All right, I think, I think we should get started. So for those of you who don't know me, my name is David Risinger. I'm responsible for diversified biopharmaceuticals research coverage at Leerink Partners, and it's very much my pleasure to welcome Roivant to our conference. So with me, I have Richard Pulik, who is the company's CFO, and, it's a very interesting time for the company because they had promised on their 4Q call, action by, the timing of the 1Q call. So I, I'm not expecting any disclosures today, but, but looking forward to, to the discussion. So I thought it'd be helpful, you know, for you, Richard, to frame, you know, the company vision and, how you see its prospects.
Clearly, the company has created a lot of value and made a lot happen in a short period of time, and I know that there are aspirations for even bigger and better things over the long term. So would love to hear you describe the vision and the corporate agenda.
Great. Thanks so much for having us. Look, in May, we're gonna be celebrating our 10-year anniversary. I think it's pretty incredible what the company accomplished in its 10-year history here, with six FDA approvals, you know, now $6.7 billion in cash as of the last quarter. And lots of late-stage programs in play with many data readouts coming this year. Look, just as you said, you cover diversified biopharma. Our vision is to be a large, diversified biopharmaceutical company. You know, I think we have a lot. You know, we have now an approved product in psoriasis, with AD coming towards the end of the year. That file is now complete.
And we have 55% of Immunovant, so a broad anti-FcRn portfolio, with 10 additional trials expected by the fiscal year of 2025, four or five of those being pivotal. So it's a lot more breadth around the anti-FcRn platform. In terms of ongoing, you know, trials, so we expect to have the readout on the NIU POC this month. So obviously, as we look at that data, we will have a discussion and think about, do we take this forward into an additional indication with brepocitinib? That's currently underway for phase III in dermatomyositis. And, you know, look, certainly, I think given some of the HS data, that would be another place to potentially go. And then we have an anti-GM-CSF inhibitor in sarcoidosis. That data reads out phase IIb at the end of the year.
And then as we're approaching, you know, FcRn data, we obviously have CIDP, Q2, Q3. That, that is a phase II study, and then we have the phase III in myasthenia gravis at the end of the year, and a phase III TED study in the first half of 2025. So lots of important catalysts, before we can get to additional spend on the $6.7 billion.
Phenomenal. That's a great start. So, considering the discount that the stock is trading at, you know, ahead of, you know, future capital deployment and strategic action, could you just characterize the components of the company as you see it? I mean, obviously-
... there are a lot of places of value, but if you could frame it as you see it, that would be, that would be helpful.
Yeah. So, cash, obviously the first one with $6.7 billion. Then we have a 55% stake of Immunovant. That's a publicly traded company. I think if you add those up, you're pretty much at our current market cap. And so, take any of the components that I talked about with the additional data reads out. I didn't even mention the LNP litigation, where we have, you know, the results of the Markman hearing, expected around April. But as you take... You know, there's a very clear basis here in terms of cash plus a liquid stake, and so you don't have to do a lot of work on the other pieces here to find the significant value.
Makes sense. I was obviously kidding upfront about when you'll take action, 'cause you obviously have to take action when assets are available for sale and when it's the right time for the company to act, and you obviously don't wanna move too quickly and pursue something and maybe end up passing up an opportunity that comes six months later that you don't quite see yet. So how do you balance that? How do you think about the timing of capital deployment?
So we're ruthlessly economic. I think. Look, the feedback at this conference and others from multiple investors has been, "Look, this is an unprecedented position to be in. We know you guys well. We like the types of deals you do." Usually, these are fairly small upfronts. We then generate data as we get to, you know, usually in a small trial to prove the POC or the indication we wanna go into, and then we talk about it publicly. So I think the DNA of our deal appetite hasn't changed just because we have, you know, a lot of cash. Like, I don't. You know, look, I spent 10 years of my life being an M&A banker. I don't necessarily want to be paying M&A premium and doing those types of deals.
I feel like the bread and butter still here is from the types of deals we've done before. And then in terms of, you know, look, share buybacks, I think you know, one of the top holders has been talking publicly about needing to sell their shares. Certainly, very happy to have the discussion at the right price, and I think it ultimately that's sort of the key driver as we sort of think about that.
Got it.
So and then as we have data being generated from for NIU and other places where we could spend money on the internal portfolio, of course, we're gonna have a very lengthy discussion around what's the competition? How does this data compare to Humira? How does it, you know, what do we think about the market potential here, and how that interplays with the me you know, our other indication that's in the phase three. We have very lengthy discussions around data as they read out. Just because I have lots of cash, doesn't mean that I'm we're gonna approve something here. I mean, I think the, the high bar remains, to make sure that we get the right drugs to patients, and they're meaningful additions to standard of care.
Excellent. And so I guess, I'd like to go into some of the Immunovant readouts ahead, but, maybe we could talk about other FcRns-
And their readouts that you're also watching that could influence, you know, relative positioning for Immunovant.
So, look, I think everybody wants to hear, well, which indication you want. You know, I mentioned 10 indications. Which indications?
We've seen, you know, sort of positive data now from J&J on Sjögren's. I think what, you know, last I heard is that they were gonna show detailed data of that at an upcoming medical conference, so whatever that means. And, you know, we're gonna see the CIDP label from argenx, probably this year. And then some additional indications, so I think like, you know, there's, sort of post-COVID indication that's upcoming and a few others. Ultimately, look, this is a field that I think last I checked, has around 22 different indications in play. We are the only company that has two antibodies that suppress IgG at 80% at the high dose. It was engineered to be subQ and can be put into an auto-injector.
So we probably have, ultimately, sitting where we are today, the best, you know, most convenient, form of delivery. And, we've now generated data that shows that for TED, we've seen almost doubling of responses in the 680 versus 340 milligram dose batoclimab. In Graves, we announced data again, that there we saw meaningful efficacy deltas across the 680 and 340 dose. And then some of our competitors as well have... You know, if you look at the UCB ITP data, you can see that there's a clear, dose response as IgG, is suppressed further, where you have increases in platelet count, and, important markers that suggest better efficacy. So, look, stay tuned in terms of, where we go.
I think, you know, given competitive nature here, we're holding, I would say, the next indications close to chest here. We have a lot of flexibility in different places to go, not to mention the ongoing phase 3s, that it will be potentially viable, as MG data, a TED readout, in short order.
Excellent. Obviously, the batoclimab CIDP data is quite important. Could you shed some more light on that?
Yeah
... and what you're hoping for?
So, look, we designed this to be at the 680 and 340 doses, for 12 weeks. So that's the data you're gonna see in Q2, Q3. The idea would be to see, similar to what we did, with Graves, some, you know, pointing at efficacy deltas. I mean, I think the questions are, given this heterogeneous disease, and, you know, will it play out the same way? Is 12 weeks enough to show efficacy delta? So, you know, look, it's, it's not too far away, and, you know, we'll also have the data point of the argenx CIDP, able to think through, as we, think about whether we wanna move this into a pivotal trial.
Got it. And then just, how should we think about doing any cross-trial comparisons or, let's say, benchmarking-
Yeah
... when we see the data?
I mean, look, I think, all of these, you know, I would put the typical caveats here.
Sure
... on cross-trial comparisons, but I don't think that. Obviously, everybody's gonna look at this data compared to the other data that we've seen, and-
You're talking about the argenx data?
Yeah.
Yeah.
Even for other indications. Like, for example, when our phase 3 MG data reads out, I'm sure people are gonna look at that.
Yeah
... versus the J&J data, you know, which we should probably see at some point this year. There wasn't too much in their PR, and it would be hard to believe that everybody is not gonna put this side by side-
Yeah
... and to try to sort of think through, you know, do we really have a best-in-class efficacy profile? I think, given what we've seen on a few of these indications, that's what we're seeing on TED and Graves and feel confident there. And, as we get data for other indications, I'm sure people will make a similar comparison.
Yeah, makes sense. Okay. And then, you, you had highlighted it, or you, I guess, ran through it, but I was hoping you could just add a little bit more color on some of the other big readouts for the company-
Yeah
over the next year or so.
So, this month, NIU. So, you know, I think we will look at that data and, you know, make a decision. Do we invest into a pivotal trial here, and, or do we really focus on DM in phase III? And, that was the initial hypothesis for doing this. And, you know, probably also-
This is on Brepo.
Yeah, Brepo, so the TYK2/JAK1 inhibitor. Maybe we'll also show a little bit on... We always get asked about HS as well, so that'll be another indication to think through. So that's gonna happen this month. Then, in April, we will get likely a decision on the Markman hearing. So it usually takes a few months for the judge to respond, so that can shed a bit of color on the various patents and how they're being viewed. And that's for the Moderna case. Then in Q2, Q3, we're gonna get the CIDP anti-FcRn data, which we talked about. And then end of the year, you're gonna get the sarcoidosis data, phase IIb, the MG phase III.
And then in the first half of the next year, 2025, you're gonna get the TED phase 3 data for the anti-FcRn. In 2025, you're gonna get the brepocitinib dermatomyositis phase 3 readout. So obviously, we'll look at that and see, you know, whether we should file and which agency.
Excellent. So then just-
I missed VTAMA. We've already filed.
Yeah.
That would be approved at the end of the year. That would expand the market potential, roughly fourfold. You know, we see like 450,000 weekly scripts, topical scripts, mainly steroids. So take a modest share of that, apply our current net price and 50% gross net, which we think we can eventually get to, and you get to $1 billion in sales.
I'm sorry, with what penetration or?
So, you know, roughly like 6% penetration, you get to $1 billion in sales. So, you know, huge amount of-
$1 billion would be the two indications combined or AD alone?
Yeah, so 450 is AD. So, psoriasis is around 80,000 scripts per week.
I'm adding the AD piece to that, so
At fourfold?
Yeah.
Got it.
Yeah.
Okay, thank you.
Right now, we're running about... So last we checked, we were kinda like 4,900 scripts out of the 80,000 in psoriasis.
Got it. That's very helpful context. And then just in terms of dermatomyositis for brepocitinib next year, do you have any color on how we should think about with that relative to Pfizer's dazukibart, which they retained? That's in phase III as well.
Yeah, if I recall, that's a, I think that's an IV every 4 weeks. That's interferon beta, and it was what, roughly less than 50 patients, looked interesting. I think, look, we are, this is a normal molecule, JAK1/JAK2. We, JAK1/JAK2 hits interferon beta, alpha, IL-12, IL-23, like a lot of, important cytokines here that we think better in DM. So I think from a mechanistic perspective, I feel like we have a lot of breadth here to make a difference for these patients. Their data looks interesting. I mean, we're in a phase III study, and-
We have the data in 2025. There was, you know, sort of early data. And there's a big need here for patients. So, I'm sure that, you know, as we were looking at this from a competitive perspective, there's a big need, and-
Yeah, there's nothing approved.
Yeah, yeah. So, like, an IV, different mechanism, I'm sure would be welcome if they're successful there, and I think there would be room for both. So wish them lots of success on that.
Okay. That's very helpful. Why don't we pivot to the financials? So could you just remind us about, you know, the cash burn rate of the company? I mean, obviously, that's not really relevant, considering the valuation and the cash you have, but I'm just curious what that run rate is, and-
... you know, how that might evolve. I know that you rationalized the company in recent years, and you know, you have opportunities and are gonna create more to build upon the pipeline. So it'd be, I guess, helpful to just have a baseline for thinking about the current cash burn.
Yeah. So, I mean, I kinda roughly think about it as $200 million or so per quarter. I would say you have... You know, that doesn't include the additional spend on the anti-FcRn programs that we talked about. That gets fully consolidated into my P&L, so that certainly will be an uptick there. Then you have some of the IMVT-1401 spend, right? Because you have MG reading out at the end of the year, and then TED first half, so that would be going down eventually as IMVT-1402 ramps up. And then for the VTAMA, you know, a lot of majority of my SG&A, if you take out the stock-based comp, is drives the Immunovant to sort of sales force and DTC.
And so as we launch AD, you probably want to expand the sales force by roughly 25 people from the 100, and lean into DTC a bit more, right? So that would get approved towards the end of the year, and then you'd probably start hiring as that approaches, and then, you know, do some DTC campaign development. And then as we look at the NIU data, if we like that, that'll be a, you know, probably a pivotal trial. You know, those... You know, let's, let's see then how the discussion with the agency and new patients, but again, that'd be another piece of spend. And then as the CIDP data reads out, that'd be another thing to think through.
You know, do we wanna do a pivotal there, and sarcoidosis lastly, right? Because that's a phase IIb, so that would most likely require another trial at the end of the year. So lots of different moving pieces, where we know with additional potential spend. I would say the bar certainly it didn't change, given our cash balance, and-
... we are ruthless about prioritizing these assets and making sure that, you know, we have the similar high standard for return on capital that we had when we didn't have this quantum of cash.
That's helpful. Can you talk about the deal environment more generally? It seems to get better and better, meaning big companies are facing cliffs, they're doing their... They're doing deals, and then they have to reprioritize their portfolios. So, you know, Pfizer has been cutting spending recently. Bristol disclosed on a sell side call, I think it was last Monday or the Monday before, that they, you know, in the wake of doing a number of acquisitions recently, they're going to be exiting certain development efforts, which could create opportunities.
... as well. And then, you know, there are still a lot of large global companies that are not optimized in terms of their, you know, certain areas of therapeutic focus, which may be whatever, sixth or seventh on their list or, you know, may be candidates to exit. So considering all that, could you comment from your vantage point?
Yeah. So having sat in a big firm for 10 years, I would say a lot of these decisions on reprioritizing. I mean, when you're a big pharma, you obviously have a quantum of capital that's allocated R&D, and if too many things were successful, then you need to prioritize the portfolio, right? Because it's... If, you know, you typically will say, like: "Okay, this thing is 30% POS, it hits," and if things were really 50%, then your R&D budget goes out of control, and you're not gonna hit your operating margin guidance, and there's very few levers you can play with, right? Because if I play with sales, like DTC, then immediately my sales go down.
If I play with, like, you know, the chunky things that you can potentially impact actually will drive sales decreases. And so R&D is one of the few places that you can play with, especially if you have the success. And I would say the things that in big pharma we always struggle with a little bit is to what obviously many of these programs have ongoing trials. There's a lot of different breadth where you can go into, and I would hope that we're all here to make great drugs for patients, and that some of these capital allocation decisions and margin pressures still drive my pharma colleagues to find great partners here.
I would say the thing I struggled with when I was in big pharma was: How do I find a partner that actually has the capital, the breadth of experience, and the track record to take on these programs? Because there's obviously reputation risk if you get the wrong partner here. And who is flexible enough, right? I mean, if you look at the way we structure many of these deals, we're very flexible and thoughtful and, you know, are very happy to have the pharma company retain economics and, you know, doing other things down the line, depending on what their needs are. And Roivant, I would say, is probably clearly the only company that stands out here, given the breadth, the track record, and the capital runway to be able to take on these programs.
And so I think that people are noticing that a lot more, given our success. That obviously drives a lot of dialogue and a lot of great choices, and it's been probably one of the best dot times, given all the, you know, a lot of the companies you mentioned had management changes as well.
And so that also then creates opportunities as those companies reprioritize and, you know, but still want these drugs to be successful and to go to patients.
Excellent. That's, that's very helpful context. And then, just maybe taking us behind the scenes a little bit, what are some of the things that the company's been working on, you know, that maybe, you know, are flying sort of below the radar screen.
for the investment community. Anything that you would highlight, either operationally or strategically?
I almost don't want to highlight them because, you know, look, the given where the valuation is, it's almost just focused on the big things. I mean, very, very openly. So, but look, we, I would say at Roivant are. You know, there's a very strong group of tech engineers, for example, who, you know, we kind of look and solve problems.
And there's this, you know, we've been doing small deals across health tech, where you have a small discovery effort, where we're looking at, you know, protein interaction on small molecules and trying to bind, you know, using AI and also some of the wet lab data that comes back through that to find better binding pockets and, and, and a way to, you know, do some discovery. But look, that effort has, you know, we've also announced a few partnerships with Big Pharma here to on particular targets. I would say that sort of, all of that is, is, is sort of cherry on top, and the big things I talked about would, would, you know, sort of...
I would tell people to focus on that, to really drive value and not to get too distracted on some of these other things.
Okay, that's helpful. Could you just provide a little more color on health tech?
So, you know, for example, there was a company that, you know, where we have a, what, probably less than 20% ownership now, called Datavant, that essentially, solved kind of like the plumbing problem of getting data between, different providers. That was then merged with Ciox, and, that's sort of like one example, right? Like, so you have data, how do you connect that data, and, you know, you basically have tokens to, to drive the exchange there. Or for example, we had thought about, you know, various, you know, how do we drive recruitment and, think about, you know, maximizing, enrollment? And so, you know, we had sort of built, something out called Lokavant, to think through that. I mean, these are all very small-
You know, small investments and to address some problems that we've seen. But look, some of these can grow to meaningful stakes. I mean, I would say that, you know, that Datavant stake is a fairly significant business here with meaningful EBITDA, and you know, eventually that may, you know, be IPO'd or something else down the line. That's just another piece of value that people aren't really thinking through as they look at the total value of the company.
Excellent. Thank you. And then just going back to the LNP litigation there, you know, you obviously can't litigate it publicly here, but if you could just talk about that. So the Markman hearing comes, and that shines some more light on, you know, your, the strength of your case. But then there's also that, you know, sideshow with Moderna trying to assign liability, you know, to the government and the government, you know, potentially taking on some of that. Could you contextualize that?
for us, please?
So, maybe stepping back, if you look at the royalties that we struck with, you know, different partners across—you know, BioNTech and others, like, across different non-COVID indications, usually these were struck at low, like mid-single digit to low teens when there was no clinical data. So, you know, obviously, there was clinical data at the time of, you know, infringement here. And, you know, Moderna tried to invalidate the patents with using some of the IPR process. You know, there's a question here in terms of like, what percent of sales would be implicated, right?
So, they tried to partially dismiss, you know, like exclude the sales for that were bought by the U.S. government, to, you know, to try to offset some of that liability to them, to use this Wartime Act that essentially removes liability for particular, you know, during times of distress. I mean, just like very, very high level. Obviously, we think that doesn't make a lot of sense, and, you know, we have, you know, disputed that very creative solution, and we should get a decision there by probably early next year, I would suspect. And then, you know, in your model, it, it would be essentially, like, do you take all of the U.S. sales, historical and forward?
Do you remove a portion because some of it was sold to the government? Do you... You know, like, as you have your various scenarios, it all comes down to what quantum you apply for sales, as we get more color around some of these different disputes.
Got it. And then, what about with respect to Pfizer? What's the outlook there for the litigation?
So that that case is roughly a year behind. You know, I would say, you know, they didn't play similar games with with the statute that we just talked about. So in some ways, it will be, you know, maybe a little bit less than a year behind. And then the Markman hearing, I expect to be sometime next year. And then let's see how all of that progresses.
Great. Well, I just kept rolling with my questions. I didn't realize that we ran over time, but very helpful.
Great.
Thanks so much for being with us.