On November 13, 2023 Roivant (Nasdaq: ROIV) reported its financial results for the second quarter ended September 30, 2023, and provided an update on the business (Press release, Roivant Sciences, NOV 13, 2023, View Source [SID1234637560]).
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"In the last few weeks, we announced a historic deal with Roche for the sale of Telavant for $7.25 billion. While we intend to be very thoughtful about capital deployment, we expect that the resulting cash will be sufficient to fund our programs through profitability, in addition to enabling other opportunities and investments," said Matt Gline, CEO of Roivant. "This was also another significant quarter for our clinical programs with a data readout from IMVT-1402’s Phase 1 SAD study and 300 mg MAD cohort. The data represent what we believe is the best-case scenario for our FcRn franchise and truly broadens the horizon for what is possible in the landscape of autoimmune therapies and for patients suffering from autoimmune diseases. We are excited about the recent progress and look forward to announcing additional clinical results for 1402 and brepocitinib in the final quarter of the calendar year. 2023 has continued to deliver on being an incredibly catalyst-rich year, and certainly Roivant’s biggest year yet."
Recent Developments
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Telavant: In October 2023, Roivant entered into a definitive agreement with Roche for the sale of Telavant. Roche will gain the rights to develop, manufacture and commercialize RVT-3101 in the US and Japan for the treatment of inflammatory bowel disease and potentially other diseases. Under the terms of the agreement, Roche will pay a purchase price of $7.1 billion upfront and a milestone payment of $150 million payable upon the initiation of a Phase 3 trial in ulcerative colitis. Roivant owns 75% of the issued and outstanding shares of common stock and preferred stock of Telavant and Pfizer owns the remaining 25%, in each case on an as-converted basis. Roivant’s net proceeds from the transaction are expected to be approximately $5.2 billion plus $110 million from the milestone payment. Regulatory filings in connection with the transaction have been submitted and the closing of the transaction remains on track for the fourth quarter of 2023 or the first quarter of 2024.
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Immunovant: In September 2023, Immunovant announced initial data from the Phase 1 clinical trial evaluating the safety, tolerability, and pharmacodynamic profiles of IMVT-1402 in healthy adults showed that subcutaneously administered doses of IMVT-1402 produced dose-dependent reductions in Immunoglobulin G, with no statistically significant dose-related decrease in serum albumin or increase in LDL cholesterol, strengthening IMVT-1402 as a potential best-in-class neonatal fragment crystallizable receptor (FcRn) inhibitor. In October 2023, Immunovant announced the closing of an underwritten public offering and concurrent private placement offering of common stock yielding approximately $467 million in net proceeds to Immunovant, after deducting underwriting commissions and estimated offering expenses. Roivant owns approximately 55.2% of Immunovant as of November 3, 2023.
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Dermavant: For the second quarter ended September 30, 2023, Roivant reported VTAMA net product revenue of $18.4M, representing a 28% gross-to-net yield for the quarter. As of November 2023, over 250,000 VTAMA prescriptions have been written by approximately 12,800 unique prescribers for psoriasis, based on IQVIA data. Coverage has been expanded to 137 million US commercial lives and includes coverage by all three of the top pharmacy benefit managers.
In October 2023, Dermavant reported that in adult patients, VTAMA showed positive results from a Phase 4 open-label trial for the treatment of intertriginous plaque psoriasis – 82.8% achieved an intertriginous Physician Global Assessment (iPGA) Score of 0 (clear) or 1 (almost clear) and ≥2-grade improvement from baseline at Week 12, demonstrating compelling efficacy. Additionally, Dermavant reported in adults and children down to two years of age with atopic dermatitis, VTAMA showed rapid and significant onset of pruritus (itch) relief as early as 24 hours after initial application.
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Roivant: In September 2023, Roivant raised approximately $200 million in a follow-on offering. Roivant reported cash, cash equivalents and restricted cash of approximately $1.4 billion at September 30, 2023. Giving effect to Immunovant’s October 2023 follow-on offering and expected cash proceeds from the pending sale of Telavant (including one-time milestone), Roivant’s cash, cash equivalents and restricted cash would have been approximately $7.0 billion. The acquisition of Telavant is subject to customary closing conditions and is expected to close in the fourth quarter of 2023 or the first quarter of 2024.
Major Upcoming Milestones
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Immunovant expects additional IMVT-1402 data from the 600 mg multiple-ascending dose cohort in November 2023. Additionally, for batoclimab: Top-line data from the Phase 3 clinical trial in MG are expected in the second half of calendar year 2024. For the Phase 3 program in TED, top-line data are expected in the first half of calendar year 2025. Immunovant also expects to have initial results from period 1 of the Phase 2B clinical trial in CIDP in the first half of calendar year 2024, and initial Phase 2 proof-of-concept data in Graves’ disease by the end of calendar year 2023.
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Priovant plans to announce topline results from the potentially registrational trial evaluating brepocitinib for the treatment of patients with systemic lupus erythematosus (SLE) in the fourth quarter of calendar year 2023. Priovant also expects to announce topline results from the Phase 2 POC study in non-infectious uveitis (NIU) in the first quarter of calendar year 2024 and topline results from the Phase 3 trial in dermatomyositis (DM) in calendar year 2025.
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Dermavant plans to submit its sNDA for VTAMA in atopic dermatitis to the FDA in the first quarter of calendar year 2024.
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Hemavant plans to announce data from the ongoing open-label Phase 1/2 trial evaluating RVT-2001 for the treatment of transfusion-dependent anemia in lower-risk myelodysplastic syndromes (MDS) patients in the first quarter of calendar year 2024.
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Kinevant plans to report topline data from the ongoing Phase 2 trial of namilumab for the treatment of sarcoidosis in the second half of calendar year 2024.
Second Quarter Ended September 30, 2023 Financial Summary
Cash Position
As of September 30, 2023, the Company had consolidated cash, cash equivalents and restricted cash of $1.4 billion.
Research and Development Expenses
Research and development expenses were $132.0 million for each of the three months ended September 30, 2023, and 2022. Changes in the components of research and development expenses included a decrease in personnel-related expenses of $5.4 million and increases in share-based compensation expense of $1.5 million and program-specific costs of $1.2 million.
Within program-specific costs, the primary drivers of change during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022 were an additional expense of $18.6 million related to RVT-3101, which was acquired in November 2022, and a decrease in expenses related to other development and discovery programs of $18.2 million, which in part resulted from the deconsolidation of Proteovant in August 2023 along with the reprioritization of certain programs and drug discovery efforts.
Non-GAAP R&D expenses were $121.9 million for the three months ended September 30, 2023, compared to $123.3 million for the three months ended September 30, 2022.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $6.7 million to $164.4 million for the three months ended September 30, 2023, compared to $157.7 million for the three months ended September 30, 2022, primarily due to an increase in selling, general and administrative expenses of $21.8 million at Dermavant as a result of the progression of the commercial launch of VTAMA, partially offset by a decrease of $14.2 million of share-based compensation expense.
Non-GAAP SG&A expenses were $122.1 million for the three months ended September 30, 2023, compared to $101.5 million for the three months ended September 30, 2022. The majority of non-GAAP SG&A expenses were related to Dermavant’s SG&A and ongoing VTAMA commercial launch activities.
Net Loss
Net loss was $331.1 million for the three months ended September 30, 2023, compared to $315.9 million for the three months ended September 30, 2022. On a per common share basis, net loss was $0.40 for the three months ended September 30, 2023, and $0.42 for the three months ended September 30, 2022. Non-GAAP net loss was $225.4 million for the three months ended September 30, 2023, compared to $226.8 million for the three months ended September 30, 2022.