Roivant Sciences Ltd. (ROIV) Q4 2022 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Roivant Sciences Fourth Quarter and Fiscal Year 2022 Earnings Call. At this time, all participants are in listen on the mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] 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 with Roivant. Your line is open.

Good morning, and thank you for joining today's call to review Roivant's financial results from the company's fourth quarter and fiscal year ended March 31, 2023. I'm Stephanie Lee with Roivant Sciences. Presenting today, we have Matt Gline, CEO of Rogan. For those dialing in via conference call, you can find the slides being presented today as well as the press release and now can be updated on our IR website at www.investor.agan.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 SEC 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, Steph, and thank you, everybody, for listening this morning. It's great to be back. It's -- I was talking to the team this morning saying it feels like a slightly anti-connected call because we were obviously just together last week to talk about the really exciting data from the chronic period of our RVT3101 study. But actually, an enormous amount has happened for us, both in this fiscal year generally as well as specifically in recent quarters. So looking forward to providing updates on those topics. We'll talk a little bit about where we are through the course of our year. We'll give some great updates on the progress that we're making with the ongoing launch of VTAMA as well as a reminder of our atopic dermatitis results. We'll do a quick refresh of the data we put out last week on RG311, A quick update on our FcRn program, a financial update, and then we'll turn the line over to Q&A. Starting on Slide 5. Just kind of as a reminder or a level setting, look, we're really proud of the continued progress that we've made here. We celebrated this quarter with a dooring, the 10th consecutive positive Phase III study that we have run. That's the most recent 10 studies that we've run have been successful. We now have 6 products that we've gotten approved by FDA out of our model. We reported $1.7 billion in cash as of March 31, which supports our cash runway to the second half of 2025 before which we'll have a tremendous amount of data to share. And then we are incredibly proud of what we now believe is an industry-leading pipeline, especially in late-stage I&I with over $15 billion of sales potential supported by the ongoing launch of VTAMA and with a number of potential best or first-in-class programs. We've said all along on Slide 6 that 2023 was going to be our biggest year, we are right at the midway point, both in terms of the year and in terms of the data that we've been look forward to sharing. We've continued to provide updates on VTAMA as we will do today, and this has been another great quarter of progress for that launch. We've now shared data for both of our Phase III studies in atopic dermatitis for VTAMA, data that we think is really, really exciting and will support an important product in that class pending potential DA approval next year. We've now supported data from both the induction and chronic periods of our study of RVT3101, our HTTL1A antibody in ulcerative colitis, which again is phenomenal data. We think so really top-end efficacy that has the potential to really matter for patients and to be an important new option we'll continue to ride updates on that program. Still coming and obviously closely watched our number of updates from our anti-FcRn franchise, including the healthy volunteer study for IMVT-1402, which we hope and believe will establish that program as a best-in-class anti-FcRn antibody as well as a number of ongoing trials in bitoklimab to show continued efficacy of that agent and the class in multiple indications. And then finally, in the fourth quarter of this year, and we will talk more about this before it comes, we have our readout of brepocitinib or TYK2/JAK1, it's a potentially pivotal 102 studies in SLE, which we think has the potential to be, again, transformational top-level efficacy in that patient population. And on Slide 7, just as a reminder, we are just very proud of our portfolio of our pipeline overall here with a number of late-stage agents that we think matter in some of the biggest classes, certainly in immunology. And we will continue to add to this pipeline as opportunities present themselves. Obviously, we made some really important additions within the last 12 months with IPT4102 and RVT3101. And I hope we can find more just like those 2 to bring on in the coming year. So I will start in the next section here with an update on the commercial launch of VTAMA. On Slide 9, I'll say we are very excited about the way that demand continues to evolve for VTAMA. We are the best launching novel topical. We believe in psoriasis history. We are obviously the best selling branded topical in psoriasis and have been since very shortly after our launch. We continue to like the way that the demand has grown, and we expect to see it continue to build through the end of this year as various things including coverage and our DTC efforts build. On Slide 10, some really great progress here in the early launch that we just wanted to make sure we hit. First of all, we did $13.7 million in net product revenue for the March 31 quarter, which is up a pretty good degree from $9 million or $9.2 million in the prior quarter. So obviously happy with the sales number. Maybe frankly, even happier with the progress that we made during the quarter in gross net yield, up from 18% to 25%, which is a reflection of the breadth of coverage that we added, frankly, faster than expected in the first quarter of this year, and we've continued to add coverage since. So we're really happy with that. In some ways, I think we managed to pull forward gross to net improvements earlier this year, and we continue to feel good about our trajectory through the year. We'll talk more about that over time. From a coverage perspective, on Slide 11, we're now up to 76% of commercial lives covered within a year of launch. This is better by a meaningful margin than our expectation at the time we launched the product. This includes the addition of 2 major -- 2 national PBM formularies, 2 national health plan formularies during this period. An important regional PV and formulary well with 18 ABS plans. So just really great coverage. And as a reminder, the significant majority of that coverage is single step through steroids, which is exactly where we wanted to be when we launched the product and which gives us access to the patient population that matters most to us. As a reminder, there are almost 400,000 topical corticosteroid scripts every week between psoriasis and atopic dermatitis. And we're currently doing about 4,000 or a little bit more than 4,000 scripts a week. So we have a ton of room to grow into that opportunity, and we're really excited to do that both in psoriasis today and pending FDA approval in a dermatitis as well. Speaking of atopic dermatitis, on Slide 12 here, just a little reminder we've talked a lot about this data. We got together to talk about the Dorint data on the call in March, we put out the DR1 data as well, which is extremely consistent. This is just -- it's great data. We are really excited about this. It's data that is really -- it's terrific on IGA response rates, really, really good E75. And I'm very happy with the quality of the idea here. The reported data was in adults that looked very good in children as well and about equivalent. And we feel like NAD, which is really a disease market by itch, these data are going to make a really big difference for patients. And as a reminder, this study went all the way down to pediatric patients in H2, which is right because the pediatric patient botulin maybe is large and the unmet need there is significant. Across all patients and especially in pediatric patients on Slide 13. One thing that you really care about with a topical agent is safety. And I think it's clear from our data that the tolerability of this agent in atopic dermatitis is very, very good, frankly, even a little bit better than we saw in psoriasis with very low rates of contact dermatitis, very low rates of follicular events. Just a clean profile that gives us exactly the profile of a product we think will matter to physicians and patients. So really excited about the data from a safety perspective as well. I won't spend too much time on the crush hot comparison on Slide 14, but this is data in a moderate to severe patient population that looks competitive with or better even a number of systemic agents and certainly in the same ballpark or better than anything else that is topical in atopic dermatitis. So more updates to share on Dermavant over the course of the year. Looking forward to continue cover, looking forward to progress in the franchise. Looking forward to providing updates on the SNDA filing for Vitamin D, which we expect to be at the very beginning of next calendar year. Looking forward to sharing those in quarters to come. So I'm going to pivot now and give a brief reminder. This is data that we put out just last week. So I won't spend a lot of time on it with RVT3101. On Slide 16, we really believe this program is in a class of its own, right? Anti-T antibodies at this point between our program and one of our competitors that also reported data earlier this year. This is a remarkable class of drugs that has shown incredible efficacy, and we are very proud to be the first agent to show sort of real and proper-blinded 52-week data last week. And it's great data. We showed substantial improvements between week 4 and with 56 across basically all of the endpoints in our go-forward dose. We are the only anti-TL1A antibody at this point with valid long-term efficacy data, and we have over 200 patients of set data. we have a biomarker that we've talked a bit about that is relevant to 60% of the UC population with meaningful improvement in efficacy relative to the all-comers population. And then safety has been very good for the agent in the study so far. And we've seen no impact of immunogenicity on the program, which we know was a question that people are hoping to get run to ground in this trial. So we're now full speed ahead here with a plan to run a simple Phase III program with a single subcutaneous dose in the near future, and we'll provide updates on that just after our discussion with FDA, which is coming this summer. As a reminder of the data, and I'll go quickly on this on Slide 17. We saw modified Maoclinical remission. This was in our KNR Phase III dose, go from 29% to 14 weeks to 36% at 56 weeks, a remarkable 50% of week 56 in endostatic improvement. And then endostatic remission, this is an [indiscernible] of 0. It's something that, frankly, very few agents hit, and so we don't typically see it reported. And we were really excited with what we saw there with 21% of patients in the all-comers population on the Phase III dose, achieving a clear endoscopy. Once you overlay the biomarker on Slide 18, that data looks even better it gets up to 43% clinical remission in the Phase III dose at week 56, 64% of patients meeting the are endostatic improvements. And again, a really exciting 36% of patients in endostatic remission by week 56, which no look, we didn't measure specific antifibrotic markers here. But personally, I look at this data suggesting that we are having a potential disease-modifying impact on these patients. So really exciting. Another topic -- and this is also data that we shared, but just as a reminder, in a large patient population here of really the whole study in patients who are biologic experience, with our biomarker, we saw, frankly, just phenomenal data at 56 weeks, 34% clinical remission for biologic experience patients, 45% endostatic improvement. This is some of the best data that's been shown in bilas-experienced patients, which are generally recalcitrant and hard to treat. And as a reminder, this includes patients on doses other than our optimally chosen dose. So we expect when we generate large end data in our Phase III studies that there's room for improvement even over these really great numbers. So very excited about the potential for efficacy in the biologic experience population. And I think any way that we look at our data where there's sufficient and to reach a judgment, we feel very confident that this is going to be a great agent in later lines of therapy. Obviously, all that has to be backed up by a good safety profile. And one of the really exciting things about the TL1A class, and you can see our safety data on Slide 20 is because of the way TL1A works a mechanism because it is really only sort of present in disease inflict tissue in terms of signal amplifier you don't get some of the infection and other things that you see in other anti-inflammatory classes. And so we had no severe infections observed and no infections observed greater equal to 5% rate in the chronic period. And just generally, we saw a really good safety profile 356, well tolerated at all doses and serious AEs were practice determined by the sponsor not to be related to drugs. So very clean safety profile that we think is going to help the utility of the drug going forward. And then finally, on the data on Slide 21 as a reminder, one of the questions that we got a lot going into the maintenance period was whether I mean is was going to matter. We were reasonably confident that it was not. What you can see on this slide in the chart in the middle, this is across the data pool across all 9 arms of the study. Patients with ADAs by and large, had somewhat better clinical remission than patients without ADAs, and it was uncorrelated with the quartile of ADA titer. We don't think this is a real effect, obviously. We just think this is noise. We think the ADAs are having no impact on safety or efficacy across all the arms of the study. And we have said we expect that our rising antibody rate to be flat to down. I perhaps say it was 0 at week 56, and the expected Phase III dose. So we have no patients mutualizing antibodies that 56 on that are. On Slide 22, without belaboring the point too much, we feel really great about the amount of data that we have here, and it is quite differentiated relative to the field here. We have over 400 subjects dosed, including 250 patients dosed across an IV and 3 subcutaneous doses, 200 patients dosed across 3 seasons out to a year of dosing, just hundreds of basis dose no matter how you cut it. We are the only agent here with subcutaneous data, the only agent here with anything like this quantum of long-term data. Our biomarker, which prospectively specified has obviously been tested in many patients, and we expect a commercial form factor that is a once-monthly subcutaneous auto-injector. So we really feel great about our profile versus the other agents in this class, which also have where we expect will show promising data given the quality of the target. Finally, on Slide 22, I wanted to highlight, we have initiated, as we mentioned last week, a Phase II study in Crohn's disease. It's just over 100 patients. It is 2 doses subcutaneous monthly similar in that sense to the Phase IIb study that we just ran in UC. There will be 12 weeks of dosing followed by a 40-week chronic period, again, similar with a similar set of endpoints, which you can see on Slide 22. This was a study that we wanted to start very quickly because we realized, as we took a step back that we felt like we could run a proper dose ranging study in Crohn's patients without giving up any ground on the opportunity to be first-in-class in Crohn's, and that would allow us to run just as we are doing and you see a straightforward, simple single-dose Phase III study that will be optimal for patients. One question I expect we'll get is in placebo arm in the study. The basic answer to that is we want to get the dose ranging study done as quickly as we possibly could. And so we wanted to make this a really attractive study for patients to enroll in starting now. And so we're trying to have that study up and running. So overall, as a reminder on Slide 14 -- or sorry, Slide 24, just really excited about this program. I think it is a major anchor in our late-stage pipeline. We think it will be the first-in-class anti-TL1A antibody with an efficient well validated path we will on a single dose carried forward to Phase III. We think we are uniquely positioned to overcome some of the limitations of IVD therapies, including efficacy in later-line therapy with sustained clinical remission and endoscopic improvements among the highest ever reported. We think our biomarker further differentiates this class and our agent versus other treatment options for IBD patients and gives us an opportunity to select for patients with an even higher clinical remission rate, although notably, we think our data clearly supports a study in an all-comers population, irrespective of biomarker status or a line of therapy. And our expectation is that, that is the patient population that we will be targeting for approval. And then finally, just many opportunities for additional growth, including the Crohn study I just mentioned as well as the dual targeting of both inflammatory fibrotic pathways, opening up a range of large markets and high end that need indications that go well beyond Diab D, and we'll look forward to sharing more on that as soon as we're underway with additional studies. Finally, I want to spend a few minutes on IMG-1402 and our anti-FcRn franchise. Obviously, Immunovant has spoken about this program. And there's no new updates in the section, but just wanted to remind everybody of what was coming, given how excited we are about this program. So on Slide 26, as a reminder, we have a proper franchise in antisera antibodies with our first-generation batoclimab currently in multiple pivotal studies across MDD and CIDP with data coming over the next couple of years in those studies as well as others. And then we have our next interaction antibody, INT-1402, which we believe will have the same best-in-class suppression of IgG as batoclimab, while showing minimal impact on albumin in LDL and therefore, being useful for chronic dosing and diseases with an even larger population. We have data coming from that program in August, September for single sending dose data in October November for multiple sending dose data. And we think that has the potential to establish that agent is best in class. As a reminder, both of these agents are proper classic subcus. They are subcutaneously administered. They are simple subcu-injections. They will be sort of at home administered, we believe, and sort of very straightforward comparable with other subcu-programs on the market, which we think is also at this point, something differentiated and something we do not believe any of the other agents in the class have today. Our Phase I study that's ongoing IMVT-1402 has, as I said, single ascending and multiple ascending dose cohorts. That study is underway, and we are looking forward to sharing that data later this year, as I mentioned. And we believe that the data that we have in hand is likely -- we have NHP data that we've shared on these calls and other forums. And based on our data for batoclimab, both on albumin and on IGG, we think the SAD data, which we will be putting out a at the end of the summer may be usefully predictive of MAD data. I get a fair number of questions on the war for success. And I guess the one thing I'd like to say is, look, we believe based on the NHP data and based on the way these programs are engineered that we should be clean and albumin in LDL. Remember that the LDL assay has about a 10% variability and the albumin assay is a little bit more specific than that, but has some variability. And frankly, although we have seen to be clear, none of this data today. So I have no information about what this will show and our expectation from the NHP days but ought to be clean. Our advisers tell us that even up to, for example, a 10% of surge in LDL would not be clinically meaningful. So looking forward to sharing that data, optimistic given the way that drug was engineered as well as the NHP data that we should have a good result there and look forward to getting that together with the Immunovant team later this year to go through it. Finally, I'll give a brief financial update on Slide 21, and then we'll open the line for Q&A. So we showed net revenue of $27 million, including net product revenue of $14 million for the quarter ending March 31. And or net revenue of about $60 million and net product revenue of about $28 million for the fiscal year. For the quarter, we had R&D expense of $130 million or adjusted R&D expense about $126 million. And SG&A was $126 million or adjusted about $100 million. So consistent with prior quarters from a spend and burn perspective. And notably, we ended the fiscal year with $1.7 billion in cash equivalents, which we feel good about as far as carrying us into that second half of 2025 guidance giving us lots of opportunity to turn over data cards. So look, I won't go through all of the catalysts on Slide 33. I'll just say we've talked about some of them here, but there is a long list to come of important developments, including in programs we've talked very little about frankly. And so we're looking forward to sharing that data look forward to getting back together. It's been a tremendous fiscal year for us. It's hard to believe this is only the second 10-K we filed. I want to thank all of our patients and the team at Roivant as well as those listening on this call for being with us. And with that, I will pause and turn the line over to Q&A. Thank you, everybody.

[Operator Instructions] Our first question comes from Robyn Karnauskas from Truist Securities.

Just going back, Matt, on your comments around like the bar for 1402, do you think, given the properties of the molecule that we should look at the graphs that you've shown for the SAD and IgG data and it will look similar? Like is -- are the properties of the molecule similar enough that we should expect the curves to look similar? That's my first question, then I have a follow-up.

So I'll also invite Frank, if he has any comments there. Obviously, Immunovant team talks about this often. I see like overall, in terms of the broad properties, I think the answer is we would expect them to look generally similar. Obviously, with the notable difference that 1402 has been engineered to avoid the almond binding, and so the albumin interferon steric hindrance. And so I would not expect to see an impact on Aluminide. Frank, anything you'd add to that?

I think that's well said. The only thing I'd add is, they are not identical antibodies, obviously. So they have slightly different properties and they are similar. I would encourage the investment community to kind of look at the albumin data as probably the most robust and reproducible assay among the assays we're going to be presenting in the future, but I do think that the curve should be directly similar.

And for IgG as well. That's what I was really asking. And then a question on VTAMA. So congratulations on doing a great job selling so much drug this quarter. I was just curious, can you give us some trends on what you're seeing in feedback from the remittance effect. At what point might you expect to see patients not taking the drug or pausing the drug and not -- and then waiting for the disease to come back a little bit. I know it's early in the launch. So I just wanted to see if you're seeing anything there in that thing.

Thanks, Robyn. It's a great question. I'll say broadly, first of all, physician and patient feedback on the remitted benefit is great. I think it's something that patients experience very quickly on drug, right? People go on. They use it for a while, they go off, they see the effect preserve, and we get a lot of feedback from docs and from patients that they are excited about it. I suspect that, that is embedded in the renewal rate for the product already. That is like the rate at which patients are renewing, the number of tubes that they're using is a function of that already. It's obviously a little bit too early to tell how that shakes out versus the overall growth in demand. But in general, it's not like I would expect to see some sort of significant change in the future because of that effect. And I think it's a selling point for the drug. I think it's something that physicians are happy to tell the patients that they can go off drug and continue to see a benefit. In terms of tubes, I guess like I'm not sure that exactly your question, but our view has always been that in order to be successful, we need to be a steroid replacement. And the steroid sort of just over a 2 year, maybe a 2.25 a year. It already looks from our data like we are in excess of that. It's hard to tell how much in excess of that, given how early it is, but my expectation is that we will have more to per euro than steroids, mostly given the lack of duration limit on the drug.

We have a question from David Risinger from SVB Securities.

So congrats to you, Matt and your team for all the nice updates and the corporate progress. So with respect to my questions, I guess I'll start with VTAMA. So the trends are obviously moving in the right direction. But on Slide 9, it does show that the TRx peaked and I know that there are sometimes anomalies in the data, but the TRx peaked for a few weeks, close to 5,000 and they're not back at that level yet. So could you just talk about the trajectory ahead and the commercial drivers for the continued ramp of the product. And then second, with respect to the approval clock for AD, once you file it in the first quarter of '24, how many months after filing would you expect approval? And then finally, a higher-level question, could you talk about second half '23 transaction opportunities. So should we expect a potential acquisition of additional external assets? Is it possible for Roivant to monetize an undervalued asset, any framework for thinking about potential external transaction activities would be helpful.

Thanks for listening, David. Thanks for those are all great questions. I will take them in order. First of all, on the script trends, thanks for asking the question. Look, I think, first of all, there's clearly just like week-on-week variability in the strips, and that's been true for all of the topical launches. It's not just ours. And so I think a little bit of the sort of "choppiness" noise, and I expect we will continue to break through the ceilings that we set for a set for ourselves over time. It may not be linear. The particular peak that you pointed out was just on the back of AD. And I think there were some docs who were maybe trying the product out on the back of that first atopic dermatitis data. And I guess my hope and expectation is that that's a preview of what's to come when the AD approval comes in, in terms of the level of enthusiasm around that data. But obviously, the product is currently not approved in that indication. In terms of time lines, so it's an sNDA, we expect a 10-month approval clock is the short answer after filing. And then in terms of transactions in the second half of the year, look, I think it is clear from our history that we are not great at sitting still. It's a pretty exciting market in a lot of different directions. Obviously, some of the targets that we are in are targets that are closely watched. They're targets that big pharma companies clearly care about. So you can imagine those are discussions that we're thinking through economically and trying to make sure we do the right thing for patients and the right thing for each program in turn. And then in the other direction, it remains a very fertile opportunity for new programs. Big pharma companies are constantly making portfolio prioritization decisions. obviously, the patent flip dynamics and other things facing the industry that have provided us opportunity in the past still can. And I think you can expect that we are looking actively at lots of things. And I hope to be able to share some of them with you over the course of the rest of the year.

Our next question comes from Neena Bitritto-Garg with Citi.

Sorry, if you can hear me. I just wanted to ask a follow-up question to Robyn's question earlier about what you're looking to see with 1402. Just in terms of the albumin reduction since it sounds like that is the most reliable sort of assay to look at. How should we think about what an acceptable albumin reduction looks like. I believe with the lower dose of batoclimab or the, I think, the 340 mg dose, you saw about a 30% reduction, which corresponded to about a 40% increase in LDL. So I guess, is there a benchmark on albumin reduction that we should be thinking about in terms of translatability to that kind of 10% or less LDL increase?

Yes. Thanks, Neena. And I'll ask Frank if you had any comments as well. Look, I think the short answer is lower is clearly better. And our expectation is it will be categorically different than what we saw with batoclimab and much lower. I think the sensitivity of these assays is in the kind of mid-single-digit range. And so I would say anything within that range should be completely acceptable as noise and will, in our view, lead to very low LDL in any reasonable patient acylation. So that's probably how I answer that question. Frank, anything to add to that?

No, I think that's…

Perfect.

We have a question from Corinne Jenkins with Goldman Sachs.

Maybe a couple of questions from us. First, what can you share with respect to like fill rate and the time from prescription to fill for VTAMA? And it sounds like it's early, but whatever other color you could provide on refill rate at this point would be helpful. Maybe I'll start there and ask my second one as a follow-up.

Thanks, Corinne. Appreciate the question. And I'll -- again, I'll ask Frank had anything to add here. I think our general view is patients getting scripts filled has not been a significant challenge at this stage. Early in our launch of specialty, we were heavily seeing fills through specialty retail derm pharmacies, which are a direct channel that the dermatologists work with all the time that we're very knowledgeable about VTAMA, knowledgeable about our copay card program and so on. So I think that was helpful at this point with our insurance coverage, frankly, many patients who show up at the pharmacy or just cover that the pharmacy. And so again, I feel it was as easy as any other product of Walgreens or CVS and so on. So I think we're not seeing much in terms of challenges getting scripts filled. On refill rate, look, I think we've been happy to see growth in NRx as well as good growth in TRx. And I think we're seeing a good number of refills. That's, in our view, a measure of the fact that patients on drug are happy to be on drug and continue to use it. And again, we don't have that duration limit. So I don't know how much to add beyond the data that say, I think it's clear from our current refill rate, as I said before, that we will be in excess of steroids in terms of tunes per year. Frank, anything you'd say on either of those points?

I think the only thing to add is, as you know, our coverage has been increasing meaningfully over time, and that is -- there's a little bit of a lagging effect, obviously, and how that coverage comes into play and plans its way into downstream plans. And so I think you'll see our -- the ease of prescriptions at the point of sale only continue to get better as that coverage has come and continues to come into place.

Okay. Helpful. And then as you think about, I think you referenced direct-to-consumer campaigns and spend, just how do you think about balancing that spend versus the coverage and yield rates you're working with today? And how can that change over the course of the year?

Yes, thanks. Look, it's a great question. And obviously, I think we've talked about this in various forms for early in the launch, when we didn't have the kind of payer coverage that we do now, DTC is a real balancing act because you can definitely drive volume through DTC. But if you're not getting coverage, you're driving volume that is not sort of commercially helpful volume per se, and it does cut against GTM. But where we are now with 76% commercial coverage, I'd say in general, demand generation is going to be helpful. And so we've increased sort of the picture around DTC. The Derm team has put together a great campaign. It's out there now, and we're sort of still in the early days of it figuring out exactly the right targeting plans and sort of getting real-time feedback from the marketplace. -- but feel good about what that's going to mean. I would expect to see that take some time to filter into the strip trajectory. It takes a number of impressions before patients respond to you can see and come into the office and so on. So that's something to watch for kind of through the end of this year and beyond. But in general, I think it will matter. And then in terms of spend, I'll just say it's included in the various guidance that we've given in terms of where we expect it to be. And I'd say in the grand scheme of things, it will be well worth it for the demand that we generate on the back of it.

We have a question from Dennis Ding with Jefferies.

Just 2 for me on TL1A. For your Crohn's program, thanks for timing your deck. Can you comment on if you will use similar doses as you did in UC? Or could you explore higher doses? And maybe talk a little bit more about the biomarkers is this the same biomarker from UC. And then number 2, I saw in your 10-K that for TL1A, 20% of patients who are biomarker positive did not give consent. Can you confirm that's true? And maybe give a little bit more color as to why and perhaps the commercial interpatient there.

Perfect. Thanks. So on the dose question, I'd say we're pulling from a similar range of doses in the Crohn's study as in UC. So I think that's the answer on dose. And on biomarker, we are using the same biomarker algorithm in Crohn's as we used in UC. And our expectation is that the patient population should be similar in the size of the patient population. And our belief based on our understanding of our biomarker algorithm is that it should obtain equally chrome, obviously, we're excited to see that data from the study. On your question about the 20% consent. So this is something we had shared at the time of the induction data. Basically, the biomarker samples were gathered from all patients in the study but the analysis of those samples required a separate consent and the sponsor of the study did not obtain consent for 20% of the patients in the study for those samples to be analyzed because of local IRB and site policies. So basically, all of our biomarker data, biomarker-positive and biomarker-negative effectively reflects on 80% of the study population. Where all comers include even those 20% of patients for which the biomarker data was not gathered. We have no reason to believe there's any relationship between those consents and severity or anything else. The data are robust. There's plenty of end, but that's just the way the study was conducted.

Great. And maybe as a quick follow-up around the LNP patent litigation. What's going on there? And when can we get the next update? Are we still waiting for that claims construction order maybe in 2024?

Yes. Thanks. So those cases, and there are several of them at this point are ongoing, and we continue to be pleased with the overall progress now that we're actually in the medium the case. We are in the discovery process in the Moderna case now. And so you can imagine new information will be forthcoming that will affect the progression of the case. But most importantly, we're gearing up for that same think construction hearing and claim construction order that will come at the beginning of next year. That will probably be the biggest, most publicly visible next step, although plenty will be happening behind the scenes over the course of the fall.

We have a question from Yaron Werber from TD Cowen.

This is Julius on for Yaron. Maybe just a follow-up on the question before about 101 in Crohn's. Is there a hypothesis here that it might work better in Crohn's just given that the fibrotic component is a bit more involved in this disease versus UC. And then you obviously show really great data on endoscopic remission in the FDIC study. Can you just maybe comment on what you're hoping to see there in Crohn's disease? And maybe what other studies have shown in the past on this endpoint?

Yes. Perfect. Thank you. These are great questions. Look, obviously, the study will show what it will show. Certainly, the line of pression you're asking is one that we thought to that Crohn's is an even more -- fibrosis is even more involved in Crohn's ease than it is in UC. And when we look at things like the specific markers of fibrosis that were identified in Pfizer's Phase II(a) study as well as the anomic remission and the clean endoscopy that we saw in our own Phase II(b) in the chronic period. I think there's certainly reason to believe that we could potentially be even more differentially efficacious MCD. And look, agents typically that work in one typically work for the other. So I think that's the other the other sort of generally historically true fact. And certainly, a biology of TL1A suggests the same would be true here. And then look, our biomarker, as I just said, also we think should carry through into CD. It should give us an opportunity for differential efficacy in a large subset of CD patients as well. In terms of endoscopic remission specifically, it's a good question. I don't have a super specific answer. I think Crohn's patients may have more tissue involvement than UC patients. So that may be a slightly tougher endpoint in that patient population. But on the other hand, we're delivering an antifibrotic benefit that could matter. And I would say it certainly seems plausible that we would see benefit in endoscopic remission as well.

And our next question comes from Brian Cheng with JPMorgan.

Maybe just first one on TL1A related to your Phase II trial design that you have ongoing for Crohn's. I'm just curious if you can provide a bit more color on the dosing that you have selected, specifically in the chronic period. It seems that you will be only be evaluating one specific maintenance dose based on Slide 23. Just curious if you already have a sense of what the dose will be for the chronic portion? If not, what would be the deciding factors for the chronic portion? And I have a follow-up.

Yes. Thanks, Brian. Look, I appreciate the question. We believe we got a fair amount of information from the dose ranging in our UC study that has been helpful in making a prediction here, a pretty robust understanding from our dose response there. That's given us a good deal of confidence in Crohn's dosing. And we are pretty confident that we know what our chronic period dose will be in the Crohn's study. So there's no -- there's not really any ambiguity for us in that. We are -- for the same reason that we have not shared specific dosing information in UC. We're not going to share our choice of doses at this stage for the CD study, we will be happy to share those around the same time we're willing to share dose ranging data in use next year. But in general, dose response that has been identified USC is generally predictive across IPD. And so we feel pretty confident in our selection of doses there. As a reminder, we have very robust dose-ranging data at this point for 3.

Okay. I guess related to hemavant, which I don't think a lot of investors have looked at yet. Just curious, one is, how should we think about the timing for this update given that you will have immunovant data spread through the fall and also you have brepocitinib data in the fourth quarter. So one is how should we think about the timing from the Phase I/II? And then also, what do we think about -- what should we think about the expectation for the lower risk MDS data? How do you think about the bar there for you to move forward to the next stage?

Yes. Perfect. Thanks, Brian. That is -- it's a great question. You're absolutely right. We don't get it very often. So the study for 2001 is an open-label study, and we've had good progress on enrollment. So we're going to have a decent number of patients worth of data. We will provide the update probably pretty late this year, frankly, because the longer we wait, the more data we have, and I think we want to provide an update on the load comprehensive set of that data. I think in terms of the bar, as I think we've said before, in the earlier patients -- in the earlier study in AI -- or the early report of the study at AI conducted, there were about 20 patients or a little bit less than 20 patients that had the sort of profile that we are looking for here that were sort of low-risk transfusion-dependent MDS patients. And we saw sort of a little bit higher than 30% transfusion independence rate. But I think what we're looking for here as we move into earlier line patients is something that would be sort of obviously competitive with or superior to luspatercept, which as I'm sure you know, is in kind of the mid-40s in patients without privalienomide exposure. So I think that's probably the first thing. The second thing we're looking for is we are hoping that a decent number of these patients will have this biomarker Abertamon14C transcripts, where we saw a very high response rate in the earlier patients. And if that's true, we should be able to provide some update on how we are doing in that patient population and whether that opens up for precision icono strategy. So that's broadly what we're looking for here. We will share that update, as I said, very late this year, almost certainly after the other.

We have a question from Louise Chen from Cantor.

Congratulations on the quarter. So I wanted to ask you, if you're approved for atopic dermatitis, is all the work or the payer work that you went -- or that went into beta for psoriasis, can that be leveraged? And then secondly, are rheumatoid arthritis, is that a potential opportunity for Immunovant? And if so, what do you think your go-forward plan would be there? And then lastly, just wanted to ask you for brepocitinib, big data readout coming at the end of the year. What do you think you need to see to move forward with this opportunity? And why do you think you'll be successful when others have failed here?

Yes. Thanks, Louise. Those are all good questions that span the portfolio. So I'll take them in turn, but thanks for asking and thanks for listening, as always. So on the first one, the short answer to that question is it's definitely yes. That is all of the payer contracting work in psoriasis is extremely helpful in atopic dermatitis. Obviously, at some level, there is an additional sort of formulary positioning question that needs to be answered because the cascade of therapies at AD is slightly different. But the contracting work, all of the commercial work in psoriasis will translate and be very helpful in getting quickly on to formulary NAD. In terms of 1402, look, the sky is the limit from an indication perspective. And I think, especially now that we think we have really the only true at-home Easy subcu, any indication is eligible. RA, it's an interesting question biologically. It's probably not something that we were initially very focused on. JJ has this ongoing study that they've talked a bit about, and they've said they are going to show that data later this year. You can imagine in autoantibody RA patients that there could be an opportunity. And I'd say if the JJ RA data looks good, we could be very quickly in, frankly, a pivotal study if we needed to and compete with them, probably, again, sort of the more severe patient population. And I think that could be a really, really exciting opportunity for 1402. And given 1402 profile, a simple subcu, what we believe will be the cleanliness in Albian LDL and the depth of ITT suppression. We think that's an example of an indication where if JJ's data is good, we think we ought clearly to be the best-in-class agent and frankly, it could be neck and neck for first-in-class at that time as well. So really exciting possibility. On brepocitinib and SLE, we talked a little bit about this. It's not a simple numerical bar. Look, I think it's about building on the data that we've already seen, including data on baricitinib as a JAK1, more recent data in baricitinib is a DAC1 and then the data that we've seen in deucravacitinib as ATCI, combined with the knowledge that brepocitinib, which has now been in well over 1,000 patients, has outperformed the cross-trial comparisons, both JAK1 and TYK2s across many, many, many studies. Remember, it's been running 5 large late-stage sort of Phase II studies at this point. And so look, I think that combination gives us optimism that the agent could perform very well in SLE. The other factor with SLE always is you mentioned some of the challenges. So there's a base these studies are difficult to conduct. Pfizer has the conduct of the study, although we've had a lot of input. And I think we're doing everything we can to ensure including the study learned from many of the prior designs to optimize for the possibility for success there.

Our next question comes from Douglas Tsao with H.C Wainwright.

Sorry, I was on mute. Can you hear me now?

Yes.

Congrats on the progress. Just given what we saw from Tuscany, obviously, with 3101, you're starting the study in Crohn's. I'm just curious how much more broad how are you thinking about the opportunity with that asset outside of IBD. So obviously, Crohn's is a natural sort of first step, but are you thinking about other indications in I&I with that asset?

Yes. Thanks. Look, the short answer is yes. We are thinking about opportunities that go broader to other inflammatory disease to other fibrotic diseases. I think the plan -- given the quality of the data in IBD, the playing field is very large. And so we're thinking about ways right now to narrow it down a little bit and figure out what our best lines are. And we're looking forward to sharing more of that color as soon as we can look, there's just a lot of biology to support indication expansion here. And frankly, TNA knocks down so many different targets along the inflammatory and fibrotic axis, but you can look at like we have an impact on IL-6. You can go where the 6s are. We have an impact on T&F if you look at all of the many places the TNF sander. So there's just a lot of different places to go. And I think our goal is to be smart about it to find things that benefit from the full access to find things that fit from a commercial perspective together with where we're starting and to try and learn as much as we can from small studies to guide our decisions. So that's all sort of to come soon.

And I guess, Matt, as a follow-up, within the portfolio, I&I has certainly become a clear focus from a business development standpoint, obviously, bringing in 3101, you bought brepocitinib. I'm just curious at this point with the portfolio, how are you thinking about the balance between bringing in new additional assets as they potentially might become available versus pursuing some of the natural expansion opportunities or sort of just running new studies in different indications than the initial targets.

Yes. Look, I think on the one hand, we are very pleased with the coherence of our late-stage portfolio and of the fact that we've built and I&I pipeline that we think is among the best out there. So I think we're proud of that. And we think insofar as opportunity begets opportunity, we will continue to get calls and look at lots of different things within I&I. That said, when we started talking about the TO18 program with Pfizer, 1402 hasn't yet presented itself, and we obviously didn't have TL1A yet, and we still had -- I think at the time, we still had our sickle cell program, and we weren't obviously an I&I company. And I think if we had said that we're something else company, we might not have had the opportunity to work on TL1A. So I guess what I'd say is the next TL1A, if it is outside of I&I, but that attractive, it's still something we will work on. So look, I think we see lots of opportunity in lots of places. We like the concentration but not so much that it would stop us from working on something else great in another area. And we see plenty of exciting things inside and outside of I&I.

Thank you. I would now like to turn the conference back to Mr. Matthew Gline for any closing remarks.

Yes. Thank you, operator, and thank you, everybody, for dialing in this morning and for listening. I know we made you do 2 calls in the space of a week. So we appreciate it. We have a lot more to share over the course of this year and look forward to getting back together later in the summer. So thank you again, and have a great day.

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