Well, yeah, look, we are, we're really, really excited about where we are right now. Obviously, last year was a bit of a wild ride, and now we're very well capitalized, and capitalized to fund a pipeline of programs that we think is pretty unique. So obviously the first and top of everyone's sort of mind is the Immunovant program, the anti-FcRn antibodies. Those are, we think, likely, potentially best in class in a class that has clearly mattered so far. And so we're working on a bunch of clinical trials there, including some in our first-generation program that read out in the next, call it, 12 months. And then, we're gonna start 4-5 new pivotal programs this year with our next-gen anti-FcRn antibody, IMVT-1402.
And then, you know, behind that, we have a number of other things in our pipeline. We have VTAMA, which is a commercially approved product in psoriasis that we'll be launching in atopic dermatitis at the end of this year. We have brepocitinib, which is a dual inhibitor of TYK2 and JAK1, that's in a registrational study reading out next year in dermatomyositis, and where we'll begin a registrational program in non-infectious uveitis following some data that we put out just a couple months ago. And a bunch of other things earlier in the pipeline, as well as some not yet described or coming into the pipeline soon.
Okay. Great. We're gonna do, like, a run-through of all of those programs, but maybe one of the top-of-mind questions is, "What are you going to buy, and when do we get to hear about it?" So maybe we can talk about that, but also the criteria you're using to evaluate potential opportunities.
Sure. So, one of the things that we've already bought, as I think you know, is a program that'll interface two studies later this year, and you'll get to hear about it either the very end of this summer or the beginning of the fall.
Okay.
Before we begin that program and put some data out in the medical meeting. So I'm really excited about that one. I'm excited to finally be able to talk about it. Other than that, I'd say we're looking at a whole bunch of different things. Much of what we're excited about is late-stage programs in the pipelines of big pharma companies, similar to what we've done historically, and we think that environment is very ripe right now, given the transformation happening in pharma, given the impending patent expiries, and so on.
Yep.
And then, it's just an interesting moment in biotech generally, and so we see other things in phase II, other things in biotech companies that are maybe underfunded at the moment, etc. So, a bunch to round out beyond those late-stage programs. In terms of criteria, you know, I think first and foremost, given the moment we're in, given the capital we have, we're looking for things that will matter to us and matter to patients. So these are generally programs in large indications with human proof of concept data where we understand a little bit about the biology and where we think we can make a difference running an impactful clinical trial. So that, that's an important piece to us. We are necessarily agnostic on therapeutic areas, so we're not focused on one specific disease area.
Currently, things that we are excited about in either economic or late-stage business discussions around, we're looking in immunology, obviously, where we have a concentration. We see things in cardiology and pulmonology and rare disease. A couple of things in kind of peripheral oncology, where it's like a sort of where monotherapy might work, basically.
Mm-hmm.
A little bit less in areas where a combination is required, just 'cause we don't have the sort of critical mass to build a combination.
Sure.
A combination in onc. And then, yeah, I'd say mostly, but not entirely, things of easier-to-manufacture modality, small molecules, antibodies, maybe oligos, a little bit less in the cell and gene therapy area.
Okay. I'm gonna jump around a bit because I think, like you said, Immunovant and that kind of franchise is obviously top-of-mind as well right now. So you recently announced, "Let's start with the CIDP update," that you're going to push the data by a couple of quarters. Just, like, walk us through the rationale for that decision and the additional patients that it'll enable you to see.
Yes. So I wanna I wanna take a step back on Immunovant because I feel like, the last couple weeks after, after our quarter, I've been sort of reflecting. And I think we made a mistake the last three to six months, and the mistake was getting drawn bluntly into a stupid discussion about, about what appeared to be carving up a small pie, right?
Sure.
This common conversation about IL-6 or IgG degradation or CD19 or whatever, where there was this idea that we have uncovered this vast new space of biology that FcRn has sort of elegantly demonstrated efficacy in, and now we've been drawn into this, like, 10 feet in front of us discussion around this trial or this program or this competitor. The first thing is I promised myself I'm gonna do is just make sure to remind everyone, this is a big tent. There is a lot of biology addressable by FcRn. IgG is an important mechanism for many, many diseases. We continue to get new data weekly showing this. Obviously, within the last couple weeks, for example, we've now seen quite good data from J&J in Sjögren's. There's just a lot of addressable space to go after.
Yeah.
I think it's a mistake to think about any one competitor, any one program, versus just to think about the breadth of what we could do.
Sure.
And frankly, to think about the pole position that FcRn as a mechanism is in now with hundreds and hundreds and hundreds of patients of clinical data and thousands of patients treated, in the wild with VYVGART and others. So that's the first thing I'll say about Immunovant.
Yeah.
We're really excited about the breadth of the opportunity. Look, I think we made a couple of announcements a few weeks ago that are designed to, yeah, continue to keep us headed towards best in class with 1402. One of them was a slight delay in MG. That's basically nothingburger. We're almost fully enrolled there. We would've had to have been fully enrolled by, I don't know, the end of this week in order to actually read it out in December.
Mm-hmm.
It's still possible. There's a few days left.
Mm-hmm.
But more likely, it'll slip a little bit, but there's nothing going on there. CIDP is a little bit of a different story. So CIDP, for those that have been following, look, it's a complicated disease. It's heterogeneous biology. And frankly, the diagnosis is difficult, so many patients are running around with CIDP diagnoses that just don't have active CIDP.
Sure.
And what argenx has shown us, carefully and thoughtfully with their clinical program, is the way that you demonstrate efficacy in CIDP is you really do well at adjudication. You find the patients who are active CIDP patients. And that requires a lot of clinical execution that I'm proud of our team. I think we're doing a good job of it. Now the problem with that is the way these trials are designed, there's sort of a, these patients come in on some kind of therapy. They come in on steroids. They come in on IVIG. There's a 12-week washout period followed by a 12-week treatment period during this whole thing that's called period one.
And the problem with those active CIDP patients is they're on IVIG, let's say, it's working well for them, and then you say, "You've got to wash off IVIG, sorry, IVIG," and they feel really crappy. So you start to lose patients before they've either been dosed with our drug or before our drug has had any time to build up a pharmacodynamic effect. That's probably fine for the study overall. In fact, our argenx had a similar phenomenon in their study, and I don't see any reason why our numbers will be any different. The thing that we are trying to do in our CIDP study that is different than what our argenx was trying to do in their CIDP study is our period I is our opportunity to show dose response.
It's our opportunity to understand the difference between high dose and low dose.
Sure.
Therapy. If you lose too many patients, even if the set of patients in aggregate is sufficient for the registrational endpoint of the interim period II, you lose the end in the individual dosing arms in 680 and 340.
Yeah.
To be able to separate between them. And so what we're trying to do is we're trying to make sure that we push enough patients through period I before we read it out such that we get that real separation. And in particular, that's important for all of the planning we're doing around 1402, and we think it matters for investors and maybe even importantly for strategics for helping them understand what we think is gonna be a robust dose response. Anyways, so that, that was the sort of nature of that change.
Sure.
One thing I think is important, the vast majority of the extra patients that we're gonna capture here are already in the study, right? Remember, it's effectively a six-month period, and so if we've pushed it out by two quarters, you're talking about patients who may be enrolled in March who are now at the end of their 12-week washout, who we would've lost if we had read out the study now, but we will get because we've pushed back by a quarter or two.
Okay. As you think about then, like, the kind of value of this study and what you will learn from it, what are some of the key takeaways that you'd like to have on the back of the data, and how will that inform the 1402 program for on the forward?
Yeah. I think if you take a step back and you think about the data that is coming for us in the next 12 months, you've got our Graves' data early this fall sometime. You've got our MG data either the very end of this year or the beginning of next year, and you've got the CIDP data set coming thereafter. And all that's in our first-generation program. All that's in batoclimab. But if you just think about where IgG biology is, you think about where B-cell biology is right now, there's a whole world of companies thinking about what they need to do to be relevant in that space. And what we're trying to prove is that we play at the top of that pack. And these three studies in aggregate are really gonna help us show that, right?
Yeah.
We know in Graves that we've seen a clear dose response. We've said that before. We're gonna show that data when we put it out this fall.
Yeah.
I hope in MG, which is obviously the field where it requires the least imagination to understand, we can show the same. And also in CIDP, where by the time we read this data out, argenix will be well into a commercial launch.
Sure.
You know, I think this will help us establish the profile of 1402 as best in class from an efficacy perspective, be able to show that deeper IgG suppression really matters for patients. And I think that will clarify our pace of development. I think everyone will understand much better. We will have a clearer conviction in everything we're trying to do from here. We're gonna run 10, 10 programs starting in the next two years.
Sure.
So it's a lot of investment. It'll help us optimize how we manage dose on those studies, right? Do we do induction and maintenance dosing? Do we just go for high dose all along? Sorry, how do we think about dosing? And then bluntly, I think the importance of these readouts is just, like, underappreciated for the field, right? Think about how many companies that are running around in MG or in other indications setting the bar for themselves at what argenx's label says at the, whatever, a four-point improvement in MG-ADL.
Sure.
I think that bar could change as a consequence of our data, and so I think it's important to us to get that data together, get the cleanest possible shot, and really sort of put ourselves into a strong position relative to where we're hoping to be.
Yeah. To your point, MG does provide kind of, like, the most obvious and clearest path of, like, what is best in class. So as you think about your conviction in being a best-in-class asset at this stage, particularly with respect to the efficacy, where are like, how convicted are you that you guys can deliver that?
So look, we have strong phase two data in TED showing that the IgG suppression that we can deliver is better than the IgG suppression that our competitors can deliver from an efficacy perspective. We have the phase two data in Graves' that I've talked about. The field has generated data in ITP. The field has generated data in a variety of other indications, again, showing a dose response. And within MG, the vast majority of programs have studied individual patient-level correlations between IgG suppression and MG ADL improvement and have shown a clear relationship. So I think biologically, it's also just, to be blunt, not that complicated hypothesis, right? These diseases are caused by autoantibodies. It's clear that the fewer autoantibodies you have, the less disease activity you'll have. And so I think both the biology and the clinical data bear it out.
Obviously, it has not yet been shown in a large placebo-controlled sort of registrational study, and so I think that's an important step. And I think some of these indications, like MG, for example, MG ADL is a composite endpoint. It's an activity of daily living score. It's a little bit noisier than something like thyroid hormone levels or even proptosis response rates.
Yeah.
And so, you know, I think it's important to do it in a big study so that you can really understand the impact. And ideally, to do it over, as we've done in our program for batoclimab, longer dosing so that you can sort of see the improvement on MG-ADL scores in these patients. But my conviction in the biology is high, is the answer.
Okay. And then what would that look like if, if you were to say, like, to say this is best in class efficacy, what do you have to see in terms of MG-ADL?
Look, I think, back to the point I made before, my view of our drug being best in class from an efficacy perspective is not sort of specifically dependent on the.
What indications?
Some of the MG studies.
Sure. I think.
We will show it in a bunch of places, whether we show it in MG or not. I think ultimately, the question of what we can do in MG and what that means for our competitive positioning there is gonna be read in comparison to our competitor's data.
Yeah.
Obviously, J&J has data. argenx has data, etc. Look, I think, even relatively small deltas in MG ADL could be relevant to docs, but I think the bigger that delta, you know, if we show a 1-point, a 1-point relative benefit, 1.5-point relative benefit, I think people will start to just prefer the idea of deeper IgG suppression.
Sure. Okay. You did mention 10 indications. Obviously, not all of those are known. Some of them maybe are. How are you thinking about which? Because there is a huge list of indications you could go after with this biology. How do you think about characterizing the indications that are of most interest for you?
Just for example, we're excited about Graves for a lot of reasons. It's a big patient population. It requires a leap of imagination. There has not been a lot of development in Graves in a long time.
Yeah.
We're excited about it because there's a lot of patients, and they have a lot of unmet medical need, and because our data's good. I think that's a good example of an indication where there will be white space for us, right?
Yeah.
Nobody else is developing there yet. We can be first and we think best based on the data that we've shown. You know, I think that's obviously a huge priority for our development plan is seeing those indications where either we are truly at the front of the pack, where we're sort of defining the path forward, or I think about, and we haven't committed to this yet, but I think about an indication like something like a Sjögren's where we know from the phase two studies from J&J and argenx that the data is good, that these drugs are efficacious, and where if we move quickly, we can get a program in place that can compete with them from a timeline perspective, can get to market around the same time.
Sure.
So that we're not playing from behind there the same way that we currently are.
Yeah.
In something like MG or something like CIDP. So I think top of our priority list is places where big indications, lots of unmet need, deeper's gonna matter, and where we can be first or, or close to first so that we can play.
Yeah.
With the front of the pack.
Okay. And when can we expect to get more details on what these indications are gonna be?
Well, we're gonna start 4-5 trials by the end of this fiscal year. And so over the next few months, I would say you're gonna get a lot more color.
Great. You've talked in the past about the strategic value of Immunovant. I guess, how do you think about it? You obviously own a large portion of it, but it is still an independently traded company. So how do you think about the strategic value of that asset, either internally or as something that could be pushed out?
I think we have, for better or for worse, depending on who you ask, proven that we are ruthlessly economic in how we think about our programs.
Yeah.
I think we're gonna be exactly that way with Immunovant. The truth is, look, argenx is doing a pretty healthy job of launching their program. I don't think there's much question that FcRn is an indication that matters to companies that want a large footprint in immunology. And so I think there are many companies interested in what FcRn can do for them and some that feel they have to have one. You know, I think we are in those conversations. Our view is assets that can take you to multi-billion dollar sales, with proven biology and with a breadth of possible indications are not that common.
Mm-hmm.
So I think the sort of reservation price for us is high, especially because we have the capital to progress this program and.
Yeah.
Win with it. So I think the answer is we're just gonna take it as it comes. You know, we've talked about being open to JV structures that would allow us to see it through. We've talked about all kinds of things, but I think the short answer is, first of all, there's clearly a lot of strategic value in the target, and second of all, we have the capital to be patient and thoughtful and aggressive. And if what it calls for is for us to commercialize the program, I will be really excited to do that.
Okay. Okay. Maybe last question, then we'll move on from, from this program. But, the competitive landscape obviously has been an area of focus with, like, emerging assets in the IgG degraders space. I guess, just how do you think about the role of FcRn versus IgG degraders and some of the others?
I think.
The data that we've seen, I guess.
Yeah. I think, first of all, and this is the, this is the conversation that I was a little bit bummed to get drawn into. I, I think.
Sorry about that.
No, no. It's fine. I get you're not the one who drew me into it. Look, I think, first of all, it's clear that, and lots of people have different incentives to do this. Putting FcRn into a comparison with these other classes where you're talking about, like, again, thousands of patients treated with FcRn antibodies and, like, 20 patients treated in a single study.
Yeah.
With these other mechanisms in some cases, that it's just, it's a difficult comparison to make. That said, I think if you look at the IL-6 data or the IgG degrader data in the last few months, I think the common theme of them is FcRn has elegantly cleared a bar, in being able to deliver benefit to these patients and being able to deliver sustained IgG suppression that has been difficult for other companies or other programs to match. And I suspect eventually other mechanisms will get there and deliver value, but I think it's just a reminder that,
Drug development is hard.
Drug development's hard. If you imagine a pole vault without being able to see the pole, I feel like what we've seen subsequently is a bunch of people trying and figuring out that the bar was higher than they thought it was. And so, you know, we'll see how that plays out in the coming months and the coming years. And again, I do believe many of these other programs have cool biology. I think CD19's gonna matter. I think IgG degradation could. But I think there's still a lot of work to do to figure out how they're gonna play.
Okay. A-okay. Maybe we'll switch gears to brepocitinib. One of the things we recently saw was phase 2 data in non-infectious uveitis. So maybe you could talk to us about the relevant data that you guys presented there and provide some context for those results.
Yeah. Perfect. So brepo, for those that don't know, it is a dual inhibitor of TYK2 and JAK1. We acquired it from Pfizer. Kind of the local nadir of JAK inhibition right around the time that everyone was worried about JAK labels. Obviously, the class has continued to do extremely well with Rinvoq, etc., so important medicines, let's put it that way. NIU was an indication that's kind of like Graves in that it requires a little bit of imagination. There has not been a lot of development in NIU. It's a very severe disease. It causes tens of thousands of cases of legal blindness every year. It's an acute ocular inflammation. And it's very poorly treated, right? The interesting thing, the endpoint of sort of note, the FDA endpoint for NIU is called treatment failure, and it is literally what it sounds like.
It's people failing to be successfully treated. And the only really approved novel therapy is Humira, which has a treatment failure rate, as we measure it, which includes discontinuation rates, close to 2/3.
Mm-hmm.
So these therapies are not working well for these patients.
Sure.
The alternatives are, especially for patients with sort of back of the eye NIU or systemic steroids at very high doses, which the whole name of the game has been trying to avoid for years. And we blew our own bar out of the water. Our treatment failure rate for brepocitinib in this phase II study was about 29%.
Sure.
So, over 2/3 of patients succeeding on therapy, which is a really exciting place to be. If you talk to docs, the tolerance for ocular inflammation is extremely low. It takes precedence over comorbidities. It's just a very important thing for them to treat, especially because patients really don't wanna lose their sight. And so we think we have an opportunity to offer some real benefit to patients that need it.
Okay. And what are the next steps in NIU and kind of where are you in the process of executing against those?
Yeah. So we'll have an FDA meeting. We haven't said exactly when, but imminently, to discuss the pivotal program there. I think FDA's gonna be excited about what we have to offer, and we'll start that program later this year. We'll provide some guidance when we get it started on exactly how long it will take. I think, historically, studies in NIU have been relatively slow to enroll, but I think no one's shown phase two data like we have. So I think we're still sort of figuring out exactly what that's gonna look like for us. So that's, that's sort of the immediate next step there.
Okay. As you think about going to the FDA with, like, a request list or a priority list, anything you would highlight that you'd like to see in that registrational path?
No. Look, I think there's still a debate about one study versus two. But that doesn't actually affect the overall number of patients very much. I think we're just trying to get the fastest path to get this out to patients at this point. And so things that allow us to move faster are better.
Okay.
yeah.
Then maybe in terms of market opportunity.
Yeah.
I guess, like, how would you size this opportunity? And what do you think the market is like, and I mean the investor side, what do you think we're all missing with respect to the size of the opportunity there?
Yeah. The number one comment we heard the day we put out the data was people saying, "Crap, now I need to model NIU." So, you know, I think the first thing is it just hasn't been on people's radars. And I'm not sure that's changed even though they said that, I'm not sure that's, like, changed a lot in the last month.
Yeah.
Look, I think the thing that's hard is we're all a little lazy, and there is no like, Humira's probably doing tens of thousands of scripts a year. I think overall, we think there's about 40,000 patients on biologics. So it's a relatively decent-sized market, but that's spread across both Humira and some off-label use of other things. So it requires a fair amount of imagination. I guess the way that I'd flip the script is I'd say, "Look, so brepo, in NIU, we're gonna study 45 mg as our dose. In DM, the likely commercial dose is gonna be 30. I don't think we're gonna go to 45 in many or any other indications." So what that means is, first of all, we could launch it as an NIU-specific product with its own brand.
Second of all, even in the abstract, it'll be sort of 50% more expensive on a milligram basis than.
Mm-hmm.
Than DM. And, you know, you think about other therapies in diseases with ocular inflammation like Tepezza, and you think about the price point there. Even if you think of us as capturing a fraction of the biologics patients, right? Just the 50%-60% of patients that fail Humira, that's maybe 10,000-20,000 patients. And at a Tepezza-like price point or a moderate discount to a Tepezza-like price point, even if that's the only market you think we're gonna capture, that is a large multi-blockbuster market. So I think that's the maybe a commonly missed thing is these are patients in real need, and we have an opportunity to address it. And in those situations, there's clearly a willingness to pay in the smaller patient population.
Yeah.
And, and a real need.
Okay. You mentioned dermatomyositis. We're obviously waiting for registrational data there next year. So maybe walk us through what that study is evaluating?
Yeah. Sure. So in dermatomyositis, the endpoint is this thing called total improvement score. IVIG is basically the only approved novel therapy there. We're evaluating patients in long-duration application of brepocitinib for improvement on that TIS score. There has been an open-label study of tofacitinib of another JAK inhibitor, on that endpoint. It looked quite good. So, you know, we're just hoping to deliver data that is, you know, in my dream, in my dream, obviously better than IVIG, but I think it's an oral therapy, and IVIG's got all kinds of challenges. So I think if we get within the same ballpark, we're, we're in very good shape commercially.
Okay. And to what extent does the positive data you've seen across all these other indications kind of affect your conviction in dermatomyositis? And then probably subsequently, like, if dermatomyositis hits, how do you think about the read-through to other programs?
I mean, there's no question in my mind that if, if brepocitinib were in an independent, publicly traded company, it would be valued at $ billions at this point, right? We're in a registrational program. In an endpoint, we get data by proxy. We have amazing phase II data and indication that we're about to start a registrational program. And then we have six other positive studies across a variety of indications that are not our commercial focus, but it's a drug that works. It's a drug that works extremely well. And frankly, I think a lot of the concerns about JAK inhibition have been overblown generally and don't apply to the sort of orphan immunology approach.
Sure.
So we feel really great about the program. The fact that it continues, with the notable exception of lupus, to clear the high bar that we set for it, I think makes us excited to invest more. There are other indications. We've mentioned things like Behçet's disease. We've mentioned things like sarcoidosis, where we are familiar with it from our GM-CSF program as places where there's definitely need for a potent oral therapy. And, you know, I think over the next, call it, six months, we'll provide some updates on further development plans there, but we think it's a drug that deserves to see broader application.
Okay. I think you just stole my next question, maybe.
I'm sorry.
Yeah. That's okay. Maybe we'll go to VTAMA then. I guess, how would you characterize the launch date? And then as we think about kind of the balance of the year, what should we continue to monitor?
Yeah. I, as a CEO of a public company, love how VTAMA is set up right now in that I think everyone gives it zero or negative value. When it's on a path to being a profitable drug, we know there's strategic interest in it. We have lots of flexibility in terms of what to do. So I think we feel quite good about sort of the path forward. As far as where we're at, look, I think unquestionably we had hoped psoriasis was going to be a faster commercial launch. I think the thing that we've said publicly is, it's been more of a slog to convert docs from steroid prescribers to prescribing any novel therapy, but VTAMA's the one that I care most about. And so, you know, I think we're working through that in psoriasis.
The truth of the matter is psoriasis was always the tougher market. The biologics are much more well-established there. The topical market has not been growing in years. And, no one's really preconditioned it, right? We were the first novel topical mechanism in psoriasis in 25 years. So there's been no sort of preconditioning for getting patients off steroids. AD is a vastly larger market with a less well-developed set of biologics, where both Eucrisa and Opzelura and now Zoryve shortly have all sort of been out there doing the work of getting patients off or getting docs off steroids, getting docs to stop writing steroids for a long time. So the setup in AD feels a lot better to us. We'll launch an AD later this year, and I think what we would hope to see is sort of a different trajectory.
Ultimately, even if it winds up being a slog, as I said, this drug is on a path to being a mid-nine-figure profitable program in the downside scenario. And that's where I'm like, "Okay. But if it's gonna be valued at zero, even if we hit that very, very, very low bar for it, it's worth a, well, it's worth a large multiple of zero.
Yeah. Okay.
Or it's a lot more than zero.
I don't know if you can do that.
Yeah. That's right. You can't.
Oh. You're the math guy. Okay. So in terms of gross-to-net, I obviously that's been one of the questions around all of these topicals, but just how are you thinking then about the cadence of gross-to-net, both through the year and then your conviction in kind of long-term 50%, which has been the goal?
Yeah. So this year, I expect gross-to-net to improve slowly over time here. I think the main thing that's gonna drive improvement in gross-to-net is volume, which is something that, you know, we'll see with AD and otherwise going through the wholesalers. But, you know, I expect, you know, steady-ish. There, there's been some contracting noise in the last sort of six months that is now done, but we're sort of still sort of.
Yeah.
Seeing the impact of. And then, you know, obviously the first quarter was impacted by high-deductible plan resets. Ultimately, I think we're gonna get to that kind of 40%-50% range that we always indicated. And sort of as we get to the higher amount of total sales, we'll get closer and closer to 50%. And I think that's kinda where all products are headed. So I'm not too worried about it, but the pace will be a little bit slower from here.
Okay. As you think about the AD launch coming later this year, I guess, how should we think about initial launch costs and, like, early frictions to that launch versus the ultimate opportunity?
Yes. So another thing that no one asks about is in our K, we put out that we have renegotiated some fixed OpEx. We had financed our acquisition of tapinarof with some effectively debt milestone-based financing. And we've renegotiated all of that to take about $200 million out of our near-term, $225 million out of our near-term costs. I'd say at this point, cost to profitability for that program is maybe $225 million to sort of no more dollars going out the door. That's inclusive of AD. I don't think there's gonna be, like, a massive inflection in our costs at the time of the AD launch. We had dialed back a little bit on DTC. We'll ramp it up a little bit likely.
And then we're gonna add about 25 reps at the time of the launch to cover some of the allergists and pediatric dermatologists who are not already writing in psoriasis. But I don't think there'll be, like, a massive change in cost at this point. And the look, that program just keeps getting cleaner for us from a burn perspective.
Okay. Maybe on the Moderna litigation or just altogether the patent litigations.
Yeah.
You guys are going through, what should we expect to learn about those this year?
Yeah. So the biggest event to come this year will be at the end of this year with the filing of what are called summary judgment motions. So those are basically the final stage of pretrial conflict. That's where they lay out their last asks for the judge. We lay out our last ask for the judge. And then in the beginning of next year, those will be adjudicated. The most important issue that will be cleared up in those, in that process is this issue of what's called Section 1498, the U.S. government contractor defense. How much of the liability belongs to Moderna versus to the U.S. government? Our view is the vast majority. Their view is they're trying to offload some of it. And so we'll find that out during this summary judgment process. Also, happening this year quietly. So fact discovery's ongoing now.
Analytical work on our part, depositions, etc., are all kinda underway. You can see that on the docket. And then in the Pfizer case, so we had the Markman opinion in the Moderna case in April. The Markman hearing in the Pfizer case will be this fall. And so that'll be an interesting milestone and, and, potentially an opportunity to reinvigorate discussions with Pfizer. So that'll be this fall.
Yeah. I guess one of the questions is also around kind of, like, what could the damages look like? How much capital infusion could you get here? Any latest thoughts that you can share around what that?
Yeah. It's tough to comment on.
Yeah.
Ongoing litigation in that way. So I probably won't offer that much in the way of a suggestion. But, you know, these are, the COVID-19 vaccines collectively have sold well and have been used widely. And, you know, we've done other COVID royalty deals in the mid-single digits to call it mid-teens royalty rates. So those are not necessarily precedential here. They're sort of set up differently at different stages of development. But.
Mm-hmm.
If you applied that range to the COVID-19 vaccine sales, it'd be a big number.
Okay. I guess beyond the things we've already talked about, any other assets in the pipeline you wanna make sure we highlight?
Yes. So, I mean, we have a phase II readout from namilumab in sarcoidosis later this year. That's more of a swing. GM-CSF is a target that is still in search of an indication. And sarcoidosis is tough biology. But, you know, we know that sarcoidosis is mediated by granulomas, and we know that macrophages matter in the formation of the granulomas. And so GM-CSF ought to work there. And if it does, you know, I think that's another program probably more correctly ascribed low value right now. But if it works, it'll be a potential blockbuster drug with, with a real opportunity. So that's data coming this year.
Mm-hmm.
And then, you know, there's a couple of things that sort of meet that general description, but mostly I'm excited to start to share more of what we're gonna add to the pipeline, which will come in the next few months.
Yeah. Maybe then, like, last question, just in terms of capital allocation, obviously you have plenty of money. What exactly or, like, how are you thinking about the buckets that you wanna invest in? And maybe if you could, like, rank order them or talk about how the portions.
Look, what we've said before is of the, call it, $6 billion of capital that was.
Yeah.
Prescribable to Roivant. About $2 billion of it was sort of allocated to the existing portfolio. The significant majority of that is set aside for Immunovant, where we think we can win a really big opportunity.
Okay.
About $2 billion of it is set aside for, I'd say, mostly clinical spend on new BD. So deals that we will do to acquire programs where we will spend maybe mid-nine figures on a phase III program.
Sure.
and then the last $2 billion is sort of, flexible now currently part of our share repurchase authorization.
Yeah.
The error bars around those numbers are very, very wide. And so I think we'd like to narrow down what our BD looks like. We'd like to articulate a little better what we're spending in Immunovant, etc., before we finalize that. But that's kinda really rough numbers.
Yeah.
How I think about it. And that puts if we can't win with six, if we can't win with four, we definitely can't win with six. And so that puts us in a position I think that is, yeah, unparalleled in biotech bluntly to go after big markets and to win.
Okay. And then in terms of the share repurchase program, just refresh us on, on where you are and where you could still go?
Yeah. So we had $1.5 billion authorized. We used about $650 million of that to buy Sumitomo out at $9.10 a share. Our concentration of our shareholder base has been a little bit of an impediment over the last 18 months.
Mm-hmm.
That's changed for me from an impediment to an opportunity. I'm now sort of looking for big block sellers of our stock.
Yeah.
So that we can buy the stock at an attractive price. We're gonna continue to play that through in the coming months. And we have yet quite a lot of dry powder, about $800 and something million to deploy there without any change to our authorization.
Great. I think that's the end of my questions. Matt, thanks so much for the time here today. I appreciate it. Lots of insightful.
Thank you. Appreciate it. Thanks for having me.
Thanks, everyone.
Thanks.