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…

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…

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.