To the Jefferies Healthcare Conference. My name is Dennis Ding, biotech research analyst here at Jefferies. I have the great pleasure of having Matt Gline here, CEO of Roivant. Welcome.
Thanks for having me. It's great to be here.
Before we get into Q&A, and there is certainly lots to talk about, I'd love to hand it over to you to just give an overview. Roivant's a $20 billion market cap company now.
It's true. Look, it's been a really great 12 months for us. Yeah, look, I think many of you know a little bit about our story, we are roughly out there trying to do the same thing everybody else is, which is develop medicines that matter. We've been very fortunate to have now three drugs in our late-stage pipeline in brepocitinib, IMVT-1402, FcRn, and mosliciguat, all of which appear to be drugs that matter. We have our first sort of major commercial launch, certainly our first next commercial launch in brepocitinib dermatomyositis, which should be by the end of September, assuming everything goes along as expected with FDA. A bunch more data coming later this year, all that building on top of positive data in DM, in cutaneous sarcoidosis, in D2T RA, at Immunovant, all sort of in the recent history.
Just a ton going on, a ton we're excited about, and a really great year for us.
Yeah. I think going back several years, one of the big narratives around Roivant is that you guys are really good at identifying assets, going outside the cookie cutter, right? Finding unique opportunities that you guys could capitalize on under Roivant. Has that changed at all, or are you guys more focused right now on developing mosliciguat or 1402 and launching DM?
Yeah.
Has that focus shifted?
I'm smiling in part because I thought you were going to end that sentence, because you guys haven't found an asset in a few years, so now you must be known for something else. Look, I think the other side of the finding a good asset coin is how do you know it's good? Well, you know it's good when you've successfully developed it in indications. You've generated good clinical data. That's actually when you know the answer, right? Every new program is a question being begged, and until you've run the study, you don't know what the outcome is. I think one of the things that I'm probably most proud of is I feel like at this point, I believe one of the things that we ought to be known for is creative, aggressive clinical development. We found great indications. We've run good studies.
We've generated a lot of data that's created a lot of value, and I think that's something we are excited to continue doing with each of our late-stage programs, all of which have opportunities for expansion. That said, look, we were built on DNA of thoughtful asset hunting and creative development, and I think we will continue to be who we've always been. We're excited about deals in the market, excited about things we're looking at. Despite appearances, we've been super active on the BD side and have been at the one-yard line multiple times in the last couple of years, when the right team crosses the finish line, everyone will know about it.
Is there a sense of urgency in terms of finding the next big asset, or are you fairly content and excited about what you have right now?
We're definitely excited about what we have now. I would say constitutionally content isn't our thing, so we're never fully content. I think one of the things that has served us well is restraint. That is, I think we've been pretty disciplined allocators of capital. We've been pretty disciplined about chasing the right opportunity. We haven't built a portfolio for the sake of building a portfolio. By the way, that's in part because we, at various times in our history, did more of that, and I think we regretted it after. I think as a consequence, we've been pretty choosy, and I think we'll continue to be pretty choosy. One of the things that's great about where we're at now is obviously thinking about the 10 and 20 year future.
We replenish our pipeline, we need to keep bringing things in, we need to keep building on what we've got. I think for the immediate term, we don't need anything else to build a big company. We have all of the ingredients in-house. We just need to nail the execution, that's where a lot of our immediate focus is.
Yeah. Maybe let's talk about DM.
Yeah.
That's going to be approved soon and knock on wood. I guess, how are you thinking about that launch? What sort of commercial readiness initiatives that you guys are doing ahead of the PDUFA?
Yeah, perfect. Dermatomyositis, for those who are not familiar with it, is an orphan inflammatory disease. There's about 40,000 treated patients in claims datasets now. There's probably 70,000 patients on an epidemiological basis. It's one of these diseases where that population could easily grow as more people get diagnosed, as more treatments are available. The data we generated last year was really great. This is the first effectively modern targeted therapy ever to succeed in a phase III study in dermatomyositis. There's IVIG, but other than that, there's really been nothing out there. One of the things that I feel very privileged is the Priovant team has done a phenomenal job working closely with the doc community in DM, and I think the community of physicians and patients is excited about the fact that there's a new opportunity coming.
I think we've got all the right ingredients in front of us on the table. I think one of the great things about dermatomyositis is it rhymes in severity and scale and existing treatment landscape with a bunch of the other indications like myasthenia gravis, like TED, where commercial launches from biotech companies have been successful. I think the first thing we're doing is just making sure that we've learned all of those lessons as well as we possibly can. We've studied those launches. Dan and the Priovant team have studied those launches.
I think certain patterns emerge on pricing, on rebating strategy, but also just on how you structure the organization, that you have medicalized field forces that talk to these docs where they are, that builds good relationships with them on a scientific basis, that you focus on the broad community of docs, including community docs, but especially on the referral centers where a lot of these patients are treated, and that you build these patient support organizations that are designed to help manage the coverage and payer process.
I think we've been both trying to learn as much as we can from other institutions that have done this successfully and in many cases hiring people from those institutions who have been successful because I think at this point, I hope someday we are thought of as commercial innovators. Before we get that opportunity, I'd like to be thought of as people who successfully replicated the commercial model that's working for other companies now. That's a lot of what we're after.
What are some of the learnings on price? Historically, you've given a fairly broad range in terms of what to expect for this prevalent population in DM.
One of my learnings on every sort of number is not to provide guidance, because it doesn't benefit anybody else who's ever done it. I don't have a new narrower benchmark to give on price. Look, I think the truth is what we've said about price before, without giving any guidance on price, is that IVIG is about $200,000 in dermatomyositis. If efgartigimod is successful in myositis, it'll be a $500,000, $600,000 plus drug. That sets some bookends, and there's a lot of good territory between those bookends in which we can develop a commercial strategy. I think access is important. I think, talking about learning from other launches, I think the work that argenx has done in moving into earlier and earlier line therapy in myasthenia gravis has been powerful.
I think it's not an accident that Tim made a good decision, that they made a good decision to price lower in that indication. Also, they've been very successful in indications like CIDP at higher price points. I think there are good arguments for living anywhere in that band, and I think we will make a choice on that basis. What I've been saying lately, which I think works well for us, is everyone should just assume we're going to be at the low end of that range and be pleasantly surprised if we price higher, because there's just plenty of patients here such that it's really just about the commercial model working the way we want it to.
How do you think about the phases of uptake in year one, year three, year 10, in terms of, I guess, the low-hanging fruit perhaps would be off-label JAKs and you switch those patients over? Do you agree with that or just-
Yeah
any kind of color there?
I'll say, first of all, I think the truth is, in any indication where nothing novel has launched for a good long time, there's very wide error bars around the early launch. We've been saying slow and steady. I believe slow and steady is the right way to think about this. It's just really hard to know who the early patients will be, how the payer process will work, and it could take a long time to dial all that in. In some weird, perverse way, it's easier to have confidence around the peak number and the size of that opportunity than it is to have confidence around year one or year two or year three or whatever, and I think there's pretty wide error bars around the early launch.
I don't think it, in the long term, I think it may not matter that much in the sense that if we launch slow and roll to a big opportunity, I think that could be the best outcome. I don't know that I agree that off-label JAK use is the lowest-hanging fruit. I think the truth is the DM population is littered with poorly controlled patients, and some of them are poorly controlled patients because they're on off-label therapies like an existing JAK inhibitor or rituximab or something like that just doesn't work, or REMICADE that doesn't work very well. Some of them are poorly controlled in the sense that they're on IVIG and maybe their disease is okay, but they're spending five days a month, eight hours a day in an infusion clinic and want to try something different.
That together, all of these sort of "advanced therapies," IVIG and off-label stuff, accounts for about 25% of the treated patients. 75% of these patients are just on high-dose steroids and immunosuppressants. In many cases, very high dose steroids, like more than six months a year at over 10 or even over 20 mg of prednisone. I don't know if you've been on oral prednisone before. Being on 20 mg of oral prednisone is miserable for a weekend. Imagine doing it for six months. It's terrible. It's probably not doing a particularly good job of controlling DM in the long run. These patients are sick, miserable, unhappy, and are ideal candidates, even though they're not in any of the treated populations.
I think it's going to come down to each physician is going to approach the early patients differently, and we're going to meet everybody where they are and just find the right patients to get started with and build from there.
Yeah. I think you guys are somewhat steroid-sparing as well, right?
That's right. Look, in what I probably best describe as an accident of history, we ran very intentionally in our phase III study, a steroid taper, which was designed, as with most steroid tapers, to ensure or protect separation from placebo in the study by making sure that the placebo patients were not just increasing steroid dose over time because they were getting worse as the disease progressed. What happened in practice is these patients were sick enough, it was relatively difficult to guarantee a full taper, and we wound up with a pretty significant difference between the steroid dose on drug versus steroid dose off drug, which wasn't the goal.
It turns out I wouldn't change a thing in hindsight, because I think one of the things that docs are most excited about is that we've demonstrated that we can get patients with a clinical benefit also on significantly reduced steroid burden, and that's something that these patients think a lot about.
Okay. One of your competitors, argenx, is going to have phase III data in the third quarter, also in DM. Curious how you're thinking about the market, assuming their data is positive. We obviously have to see what the magnitude of this is in the clinical trial, but do you have any thoughts on that?
Look, the first thing I'll say is efgartigimod's a great drug. argenx is a great company, has done a phenomenal job. I think in general, the lesson from argenx's experience in diseases like MG is that these are markets where more new drugs actually benefit everybody. I think efgartigimod has done better in MG because of the complement inhibitors. I think we will do better in DM if efgartigimod is approved, because there will be more awareness of novel therapies, more docs trying to figure out which drug to use for their patients. Frankly, we get to play in DM the role that argenx got to play in MG. That is, we are coming in as the pulpitis drug. The doctors are excited about it. There's the other things into the market. They will find new patients.
They will get new docs excited, and I think that will continue to accrue to our benefit. I genuinely believe argenx's success will be our success. That's thing one. Thing two is, look, I think biologically, there's reason to believe that IMNM is probably a better myositis for an FcRn, and DM is a better myositis for an anti-inflammatory like brepocitinib. I think my hope, and to some degree, expectation, is that we have a better agent for this patient population. I think indeed argenx's body language around their trial suggests that their head's in a similar place. I think that's ultimately helpful.
I think if you look at the argenx data as of, I think they have over some more data that I can talk more about in a second, but even as of the earlier data, we had a significantly faster path to a moderate response, and we saw at least a comparable TIS benefit while they didn't have a steroid taper in their induction study.
I think all of those suggest to me that we have a good setup here from a data perspective. I think this is both a liability and a blessing. argenx's study is very different than ours. It's not a DM study. It's a study across three different myositis subtypes, IMNM, DM, and polymyositis. In each myositis subtype, it's about 25 patients on drug and 25 placebo patients.
First of all, DM treating physicians are obviously aware of that and are, I think, deeply appreciative that we ran a proper size study with lots of patients specifically in DM. Second of all, look, it does mean they could just get lucky, right? If 25 patients tests as a noisy endpoint, we're going to have to contend with whatever that study shows. Again, I'm not that worried about it long run, but I think that's sort of the rub.
Sure. Okay. Even outside of DM, you guys have NIU data coming up, I guess.
Yeah.
Like a big part of the brepocitinib thesis is way bigger than just DM, right?
I totally agree.
I call it RINVOQ for rare diseases.
Yeah.
It could go for multiple indications.
I appreciate that nomenclature.
So for-
Anything to draft off RINVOQ.
For NIU, I guess characterize how the size of that opportunity relative to DM?
Perfect. By the way, I think in some ways, NIU is among the more underappreciated of our commercial opportunities in that it is devilishly hard to isolate in claims data sets. It's just hard to isolate, even for us, we're out there in the field with these docs all the time in the trial. Hard to isolate the size of the patient population. I think it could be, frankly. First of all, NIU overall, non-infectious uveitis and eye inflammatory disease. These are patients who have eye inflammation and the third leading cause of blindness in the U.S., so high morbidity. Docs want to treat it aggressively because it can lead to blindness. Of the 400,000 NIU patients in the U.S., the significant majority of them have mostly front of eye inflammation and get treated with steroid eye drops, and those are not our patients.
We are treating patients with back of the eye or whole eye inflammation, and I think there are somewhere between 70 and call it 150,000, 160,000 of those patients, which is wide error bars because there is a lot of diagnostic slop.
I think it just gets to the answer is probably there are more such patients than dermatomyositis patients. HUMIRA is approved in uveitis. It doesn't work spectacularly well, and certainly left some room in our phase II data for what it's worth, was obviously meaningfully different than what HUMIRA had seen in uveitis. If we're successful, I think there's a huge opportunity in uveitis to be a big market.
Yeah. How would you approach pricing, I guess, for DM, and how much do you consider some of these pipeline opportunities?
Yeah, I think we are absolutely thinking about a collection of indications that can support the same commercial model, the same price point, the same orphan setup, the same patient support structure. I think we certainly have some levers to pull. We could decide to do different prices for different doses. DM is a 30 milligram dose. NIU is probably 45. Overall, I think the answer is these are comparably morbid, comparably sized populations. I think these are all really bad diseases, and I think they will all support the kind of price point and commercial model that we have in mind. One thing I'll say is, look, I think it's very tempting, you're at this stage in the game to think of Brepo as a dermatomyositis drug. To your point, that's not how I think of it at all.
I think dermatomyositis is a base layer on which to build a really big setup across a whole bunch of different indications. While DM is certainly large, and you can underwrite, in my view, a very big peak sales market opportunity for it. By the time it's close to peak, we've got three other indications in active late-stage development.
and more to come. We have a lot more work to do to build this into what it could be.
For NIU, remind me, what do you view as the clinically meaningful improvement on treatment failure?
Well, HUMIRA, as I recall in visual, had three and a half or four months placebo time to treatment failure, around six months of drug time to treatment failure. In our phase II, we were greater than 12, meaning the median patient had not failed by the end of 52 weeks when we finished the study, or 48 weeks or whatever it was. Look, I think the answer is, HUMIRA is viewed as not a perfect agent in NIU, but clinically meaningful. I think certainly anything in the same ballpark as HUMIRA is going to matter to patients, and the more better than that that we can do, the more people will be excited about the data. There's room for a lot of degradation from the phase II.
Your phase III, does that enroll pre or post-HUMIRA, or does it not specify?
It doesn't specify. We have both.
Okay. Well, that's a readout, a phase III readout in the second half.
Yep. Absolutely.
Very interesting. Could be, in our views, $2 billion-$3 billion peak sales.
Thank you.
Depending on price. I mean, let's see on price. Another catalyst that's super interesting to us is PH-ILD.
Right.
This was a small asset that you got from Bayer several years ago. Very under the radar, but here we are, phase II data coming up in the second half. Maybe talk about the opportunity in PH-ILD and what gave you the conviction to go away from PAH, which is where the phase I-B data or trial was running, and into PH-ILD.
What gives us conviction is a question that investors ask often, and I think it presumes that I sleep better than I do. Look, this is a drug we in-licensed from Bayer. It is an sGC activator. That's a related mechanism to sGC stimulation, which is a mechanism of a systemic drug called Adempas that was commercially quite successful in PAH and failed a clinical trial in PH-ILD, in our indication. What we think we know from the field, and this is principally paths paved by prostacyclins, by Tyvaso and other treprostinils, is systemic vasodilation works in PAH, does not particularly work in PH-ILD.
The ostensible reason is you vasodilate a lung with diseased tissue and as much benefit as you get from vasodilating the healthy tissue and improving lung function on healthy tissue, you give up a lot of that benefit in the diseased tissue and so you get this V/Q mismatch, basically. The solution for PH-ILD in prostacyclins and treprostinil world has been inhaled prostacyclin. Tyvaso is approved and doing very well in PH-ILD. YUTREPIA is on a path to doing well in PH-ILD is another formulation of treprostinil. There's clearly a lot of enthusiasm for that idea. The thing that we've done is neither more simple nor more complicated than simply try to replicate that with sGCs. That is, we know that systemic treprostinil does not particularly work in PH-ILD.
We know that systemic sGC modulators did not work in PH-ILD, but we have an elegant formulation of an inhaled sGC activator. In group 1 patients, it demonstrated extraordinary, some of the best PVR reductions ever seen. We believe strongly that it is an effective locally administered vasodilator, inhaled vasodilator of this mechanism. The hope is that we replicate this idea that taking an inhaled potent vasodilator into PH-ILD can yield benefit for these patients. That's the bet, that's the risk, that's the setup.
Okay. On PVR in PH-ILD, right?
Yeah.
I think in PAH it's fairly standard to assume that anything north of 20% is clinically meaningful and there's a good shot that six-minute walk will be positive. What about PH-ILD?
Look, again, the end of studies run in PH-ILD is small.
Yeah.
I don't have some giant body of evidence to point to. I think we do a lot of translational thinking from PAH, and I think our general view is north of 20 on PVR. The math of or the mechanism of translation from cardiac output or PVR to six-minute walk is pretty similar in PH-ILD. There's probably some differences related to the other causes of morbidity associated with PH-ILD. In general, I'd say if we see north of 20 on PVR, I think we're going to be pretty happy with that, and I think ideally we would see some directional signal on six-minute walk. We're not powered for six-minute walk. I don't expect a P value on six-minute walk.
To be honest, if we see a high enough PVR, we could see literally nothing on six-minute walk and still go ahead with the phase III. If we saw good safety and a deep PVR reduction, you would have to really contort our current understanding of these patients to not think we could generate a six-minute walk benefit in a properly sized study.
When you say it's not powered for six-minute walk and there's no P value, are you saying that's not even being tested or that is just vastly underpowered?
We will mechanically run stats on six-minute walk test.
I expect to not get a P value on six-minute walk.
Okay. When you think about the mechanism of action, right? You guys and Bayer have done a lot of studies across phase I and studies where it's healthy volunteers.
170 subjects. Yeah.
It seems like from what's disclosed, I believe, the MOA acts specifically to improve mPAP.
Yeah.
Mean mPAP.
Yep.
For PVR, there's obviously that cardiac output component to it, right? In your phase I-B, it was interesting to me that I believe only the four-milligram dose had a improvement in cardiac output, but not the others.
We ran a bunch of phase I studies.
Yeah.
In general, I'd say the picture was consistent, and we measure different things at different studies. Like for example, we see elevated cGMP production for 48 hours after a single dose of drug at different dose levels. I'd say in general, I'm pretty confident looking at the totality of the evidence that this drug will deliver a cardiac output benefit. I think that's just what we've consistently observed. That said, the way the phase II-B works is a dose titration paradigm where you start on the low dose and you get up to 4 mg pretty quickly.
One of the things that gives me comfort, especially from a safety perspective or tolerability perspective, is that 95% of these patients are getting to 4 mg and staying there. That's obviously a sign that people are, A, tolerating the high dose, and B, not having sort of massive safety issues.
Yeah. This is once daily inhaler.
Once daily puff. Once daily, one puff off a DPI.
That's right. Okay. One of the key reasons that it's able to do that is that there's a lot of deposition in the lungs.
That's right. We do well at getting into the lung, and we do well at staying in the lung.
Yeah. Okay. Perfect. You guys are the phases for PH-ILD, but I'm also curious, how are you thinking about opportunities beyond PH-ILD?
Look, PH-ILD is obviously a great market and we're excited to be there and we're going to learn a lot from this study, including one of the things that we're going to measure in this study is things like FVC and other measures of underlying lung function. Obviously, one of the things we've watched closely is the TETON data around IPF.
once we've seen this data, I think IPF is a natural place for us to be thinking about. But also we think about PH-COPD, we think about PAH, we think about other indications.
of impaired lung function or other subgroups of pulmonary hypertension. I think there's a lot of places to go. Obviously, first and foremost, this is a don't screw it up opportunity in PH-ILD.
Yeah
It's the kind of mechanism that should work more broadly as well.
Yeah. Depending on the phase II data, how would you approach the development of mosliciguat across many of these indications?
Well, I think we would run more studies if the FDA.
Sure
if the study was suggested.
One at a time and look at PH-ILD and see how that goes? Would you take a farther-
No
like approach and go broad.
Look, we haven't perfectly clearly articulated the regulatory path that we intend to follow from here to approval in PH-ILD. I think insofar as that path cuts through another phase III study that we're probably going to start relatively soon in PH-ILD, I think we would start other indications in parallel with that study. We're not going to, at this point, after we generate the stage data, are going to wait to go broader.
Maybe briefly, how big do you think is PH-COPD? I'm just curious because Merck has this MK-5475 product.
Yeah
that's failed. That's supposed to read out this year. That data were positive.
Yeah, that would be informative. Look, the scary thing about PH-COPD for clinical development of inhaled therapy is like the lung tissue is a little bit more complicated to work with. I think that's on the list of things that would give us some consideration there. Obviously, if Merck succeeded there, that'd be super informative.
That Merck drug, if I'm remembering the study correctly, is a once-daily study of a drug with less deposition in the lung, which is one of the issues they've had with that drug in PAH. Even if that study doesn't work there, if we see evidence of good safety and the possibility of early efficacy, I think that could be informative as well. I think PH-COPD is a big market. There are a lot of theories as to why treprostinil works in IPF. I think there's a series of religious devotees who think it has to do with this preclinical fibrotic or anti-fibrotic effect of treprostinil. I think there are people who are just of the opinion that you get vascular remodeling when you improve lung function in pulmonary hypertension patients with lung disease.
Then I think there's another possibility, which is just a lot of IPF patients have undiagnosed pulmonary hypertension, and when you get out there and you treat their pulmonary hypertension, they get better. So I think across the variety of different explanations, I think a lot of those explanations potentially hang true for us.
Yeah. Okay. That is very helpful. In the last few minutes, we'd love to talk a little bit about Immunovant.
Sure.
Just remind us, you guys did have some RA data.
Yeah
Recently, it seems like still kind of TBD, and we'll get some more updates in the second half, but just remind us of where you are.
I've been cautioned not to answer questions about Immunovant because we're hold rated on it.
Okay.
I'll do it anyway just because we're here. Look, the D2T-RA data it was honestly better data than we expected in D2T-RA. It showed meaningful, whatever. It's an open label run into a randomized withdrawal study, and so it's hard to interpret, especially in this patient population. We have pretty high ACR-70s and ACR-50s, which are not the sorts of things that happen that often spontaneously, and so it feels like there's a real effect here, and we're excited about it. As we said when we announced the data, this is a randomized withdrawal study. It was an open label run in, followed by a randomized withdrawal period. The truth is, because the data was as good as it was, a lot of these patients had ACR-50 and ACR-70 responses. The primary endpoint of period two of the study is loss of ACR-20.
If you are an ACR-70 responder, are you definitely going to lose an ACR-20 in 12 weeks? I'm not sure. You've got some extended pharmacodynamic benefit from the drug.
Then you're trying to get a lot worse fast on placebo. I don't know exactly what our likelihood of clinically hitting in period two is. What we said is we're going to look at period two, obviously, but equally informative. There's a lot of patient-level work we want to do on inflammatory markers, dimensioning autoantibodies, and trying to understand which patients are responding and why, and looking to make sure there's coherent narratives that support the drug activity. We want to do that analysis. Then luckily, there's a pretty important regulatory question here in that historically, basically every approved RA therapy has gone down the broad indication, like large, in some cases thousands of patients large study.
We're trying to understand what a regulatory path looks like for an agent willing to restrict itself to late multi-mechanism failure D2T patients who have, for example, failed a JAK and a TNF.
Yeah
the needs are different. I think what that pathway looks like affects a little bit whether and how we run the second phase II. One thing that benefits us is there's a whole class of CAR Ts and T-cell engagers, there's a bunch of stuff coming in late-line RA.
We obviously won't run 2,000-patient CAR T studies.
Yeah.
There are going to be answers to these questions, but we're kind of out in front of that. Anyway, what I'm hoping is that by the end of this year, we can package period 2 with the patient-level analysis I just described and with that regulatory feedback, and present it as a coherent whole with a plan forward, and that's what the next update will really look like.
Got it. Perfect. I will just limit it to one Immunovant question.
Thank you.
Thank you so much, Matt, for being here. It's great to hang out with you.
Thank you. Appreciate it.
Have a great conference.
Thanks, everybody.