Roivant Sciences Ltd.

Good day, and thank you for standing by. Welcome to the Roy Vant fourth quarter 2023 earnings conference call. At this time, all participants are on 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 11 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, Abby Beyer. Please go ahead.

Good morning, and thanks for joining today's call to review Roybent's financial results for the fourth quarter and fiscal year ended March 31, 2024, along with a business update. I'm Abby Beyer with Roybent. Presenting today, we have Matt Glein, 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 investors.roybent.com. We'll also be providing the 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 have filed with the SEC, along with our Form 10-K for the fiscal year ended March 31, 2024, which we will file after market close today, 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, Abby. Good morning, everybody, and thank you for joining our fiscal year March 31 call. I'm going to start just briefly on slide four with a run for what we're going to talk about, and then we'll go through the presentation. So we're talking a little bit today about where we are in the year, and it's been an exciting fiscal year for us already, even though we're only a couple months in, as well as what our plans are for the balance. We're going to give some updates at Immunivan, who also filed their earnings yesterday and who aren't doing a conference call. We'll review the prepacitinib data and noninfectious uveitis that we generated during the quarter. We'll talk a little bit about the ongoing Vitamil launch, and actually we'll spend a minute or two on renegotiation of some of Vitamil's fixed obligations and debt that will take a significant amount of burn out of the cost of that program. We'll spend some time on some upcoming catalysts and on a financial update, and then we'll go to Q&A. Thank you, everybody. I'll start on slide five. And just to say, 2024 was always planned to be a year of expansion and growth and planning for the future from us. And that includes some updates that we'll talk about today and exciting updates coming through the balance of this fiscal year at Immunovant, where we have a bunch of important clinical data coming that we're going to continue to advance the rest of our pipeline, including, for example, the data we generated already in brepacitinib, as well as data coming later this year in sarcoidosis and others. We continue to make progress at DermaVant with Vitamins SMDA now in for atopic dermatitis with a PDUPA date at the end of this year. And we've continued plans to grow in psoriasis where we're already on the market. And then we're very active in our late stage business development activities and are looking forward to continuing to provide updates there, including on the program that we've been licensed and haven't yet described, which we'll talk more about later this year. And finally, one thing that we intend to do this year that I think we've made major progress on is to communicate about, is to finalize and communicate about our plans to return some capital to shareholders. And as you'll know, within the last couple of months, we announced a buyback program of up to a billion and a half dollars and repurchased stock from Sumitomo, what we think was an attractive price. So on slide six, before we get into the specific programs, I'll just say I am incredibly excited about the pipeline that we have today and the way that it is shaping up. Obviously, VITAMA's launch in atopic dermatitis will be an important event for us. The NTFCRN franchise at Immunovant, I have never felt better about that franchise than I do right now. The clinical data that we continue to generate, including the data that we're going to share in Graves later this year, underscores what we have, as does the uniqueness of our data relative to what we've seen in the competitive landscape in recent days, weeks, and months. And we just feel like we're in a really, really strong position there. And on top of that, we've had, and I'll talk more about this in a minute, a very important type of meeting with FDA that sets forth the clinical development plan for IMBT1402 that really establishes it as our lead program at Immune Advanced. Then we've got brevisitinib, our dual inhibitor TIK2 and JAK1, which now has pretty obviously best ever demonstrated data, at least in a phase two study in non-infectious uveitis, an ongoing pivotal program in dermatomyositis, just a really great set of data on which to build an exciting franchise, and we're open all-immune. And then we have some other readouts coming, including the nolimab and sarcoidosis, which will be later this year, and some data and our future plans in this undisclosed program that I mentioned. So I'm going to go first into updates on Immunivant on slide eight. So there's a lot of progress in the Immunivant portfolio, and Immunivant put out their earnings release yesterday with some of that highlighted. I just want to hit what I think are really the key highlights here on slide eight. First of all, and perhaps most exciting to me, we have held a successful type B meeting with FDA on 1402, which really covered a lot of the important topics around future development of 1402 in the clinic. And with that, we feel fully on track to initiate four to five potentially registrational programs for that antibody over this fiscal year. With that behind us, we're now comfortable saying 1402 is really our lead program at Immunoband. It is, we think, a potentially best-in-class anti-F-serum antibody, a target that we think is going to matter to a ton of patients, and where we think we can deliver a lot of value. Batoclumab development efforts are being optimized to a point to inform 1402 development plans, so to serve as better, more robust phase two studies in many cases to inform what we can do with pivotal program with 1402. But notably, because the way those studies are designed, we retain full optionality for registration with Batoclumab if the data is supportive. And then finally, I think an underappreciated fact about 1402 is that relatively recently we've been issued a patent that gives us composition of matter, method of use, and methods of manufacturing IP out to June of 2043, and that's notably before any use of patent term extension. So in designating that our lead program, we have a really long time here with a very exciting anybody with a lot of really promising clinical development underway in a target that is obviously going to matter broadly in immunology. So, you know, overall updates that I think are important and positive in establishing what Immunovant looks like for the coming months and years. There are some program-specific updates in Immunovant laid out on slide nine. One is, perhaps most importantly from my perspective, we're now announcing that we're planning to disclose detailed results from the Tokamav study in Graves' disease this fall, together with an overview of our upcoming development plan. As you know, we've seen some of that data and are excited about it. but have declined to share detail thus far due to competitive reasons, and we expect to be ready to share that data this fall, and we think it will set up for a lot of clarity on what we believe Graves can be. Top line data for BATO and MG is expected this fiscal year, and notably, Mutivant's expecting also to begin registrational development in MG with 1402 in the same timeframe. So, again, we retain full registrational flexibility with BATO, but we think MG is an important enough indication and 1402 is an important enough program that it deserves to be developed in MG. The new event has decided to extend the runtime effectively of the CIDP study in VATO by about two quarters prior to unblinding the period one data. This really is to optimize the potentially pivotal plans for 1402 in CIDP and in essence to treat this sort of period one more as a robust phase two for 1402 and to get as much information as we can about dose response. That's in particular informed by, you know, trying to make sure that we continue to enroll the most severe patients into that study and really understand the profile of that patient population. And finally, we are on track to produce the potential registrational data in TED in the first half of next year, and that will be a first-in-class opportunity. And another indication where we think it's relatively clear that deeper IgG suppression will produce better efficacy. Now, that point I want to underscore again on slide 10, and this is not a new slide, but I think it's a really important framing point to keep in mind as we generate data to come this year. And that is, it has been very consistently shown across different anti-F-sharing antibodies, across different indications that deeper IgG suppression matters. It's been true at a patient level in MG, across our competitor programs that are JANX and JNJ, It's been true to a significant degree in our own thyroid eye disease data. We've stated, and we'll show better this fall, that it is true in the data that we have generated in Graves' disease. It's been true in the data that UCB has generated in ITP, and it's been true that patients with greater IgG reduction have correlated with greater autoantibody reduction and greater clinical response in J&J's RA data. So, you know, we say over and over again that we think 1402 is the best-in-class drug, but I want to remind everybody that data we are generating this year, in particular in MG this fiscal year, is among the very important possible proof points to demonstrate that deeper IgG suppression could yield meaningfully better clinical efficacy. And we think there's a lot of supportive evidence to suggest that dataset matters. And then the last point I want to underscore on slide 11 as we get sort of closer to the fall is We're excited about Graves' disease. It's an indication, obviously, that requires a little bit more imagination than MG because there is not yet any approved product, but that is also, other than sort of antithyroid drugs, but that is also, that's also the opportunity for us is that it's real white space where we can deliver a significant clinical benefit to patients with high unmet need. What we've said so far is that results from the initial cohort of patients in that ongoing 24-week trial meaningfully exceeded our target response rates. And that we saw numerically higher responses both for dose tapering and discontinuation in patients at 680 as compared to patients at 340, further supporting our more is better hypothesis. And so, and also that we continue to demonstrate best in class IgG reduction with a mean of 81%, meaningfully greater than what we saw at the 340 milligram dose, and as good or better as anything we've seen from, frankly, any competitor inside or outside of our class. And then finally, as I said, we expect to produce detailed data along with the development plans this fall to underscore where we are in Graves and to give people a picture for what that's going to look like in the future as an important indication for the program. So I'm sure there'll be questions on ImmuneVet we'll come back to, but I'm going to move to other elements in the pipeline now. I'm going to take a few minutes to recapitulate or go over some of the data that the PryEvent team presented on our call earlier this spring on brevisitinib in noninfectious UVIS because it's an opportunity we think is really exciting. It's a larger market than we think most people appreciate. And frankly, we're really proud of the data that we've generated to date. So UVIS is not a widely discussed indication, obviously, in our industry. There's not a lot of approved therapies. It is, however, the fourth leading cause of blindness among the working age population. It's a significant severe disease with difficult morbidities. There are, and this is an updated claims analysis that we've continued to refine, about 40,000 patients with non-interior NIU on biologics, which includes adalidomab, which is the only approved therapy, as well as a number of off-label therapies. And we continue to see rapid growth in those scripts. So we're excited about the already existing biologics population. That's against the backdrop that we'll talk about in a second. Those therapies do not work particularly well. And so far, what we've seen in phase two, our data looks meaningfully better. And notably, there are no competitors currently in phase three in uveitis with only a limited number of competitors in phase two. So we think at any kind of orphan price point with our kind of differentiated data, this is a multi-billion dollar peak sales potential opportunity, even in a post-biologic, biologic refractory population with additional opportunities in a broader non-interior population. This is on slide 14, you know, I think, Interestingly, we feel like NIU is a little bit where something like HS or even TED was a few years ago, where there's an understanding of the population. But again, as I said earlier, imagination is required, and so people don't fully see the farce for the treatment. But if you look at the overall prevalence of the disease, the prevalence in our relevant subpopulation, if you think about whether this is a sort of TNF-approved market, and you think about the level of morbidity of the disease and the size of the competitive opportunity or the number of competitors against us, this is an indication that ought to get the same level of attention as other severe diseases, including something like HS, but also including something like TED, where the need is high, where it's another ocular disease, and as a reminder, docs just have no tolerance for things like ocular inflammation, and patients really want good treatment options. So the study that we completed that we've now put out on slide 15 was a phase two randomized double mass dose ranging study that studied both 15 milligrams and 45 milligrams. And the endpoint is a thing called treatment failure rate, which is what it sounds like. It's patients who have effectively a worsening or non-improvement of disease while on therapy. One background point of note on slide 16 that we talked about on our prior call The way these studies all work, because there is so little tolerance for ocular inflammation, is these patients show up with disease and are put on a high-dose burst of prednisone, which is then tapered quickly. And we used a quite aggressive steroid taper, meaningfully more aggressive than the Humira studies, in order to give our drug the hardest test in phase two so that we would understand what we had. And the goal here is to be able to preserve or improve benefit even after the steroid taper, which is sort of the name of the game here, and the basis on which Humira was effectively approved. So on slide 17, you can see the data. I know we've put this out before, but it's a slide that I really enjoy looking at. This is really, really good data. By our own measure on the left side here, which includes treatment discontinuations on the treatment failure calculation, Humira had about a 62% treatment failure rate. At our high dose, we had a 29% treatment failure rate. So Effectively twice as low and a really exciting result. On the right-hand side, you can see the data as Humira presents it in their label. There they excluded treatment discontinuations rates and treatment failures, so they had about a 50% treatment failure rate. There we had a sub-20% treatment failure rate. And a nice dose response both on this and on the other sort of subcomponent endpoints that gives us some confidence that this data should be translatable to a placebo-controlled study. One last point on the data on slide 18. You know, I think that there's questions like how to think about this. Maybe put another way, you know, in Humira, after about six months, half of Humira patients, after about 11 months, half of Humira patients had developed macular edema. And after about six months, half of placebo patients had developed macular edema. And these are among patients who didn't have macular edema at baseline. We had 10 such patients in our 45 milligram arm and none of them had macular edema by week 24. And then of patients who came in with macular edema, three of those patients had resolution of their macular edema by week 24, whereas in Humira it was about 22% had resolution. So again, just another way of thinking about this data that in our opinion underscores the uniqueness of our data set and the opportunity we have. I think on slide 19, Just to reiterate, this is a large commercial opportunity that supports a differentiated product profile with a real early treatment option for physicians looking to intervene aggressively to prevent blindness. And if you call these docs, I think the thing you'll find over and over again is the tolerance for inflammation of the eye is basically zero. And in our opinion, there's really no agent, certainly no non-steroidal agent, that has showed an ability to reduce or mitigate ocular inflammation. as well as representative has so far. So we are incredibly excited about this opportunity. We'll continue to talk about it, and we'll prepare for a pivotal program to begin later this year, and we'll share more about that design and timeline as it comes together. So now I'm going to transition to BCAMA. On slide 21, we just have the results for the fiscal year to about 75 million in net product revenue, aggressive net yield of about 24% for the quarter. You know, we expect those numbers to continue to improve and grow over time. We'll talk more about that guidance as time goes on. And we're sort of expecting steady progress in psoriasis. Most notably, as we get closer to the end of this year, we feel like we have a strong foundation for a quite rapid launch in atopic dermatitis. First of all, we have a proven ability on slides on slide 22 to drive switches from standard of care just based on the existing VTAMI patterns in psoriasis. And 75% of the early adopter healthcare providers in AD, the ones who write novel mechanisms early, have already been engaged with in our psoriasis launch, so we know these docs. And this is against a backdrop on the right-hand side of a topical market in AD that is frankly growing a lot faster than the topical market in psoriasis with many more scripts to begin with. So, you know, we think the AD market dynamics are meaningfully different than the psoriasis market dynamics. And we think our data set, which we've talked about before, won't spend a lot of time on today, as well as the sort of commercial infrastructure that we've built, set us up for an exciting possible launch in atopic dermatitis. Again, as a reminder, our Perdufa date is in the fourth quarter of this year. And then one important update that I suspect is not high on people's minds is that Dermavent had some debt and royalty obligations that came from the early acquisition of the program that actually represented a relatively meaningful portion of our burn on Dermavent. during this pre-launch and early launch period. We have successfully renegotiated those obligations with the counterparties. That includes NovaQuest and a number of other lenders. And this renegotiation has reduced our potential payments by about $300 million, of which about $225 million we expect to realize over the next three fiscal years. So a pretty meaningful reduction in the expected burn at Dermavant. that overall gets to one of the themes that I'll hit in a minute, which is that we are focused on maximizing the longevity of our capital and our ability to deploy it either on buying our own stock or on investing in valuable programs to the maximum extent possible. And so we're really focused on, in this period where we are cash rich, being as dogmatically efficient around capital as we possibly can be. And this renegation is certainly a part of that commitment. So we have some pretty important catalysts coming on slide 25. You know, we're through at this point the exciting data from Repositinib. We're through the SMDA filing for the CAMA. We have the upcoming Graves data from Mitoclonab and an overview of our 1402 development plans this fall. We have top-line data from our Phase II trial in Sarcoid and Milimab in the fourth quarter. And then by the end of this fiscal year, we have upcoming top-line data from Myasthenia gravis. as well as potentially that data from period one of the Phase IIb study in CIDP. And Immunomaniacs expects to initiate four to five potentially registrational studies for 1402 on the back of the recent positive FDA interactions. We also, this quarter on 26, as a reminder, announced this $1.5 billion share repurchase program, including our repurchase of the entire Sumitomo stake at a price of $9.10 a share. We continue to be excited about that commitment, and we have that program outstanding. We will use it to buy back stock at attractive prices. I expect we'll use it in the coming months to be thoughtful around continuing to take advantage of that opportunity. And it's a way that we expect to be efficient with our capital. And frankly, we think our shares are, I'll just say, attractively priced at the moment. On slide 27, not expecting to spend a lot of time on this, have not spent a lot of time on it historically, but we continue to have some really exciting work ongoing in early stage drug discovery, in this case at Vant.ai. where we have a set of tools for probably the best out there capability for modeling and predicting protein-protein interactions. We really do think we may be the best in the world at this thing. And notably, I think this is clear to most, we have mostly been funding our discovery efforts through external partnership and external investment, and that continues to be true at Vent AI, where we've recently entered into partnerships with Bristol-Myers Squibb and Blueprint. that are both important for developing our capabilities and are providing a significant portion of the capital required to continue to progress Vant AI. Finally, two other business updates on page 28. One is something that we get a lot of questions about over time, which is our patent litigation with Moderna. In April of this year, as many of you know, the court agreed with our proposed constructions for most of the disputed terms against Moderna. in our Markman ruling, which sets us up with a clear set of favorable boundaries to the playing field as we get through the rest of the pretrial disputes through the rest of this year. And we are in the midst of fact and expert discovery. We're expecting a filing of summary judgment motions late this year and a trial date less than a year from now. So looking forward to that. And then finally, ChinaVan has fully enrolled at this point, as we've announced publicly, our Phase 2 Potential Registrational Study for Nenovab and Sarcoidosis. We're expecting that to read out in the fourth quarter. That is a high skew opportunity that I think most people have not paid a lot of attention to historically. We'll talk more about it as it gets a little closer, and especially as we generate that data. But needless to say, if that is successful, it would be a potentially first novel therapy for pulmonary sarcoidosis, which is another one of these large untapped orphan disease markets. So finally, I'll wrap up here with a financial update. I won't go through all of the numbers on slide 30. I'll point out a couple of things here. One is that our net cash utilization for the quarter was $108 million, which is a function of a number of things, including streamlined burn and the fact that we generate meaningful interest on our cash balance. So we're excited about that. And it's, again, a part of our significant commitment here to being efficient with our capital as we focus on deploying on the most valuable opportunities. We ended the quarter, again, this was prior to the Sumitomo repurchase, with $6.6 billion in cash. And I'll point out that the carrying value of our debt in this 10K does not yet reflect the renegotiation with Dermabent. So you will see that renegotiation reflected on our 10Q for the 630 financials. So with that, I'll leave off on slide 32 and just say, in addition to everything we've talked about from Cal's perspective, there's just a bunch of interesting data and a bunch of opportunities coming. And all this is in addition to pipeline growth for our pipeline that we're excited to talk about next. on an ongoing basis, and in some cases as soon as it happens. So stay tuned. We're really excited about what we see in that opportunity set, and I've never felt better about that either in terms of the space of opportunities that we may be able to access. With that, I will wrap up the prepared remarks portion of this call, and I will hand it back over to the operator for Q&A. Thank you, everybody, for joining this morning, and I look forward to your questions.