Roivant Sciences Ltd. (ROIV) Q4 2023 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Roivant Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [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, Abby Beier. Please go ahead.

Good morning and thanks for joining today's call to review Roivant's financial results for the fourth quarter and fiscal year ended March 31, 2024, along with the business update. I'm Abby Beier with Roivant. Presenting today, we have Matt Gline, CEO of Roivant. 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 investor.roivant.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 4 with a run for what we're going to talk about and then we'll go through the presentation. So we'll talk a little bit today about where we are in the year. It's been an exciting fiscal year for us already even though we're only a couple of months in as well as what our plans are for the balance. We're going to give some updates to Immunovant who also filed their earnings yesterday and who aren't doing a conference call. We'll review the brepocitinib data in noninfectious uveitis that we generated during the quarter. We'll talk a little bit about the ongoing VTAMA launch and actually we'll spend a minute or two on renegotiation of some of VTAMA'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. So I'll start on Slide 5 and just to say, 2024 was always planned to be a year of expansion and growth as you're 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 out of 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 brepocitinib as well as data coming later this year in sarcoidosis and others. We continue to make progress at Dermavant with VTAMA's sNDA now in for atopic dermatitis with a PDUFA 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 the program that we've been licensed that haven't yet tried 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 $1.5 billion and repurchased stock from Sumitomo what we think was an attractive price. So on Slide 6, 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, if VTAMA's launch atopic dermatitis will be an important event for us. The anti-FcRn 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 grades 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. 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 B meeting with FDA that sets forth the clinical development plan for IMVT-1402 that really establishes it as our lead program at Immunovant, then we've got brepocitinib, our dual inhibitor TYK2 and JAK1, which now has pretty obviously best ever demonstrated data, at least in a Phase 2 study in noninfectious uveitis. An ongoing pivotal program in dermatomyositis, just a really great set of data on which to build an exciting franchise in orphan autoimmune. And then we have some other readouts coming, including namilumab and sarcoidosis later this year and some data and expect in our future plans in this undisclosed program that I mentioned. So I'm going to go first into updates on Immunovant on Slide 8. So there's a lot of progress in the Immunovant portfolio and Immunovant put out the earnings release yesterday with some of that highlighted. I just want to hit what I think are really the key highlights here on Slide 8. 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 Immunovant. It is, we think, a potentially best-in-class anti-FcRn 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. Batoclimab development efforts are being optimized to a point to inform 1402 development plan, so to serve as better and more robust Phase 2 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 batoclimab 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 method of manufacturing IP out to June of 2043 and that's notably before any use of patent term extension. So designating that our lead program, we have a really long time here with a very exciting antibody with a lot of really promising clinical development underway in a target that is obviously going to matter broadly in immunology. So overall, updates that I think are important and positive in establishing what Immunovant looks like over the coming months and years. There are some program specific updates in Immunovant laid out on Slide 9. One is perhaps most importantly from my perspective, we're now announcing that we're planning to disclose detailed results from batoclimab 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 in MG is expected this fiscal year. And notably, Immunovant is expecting also to begin registrational development in MG with 1402 in the same timeframe. So again we retain full registrational flexibility with bato. We think MG is an important enough indication and 1402 is an important enough program that it deserves to be developed in MG. Immunovant has decided to extend the run time effectively of the CIDP study in bato by about two quarters prior to unblinding the period 1 data. This really is to optimize the potentially pivotal plans for 1402 in CIDP. And that is to treat the sort of period 1 more as a robust Phase 2 for 1402 and to get as much information as we can about dose response. That's in particular informed by 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. That point I want to underscore again on Slide 10. 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-FcRn antibodies across different indications that deeper IgG suppression matters. It's been true at a patient level in MG, but across our competitor programs at argenx and J&J. It's been true to a significant degree in our own thyroid eye disease data. We stated and we'll show better this fall that it is true with 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 auto antibody reduction and greater clinical response in J&J's RA data. So we say over and over again that we think 1402 is a best-in-class drug. But I want to remind everybody, the 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 data set 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 any thyroid's drugs. But 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 with patients with 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' 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 will be questions on Immunovant we'll come back to. Now 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 Priovant team presented on our call earlier this spring on brepocitinib in noninfectious uveitis 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 uveitis 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 define about 40,000 patients both with non- anterior NIU on biologics, which includes adalimumab, 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 a backdrop that we'll talk about in a second, that those therapies do not work particularly well. And so far, what we've seen in Phase 2, our data looks meaningfully better. And notably, there are no competitors currently in Phase 3 in uveitis with only a limited number of competitors in Phase 2. So we think at any kind of orphan price point with our kind of differentiated data this is a multibillion-dollar peak sales potential opportunity even in a post biologic refractory population with additional opportunities in a broader non-anterior population. This is on Slide 14. 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, this is -- the 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 or 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 2 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, if these patients show up with disease and are put on a high dose burst of prednisone, which has 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 2 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 a 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 discontinuation 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. I think that there's a question like how to think about this. Maybe put another way, in HUMIRA, after about six months, half of HUMIRA page, which after about 11 months, half of HUMIRA patients have developed macular edema. And after about six months, half of placebo patients that develop macular edema. And these are among patients who didn't have a 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 the macular edema by week 24, whereas in HUMIRA, it was about 22% and 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. Yes. I think on Slide 19, just to reiterate, this is a large commercial opportunity. This supports a differentiated product profile with a real early treatment option. The physicians look 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 agents, certainly no nonsteroidal agent. That has shown an ability to reduce or mitigate ocular inflammation as well as brepocitinib has so far. So we are incredibly excited about this opportunity. We'll continue to talk about it, and we're paring for a pivotal program to begin later this year, and we'll share more about that sign and timeline as it comes together. So now I'm going to transition to VTAMA. On Slide 21, which kept the results for the fiscal year to about $75 million in net product revenue, a gross net yield of about 24% for the quarter. 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 slide 22 to drive switches from standard-of-care just based on the existing VTAMA patterns in psoriasis and 75% of the early adopter health care providers in AD, the ones who writes novel mechanisms early have already been engaged with in our psoriasis launch. So we know these docs. And this is against the 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 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, we 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 PDUFA 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 Dermavant had some debt and royalty obligations that came from the early acquisition of the program actually represented a relatively meaningful portion of our burn on Dermavant during this prelaunch and sort of 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 saw a pretty meaningful reduction in the expected burn at Dermavant that overall gets to one of the theme 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 renegotiation is certainly a part of that commitment. So we have some pretty important catalysts coming on Slide 25. And we're through at this point, the exciting data from brepocitinib. We're through the sNDA filing for VTAMA. We have the upcoming Graves' data batoclimab and an overview of our 1402 development plans this fall. We have top line data from our Phase 2 trial in sarcoidosis and namilumab 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 1 of the Phase 2b study in CIDP and Immunovant 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, I 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 VantAI 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 of this thing. And notably, I think this is clear to the most. We have mostly been funding our discovery efforts through external partnership and external investment, and that continues to be true at VantAI, 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 VantAI. Finally, two other business updates on Page 28. One is something that we give our questions about over time, which is our patent ligation with Moderna. In April of this year, as many of you know, the court agreed with our proposed constructions for most of the distributed terms against Moderna in our Markman ruling, which sets us up with a clear set of favorable boundaries in the playing field as we get through the rest of the free trial disputes through the rest of the 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 Kinevant has fully enrolled at this point that we've announced publicly our Phase 2 potentially registrational study for Immunovant and sarcoidosis. We're expecting that to read out in the fourth quarter, that is a high SKU 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 10-K does not yet reflect the renegotiation with Dermavant. So you will see that renegotiation reflected on our 10-Q for the 6/30 financials. So with that I'll leave off on Slide 32 and just say in addition to everything we've talked about for catalyst 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 are excited to talk about 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.

Thank you. [Operator Instructions] Our first question comes from the line of David Risinger with Leerink Partners. Your line is now open.

Yes. Thanks very much and thank you for all of the updates. So I just wanted to ask a little bit more about batoclimab's readout. So could you please add some more color on what was surprising in the CIDP trial? And I guess whether your level of confidence for that asset and CIDP is unchanged. And then also if you could discuss the slight delay in the MG readout for batoclimab, that would be helpful as well. And then separately, Matt, you mentioned the very unique modeling capabilities you have for protein-protein interactions. Is that solely for facilitating larger drug companies drug development via partnerships or would your organization ever design its own drugs with those capabilities and patent drugs to be developed by Roivant. Thanks very much.

Yes. Thanks, Dave. Those are great questions and I appreciate them. I'll start with the Immunovant questions. First of all, I want to be clear. We haven't seen any of the data for either batoclimab in MG or batoclimab in CIDP and certainly, the biology continues to be supportive. The competitive data continues to be supportive. So I would say, there is absolutely no change in our level of conviction around what batoclimab or anti-FcRn antibodies can do and I think the main thing behind these changes, especially on the CIDP side is actually increased conviction in what we think 1402 is going to be able to do, including increased conviction based on the regulatory interactions that we're going to be able to move really quickly with that development plan. And so a desire to get the most possible information out of the bato study in order to inform that plan as it falls into place. And notably, this won't create any delays with the 1402 CIDP study because that would have begun sort of by the end of this fiscal year effectively anyway. Look, I think, the short answer to the CIDP question you're asking is, I think, we believe we are successfully enrolling quite severe patients. These studies are complex and it's hard to know exactly and we don't have exact data, but we continue to see some discontinuations. This has been observed in the argenx program as well. This is an early learning of theirs. Frequently, in patients who either have not yet been dosed with batoclimab or who've only had minimal early dosing of batoclimab. So nothing to do with batoclimab, but these are exactly the patients who are severe and active and you want in the study. And so we want to make sure we have enough of these patients and enough data from these patients. Frankly, specifically to understand the dose response that we'll generate in period 1, so as to inform a proper design for 1402 where we can get a maximum efficacy benefit from that program. So that's what I'd say on batoclimab overall. I think the sort of small delay, to the extent there is one in MG is really just a function of why getting a little bit closer to full enrollment on that study and understand exactly when the patients are coming in. I don't think there's anything particularly material in that timing shift. And we haven't finished enrollment yet. So in theory is possible, that can still be on time. We just got to see what that looks like. On the VantAI point, yes, look, it's a great question. It's not something we talk a lot about these days. Certainly, the reason that we continue to invest time and energy in VantAI and the other drug discovery events that we've built is because we see pipeline optionality for ourselves and value and continue to invest in these technologies. And frankly we think the sort of predictive generative modeling of protein-protein interactions, something we've been working on for years. It's starting to get more billing now because it's something that [indiscernible] has been able to do to some degree. And we think it's going to be incredibly important, obviously, for things like where we've historically spent time and effort header by functional in particular molecular glues for protein degradation. But also for lots of other systems that involve protein-protein interaction. So I think the short answer to your question is while it's currently largely externally funded through partnership and other things. Absolutely, we constantly reevaluate opportunities to develop and advance programs for our own pipeline using those technologies.

Great. Thank you very much.

Thank you.

Thank you. Our next question comes from the line of Louise Chen with Cantor. Your line is now open.

Hi. Congratulations on the progress this quarter and thanks for taking my questions here. So I wanted to ask you how you think about the peak sales for atopic dermatitis and the pace of the uptake of that potential approval later this year? And then do you have any updates on your capital allocation strategy? I know in the past, you kind of broke out what you thought about share repurchase, M&A, internal investment. Any thoughts there? Thank you.

Yes. Thanks, Louise. Those are both great questions. Thank you for listening this morning. On AD, I'd say, look, I think we are excited about the AD opportunity. We continue to reiterate, we feel like it has true blockbuster potential. AD is a big market. It is qualitatively different in size and dynamics from psoriasis. And we think VTAMA has phenomenal data that stacks up even better competitively than our data in psoriasis. So unquestionably, we think AD has the potential to be a blockbuster market. We think it has the potential to ramp faster than psoriasis has ramped. That's true for a number of reasons. It's true because the market dynamics that the market is growing because of more scripts. It's true because many of the docs now have familiarity with VTAMA from the psoriasis side. It's true because there are other novel topicals that have conditioned docs to write things other than steroids. And so for a variety of reasons, we are really excited about the AD market dynamics and think we have a potential for a reasonably rapid blockbuster potential drug. So enough said on AD. On the capital allocation strategy point, I think, we've obviously made significant progress here with our share repurchase authorization and we expect to continue to use that authorization to be opportunistic and focused in returning capital. I'd say like, overall, the broad buckets that we had laid out before remain unchanged. So about $2 billion of the original total for our existing pipeline. A lot of that focused on Immunovant as of now. About $2 billion, these are really round rough numbers focused on mostly clinical development related to newly in-licensed programs and we see some great things on a racket and then the remainder subject sort of narrowing those error bars down available for return or share repurchase, et cetera, in the coming months and years. Thanks, Luis, those are both really good questions.

Thank you. Our next question comes from the line of Allison Bratzel with Piper Sandler. Your line is now open.

Hey, good morning. Thanks for the update today and thanks for taking the questions. So just first following up on the Immunovant strategic update where you're prioritizing 1402 of batoclimab. Can you just talk more -- help us understand what went into that calculus a change in competitive landscape or the FDA meeting something else? And just why you're making that decision now? And just help us understand if there are any scenarios in which batoclimab would be filed for approval in any indications, what would that look like? And then just separately on brepocitinib kind of a bigger picture question. I think we hear your excitement on the potential market size in NIU plus BIM, other indications. Just what gives you confidence that the current ownership structure of Priovant is optimal, any scenarios where you would be open to revisiting that with Pfizer or just help us understand your thinking there. Thank you.

Yes. Thanks, Allison. Those are both great questions as well and I appreciate it. On Immunovant, first I'll reiterate, nothing about any of these updates reflects any loss of confidence or change in conviction around batoclimab, which is a great drug. We don't have the data in CIDP or MG, so I can't say what it's going to look like. But what we think is a compelling opportunity. And to be clear, we have absolute flexibility to launch it in any of these indications if the data is supportive. And that as with every decision we make will be a data-driven decision at the time. I think the update around 1402, which I think some people think is maybe a long time coming, came for us, I'd say, for a number of different reasons. Some of that related to what we've seen in the Graves' data and our increased enthusiasm for what 1402 looks like we've always been enthusiastic, but obviously, in terms you see it in patients, you don't know what you've got. And then, frankly, the FDA interaction, the Type B meeting was important because it allowed us to discuss many of the issues around the pace of 1402 development with the agency and get comfortable that we're going to be able to move quickly there. And I think that's a really important step. And I think it sort of affects how we think about the franchise with having a clear understanding around the speed in which we're going to be able to develop 1402. So I think those are sort of the main factors. That said, again, I think we're going to make a data-driven decision on batoclimab in these various indications. And I think the data, for example, in MG on dose response is going to be both informative for the potential profile of bato as an MG drug and also informative for what 1402 looks like. And again, we have, at this point, increasing and high conviction that 1402 has the potential to be a true best-in-class antibody in a class that is -- in an area of biology that is obviously growing with every passing week and month. Thanks, Allison. I'm sorry. And then on brepocitinib. Look, I think, we are really excited about what we're doing with brepocitinib. Pfizer is a good partner. We talk to them all the time about a lot of things. I think if we continue to develop brepocitinib as a 75-25 partnership with Pfizer, that will be great. But I would say everything is certainly on the table from our perspective and we would be certainly happy to own more brepocitinib as we'd be happy to own more of a number of our programs just given our level of prediction in the data. Thank you.

Thank you. Our next question comes from the line of Corinne Johnson with Goldman Sachs. Your line is now open.

Thanks and good morning guys. Maybe a question on the path to profitability comment, I think, for the press release. I guess what are the assumptions that factor into that comment? And is this reliant on VTAMA sales, sales other products, which ones? And then how do you think about that comment when you're contemplating potential deals, would you sort of forgo path to profitability in order to acquire something interesting or is that a priority over BD. Thanks.

Yes. Thanks, Corinne. That's a great question. Look, I guess, I'd say a few things. One is, how is the predicting profitability for a business like ours is a challenging exercise. That said, a little bit of everything goes into the forecast in the sense that there's sort of probability weighted estimates for a variety of our programs and some of them like VTAMA have high probability associated with clinical success and some variability in the commercial forecast. Although, again, we have a lot of enthusiasm for VTAMA and AD. Some of them have lower probabilities of success, but all of them are sort of in there to some degree. I guess the second thing I'd say is I would feel pretty embarrassed if I couldn't sit here today and say that with $5.5 billion, we could be profitable or that with $5.5 billion, we can do BD and also be profitable. So I think I believe both of those things, I believe them comfortably. That having been said, we are going to make ruthless economic decisions about everything in our portfolio and around new opportunities. And I think, I guess, it is imaginable that a program could come along that would change that picture. I don't foresee such a thing. But if it did, you'd have to believe it would be a really good program and worth investing that kind of capital in. So I don't think it's like sacrosanct, but I also feel like we have enough capital on our balance sheet right now to ensure we can do everything we need to do. Thanks, Corinne.

Yes. On the deal front, I guess, we had expected maybe some deals earlier this year. Maybe you could talk a little bit about what you're seeing in terms of those conversations and the difference between kind of sourcing ideas versus executing on a final deal?

Yeah, perfect. I mean I think the answer is -- and we said this before, and my view on it is either unchanged or slightly improved. This is among the best or the best deal environment we have ever been in. That's true because of the shifts and changes going on at big pharma, it's true because of the Cambrian explosion of new biology and B cell immunology, it's true in a lot of different ways. And we see opportunities we like in immunology, in cardiometabolic disease, in pulmonology, in rare and orphan disease in lots of different areas. We are in all stages of discussions from economic negotiations all the way down to idea generation. And I expect there will be multiple fruitful elements coming out of those discussions in the coming, call it, months. So look, overall, we feel tremendously lucky to be in the position that we're in at this moment in time, and we're working really, really hard to capitalize on it expediently while making sure that we bring in the right programs, not just to bring something in, but for something that we're excited to own forever. Thanks, Corinne.

Thank you.

Our next question comes from the line of Brian Cheng with JPMorgan. Your line is now open.

Hi, Matt. Thanks for taking our question this morning. Just first, on the back of your FDA meeting, can you give us a sense of how the rollout of your plan of four to five potentially pivotal program will look like over the next 10 years? And what was the key take from the Type B meeting with the FDA. Was the Type B meeting for all four to five programs? And I have a quick follow-up. Thank you.

Yes, thanks. Maybe I'll hand it over to Frank. I'll just say, we haven't commented which division of FDA we met with on the Type B meeting, but we can hear the correct. But, Frank, do you want to take this one?

Brian I just want to make sure. I think what you said was comment over the rollout over the next 10 years, did you mean over the next 10 years or?

Sorry, the next 10 months, the next 10 months because you'll be teeing up the prototype programs by March, sorry.

Sure. Well, I think you can imagine that they will roll out toward the later part of the year. And we've been progressing them reasonably in parallel. So there'll be some operational staggering of those things as they roll out, but we've focused on indications where we think we need to have a foundation in the space and also where we can do some novel things. And we look forward to talking about a little -- it's a little more specificity exactly what those are later in the year.

Great. And then a quick follow-up is on Biohaven's update on the SAD data yesterday. Just curious what's your view and your stand on their data. Thanks for taking our question.

Thanks, Brian. Look, I think, this is important biology. There's patients that are in need. Our general hope is to root for our competitors' successes because the rising tide lifts all boats. It's obviously that investors were disappointed with the Biohaven update yesterday. I don't think that's a controversial comment. Look, I think, the main thing competitor data generally over the past few months has underscored for me is FcRn has a target, has gracefully cleared a fairly high bar and I think it cleared it so gracefully that lots of people and other mechanisms, I think, assumed the bar was lower. We didn't totally know where it was because the bar doesn't reveal itself when you clear it. But I think what we're now seeing is it's challenging that this biology is challenging, they're predicting the translation of this biology from animal models, the humans is challenging. And there's just a lot of work to do. So, look, I think that the main thing that competitor data updates have shown us in the past few months is that it's hard to kind of kick in here. And FcRn is really the only mechanism that is clinically validated in many patients, across many indications to be able to deliver in this category of biology. And I am sure there will be others to be clear. This is not like FcRn is not the only mechanism that will succeed. But I'm also sure that it will take time and effort as it did with FcRn for that to materialize. So maybe that's what I can say on the competitor data.

Great. Thank you, Matt.

Thank you. Our next question comes from the line of Yaron Werber with TD Cowen. Your line is now open.

Great. Thank you. So maybe I have a couple of questions. The first one just on Graves' disease. Can you give us a sense of how much data are we going to see in the fall? Is it going to be the full data? Is it going to be at a medical presentation? And then secondly from that study, do you have enough, will you have enough sense in dose response to really be able to design a pivotal Phase 3. And maybe just on namilumab, I know this is a drug you really have not talked much about you kind of positioning as an upside potential so to speak. Without a lot of downside to the stock. But how strong do you feel about this mechanism sort of anti-GM-CSF for sarcoidosis. Thank you.

Yes. Thanks, Yaron. On the first one and Frank I'll ask if you have feedback here too. I think the short answer is we're going to share a fairly comprehensive data set this fall that will reveal, I'd say, like our performance and something about our dose response and the performance of various arms across different measures for these patients. And this design, which I think you know was patients were started on a dose and then move to a lower dose after a certain number of weeks of therapy was specifically designed to allow us to see a dose response, test the lower better hypothesis and just answer questions about the pathophysiology of Graves' patients. I believe this study design is sufficient for us to move and design a pivotal from here, a pivotal program from here. Frank, anything you would add to that?

No, I think it's well said.

Great. And then on namilumab. Look, this is different than studying FcRn even in a novel indication and the FcRn is validated biology. We understand exactly how it works. And these diseases are relatively straightforward in many cases cause it linked to auto antibodies. Obviously sarcoid is a complicated multifactorial disease. That said macrophages plainly play a role in the formation of granulomas in sarcoid and GM-CSF has biological relevance to that. Probably the success is still comparatively low just given the biology and the nature of the disease. But if it does work, it's a huge commercial opportunity. And so I think we feel pretty good about it. Thanks, Yaron.

Thank you. Our next question comes from the line of Yatin Suneja with Guggenheim. Your line is now open.

Hey, guys. Thank you for taking my question. Question on the Immunovant. So there are indications like myasthenia gravis and TED, where you have a pivotal program ongoing with 1401. Could you talk about what are the key metrics for you to decide if the data are positive that you will file a BLA or you will advance 1402? Or could you do both of them help us understand? Because I think the one question that we generally get from investors is that, look, you have two assets. On one hand, you're saying you're going to really advance 1402 across all indications, but you do have to deal with these two pivotal studies ongoing and then there are certain investors that care about being on the market for us. So help us understand how those decisions will be made? Is there a potential that you will file a BLA for gMG and TED, if the data are positive, and then how should we think about 1402 for those at least two indications? Thank you.

Yes. Thank you. Thanks for the questions. They're good questions, obviously, relevant. Look, I think the short answer is, we are going to make ruthless data-driven decisions around whether or not to file bato in any of these indications. These studies continue to be designed as potentially registrational studies. There is no change in any of that. And if the data are supportive of an attractive commercial profile, we will launch the program. I don't think that fact would stop us from parallel prosecuting registrational development of 1402 given the profile of 1402. So I think to answer your question, both is definitely possible. And I think what we're trying to do here is in indications where we can catch up, we'd obviously rather be out with 1402 with its profile, given where we are. And so we're also just trying to set ourselves up for the maximum likelihood of being able to get to, frankly, get to first store in the front pack everywhere that we can. And in places like MG and CIDP, where argenx is plainly ahead of us. We're going to evaluate our positioning based on the data we see and make what we think will be a smart decision at the time. Thanks.

Thank you. Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Your line is now open.

Hi. Good morning and thanks for taking the questions. Maybe, Matt, just on brepocitinib. Just curious, when you think about the differentiation we saw in your study and you look ahead to Phase 3. I'm just curious, do you have a thought in terms of where you want to lean into in terms of that differentiation. Obviously you used a shorter steroid tapering period in your study. I'm just curious, would you want to replicate that or would you perhaps just sort of go with the same steroid tapering that they use in the HUMIRA studies in which would potentially or should in theory give you even better treatment failure rates? Thank you.

Yes. Thanks, Doug. It's a great question. Obviously happy to talk about NIU because we're really excited about it. Look, I think given how well the study works, and given that a steeper steroid taper ought to continue to provide good separation or perhaps better separation from placebo when we add one into a study. I think given how well it works here, I suspect we will be in time to continue to go. Differentiation beyond that, not the study time perspective, but overall was obviously a big advantage for brepocitinib and NIU, although it pales in comparison to the potential treatment efficacy benefit and look I think what we're looking for at this point is parsimony. We're looking for a fast efficient study that will in an ideal world, replicate if we can just replicate what we saw in Phase 2 or even come close to replicating what we saw in Phase 2, I think, basically everything else in NIU is going to sort itself out.

Okay, great. That's really helpful.

Thank you, Doug.

Thank you. Our next question comes from the line of Andy Chen with Wolfe Research. Your line is now open.

Hey, good morning. Thank you for taking the question. So Matt, the question is on the optionality with batoclimab. So you have four indications on the table. And let's say, hypothetically, we know the data from MG. We know the data from CIDP. The data is that batoclimab is equal or slightly better than [indiscernible] on efficacy. I'm just curious if you can rank order the four indications, which ones are you more excited about? Which ones are you less excited about, because not all of these are the same, right? Because like some indications are more competitive. In some indications, safety is more important. If you can talk about like where each indication stands with batoclimab, that would be great. And then a follow-up on VTAMA. So I know you have your NBRx data here on the slide. Can you talk about like the drop off like how sticky is this business in psoriasis right now? How much do you lose over time to [indiscernible] and biologics? Thank you.

Thanks, Andy. I am tempting to throw this question to Frank because it's a fun curveball. But I think can I rank order the indications? Probably not. I probably can't rank order the indications, especially because setting everything else aside, I think the ordering and the commercial plans will depend on the data that we generate in the studies, all of which are designed to be interesting. Obviously, these indications have different price points. Obviously, they have different competitive environments. Those are obviously factors. But if our data and energy is extraordinary and handily beats the competitors, I think that's a pretty interesting picture. So there's lots of different optionality here. And I think the reason I call it optionality is precisely because we're going to have to wait and see on the specific profile. So maybe that's what I'll say about that. On VTAMA, look, I think there is a group of docs that write this product that have been writing it since the beginning of launch that are excited about the products that write a lot of it that represents a pretty significant bulk of the prescriptions when release. And if you call them ask about the product, say they love the product. And so in that sense, I think it's sticky. Dermatology is promotionally sensitive. We still have to get out there and be out there. There's obviously competitors who are also talking about their product, the landscape shifts constantly. But in general, I'd say the docs who love the product, keep writing the product. And one of our biggest opportunities is to increase that set of docs and get more docs excited about it and using it in daily practice. That's been hard because many of these docs have a real steroid habit. But breaking that habit and getting into right VTAMA instead represents a big opportunity even in psoriasis. And obviously the AD dynamics are exciting to contemplate.

Thank you, Matt.

Our next question comes from the line of Dennis Ding with Jefferies. Your line is now open.

Hi. Good morning. This is Anthea on for Dennis. Two questions from us. In terms of BD with the $14 million upfront deal done last year, what's the gating factor for disclosing this? And could you just comment on details from this program? And then on sarcoidosis, could you talk about what you're measuring in the Phase 2? What's a positive result? And if you will have to do another study? Thank you.

Thanks. Appreciate the question. Mayukh, do you want to take the question on BD and the new program?

Sure. Yes. I mean the – really the only reason we haven't talked about it yet is purely as a competitive strategic consideration. That's all I had, Matt.

We've said historically, there's a big pharma company with another program in the same mechanism as a different indication. And basically we're waiting to get our own study up and running. It will be announced later in this calendar year. On sarcoid, I think, we haven't given a lot of guidance on exactly what we're looking for there. I do think it's a relatively straightforward. We'll know when we see its situation. The competitive bar is low. There are not a lot of other programs. The primary endpoint of the study is effectively a proportion of subjects requiring rescue for worsening of disease. But we're also looking at FDC. We're also looking at time to rescue. We're also measuring various sort of steroid tapers or the ability to achieve steroid taper. I think all of these are relevant to the treatment of these patients. So more to say once we have the actual data, but extended the possibility of delivering new treatment option for these patients.

Thank you. I would now like to turn the conference call back over to Matt Gline for closing remarks.

Great. Well, thank you, everybody, again for listening today. Thank you to obviously the entire Roivant team who put together these results and who made everything happen in the course of the last 12 months. Thank you to our investors and supporters. Thank you perhaps most of all or at least in a significant way to the patients and investigators, which will make our trials happen and who allow us to continue to generate this data. We are tremendously excited about where we are in the business. I've never been more excited about our FcRn franchise than I am today and many other aspects of our pipeline as well. And I look forward to catching up again soon on scheduled or unscheduled future conference calls. Have a great day. Thank you.

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