlated with greater autoantibody reduction, which in turn correlated with greater clinical responses. So we feel very privileged that our drug has the clinical profile that it appears to. As a reminder on slide 13, and although it feels like a long time ago, this data was indeed generated in the third fiscal quarter for us at 600 milligrams, we show our data showing again that that clean, deep IgG suppression coming from both the 300-milligram and 600-milligram subcutaneous dosing over four doses with effectively no impact, as you can see on the right-hand two charts on albumin or LDL. And we believe, based on this data, that we will suppress IgG to 80-plus percent with sort of full-length dosing. That came together on slide 14 as a reminder with a clean safety profile with limited and not particularly dose-dependent adverse events and nothing that stands out as particularly problematic. So a clean profile, no severe TEAs reported across any arm to date. So we're pleased with that. And then I want to just spend a minute on Graves' disease. We've said we're not talking a lot about this data because, as we've pointed out, anybody's Phase II data is everybody's Phase II data in FCRN. But we are excited about the Graves opportunity. You can see on slide 15 the design of that trial involves 12 weeks of dosing at 680 milligrams, the high dose, and then 12 weeks of dosing at 340 milligrams, the lower dose. And these are all patients with active Graves disease as a reminder who are on stable ATD prior to the stable dose of antithyroid drugs prior to the screening visit and who had uncontrolled thyroid hormone levels, were hyperthyroid despite being on ATDs. And the primary endpoint was patients who achieved normalization of thyroid hormones at week 12 and 24. The primary was 24, ideally with lower ATD dose versus their baseline ATD dose. And you can remember the bar that we set for that was that we wanted 50% of patients to respond. And what we've said publicly about the study on slide 16 is that we meaningfully exceeded that response rate. and that we had numerically higher responses for dose tapering and ATD discontinuation in patients on the higher doses compared with the lower dose, which we think sets us up really well to be not only, we believe, sort of first in class in Graves' disease, but potentially best in class in Graves' disease given our unique profile. We continue to demonstrate significant deep IgG suppressions up to approaching 90% with a mean of 81%. And that was meaningfully greater at 680 than it was at the 340 milligram dose as expected. And we've said we intend to pivot development here from Botoclumab, where we were really running this study as a proof of concept, to IMVT-1402 with plans that we will announce this year along with the overall development strategy for 1402. So more to come on that opportunity as we continue to build out our analysis and, frankly, as we continue to set ourselves up to be first. As a reminder on slide 17, there are now 22 indications announced during development across the NT-FCRN class. You know, we get some questions about competitive intensity in various specific places from other mechanisms. And a thing that is remarkable to me is the breadth of these indications is such that relative to almost any other class, the competitive intensity for FCRN is surprisingly low, where, you know, in any individual indication, there might be a couple of mechanisms. but basically no other mechanism currently cuts across the full set here. And we see tremendous opportunity for a broad development strategy maximizing that unique set of competitive positioning across disease states. So, as I said, more to come on 1402 this year. We expect some continued big unveils on both the potentially on the strategic side and definitely on the development side. So, stay tuned and looking forward to continuing to provide those updates. over the course of the coming months. Lastly, on the late-stage clinical pipeline, I just want to remind everybody on oral brepacitinib that we are really pushing forward our development strategy in orphan rheumatology. We are focused today on what we hope will be a single registrational study in dermatomyositis that we'll read out next year, and that is enrolling nicely, as well as proof-of-concept data coming, I'll talk more about this in a second, in noninfectious uveitis, And we continue to evaluate other possible indications, including HS, which has obviously gotten a lot of attention as an indication this year. And as a reminder, this drug also has quite long IP protection going out to at least 2039, inclusive of patent term extensions. I want to just remind everybody on the eve of the proof of concept data that we expect to generate quite soon here on noninfectious uveitis on slide 20. You know, this is one of these orphan inflammatory diseases that is debilitating. There are 30,000 new cases of legal blindness attributed to NIU each year, with 75,000 or more patients living with non-interior NIU in the U.S. Most common symptoms are sensitivity, pain, redness, and floaters in the vision. And there's only one approved therapy. It's only Humira. And we see an important unmet need given the number of patients who are progressing. Our trial design on slide 21, it's not placebo-controlled, but it is a blinded two-dose study between 45 and 15 milligrams, randomized in favor of the 45 milligram dose. And what we expect based on evidence that we have, and we have evidence from, including from a study of Fulgotinib that demonstrated the relevance of JAK1 inhibition, and then IL-12 and 23, which are specifically mediated by TIK2, are also clearly involved in the pathobiology. So we're optimistic about the mechanism here, and the success criteria we've set is basically a sort of, if you think about it as a virtual placebo, a 45-milligram arm treatment failure rate of no greater than 70%, which is sort of what we think the sort of placebo bar would be in an ongoing study. Obviously, given the small number of patients, we'll be looking at this data on an individual patient level, and I expect we'll be sharing it, as we've said, in the first calendar quarter of 2024. The enrollment of this data is... So, we're looking forward to getting that data in the near future. So, I want to turn quickly over to another, at this point, underappreciated part of our story, which is VITAMA. We continue to see reasonable script growth in psoriasis. You can see it on slide 23. We remain the best-selling branded topical in psoriasis, as we have been since the very beginning of our launch, and we are excited to continue to see that growth develop. We've now had over 300,000 prescriptions written by over 14,000 doctors. Our revenue continues to grow reasonably nicely. We're up to $20.7 million in net product revenue for the quarter. Our growth net yield has been accreting slowly, and we expect, roughly speaking, that trend will continue over the next year. And we're now at very good payer coverage with 137 million commercial lives covered, over 83%, sort of the coverage that we were hoping for. Turning to the next big opportunity here in atopic dermatitis on slide 25, as you may have seen, we read out recently data from our long-term extension study, the ADORING-3 study, which is a 48-week study in atopic dermatitis. And we showed pretty remarkable data, over a 50% IgA score of clear, an 80% EZ-75 improvement, and just some great data overall here that puts us, frankly, not only at the head of the pack in our view from a topical perspective, but in line, frankly, with the efficacy of some systemic therapies in these populations. So a really tremendous set of data here that continues to support what we think is a really big opportunity in AD, and notably continue to have a clean safety profile with mild to moderate AEs, nothing sort of remarkable, and a very low discontinuation rate due to adverse events. You know, we expect to, as I said, file the SNDA in atopic dermatitis shortly, and that'll set us up for a potential approval later this year. It needs to be said again, atopic dermatitis is a large and growing market with close to 350,000 topical prescriptions written every week, the vast majority of them corticosteroids. and with a real opportunity, we think, for Vitama to shape that field as a drug with efficacy at the head of the pack from an atopic dermatitis sort of overall perspective and with a safety and tolerability profile that we think further differentiates from some of our competitors. So a really exciting opportunity, and notably our next fiscal year we will have a quarter of sales and hopefully some data on script volume in atopic dermatitis. So really looking forward to getting out there in that sort of full breadth of the patient population. Rounding out the year on slide 28, you know, we've talked about some of the opportunities here, but we have a lot of interesting clinical data coming. Obviously, NIU we've talked about. We've talked about some of the upcoming FCRN data, but notably this year we're going to develop Phase IIb data and CIDP in betoclumab that should help to start establishing Deep IgG suppression potentially is mattering in more diseases. Same thing with our Phase III program in myasthenia gravis, where we expect to begin getting data at the end of this year, again, setting us up for some real potential, including the first simple sub-Q to read out Phase III data and that indication. And then we're also going to get data this year from namilamab, our anti-GM-CSF antibody, and sarcoidosis, a program that we think gets no value attributed to it today, but which we think has the potential to be very important in the event of successful data. On the financials, on slide 30, net revenues for the quarter of 37.1, including V-count product revenue of 20.7, R&D expense of 120, about $1 million, adjusted non-GAAP of about 115, SG&A of about 200 million, or adjusted of about 150. And something I don't know that I'll be able to report in the near future again, net income of 5.1 billion, which is a number obviously related to the closing of the Roche deal, leaving us with cash and cash equivalents of $6.7 billion as of the end of the year, a position we're very excited about. So with that, I'll close just by asking you to flash up slide 32 and note that we have quite a rich set of catalysts coming and more to come as we continue to build out and talk more about parts of our pipeline that we're we're excited about but haven't unveiled publicly yet. So with that, I will wrap up the presentation here and I would thank you to everybody for listening. I will turn it over to the operator for Q&A.