Roivant Sciences Ltd. (ROIV) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Roivant First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to hand the conference over to your first speaker today, Stephanie Lee. Thank you. Please go ahead.

Good morning, and thanks for joining today's call to review Roivant's financial results for the first quarter ended June 30, 2026. I'm Stephanie Lee with Roivant. Presenting today, we have Matthew Gline, CEO of Roivant. For those dialing in via conference call, you can find the slides being presented today as well as the press release announcing these updates on our IR website at www.investor.roivant.com. We'll also be providing the current slide numbers as we present to help you follow along. I'd like to remind you that we'll be making certain forward-looking statements during today's presentation. We strongly encourage you to review the information that we have filed with the SEC for more information regarding these forward-looking statements and related risks and uncertainties. And with that, I'll turn it over to Matt.

Thank you, Steph, and good morning, everybody, and thank you for joining. This is a little bit of come before the storm moment for us. And so a pretty quiet quarter and maybe not the most interesting of our earnings calls in recent memory. But nonetheless, a lot of great progress in the business and certainly, we're expecting jampacked second half as I'll get to in a moment. So I'll be relatively brief in my remarks and then we'll go to Q&A. I want to start on Slide 4. This is a slide we took from our own prior deck. This is from the Investor Day that we did in December of last year, and this was a list of our priorities for the year, and we're sitting here a little bit more than halfway through the year. I just wanted to highlight that it's gone all for us that we feel really good about the [indiscernible] looking across the list here. We've got brepocitinib expected to launch by the end of September. Obviously, we got priority review and our PDUFA date, as we said, is this quarter. We had great data from 1402 in the DCRA study that we presented on our last quarterly call. Probably the most notable update for today, on the top center of the slide is that we've now enrolled patients in the Phase III study in cutaneous sarcoidosis for brepocitinib, which follows on the positive results that we had in our Phase II data, which I think we announced on our first quarterly call of this year earlier in the calendar year. We've now received the initial payment from Moderna in the settlement. And that -- the sort of second part of that, the 4098 part of that base is progressing, and we filed international proceedings against Pfizer-BioNTech in that case. And finally, earlier this year, we added LPP as a fourth preproduction. And as all premier, that study is continuing to enroll really well. As I mentioned at the top of the call here on Slide 6, I'll just say this is a quiet quarter and this is a quiet day. I don't know exactly how the following statement could be true, but I think it is. The next 6 to 12 months are, in many ways, easier than the prior 6 to 12 months for us and so we just have an enormous amount coming up starting, as I mentioned, with the upcoming potential brepocitinib launch in DM, which should happen imminently, so everything goes as we hope and expect with FDA. We've got top line data in from brepo the NIU study, an indication that could easily be as large as dermatomyositis, that data is coming in the second half of this year. We also have top line data coming shortly in the second half from mostly the Phase II study in PH-ILD. I know that's being closely watched and we're looking forward to getting that data and presenting it. We will provide updates -- further updates on the DTRA program at Immunovant in the second half of this year, including hopefully, a download on a conversation we hope to have with FDA about that program as well as the results to the second part of the study and a little bit more about our plans going forward. And then finally, probably the smallest of these, we're expecting top line data from the POC study in CLE also in the second half of this year and looking forward to finding out what we've got there when that comes in as well. So just a jampacked second half and even more coming in 2027 with the greatest data and beyond. So just a lot in the year. I'll just hit a couple of highlights in terms of the pipeline updates in a little more detail here before again, holding on to Q&A. Starting on Slide 8 with a reminder because it's been a few months since we've talked about it, the initiation of the cutaneous sarcoidosis Phase III study is a pretty exciting event. It's a little bit ahead of schedule in terms of what we been able to do here. And this is a disease that we're just privileged to be able to work in here. It's a high morbidity, very difficult disease with a high urgency to treat. You can see on Slide 8, some of the photos we've shared before, but these are patients who are really sick and have very few treatment options. On Slide 9, as a reminder of the data that we generated in our Phase II study, we have set for ourselves a goal of a sort of 5-point benefit on the CSAMI scale for clinical meaningfulness and in the study on the top left of this chart, we showed a greater than 20-point benefit compared to roughly nothing on placebo. So just a huge benefit to those patients in the Phase II study and really excited to carry that forward into the pivotal program. As a reminder, on Slide 10, we think this is a pretty decent sized indication, again, with high unmet need, probably about 40,000 patients in the U.S. and reasonable overlap with some other organ systems including optical sarcoidosis or [indiscernible] sarcoidosis, where that overlaps with NIU, that is one of the types of NIU that we're studying as well as pulmonary sarcoidosis, which is a big potential indication as well and where we hope to be able to treat some of those patients by either their ocular sarcoidosis or CS. The Phase III study that we've now begun, the design is laid out on Slide 11. I know there were some questions after the Phase II about what exactly this study would look like. It is designed to take all of the learnings from the Phase II study that was successful. It is a 16-week study with the primary endpoint of CSAMI greater than equal to 50% response rate. It's 140-patient study across about 70 sites, 3:2 randomized with patients either on 45 milligrams of brepocitinib or placebo and with a mandatory -- sorry, a mandatory steroid taper going from week 2 to week 8 down to 0, which is consistent with -- roughly consistent with what we did in the Phase II and generally consistent with what we think is appropriate for patients in this indication. So that study, as I said, has already begun enrolling patients, and we expect top line data in 2028, which just adds to the list of registrational -- potential registrational indications for brepocitinib coming up. I'll reiterate on Slide 12. The other ongoing registrational program is the brepocitinib study in lichen planopilaris, LPP that we announced earlier this year. That study is enrolling, I'll say, extremely well. There's a lot of enthusiasm from physicians and patients for that. It speaks to the high unmet need and the indications. It speaks to the quality of the work being done by then Ben and the Roivant team. and looking forward to sharing more about that as soon as we've got it. So that's also moving along nicely. Look, finally, and I'm sure there will be questions about this in Q&A and lots of opportunity to talk about it, hopefully, with a potential approval and beyond. Obviously, one of the major events in the near term here is the launch -- potential launch of brepocitinib in dermatomyositis. Obviously, I think we're in a phenomenal position here in terms of what we've got, in terms of what we hope to be able to do, starting with the quality of our clinical data, which, as you know, from the multiple times we've talked about it from the publications, including in New England Journal and so on, just phenomenal data stats figure across all 10 endpoints, big clinical benefit, a lot of enthusiasm from the DAC community. This is a really tough disease, a large addressable population, most of them on sort of polypharmacy, trying a lot of different things. And frankly, most of them still dissatisfied with the available treatments. So we feel like we have an opportunity to do something big and different for this patient population. Our team has been out spending a lot of time with the physician and the patient communities on overall education and I think the enthusiasm for a new therapy is coming out labeler, included with all the academic presentations that have been done and so on. Commercial launches, there's not much to say today other than that it's on track. We're ready to launch on time, having received priority review the sort of commercial basis support teams are built out training and ready to deploy we feel really great about the hires we've made there, really great about the organization we've built there. We think we're doing this in a way that is both capitalizing on all the learnings from successful launches at other companies in recent years and doing it in a Roivant way. There's nobody in the world that would be more excited to see oversee this than the team we've got at Roivant with Ben and Daniel and others. And I think we're going to be fully ready. Everything is on schedule. So we'll have much more to say about that with the potential approval. And after but looking forward to it. I'll say one more thing about the commercial franchise overall at brepocitinib on Slide 14. We get a lot of enthusiastic questions from investors around pace of launch. And we've been pretty consistent that our answer to that question is sort of slow and steady is what we're looking to build there. And I think there's a bunch of reasons for that. Obviously, some of them are DM is a new indication and no one's launched a novel therapy, basically ever or at least a targeted therapy basically ever. And so it's hard to know exactly what work will need to be done to get everyone comfortable and excited and on drug, although I think we're fully prepared. But also, to me, it's because brepocitinib is a lot more than just dermatomyositis. And to me, what we're really doing here is not just trying to make that launch as fast as possible, we're trying to lay the groundwork for the overall opportunity, which goes beyond DM into first NIU and then CS and LPP with the data coming thereafter. I think as you think about that layering to me, it's much less about what week 1 or month 1 or quarter 1 look like and much more about making sure that the foundation on access, the foundation on patient support, the foundation around the institutional activities, the foundation around our communication with the scientific and physician community and our communication with patients are all set up to deliver the maximum opportunity for brepocitinib across all of these indications. And so I think slow and steady isn't just about sort of guidance, slow and steady about the approach that we're taking with the program to make sure we have maximum reach across everything that we're doing there, including indications that we're excited about beyond the ones we've already announced. So a lot to come, as I said, on track for that launch. You all hear the same thing we do, which is a ton of enthusiasm from patients and physician community for approved new options in all of these indications and look forward to sharing more when we know about it. But our guidance is going to continue to be slow and steady because that's what we think we're building. Final business update here is we got the upfront payment in the settlement with Moderna that $950 million has come in to $170-ish of it to Genavant the rest to Arbutus. So that's done. There will be progress in terms of capital, et cetera, of that Arbutus and so on. The 4098 sort of pellet ruling is that, that process is ongoing at the Federal Circuit. That would be another $1.3 billion if we got a favorable outcome there. And then we continue to advance our litigation against Pfizer-BioNTech. We filed 3 international lawsuits notably in Canada and the UPC in July, so just last month and continue to progress that case as fast as we can. Obviously, not all of it in our control, but equally enthusiastic about the potential there in terms of what we could get. I'll wrap up just with our usual financial update on Slide 17. Look, I think overall, most importantly, we are spending in areas that we're excited to be spending. We're excited about all of our R&D programs, about $200 million of R&D expense for the quarter of just under $100 million of non-GAAP adjusted G&A or [ $166 million ] of GAAP G&A expense and cash just under $4 billion, and that's before the receipt of the $72 million notably pretty significant share repurchase activity, about $200 million in the quarter, a bit more than that when you include March. Obviously, what we did there was we accelerated our share repurchase program upon the announcement of the Moderna settlement. so that we could get those shares in and the shares that -- remember, the shares that we bought like kind of the first round of this, the $1.5 billion that we had bought back sort of up through mid last year, we bought back at around $10 a share. I think the average price at which we've been able to buy back stock since we kicked off the second round of this in earnest and March has been in the high 20s. So feeling good overall about retiring those shares and getting that capital back to shareholders. I'm going to continue doing that according to our authorizations for now. And all of it ahead of, on Slide 19, a really rich catalyst calendar ahead with a lot coming. So looking forward to all of that with just an incredibly busy stretch ahead. On Slide 20, again, a little bit incredulous for the people around Roivant doing all of this work or incredible people on the way we have to do this work. But by the end of calendar 2028, we would have had hopefully, 3 or more commercial launches, 9 or more business study readouts, 4-plus NDA or BLA filings, a number of proof-of-concept studies, just a ton coming up in the near term. So with that, I'm going to wrap up my prepared remarks for the day, and I will hand it back over to the operator for Q&A. And just a moment, thank you again for listening this morning and looking forward to taking your questions. Operator, over to you.

[Operator Instructions] Our first question comes from the line of Brian Chin of JPMorgan.

Maybe just thinking through the DM launch back, can you give us a quick sense of what metrics we could be receiving with gate to help us better track the initial launch? And then secondly, on CLD. As we think about the baseline cater here in focus, it seems that more patients are on ntatinib. We're curious if there's any implication in terms of the fibrosis versus emphysema ratio in the population. And then further down the line, whether there's any implication towards the bar for success for both [indiscernible] and also PVR.

Yes, perfect. I appreciate both questions. Look, on DM, I think I've gotten fun of saying as I've watched other companies with commercial launches, you all observed our guidance, which isn't quite fair. But look, I think other than sort of a slow and steady launch and obviously, the sort of top line metrics will be cleanly visible in our financials each quarter. I don't know that we're going to provide a ton of detail in the early days. I think it's important for us mostly to spend our time focused on understanding those dynamics ourselves, getting out, talking to patients, talking to physicians, doing the work we need to do. . We'll give a little more color on what that's going to look like on a call with potential approvals, and then we'll start to flesh out the package that we share with each successive quarter. But I don't have a lot to say right now about metrics. I'll say I think typical with these launches, I'm not sure a ton is going to be visible in the early days, just given how the commercial apparatus has set up frac call purposes, but we'll provide more guidance on that as it gets closer into here. On PHLD, I guess, first of all, we've obviously been watching, for example, the Treprostinil data in IPF and trying to understand a little bit better what's been going on with these PHLD patients in treatment of PHLD for fibrosis and for lung disease. It's been a view of ours for a while that one of the things to look out for in treatment of PHLD with vasodilators is emphysema, and so the study was designed with Care around the amount of emphysema allowed in the study overall. And that was an important part of the guiding philosophy of the study to make sure that we can serve the patient population broadly, but also well maximizing the potential benefit of the therapy. So that was considered from the beginning. So those are, I think, things we're keeping an eye on. I know there is a local cohort that believe that Treprostinil has anti-fibrotic benefit. Look, I think our view is if you treat PHLD patients well for their pulmonary hypertension, you may well deliver a benefit overall on their lung disease. And I think our view is probably that vasodilation is driving a lot of the activity there. But we also have some evidence from nonclinical models of any fibrotic activity for those leagues. Overall, I'm going to walk in PVR, I'm sure I'll get versus this question more today. Look, I think it's consistent with what we said before. We're hoping to see a clear signal on PVR. We expect if the drug is all active, we will. We don't expect to see very much with clarity on 6-minute walk. The study is not powered for 6-minute walk. It would be nice to see some separation, but I don't think that's essential for our sort of go/no-go decision from here. And we'll just -- we'll know what we've got once we get a closer look at it, including the full balance of that data.

Next question comes from the line of Dave Risinger from Leering Partners.

Thanks for all the updates, Matt. So I have 3 questions, but rather than rattling them all off right now. Maybe if it's okay, I'll go one by one. So first, on Mosley, you commented just now on 6-minute walk distance. But if you were to run a large trial, what type of 6-minute walk distance would you be hoping for, i.e., what would be relevant to the clinicians and to the patients? So that's my first question.

Yes. Thanks, Dave. Look, I think obviously, we'll have a slightly better answer to these questions overall once we have a sense of what we saw in Phase II. The truth is the PHLD patients are really sick. There are not a lot of options for these patients. And as we saw in Group 1 PAH when you have more treatment options. First of all, patients go on multiple options, multiple lines of therapy. And second of all, most importantly, like the actual not from a clinical trial perspective and from like a real-world evidence perspective, like survival and mortality rates go down as new classes of drugs are introduced in PAH over time. And I think it's like less about a number on 6-minute walk and more about having an approvable therapy. Remember, these are [indiscernible] to trying to walk to the car. They're trying to walk to the bathroom. They're trying to like live their daily lives. So I don't know that I think it's like correct scientifically to describe with specific numerical bar that matters versus just being able to get into therapy. And some of that is, frankly, because 6-minute walk in clinical settings is an artifact that is complicated and noisy and like a little bit difficult to translate into daily lives. Whereas if these drugs really effectively vasodilate and improve lung function and improve PVR, I think you wind up seeing a lot of benefit for these patients. So I don't know that we're going to articulate or have a specific numerical bar versus a successful study. Obviously, we will be judged, especially by the investor community based on competitor data, but I don't think we even need to be per se better than any other mechanism in order to have a big benefit to patients.

Great. That's very helpful. And then regarding the forthcoming brepo DM launch, could you discuss the cadence of formulary reviews for rare disease drugs? I ask because for mass-market drugs, P&T committees often wait until 6 months after launch before putting drugs on formulary.

Yes. Thanks. Look, I don't have a ton to say about that right now other than we're having all of the normal engagement with the [indiscernible] community that you'd expect us to have at this stage? And also and I think this is a critical point about all of these launches. We are super focused on making sure that the physicians who want to write this drug and patients who want to get on this drug are going to have access. I think that's going to be really important for our engagement with the community for access generally. I think in terms of like literal formulary, it's probably like not so different. It's not like there's a separate committee for different kinds of diseases, but there's lots of medical exception procedures and other things that you can do to get patients covered. And we have a whole team of people built out of Roivant dedicated to making sure whether the formulary -- whether the formulary work has happened yet when the P&T committee has happened yet is not something that our patients and physicians have to spend a lot of time thinking about as they're deciding how to use the drug.

Excellent. That's really helpful context. And then finally, beyond the list of programs on Slide 19, could you remind us about pipeline and product opportunities for your portfolio, including specific products that you could announce initiation of new studies for over the next year or so.

I think every single one of the programs that the world is aware of in our pipeline, as well as potentially ones that the world does not get aware of in our pipeline. In all of those cases, we could announce new trials, new indications in the next year. I think it's -- every one of those are eligible and all of our molecules could be put into indications beyond the ones we've talked about. And I think it's fair to say, in each case, we have specific ideas of indications we're excited about. We've done active work and are in fact, like preparing to initiate programs to a degree, depending on how busy those teams are today versus next month or the month after, but real progress. So I think the answer is, we are actively working on that and all of our products are, as you call them, pipeline of products and that we're excited to share more indications as we start those studies.

The next question comes from the line of Samantha Semenkow from Citi.

I also have 2, 1 on Mosley, 1 on brepo. For Mosley, I'm wondering if you could just talk about the translatability of PVR reductions in patients with PAH to those with the PH-ILD population that you enrolled and focus -- are there any aspects of either disease that could influence the magnitude of PVR that you could see in the Mosley data? And I have a follow-up.

Yes. So look, I think -- thanks for the question. I appreciate it. I think the translation from PAH to PH-ILD is the fundamental question being answered by our study. And so the first unfortunate answer to that question is we're just going to have to see what we see. And it is the risk of the program at some level that we find some Again, the Phase I data, including in PAH patients looked very good on a PVR basis, so one of the main "risks" of this program is that there's something, I would call it unexpected in the PHLD translation. Obviously, I used the word unexpected because I think scientifically, it seems relatively straightforward that inhaled vasodilation is an effective mechanism in PHLD, but we'll find out. Obviously, the lungs of PHLD patients are different than the lungs of PAH patients. And so you might expect some difference in sort of the pharmacodynamics of the drug in those patients. But overall, it seems pretty clear that when you take an inhaled vasodilator, in PHLD patient, you get drug to the healthy lung tissue and it matters. So that's what I'm asking.

Got it. That's very helpful. And then just on brepo and DM, in your conversations that you've been having with physicians for education, I'm wondering if you could just talk about the reception to brepo given the JAK class safety concerns. Obviously, the safety part file Valor was quite favorable. But from a class perspective, it would just be helpful to hear how the physicians are thinking about safety particularly since DM patients already tend to have a higher underlying risk for cancer.

Yes. We've said a few times that when we first in-licensed brepocitinib, we didn't exactly know what the reception to JAK inhibitors is going to be following the addition of Black Box warnings and our whole view is to choose indications where the safety profile of JAKs was going to be much less of a focus. I think dermatomyositis is a poster child for this in that while JAK inhibitors are at this point, extremely widely used in diseases with much less morbidity, many more alternative therapies. In dermatomyositis, there's really no other options available. And I don't think physicians, therefore, are going to be particularly focused on this question. Remember, these patients are often -- first of all, I think you sort of alluded to the profile in the trial. Dermatomyositis patients are inherently at risk of many of these concerns, malignancies, cardiometabolic events and treating them well makes them healthier and reduces those risks. And then on top of that, the therapies that they are currently on for dermatomyositis are things like high-dose steroids, which themselves add meaningfully, in fact, in many cases, much less severe disease. As a reminder, we fully expect that our label is going to look like the labels for other JAK inhibitors that's going to have the black box warnings that's going to talk about experience with JAK inhibitors and other indications. And like I said, I think docs expect that. And I think are not going to be too concerned about it because these patients are, a, very sick; and b on other drugs with, in many cases, significantly worse safety concerns.

Our next questions will come from the line of Prakhar Agrawal from Cantor Fitzgerald.

Congrats on the continued execution. So maybe a couple of questions from my side as well. Firstly, on brepo and DM, could you remind us what percentage of DM patients are on off-label JAKs based on your latest primary or secondary research? And would you expect rapid switches from these patients who are on off-label JAKs to brepo? If not, why is that the case? And secondly, for brepo and NIU trial, what do you see as the biggest risk for Phase III, given the Phase II was really strong? And is this geographic variation, which has been a key risk for this trial, which could drive some of the baseline variability. This has been flagged as one of the risk factors by some of the KOL checks that we have done.

Great. Thank you. So I -- in terms of your first question on brepo and DM around who's on off-label JAKs and what does that look like? Look, I think, first of all, there's just like variability in physician practice and some physicians use more JAKs and some physicians use less JAKs. And that has more to do, I think, with the docs in many cases than with any specific subcategory of patients. I think what we've said publicly is a low single-digit percentage or mid-single-digit percentage of dermatomyositis patients have experience with these things. Some of the docs who are involved who do use -- and some of that -- some docs don't use off-label drugs full stop. I think some of the docs who use off-label JAKs have said they expect to switch patients over, and I hope they do. And obviously, we'll be working to help them where that's appropriate, facilitate those switches. I think it's just going to be down to the preference and practice of each individual doc. I think one of the things that our team is finding in talking to physicians is that different patients have -- different docs have different sort of ideals in mind for who their sort of first patients might be. And I think it just varies based on the patient experience, the physician. And so obviously, we'll be able to have much more of these conversations pending a potential approval. But I think medically, we'll see a wide variety of different phenotypes. On NIU, what is the biggest risk in Phase III. It feels funny to call placebo risk in these trials and that's not quite exactly what I mean, but I think the variability in placebo response rates in immunology trials is significant. And if you're asking me what keeps me up at night, it's that we don't know exactly what super response rates will be in that study. And that just makes it hard to know exactly what the trial is going to look like on outcomes. Obviously, the Phase II data was quite compelling, and the level of drug activity seems good. And so yes, I'm pretty optimistic about the study, but there's certainly -- this is biotech, you can sleep over anything. Is geography of risk? I think there may be geographic variation just as there is in many other indications and some of that's literally driven by geography and some of it's driven by physician practice and some of it's just noise. I don't know that it's a risk in the sense that it's like unanticipated or whatever, it's just a feature of running immunology studies. But overall, I think the team is doing a great job with the study, and I hope it's going to come out well.

Our next question comes from the line of Andy Chan of Wolfe Research.

I don't think this has been talked about yet. But for the brepo launch, can you maybe talk about a few launch analogs that you're assessing right now, either patient curve or market share curve what are the historical products with the most resemblance to brepo and DM?

Well, thanks, it's a good question. The truth is there has never been a launch of a targeted therapy in dermatomyositis before, and so there is no good "analog" in the sense that you can point to lots of other launches and lots of other kinds and some have been faster and some have been slower and some have been slow and steady and some have been -- it's like a different versions of different things. And I think it's hard to say, and there have been successful products with all kinds of different launch phases. So I think the short answer is I don't have a specific analog for another drug that we're watching as like evidence of our own penetration. I think what we're really focused on here is the dermatomyositis opportunity itself, these docs, these patients. And the benefit and the cost of being a pioneering an indication is that you don't get to look at others, you have to that your own course. So I don't have an analog to point here.