Let's get started. Good morning, everyone. Thanks for joining the BofA Healthcare Conferences. My name is Chi Fong. I have Dina Ramadane with me today. We are both from the U.S. Biopharmaceutical Healthcare team here at Bank of America. I cover Roivant, she covers Immunovant, and we are glad to be co-hosting CEO of Roivant, Matt Gline, today. Thanks for joining us, Matt.
I'm so happy to be here. Thank you.
Okay, great. Maybe start with some high-level question, if we may, before we dive into some of the deeper product level questions.
Sure.
As you know, Roivant has gone through several distinct eras. You have the initial MYFEMBREE days through the value realizing exits like TL1A to now you're building franchises that like brepocitinib and Immunovant 1402 as multi-indication franchises. Curious which parts of the original Roivant model have proven durable and what have you potentially want to move away from as the company matures?
Thank you. It's a great question. Good to be here. Thank you for having me. I can't see that well 'cause the lights are. I think thanks for being in the room. Thank you for your great coverage of Immunovant, you know. Sorry, I have to tell the joke 'cause the video is overrated.
It's okay, Matt.
Yeah. Richard makes me do that.
Thanks, Richard.
Yeah. You know, actually, we celebrated our 12-year anniversary last week, and we've done a lot of things in our history. I think, like, it's hard, biotech is such a path-dependent industry, it's hard to say that, like, any of it was wrong. We've built a group of successive pipelines. First, a sort of more specialty pharma pipeline you referred to in women's health and urology. Then, you know, we had the TL1A briefly as a short era, and then now, with this immunology pipeline, immunology, pulmonology pipeline that I think is the best we've ever had. You know, I think one of the things that's always been core to our model is I think we're pretty thoughtful about how we bring drugs in.
One thing that's become more and more true about us, I think we're pretty thoughtful about how we develop them. I think we've become quite good at indication selection and aggressive clinical development. I think that's something we've developed as a core competence over the past handful of years, gotten better and better at, and I think it's enabled some of the multi-indication franchises you referred to. I think it's enabled some of the clinical data we've been able to generate. That's been sort of a new add. You know, BD remains core to the model. We're always out looking for new programs. Obviously, at our current scale, the things we need to do to matter are different than some of the things that could have worked for us as a smaller company. I think that's shifted over time.
In general, we remain opportunistic, we remain, you know, aggressive. I was talking to someone yesterday. I feel like there are CEOs who are sort of, whatever. They're very, like, long-term, narrative-driven CEOs. They have, like, a big vision, and I feel like Roivant's more of a Markov chain. It's about, like, what the next thing we can build is on the thing that we've got now, and sort of keep continuing to add that on over time, and it served us well, and I'm excited to see where it takes us next.
Is the business model still primarily optimizing for optionality, where, say, if you have a great asset, potentially, if you can find an extra strategy for it, you know, contemplate it, or are you starting to thinking about underwriting Roivant as more of a standalone commercial biotech company?
Look, we're not dogmatic, I think we remain open and flexible in the literal sense of that word. I think we are acutely aware, and have been since the very beginning of the company, that the way you build at this scale, the way that you deliver shareholder value, the way that you grow as a business, the way that you become a $50 billion, $60 billion, $80 billion, $100 billion company over time, there are no $100 billion, like, VC companies or whatever, like, in our industry. The way you build a company that size is you commercialize products and you generate revenues and you become profitable, I think that's always been sort of our expectation for where we would land eventually.
I think it's been true that with each successive exit from a capital and portfolio perspective, we round up in a stronger position the next time to do it again. I think you would be hard pressed to describe a pipeline or portfolio of drugs more exciting to commercialize than the one we have now, nor a pipeline or portfolio of drugs more aligned with where biotech has been successful at commercializing drugs than the one we have now. I think it's highly likely we're gonna commercialize this portfolio of drugs.
Great. Great. Curious on capital allocation. After the TL1A divestiture, you were able to balance between reinvesting in the company as well as returning capital to shareholders. You know, if additional LNP proceeds were to materialize, how would you rank about priorities on capital allocation strategy?
One of the things that has been always true about Roivant, and particularly true about us since the TL1A, is we've been spoiled from a capitalization perspective. We're a well-capitalized business. We always have been. You know, I think on the back of the TL1A, we sort of said at the time we had roughly $6 billion in cash, and we sort of said, "We're gonna return a third of it to shareholders, roughly we're gonna sort of save a third of it for, like, new stuff, and we're gonna spend a third of it making sure we do right by the existing pipeline." I think we've been executing along that plan.
If we are taking in money from this Moderna settlement as soon as this summer, we've already accelerated our share buyback on the basis of that cash coming in. The truth is, it's hard to look at our pipeline and opportunity set and say if someone handed me another $1 billion or $2 billion tomorrow, that we would do anything materially different from what we're doing now. I think up to a point, I think we'd be pretty aggressive about continuing to return capital to shareholders. We are constantly evaluating the opportunity set and looking at bigger things, different things, different opportunities. Obviously, we'll have a better sense of what our own commercial P&L looks like as we get launched, hopefully later this year.
I think, you know, all of those things will factor into capital allocation decisions, but I think the base case thought here is we have the cash to do the things we need to do, and if we have more, we'll be thoughtful about returning it. Share buybacks are judged in hindsight, which always makes them nerve-wracking to do as a company, but we bought back $1.5 billion of stock at $10 a share, which looks pretty good now.
All right, great. I guess on business development, where do you feel externally sourced assets could add the most value versus, say, what you're already developing internally?
Yeah, again, we're spoiled not to have to choose between those things in that we have plenty of capital to add indications for our existing programs. I think it is clear that both brepocitinib and IMVT-1402 are phenomenal drugs that work well at impacting important systems that have a lot of biology associated with them. I think we have lots of ideas beyond what we are currently doing in both of those spaces, and for the moment are not capital constrained on those ideas. It's just about making sure the execution remains at high quality. I think we will continue to add indications to both programs.
You talk about you're not capital constrained, but you have frequently described Roivant R&D culture as ruthlessly economic repeatedly.
I have, yeah.
I'm curious, as the company scales and begins to generate revenue improving cash flow, does that standard loosen up, allowing for bigger and longer data investments?
I don't think being ruthlessly economic precludes bigger or longer dated investments. I just think it stipulates a standard for the quality of those investments that I hope we never stop holding ourselves to. I think one of the reasons this is like a philosophical comment. I think one of the reasons Roivant exists as a company is because the investor landscape as pertains large pharma companies, forces large pharma companies to do unnatural things to try and make choppy businesses with highs and lows related to patent cliffs and R&D cycles look more like NVIDIA or Google because the marginal investor in Pfizer or Eli Lilly right now isn't deciding mostly between Pfizer and Eli Lilly. They're deciding between Pfizer and NVIDIA.
I think the truth of the physics of our industry is the return on capital can be amazing, but it's fixed life, and these programs have ebbs and flows, and the unnatural things you have to do to make yourself look different than you are, are costly. My hope, at least for the foreseeable future, is that we can avoid those pitfalls, and we can run ourselves in a ruthlessly economic way, making decisions about capital based on what is right for the capital and not based on trying to attract the attention of a specific investor.
Great. Maybe we'll jump to brepocitinib. Is your next drug coming up that has a PDUFA in 3Q and about and launch follow after. As for initial indication is for dermatomyositis. You've talked about building a targeted and specialized field force focused on academic testing physician community. I'm curious, how concentrated is the DM patient population among physicians that you are targeting?
Yeah
What proportion of that patients represent out of the 40,000 treated patients right now?
About half of the in-treatment dermatomyositis patients in the U.S. right now are treated at specialty myositis referral centers, mostly academic in nature, and there are about 200 of those referral centers. Only because those referral centers are not single physicians. It's like Mayo Rochester is a referral center, Cleveland Clinic, Johns Hopkins. There are, excuse me, often multiple physicians involved, but we will target all 200 of those centers and most of the docs at those 200 centers at launch, and more of the docs, community rheumatologists, community dermatologists, who treat a larger number of dermatomyositis patients but aren't, like, at an academic referral center. The truth of the matter is when you're talking about 200 centers or even 2,000 physicians, it's, like, not that difficult to build a field force to cover that size of operation.
I think, to be honest, our principal focus right now, we wanna make sure we have a large enough operation. We wanna make sure we're able to cover those docs, able to cover them often, get in those offices and make sure they're getting what they need from a support perspective, getting what they need from a touch point perspective. Also, we're very focused on field force quality and on making sure that the people we're sending into these academic referral centers can go toe-to-toe with the highly experienced academic physicians who treat dermato myositis patients. Like, one of our field medical, it's actually a sales rep.
Like, one of our field commercial personnel, when she's out in the field is a myositis KOL who spent her career treating myositis patients and then decided she really liked our drug and wanted to do something different and came in-house. I think if we could fill our field force with people like that, it would be enormously impactful.
You've described the expectation for the brepocitinib launch as slow and steady. I'm curious, what do you think is the biggest unknown when it comes to the pace of the early adoption or the kinetics of the launch curve?
Yeah. I mean, there hasn't been a drug launched in dermatomyositis ever at some level. The only, like, dermatomyositis specific approval of, like, a, quote-unquote, branded therapy is an IVIG. I think the truth is, like, at some level, everything is unknown. I think how, these practices treat other patients, but, like, how these individual myositis referral centers embrace a new drug, how they decide which patients to put on, how we work with them to get used to the coverage dynamics of drugs like this, which are complicated and well sorted. Obviously, argenx and Madrigal and Verona and Horizon and a bunch of other companies have, like, figured this out. Working with the physicians to make sure we're getting what we need there is important, and getting sites up and running and building a repeatable process.
I think, like, all of that is specific to the physician, specific to the patient, specific to the disease. It's like stuff to declare itself. It's the uncertainty around every single one of those elements that makes it harder to call ramp than peak.
Exactly.
There's a huge opportunity here, there's no question, but how you get there and how long it takes is, you know, it's just a question. I'll also say you watch companies launching drugs very successfully, and it's not clear to me that anybody is really benefiting from giving guidance these days.
Fair. Fair. Fair.
I'm not sure we're going to.
Fair. Fair. Fair. I won't ask that question.
No, it's fine. I just like
Fine. Fair.
Will Lewis is sitting around thinking, I wish I had given more guidance.
In terms of payments, patient segmentation in the early phase, which one do you think is the early adopters? Do you think it's gonna be treatment-naive patients who are looking to roll off steroids, or patients looking to formalize from an off-label JAK to an on-label treatment?
My honest view is it's gonna vary by physician and by patient experience. There will be some patients who hate IVIG and use it because it's the only thing that works, and they'll be eager to get off IVIG. Some patients who are at practices that have off-label JAK use is not that common in DM, and it's pretty concentrated. There's some docs who use a lot of tofacitinib, and those docs tell us they wanna get patients on a better branded drug that has better access and better patient support and all those things. Those physicians, I think, will potentially reach relatively quickly to those patients as they come in.
I think it will depend on the center, it'll depend on the patient, and I think it's gonna be a little bit of a mixture of all of the above.
Okay, great. I want to give it to Dina to ask about Immunovant questions. Dina, go ahead.
Thanks, Chi. We could talk for hours on just the 1402 pipeline. You know, you guys have over 10 potentially registrational trials ongoing for across five to six or more indications. Maybe can you level set investors on where you think FcRn has the most value across these programs, where you're prioritizing capital, what you're most excited about, and how do you kind of think about balancing these higher risk white spaces with large TAMs, right, versus this follow-on approach in certain indications that, you know, are a little bit crowded or that there's first to market FcRns already approved?
Yeah. I mean, look, I think, FcRns have declared themselves to be a pretty great category. I think in some ways one of the most remarkable, it's a new axis of biology. It can treat a whole bunch of diseases that were roughly unaddressable with modern therapies before. In some ways, I think one of the most exciting things about the FcRn class is that they've been able to do that while being, like, relatively easy to use. Safe, well-tolerated, no, like, major complicated issues, I think that has meant just, like, a lot of doc enthusiasm uptake, right?
Like, you talk to MG docs, and they're, like, excited to use Vyvgart because it's a good drug for their patients and because they just, like, put patients on it, and the patients improve and don't complain, which I think is, like, the dream for an indication like MG. You know, I think we're trying to lean into all of the great opportunities that are sort of presented in the FcRn field. I think it won't come as a huge surprise, the thing that we are probably, like, most excited about is Graves, which has good, in our view, biological validation at this point with our own phase II work, a relatively straightforward mechanistic rationale, and just, like, an unfathomably large unmet medical need.
Like, so many patients who are walking around poorly treated on current therapy, that it feels like, and I'm immensely proud of our getting there first at some level. Like, just, like, a huge opportunity to define that category in a way that is similar to what Argenx has been able to do with MG, where they've defined a category that has been enormously successful except for a patient population that is three to six times larger than the MG patient population in total. I think it's, like, it's just an unfathomably large opportunity for us to get right. You know, I think, like, we're doing and l ook, certainly there's, like, risk any time you run the first phase III program in any indication, so there's risk to the Graves' program.
It's not zero risk, like, it's relatively lower risk compared with something like D2T RA, where the biological translation is more complicated or the evidence we have from nipocalimab is more mixed. Obviously, also, if you can get there in late-line RA, a huge opportunity from a patient population perspective, you've got to clear a scientific bar that I think is, like, relatively high. I think that's kind of the bookends on the white space in terms of, like, do some things that are higher risk with big opportunity. Like, obviously, any time you're faced with an opportunity like Graves where you can do something that is, like, relatively lower risk and that big, it's gonna be sort of top of mind. You get indications like MG where look, the truth is, are we gonna take a ton of share in MG?
I believe that our drug will ultimately, in the fullness of time, be viewed as a more efficacious therapy than Vyvgart. I think deeper IgG suppression will matter for these patients. I think you look at the other FcRns on the market, and even without a ton of obvious differentiation, the little label differences and things like that, they're, like, doing okay. They're getting patients, just like docs are using FcRns because they have them. I think the MG study is obviously incredibly low risk. MGs have been validating FcRns over and over again. It's not a very expensive study. It will be a decent indication for us. Is it gonna be a huge indication for us? That's an uphill battle, but it'll be a decent indication for us, and it's obviously worth the effort given the risk.
Great. I wanna dive a little bit deeper maybe into Graves and D2T RA. I guess maybe top of mind here is just the recent phase III data you guys presented last month. Maybe can you just outline what your takeaways were from this study, how that maybe shaped your strategy for the Graves indication?
I mean, first of all, a lot of people have followed us into Graves, and that's great. I think it will actually, in the fullness of time, be good for us to have a more robust set of companies out marketing, because it's a lot of endocrinologists. It's not like myasthenias. There's a lot of people treating Graves' patients. The more mindshare you can get, the more these docs are used to new therapies, the more likely they are to reach for any of those. I think it's good. That said, we have learned an enormous amount by being years ahead of everybody in terms of actually treating Graves' patients. I think we're trying to stay, like, relatively careful about how much of those learnings we share.
Yeah, look, I think the hyperthyroid subset of patients in the TED study effectively doubled the number of hyperthyroid patients that we have treated with an FcRn, and that's informative. They are different patients. They are less hyperthyroid. They are on higher doses of ATDs. They are kept on stable ATDs during the course of therapy instead of being titrated. I think, like, looking at that patient population and still seeing a very similar consistent treatment benefit is super encouraging in terms of what we think it means for the translation of the biology to the clinical benefit of FcRns in Graves' disease.
Do you think there's opportunity to capture overlapping patient population with both TED and Graves? You know, is there an opportunity to maybe kind of factor that into your current Graves study?
Yeah. I believe based on the data we've seen in the TED study, based on the data we saw in our own phase II study, based on the data we saw in our Graves study, that especially for, like, early onset of TED, FcRns are benefiting these patients. They are slowing proptosis. They are resulting in proptosis improvements. The benefits are not as pronounced as you see with the best of the IGF-1R class, which makes sense biologically, and I think that makes TED, in and of itself, a relatively difficult commercial market.
I think for Graves patients, one of the many things that Graves patients struggle with, and you see it if you go to, like, Graves patient support groups on the internet or whatever, is like one of the most common posts in those groups is, like, someone takes a picture of their face, and they're like, do I have bulging eyes? Do I have the beginning of TED? Do I need to get treated for this? I think it's like, you know, it's something that like in an already stressful situation where you've been told you have a chronic illness that requires treatment, you're also wondering how it's gonna affect your appearance. People get really focused on that. I think being able to tell those patients, we can slow this down. We can catch it early.
You may never need to treat the TED because you're gonna get the Graves' under control. That, I think is a super powerful message. I think we are gathering data in the phase III studies for Graves' that hopefully will allow us to tell that story.
Great. You're looking ahead to when we kind of see that pivotal data from the Graves' trial in, I believe it's 2027.
Yep. Next year.
What's kind of giving you confidence? You shared phase II data. What gives you confidence that, you know, we'll be able to replicate that high 75%-80% responder rate that we saw? What kind of degree of maybe potential data erosion would still be considered commercially compelling? You know, what would you consider to be a win to position FcRn as a potential, you know, replacement for ATD and avoidance of ablative therapy in this patient population?
I'll say a few things. One is in terms of, like, what gives us biological confidence, the beautiful thing about Graves' disease is it's not that complicated, actually. Like, we know how the biology of Graves' works, and FcRn seem to be able to treat it consistently. I'm pretty confident in our ability to deliver a biological clinical benefit to these patients. The endpoints in the phase III are, like, a little bit different than the endpoints in the phase II. The truth is, like, we're exploring a whole bunch of different endpoints, some of which will be more important for regulatory and scientific perspective, some of which will be more important for commercial perspective.
I think it's very hard to say with the small group of phase II patients we have, which of those endpoints are gonna matter most in the clinical setting. I think remission is gonna matter. That is, I think the ability to preserve off-drug effects is something that physicians will look to in the commercial dataset. You see it in our GENESIS study. You see it in our study. I think that is something that will be important commercially. In terms of the numerical values of endpoints, my honest First of all, again, the definition of the primary in the phase III is actually a bit different than the definition of the primary in the phase II, I would not expect an identical number. I think looking like for like to the phase II endpoint, I think we'll see high response rates.
You know, I think there will be a variety of different data to show. One of the important things here is we're gonna generate that data, and not only is that gonna matter for, like, the street's expectations around what Graves' looks like, but more importantly, it will really be the first time a drug company is presenting data on the benefit of treating Graves' patients with a novel therapy in decades.
I think, like, even more than I'm focused on, like, how did the data look relative to the phase II study, or what is it gonna mean for the street, or how are they gonna compare us to some other company, I'm focused on, like, how do we present that data initially in a way that maximally sort of lands with the physician population who hasn't had a new drug for these patients in a long time, long time. That's really where our focus lies, not on, you know, the numerical benefit in phase II versus the numerical benefit in phase III.
The other thing that I think we've learned that is just, like, an important thing to acknowledge is because, in part, there has been no novel development in Graves' disease for such a long time, the treatment of Graves' patients globally and in the United States is pretty heterogeneous. You could easily imagine the same patient biologically. Like, if you took a patient off a drug and you watched them, that their lab values would be the same, the extent to which they were sick, their symptoms would be the same, that that patient in two different physicians' offices might be treated very differently today. In one physician's office, they might be on and off 25 mg of methimazole and relatively well-treated for Graves', but going through long periods of time where they were unhappy about the side effects of their methimazole.
You can imagine another doctor's office where that patient is perpetually on 5 mg or 7.5 mg of methimazole and, like, is fine with the methimazole side of it, but is, like, constantly complaining about symptoms of Graves' disease. They are the same patient. They're just being treated differently. Once you add things like ATD titration to endpoints, like, the way those patients present in clinical trials looks pretty different. I think that's all the stuff that we have learned an enormous amount about being out in the field and stuff that is driving how we run our study and how I expect we're gonna present the data on the drug.
Great. Just mindful of time here, I wanted to ask on the RA program, we're gonna see data in the second half of this year. Can you just speak to maybe general rationale for studying 1402 in RA, some people may argue that J&J nipocalimab's data kind of raises some questions in regards to the sufficiency of an IgG lowering approach. What are you doing differently from nipocalimab's studies that will set you up for success?
I 100% agree that nipocalimab's data raises questions about the sufficiency of an IgG approach, and I think we're gonna learn that in our study. I want to be clear, like I think that is especially the second nipocalimab study, the sort of TNF combo study. If that study had shown anything instead of basically nothing, I think like you would feel differently about risk in our phase II-B. Look, the monotherapy nipocalimab study that they ran first, like , that study looked interesting. It showed dose dependence. It showed higher responses in ACPA positive patients. It seemed to preserve benefit in later lines of therapy, which are all things that like biologically you would expect from an FcRn. Like seeing it play out coherently in that data set I think is what got us excited.
Our view was like, okay, how do you isolate a patient population where, A, maximize the benefit you see according to the data we've now seen from J&J, and B, like carve out a commercial opportunity in RA, which is obviously in the earlier lines of therapy complicated based on the number of great drugs approved. We focused on those questions in the design of our study, and we're studying late line patients who have experience with TNFs and JAKs and IL-6s in various proportions and who don't have other treatment options really. We enriched for a population that is highly autoantibody positive. My hope is that those things combined will put us in a better position than either of the J&J studies were. The J&J combo study with Cimzia was an interesting study.
I think it is hard to study the effect of any drug together with a new onset TNF because TNFs just work so well in RA.
I think, we're at time. Just appreciate you taking the time to be here with us today, Matt, and thank you for the thoughtful discussion.
Absolutely. Thanks for having me.
Thank you.
Thanks everybody