I'm very pleased to have, Roivant here, and CEO Matt Gline. So, Matt, I mean, obviously, there has been, you know, there have been a lot of developments this year, to the positive. The company has clearly been executing across the pipeline, including deals that have been done. So, so maybe to level set everybody here, you know, in the room, just remind us of all of the different developments and updates that you guys had this year, and, and sort of how should we think about the outlook through, the end of the year?
Yeah, perfect. It's actually a nice bookend because I just think back to literally a year ago at this conference, and a year ago at this conference, the biggest things in our world is we had recently announced preclinical data for our next-generation anti-FcRn antibody, and what I knew, but nobody else did, is that we were on the cusp of acquiring an anti-TL1A antibody. We had not yet generated any data in atopic dermatitis. We had obviously not yet generated any data in UC, et cetera. So over the past 12 months, we've generated 2 great phase III datasets in atopic dermatitis in VTAMA. We've continued to progress that launch. We've generated 2 truly fabulous datasets in ulcerative colitis for our anti-TL1A antibody, one at 14 weeks and one at 56 weeks.
We generated some first in human data for our next-generation anti-FcRn antibody, IMVT-1402, that showed, we think, potentially best-in-class profile with very deep IgG suppression and no impact on albumin and LDL. We culminated with a transaction just a week and a half ago, two weeks ago, maybe, where we sold the anti-TL1A antibody program that we did not yet have in our portfolio as of a year ago today for $7 billion in aggregate, of which about $5.5 billion to Roivant, in a deal that should close this quarter or next.
Right. The shape of the company a year ago in London is very, very different than what it is today.
That's correct.
You guys brought in the TL1A. Immunovant data was really strong, et cetera, et cetera. So, maybe talk about now that the TL1A has been sold off to Roche, and you guys have, you know, more than $6.5 billion or $7 billion of cash on the balance sheet, you know, a lot of people are wondering how Roivant's going to deploy that capital, you know, over the next couple of years. So, maybe help frame that opportunity, for investors.
Yeah, we've noticed that people are wondering that question. We've noticed it because we get the question, and we've noticed it because our stock has traded under cash since the deal, which I admit I find offensive. And I'll note that we have tools for addressing that particular situation, which is that we have the capital to return, and if our stock trades poorly, we can always buy back. So, but that's not actually top of our capital prioritization.
That's just an option on the table, given where the market has gone. You know, look, the first thing is. Again, it feels funny because we didn't even get to talk about the anti-TL1A program at a Jefferies conference. But, having said all of that, we have a pipeline that we are truly just super excited about. We've got the anti-FcRn franchise, which we think is a potentially best-in-class franchise and clearly a target that matters a tremendous amount, right? argenx is a $30 billion company.
There's so many indications, and having a molecule that feels best in class there is a real source of pride for us and something that is a use of capital to a great set of positive potential outcomes. On top of that, we have brepocitinib, our dual inhibitor of JAK1 and TYK2, where I think the profile has actually really come into relief within the last year. As we've seen the TYK2 space play out, we've seen RINVOQ continue to do so well as a JAK, and we've started to see some of the puts and takes between SLE, which is reading out soon, dermatomyositis, NIU, some of the other possible indications, HS, obviously a ton of data in the field this year.
So as a use for capital, the first thing is just a lot of great places to deploy it in our existing pipeline. You know, I think in the next bucket, a year ago, we didn't have an anti-TL1A antibody. I'm excited for whatever we're gonna be talking about a year from now that we don't have today. And this is one of the best environments we have ever been in for the kind of work that we do in pipeline expansion, right? Many of our drugs come from large pharma companies that have just an embarrassment of riches, too many great programs, and they have to make strategic decisions based on P&L pressure, and all of big pharma has P&L pressure associated with LOEs.
And so we just see a huge opportunity to go in and continue to do what we've always done, to find late-stage programs that we really care about, that we think are great, and to partner with great people on them. And so I think that's probably sort of bucket number two, is that. There's a lot of other possible permutations of that. I get asked a lot, "Are we gonna go out and buy a lot of public biotech companies?" and things like that. I think the truth is, like, very unlikely. It's just hard for us to find value in that category of activity.
Never say never if something is trading deeply under cash or whatever, but I think, like, in general, I would expect our BD to look in the future a lot like the historical BD, but with the confidence of knowing that if we're bringing in something like TL1A that has a nine-figure development path ahead of it, that we're gonna be fully capitalized to pursue that path.
And then the third bucket is the sort of everything else bucket. It's return of capital to shareholders to the extent that there's access to return. I think among that, you know, thinking about, using some of that cash to clean up the concentration at the top of our cap table is definitely on our list. You know, thinking about VTAMA and exactly what the right size capital deployment is for VTAMA as that opportunity continues to present itself, sort of also in that third bucket.
Right. The core to Roivant is in the ROI.
That's right. Yep.
You know.
It's in the name.
You're not going to go out and spend $3 billion on a biotech company, because that's kind of very different from what you guys have done in the past, and.
That's.
It makes more sense to kind of pay, you know, a small amount, develop it, and then et cetera, et cetera.
That's right. I think it. Just in general, it's we have found it hard to find the kind of deep value that we look for in those kinds of acquisitions historically.
Okay. So can you help frame, you know, what sort of areas that could be interesting for you guys in 2024? You know, you mentioned late-stage, mid- to late-stage assets, but, y ou know, what, what areas are interesting, you know, to Roivant?
Yeah. I mean, first of all, I'll say, like, in general, one of the things about us is we're pretty agnostic. We're agnostic to the therapeutic area, we're generally agnostic to stage, we're agnostic to modality. We'll do creative things in all different directions if they look appealing, and mostly it's about value to patients and, and therefore, value to other stakeholders. That said, I think it's—there's some things that it's less likely we will do.
One of them is what, what I've been calling capital O, oncology, just like the heart of the oncology area. So much of that these days involves combination therapy development with multiple drugs, and given that we pick one thing up from here and one thing up from there, to have a portfolio of things that make sense to develop in combination with one another is just, like, not that likely, right? It's not that likely that you're going to find the two exact right opportunities in two separate places at the same time.
Right.
So I think that's probably a little bit less likely. Again, if we saw the right thing or the right portfolio of things, we'd do it. It's just a little bit less likely from that perspective. And then from a modality perspective, I think, like, we've tried lots of things in our life, and I think one thing we've learned is that manufacturing, in general, is just, like, way harder than anyone gives it credit. And in particular, when you look at things like gene therapy, we like lots of the therapies, and we like some of the value available in some of those areas, gene therapy, CRISPR, et cetera.
But I think we are unlikely to do deals in those areas unless the deal comes with a very high conviction path on manufacturing the thing, like tech transfer has already taken place, or the partner is going to continue to do manufacturing, and we believe in them because I think those are things that we just like, CMC in those areas is very, very difficult.
Right. Right, and there are lots of different modalities that kind of fall into that bucket, right? You've mentioned gene, gene therapy, but also things like cell therapy, even radiotherapy. There's, you know, a lot of, you know, capital required to build out that infrastructure and, you know, it may not make sense for Roivant, given the amount of money that it will take to-
Yeah, I think.
Develop it.
It's, honestly, it's sort of similar to the capital oncology point. If you're not going to do five programs in gene therapy, being an expert on gene therapy manufacturing doesn't wind up being worth the investment, and so for us to do a gene therapy program or a CRISPR program or gene, whatever, I think, like, it's just got to be where, like, that expertise is sorted out some way or shape in the transaction already. But that happens all the time, right? People want to partner with us, and they're willing to spin off as manufactured by GSK in parts. So, like, people are willing to do that work.
Okay. So then, you know, in terms of, you know, 2024, the expectation is that you guys would do probably at least a deal.
Oh, yeah, for sure. I think that's.
At least a deal. We'll.
extremely likely.
Yeah. We'll hear more about it. You know, I think everybody in this room is really looking forward to that, given how the stock has been trading and people, you know, I feel like want that sort of visibility, you know, especially for 2024. So, you know, if we kind of switch gears over to Immunovant. You guys reported some really strong phase I data in September. There's going to be a 600 mg update in November. Talk a little bit about that, you know, about your confidence going to that readout?
Yeah, and look, I think Immunovant's talked a fair amount about this as well as an institution. The short answer is we feel like the data that we shared in Sep- that Immunovant shared in September, the single ascending dose data, especially the subQ data and the multiple ascending dose at 300, is very de-risking, right?
It establishes parameters that, like, we were able to suppress IgG as deeply as tocilizumab, and we did not see any impact in albumin and LDL in that data set, and so I think, like, that gives me a great deal of comfort. I think it's, at this point, the envelope of risk on albumin and LDL is pretty narrow, right? Like, we've already seen pretty high concentrations in the IV SAD and so on, so it's just, like, a relatively narrow envelope of risk.
We'll see. I'm not a superstitious person, but it's hard to call it until we actually have the data on hand. That said, my biggest, quote-unquote, "fear" about the 600 data has nothing to do with the profile of the drug itself. It's the same thing I was worried about going into the SAD and MAD data that we already presented. LDL is a noisy measure. We showed about a 16% standard deviation in LDL measurements in the phase I data we already presented, and so, like, we could totally be in a situation where LDL bounces around a little bit. Maybe there's an up 10 reading, maybe there's a down 10 reading.
Albumin bounces around a little bit. Maybe there's an up five reading, maybe there's a down five reading, and, like, there's no time course to it. There's no relationship between the two, but there's noise. There's a little bit, sort of, that requires interpretation and the benefit of the doubt. I think the quality of the data we've already presented should have earned us that benefit of the doubt, but that's probably the sort of fear that is highest on my mind, and again, I'm just not that worried about it in aggregate.
Right, because, you know, what you guys have shown in September with some of the multi-dose data, it does leave you a little bit more incrementally positive, you know, appreciating that 600 mg, there could be more accumulation, more, you know, potential for these excursions.
Exactly. Well, I think what would, to me, indicate a problem is if we saw a time course of data, if we saw albumin decreasing over time, sort of monotonically in the study, if we saw LDL increasing over time monotonically in the study, if we saw those things moving in the same direction, right? Like albumin definitively down, LDL definitively up, or, like, I think that combination of facts would be bad for us.
Up versus baseline or up versus placebo?
Up versus baseline. Placebo is noisy. I think it, it's hard to read.
Okay. And then, you know, in terms of BD regarding, you know, the FcRn, talk about why you think that, given the cost requirements to run all these different phase IIIs for the FcRn, why the FcRn would be in the best hands of Immunovant or Roivant?
Well, look.
Why not pharma?
I think the first thing is, the combination of the TL1A transaction and just what Roivant does as an enterprise, we are well set up to prosecute this. We have the capital required, which is important, right? It's an intensive R&D program across multiple studies. And then, even as like, again, we've talked about this from the other direction before as to why there were benefits in keeping the TL1A. The TL1A clinical program was very straightforward, right? It was a phase III program that we were a lot of work, but gonna be able to prosecute, and it was replicating a phase IIb study. The complexity around TL1A was that the commercial landscape was more complicated, right? It's a great target.
The data's fantastic, but you're going up against S1Ps and JAKs and and other TL1As and biosimilar HUMIRA and IL-23s and all these other things. And like, again, I think Roche will do a phenomenal job, and they're armed with a great data package in phase II to do a phenomenal job with it. But that is a thing they're gonna have to do successfully in order to win. You know, the FcRn side's a little bit different. The commercial picture is actually quite clean, right? The only thing really that cuts across the FcRn indications is IVIG. Other than that, like, idiosyncratically, you run up against TEPEZZA and TED, or you run up against like, whatever, you might run up against JAKs in certain indications.
But like, in general, the FcRn indications are clean of competitive pressures beyond that, other than the other FcRns. But which, which, you know, from a commercial launch perspective, when we get there, is good for us, right? Like, we're not necessarily the best-positioned company in the world to be making a launch in a competitive commercial space with lots of other entrants. The clinical program is very complicated, right? You're picking lots of different indications. The choice of indications matters, the sequencing of indication matters, the structure of the trial within each indication, the choice of endpoints, how you approach FDA, in what order. All of these things are important, and the one thing I'll say is like, that is definitely a challenge that Roivant's history has better prepared us for, right? Like, we've run lots of clinical trials.
We've run complicated clinical trials. We've run programs with multiple clinical trials at the same time, and so I feel like as we think about the challenge that we've taken on, against all the considerations, at least I feel like we have a challenge in front of us that we are well equipped to do, and I think what that means is we can approach FcRn from a position of strength. Immunovant has the operational capabilities. Together with Immunovant, Roivant and Immunovant have the strategic capability. Together with Immunovant, Roivant and Immunovant have the financial capability, and that means we can build a real argenx competitor.
We can build, like, a big, lasting, important immunology company around this program, and that means, in turn, if transactions present themselves, if pharma companies approach us and they're excited about the target, we only ever have to have those conversations from a position of absolute strength, knowing that we could do it ourselves the entire way and win ourselves the entire way, if that were the better answer.
So, in terms of, you know, cash and, you know, pipeline for Immunovant, I mean, batoclimab is obviously in phase III. You know, but a ton of interest is around IMVT-1402. So how do you think about Immunovant and the path forward, given that you guys have these two franchises? It will take a lot of money to run all these phase IIIs. Would you prefer to move 1402 forward, like, on its own, or would you still take a two-pronged approach for the FcRn?
Yeah, like, first and foremost, we're gonna sprint with 1402 into the clinic, into phase III studies, and we've said already we expect to go directly to pivotal with 1402 in multiple indications, both on the back of our own phase II trials in batoclimab, like Graves' disease, when that trial reads out later this year, and then in other indications where we're watching the field for phase II data that can inform pivotal program design in 1402. We still think Bato has appeal in multiple places. We like the ongoing TED study. You know, we think in some of the rarer acute-dosed indications which might command a higher price point, my personal opinion is Bato has a significant role to play there.
How exactly the world divides between the larger set of 1402 indications and the smaller set of Bato indications, depends on the data that we see from our program across these trials and depends a little bit on timelines and how things shake out with our competitors and so on. But I think we will still, for the moment, be aggressively developing both drugs, at least through the readouts of the current pivotals in Bato.
Would you move 1402 into MG?
I think MG is the toughest question in some ways, because it is, in most FcRn indications, there's like people shorthand describe us as behind, but actually, like, in most of these indications, we're not behind, right? Like, either in Graves', we're in some sense ahead, or like in other indications, like if there's an ongoing phase II that some other company is running, once that phase II reads out, we can likely move directly into a pivotal with our own, with, with 1402. So in most indications, we're not behind. We're just, like, in the pack. On MG, we're clearly behind, right? argenx has done a beautiful job getting that program approved, a beautiful job with the launch.
It has been wildly successful, and we're gonna be competing in that playing field, and our first agent in MG is gonna be Bato, which we'll read out in the second half of this year. There's a version of the world in which the depth of our IgG suppression yields better efficacy by a meaningful amount in cross-arm comparison versus Bato versus VYVGART. And in that version of the world, I think Bato's probably got an opportunity to take share. I think 1402 might make sense and would have an opportunity to take share. And then there's a version of world where those things are closer together, where I feel like probably MG is just, like, relative to Graves and some of the other opportunities that we have in front of us.
We'll do something in MG, and we'll get meaningful share and value in MG, but we see so much value in the other indications that it's not clear, in a scenario where we're closer to, to them in MG, that MG is gonna wind up being the big market for us, that some of the other ones will.
Got it. Okay. That makes sense. So if we kind of move on, you know, away from, from Immunovant and Bato and things like that, talk about the catalyst path through the end of the year, y ou know, outside of the Immunovant data.
One of the unsatisfying questions that I've gotten in the wake of this deal is like: "You've done this deal. What happens- like, now you've got no catalyst left, right?" And the thing that's been frustrating me about that is there really were no TL1A catalysts. All of our catalysts are still there, and so they are- there's a ton of data we talked about on the FcRn side. That's obviously, like, a very catalyst-rich part of our pipeline. On top of that, what do we have? We have brepocitinib, which is reading out an SLE phase IIb study that will be one of two pivotals that we believe this year. High SRI lupus is scary. We can talk more about that study, but that's coming soon, and if successful, is clearly potentially impactful.
Next year, at the beginning of the year, we have data from a 24-patient open-label proof-of-concept study in NIU, also brepocitinib, which is again, an indication really of the kind that we brought brepocitinib in for, the sort of orphan realm set of indications that we're tremendously excited about. So that's brepocitinib. Then, 2025, we have the dermatomyositis data there. Other catalysts, so, probably the next biggest one is we continue to make progress on the just like Genevant sort of prosecution of that situation. There's this claim construction hearing in February that we think will be meaningful insofar as it'll give us some information about how the court thinks about the breadth of our patent claims, which, you know, I think has impact on the progression of that case.
That's coming, and it's hard to talk too much about the particulars of it, but that could be interesting. And then we've got other clinical data coming, too. We've got data coming in as a small molecule modulator of SF3B1 and transfusion-dependent anemia in low-risk MDS patients. High risk, mostly sort of underwritten on the basis of cross-trial comparisons with small n, but if successful, could be an important program.
And the same thing, we have a study ongoing with our anti-GM-CSF antibody and sarcoidosis, which again, small dollars, high-risk study. GM-CSF has been a tough target, sarcoidosis has been a tough indication, but if we find the right pairing there, again, could be a major part of our portfolio on the back of it, and if not, it was a high skew bet to begin with. So lots and lots of clinical data coming in the next, call it 12-18 months, and we're really excited to put more of it out there, and that's in addition to, again, as a reminder, a significant percentage of the catalyst that we produced over the past 12 months were not in our portfolio as of 12 months ago.
It's interesting. Okay, so if we can kind of hone in on Lupus for a little bit with the Brepo data. That data is coming in Q4. Can you refine that timing a little bit? I think before you said mid-Q4, is that still.
Yeah, yeah. Mid-Q4 still seems like a reasonable time frame.
Okay.
We'll get it when we get it. You'll recall discussions from last spring in which we said we were waiting on the TL1A data, and it was ultimately in Pfizer's hands in terms of the amount of time. So remember, this is also a Pfizer partner program, where Pfizer ran the program, and so we are again waiting for a handoff of that data from Pfizer. So it's hard to pinpoint the exact time, but it should be mid this quarter.
Okay. You know, lupus is obviously very tough, but you know, Bristol has shown some promising phase II data. AbbVie has shown some promising data. So what, y ou know, for Brepo, given it's a JAK1/TYK2, you know, what is the bar for efficacy? T hat you guys want to see?
So look, the first thing is, setting aside the vagaries of trial design and just, like, risk that is inherent to running lupus studies, and those vagaries are real, that risk is real. Setting all of that aside, JAK inhibitors work in lupus, right? Upadacitinib showed reasonable sort of low teens SRI4 delta data earlier this year. Baricitinib in multiple studies has shown activity, varied, but activity, and then TYK2's work in SLE, deucravacitinib has shown good data.
So mechanistically, this drug should work in SLE, but for the things I mentioned before. What we would like to see is data that puts us in a favorable competitive position, vis-à-vis specifically deucravacitinib which we think sets the bar. Our view on the deucravacitinib data, it was about 23% at the 3 mg dose. It was like maybe 15% at the 6 mg dose or something like that, and then I think an even lower response at the highest dose.
Our view is if you look at the patient baseline severity going into that data, that there were significantly more severe patients on the low dose than on the other doses, and that if you blend it across, that you're really looking at like a bar that is, call it mid-teens SRI4 delta. So what that means to me, if we're in the mid-teens, it'll be a balance of factors, whether we progress the program to another phase III study. If we are above the mid-teens, if we're in the high teens or whatever, it's pretty likely, and if we're in the twenties, it's a grand slam.
Got it. That's SRI4?
SRI4. Yeah, that's, and then some similar ranges exist for BICLA, but it's easiest to think about it in SRI4 terms.
Okay. What if SRI4 did not hit that stat, but let's say it, there was a positive trend, and BICLA was also very encouraging? Would you consider moving that forward, or?
I think if the data is merely encouraging and doesn't hit stat sig, it's a hard bar because it, we would have to convince ourselves that one study would still be sufficient for approval on that basis, so I think that that would really depend on the quality of the data. Certainly, there have been approvals in SLE on the basis of one endpoint hitting and not the other. So I think, like, we'd look at that, but I think it's gonna be a balance of the factors, but also, like, we're looking for a big signal here.
Right. And, you know, the reason why I bring up Lupus is, you know, I don't think people really appreciate the opportunity there.
Oh, I do.
But I don't think it's in anybody's models right now.
I completely agree.
So if it does work, could very much be, you know, a decent addition.
Look, I think between lupus and Graves', and I think Graves' is a vastly underappreciated indication for FcRn, we have two extremely impactful data sets coming over the next month and a half, and I think, like, as much as the narrative right now is about capital deployment and what our pipeline looks like. And look, lupus might fail, Graves' might be underwhelming, or we may not choose to talk a lot about it, but, like, if both of those things work the way we want them to, I think the narrative will be about, we're squarely back on our pipeline. There's just, like, a real opportunity to do something quite interesting in the next six weeks.
In the last minute or two, and you know, it would be remiss if I don't ask about the LNP litigation, but that's coming up in February, the claims construction. I mean, what are you expecting to see? Like, what would be a positive outcome?
I'm so grateful that we only have 27 minutes for this because, look, in general, it's tough to comment on ongoing litigation. It's an active discussion. For those that are not familiar with these claim construction hearings, they really are about the court's interpretation of the meaning of the actual language in the patent claim. And most of what I'll say is you can see the bid-offer spreads because these grids are published, where their interpretation of the claim and our interpretation of the claim sit side by side on these already published documents, and I think, like, better is more like ours, and worse for us is more like theirs, and we'll land somewhere, and we'll deal with the consequences.
Okay. Oh, I got it. Well, thank you so much, Matt. I think that's all the time that we have.
Great.
Today, but it's great to see you.
Thank you.