Roivant Sciences - Earnings Call - Q3 2025

Executive Summary

• Q3 FY2025 (quarter ended Dec 31, 2024) showed minimal revenue ($9.02M) and a GAAP diluted loss per share from continuing operations of $0.22, offset by $327.0M income from discontinued operations tied to the Dermavant sale, yielding positive net income attributable to Roivant of $169.4M.
• Cash, cash equivalents, restricted cash and marketable securities totaled ~$5.2B at quarter-end; management reiterated a strong cash runway and noted additional inflows in January ($75M VTAMA milestone; $113M Immunovant external capital) not included in the quarter-end figure.
• Execution milestones: new proof-of-concept brepocitinib trial in cutaneous sarcoidosis (Phase 2 start in Q2 CY2025), imminent batoclimab MG and CIDP readouts by Mar 31, 2025, and continued progress toward brepocitinib DM and NIU readouts; management framed 2025 as a “year of harvest” with stacked clinical catalysts and ongoing LNP litigation timelines.
• No explicit financial guidance was provided; program timelines and litigation schedules were reaffirmed. Wall Street consensus (S&P Global) for Q3 FY2025 was unavailable due to SPGI access limits; estimate comparisons are therefore not included.

What Went Well and What Went Wrong

What Went Well

• Management expanded brepocitinib’s scope with a new proof-of-concept program in cutaneous sarcoidosis (30–50k US patients; no approved therapies), aligned to TYK2/JAK1 biology and expected to initiate Q2 CY2025, with topline in H2 CY2026.
• Strong balance sheet and capital flexibility: ~$5.2B cash and marketable securities at 12/31/24 (excludes $75M VTAMA milestone and $113M Immunovant capital raised in Jan), and ongoing buyback authorization, supporting pipeline execution and BD.
• Management emphasized differentiated FcRn positioning and near-term data catalysts; quote: “Deeper is Better has been pretty well established... we’re looking for a nice clear dose response” for upcoming MG data to inform 1402 program design.

What Went Wrong

• Core operations remain loss-making: GAAP loss from continuing operations of $208.9M in Q3 despite very low revenue ($9.02M), reflecting program and corporate investment; non-GAAP loss from continuing operations was $143.7M.
• Revenue declined sharply vs Q1 FY2025 as Dermavant contributions ceased (Dermavant is now discontinued ops); net revenue in Q3 was $9.02M vs $55.13M in Q1.
• R&D and G&A remained heavy on a GAAP basis (R&D $141.6M; G&A $141.5M in Q3), though adjusted non-GAAP figures were lower (R&D $131.2M; G&A $71.1M), indicating persistent opex intensity despite portfolio transitions.

Transcript

Operator (participant)

[inaudible] Ladies and gentlemen, thank you for standing by. Welcome to Roivant Second Quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Stephanie Lee. Ms. Lee, please go ahead.

Stephanie Lee Griffin (COO)

Hi, thanks. Good morning. We're actually reviewing the third quarter ended December 31, 2024, for Roivant. I'm Stephanie Lee Griffin with Roivant presenting today. We have Matt 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.

Matthew Gline (CEO)

Thank you, Steph, and thank you, everybody, for listening. Good morning. I'm going to start on slide five, and thank you again for joining our third quarter results call. So look, I wanted to just start by setting the stage. This is our first quarterly call in 2025. We talked a little bit about this at the conference in January, but we think 2025 is just a pretty incredible year for us in terms of the setup and the opportunity. Obviously, that starts this quarter with an opportunity to validate our anti-FcRn franchise as a potentially best-in-class franchise with data coming in MG and CIDP in the coming weeks. It continues in the middle of this year with a central registrational readout in dermatomyositis, which would set the stage, if we receive approval, for commercial launch of brepocitinib.

And so we're really excited about that program and excited also to talk today about a new indication for brepocitinib, in which we'll be starting a trial this year as well. And it's also a big year for our LNP litigation with Moderna and Pfizer-BioNTech, with a jury trial currently scheduled for September and the summary judgment phase to take place in the second to third quarter of this year. So just a big year with a lot of important milestones, many of which we planted the seeds for years ago at this point. And so we're excited to see those results.

Look, all of this ultimately on slide six comes down to our pipeline, which we think is one of the most exciting pipelines in late-stage biotech, obviously anchored by FcRn and brepocitinib, but with a number of other programs, including mosliciguat, which we unveiled last year, and also ongoing VTAMA, which we'll talk a little more about later in this call. This year really, on slide seven, is anchored around clinical execution. Obviously, in some sense, the die has been cast for the MG and the CIDP data, which will be imminent, but there's an enormous amount of work ongoing too. We've now cleared six INDs that Immunovant those trials are all beginning now or have begun and are looking to initiate a number more by March of 2026. So just a ton of clinical work happening at Immunovant.

Obviously, continuing to conduct the brepocitinib DM study that we'll read out later this year, as well as the NIU study, which is ongoing, and then we've initiated our trial in mosliciguat and PH-ILD. So between the data that we have coming and the work that we have to do, it's really a year-round clinical execution to drive that value. And then we have, obviously, a lot of exciting data coming this year, but when we look at how we're sort of stacked for the future, even beyond 2025, in Immunovant, we have the potential for 10-plus indications with multi-blockbuster launches. In Priovant, we have a potential multi-blockbuster franchise in orphan immunology anchored by DM, and hopefully subsequent to that, or hopefully DM and then subsequent to NIU, with proof of concept study and sarcoidosis adding to that.

Then in mosliciguat, by next year, by 2026, we hope to have, by the end of next year, data on our Phase 2 study, which we hope sets us up for frontline use in PH-ILD and other respiratory disease. All of that on slide nine is anchored by what continues to be a major strength of ours, which is our cash balance. We have $5.2 billion in cash and marketable securities as of 12/31. That includes $500 million authorized for additional share buybacks. We bought back about $1 billion in stock so far as of the end of 2024. We closed the sale of Dermavant to Organon, received about $259 million, and removed all of our debt and meaningful retirement obligations while keeping a lot of upside in milestones of royalty. We talked about that last year.

And then this continues to be among the most fruitful business development environments we've ever seen, and I very much hope and expect that we'll be adding to that pipeline in the months to come. I want to now turn to talk about a new opportunity for us, something that's probably a little bit further out, but something we're excited to get going on. It'll be public on clinicaltrials.gov soon at center, which is we have now initiated a new program for brepocitinib, our third indication. This is a proof of concept study, and it's called cutaneous sarcoidosis. If you turn to slide 11, this is. It fits really well, and I'll talk about this again in a second, into our strategy at Priovant for developing an indication with high unmet need that are specifically tailored to our dual TYK2 JAK1 mechanism.

First of all, in terms of sort of scope of disease, it's pretty similar, bluntly, to the other diseases that we are studying with brepocitinib. There's somewhere between 30,000 and 50,000 cutaneous sarcoidosis patients with no approved therapies, and the uncontrolled disease can result in severe disfigurement. It's very tough for these patients. There is proof of concept data from about 20 JAK-treated patients, so not so different from what we're seeing in some of the other indications we're studying. And then we think, and we'll talk more about this, dual TYK2 and JAK1 inhibition is particularly well-suited to the Th1 immunophenotype of sarcoidosis. So we'll get to talk a little more about that. And then it's aligned with DM and NIU in terms of a prescriber-based concentration that overlaps with DM in terms of a potential orphan price point.

So we think it makes a lot of sense as a place for us to go from here. As a reminder, on slide 12 of the overall strategy in brepocitinib, we're really focused on indications with very high unmet need tailored to our unique mechanism, where we think any liabilities to the JAK class will be far outweighed by our ability to deliver meaningful benefit to these patients. Obviously, DM and NIU, both in our view, met that. And CS, bluntly, looks pretty similar. It's got well-suited biology, a large unmet medical need, a similar patient prevalence. There is some proof of concept with JAK1 patients, and there's been nothing approved in the last 60 years. So we're really excited to add this to our portfolio. There is, on slide 13, a little bit of proof of concept data.

There was an investigator-initiated trial at Yale providing proof of concept for JAK inhibition in cutaneous sarcoidosis. That was an open-label study of tofacitinib in 10 patients with long-standing CS, and considering that study, it was about 10 patients with CS, and the mean CSAMI is going to wind up being the endpoint we talk about here a lot, of 37, and patients on five milligrams twice a day of tofa for six months, all of them achieved clinical uniform reduction in CSAMI, and six of them achieved complete resolution of disease, so pretty remarkable data from that study, again, with all the caveats of open-label studies, but for pretty sick patients, a big improvement, so that gives us a bit of comfort going into this proof of concept study.

On slide 14, just from a sort of pathophysiology perspective, Th1-type immunity is the main polarization, the predominant polarization in sarcoidosis, skin and lung tissue. We know that there's marked upregulation of Th1 cytokines like type II interferon, IL-12, which we think gives us potentially exactly the right profile with dual inhibition of TYK2 and JAK1, which are both obviously important in mediating that collection of cytokines. We feel really good about coming at this with a uniquely big gun. brepocitinib has generated, on slide 15, particularly strong data in inflammatory skin disease. These are all cross-trial comparisons with whichever other JAK inhibitors have reasonable data available. But you can see in alopecia, in HS, in plaque psoriasis, we have among the best-in-class with the best-in-class data in a cross-trial comparison that's been seen.

So we feel pretty good as well about sort of entering into an inflammatory skin disease area where we have, again, good data coming out of brepocitinib. The study design is on slide 16. It's a 16-week study testing two doses, brepocitinib 45 and brepocitinib 15, as well as a placebo, and yeah, we hope to get data in the second half of next year. So more to come as that study starts enrolling. Cool. I'm going to move on now to just a reminder of what's upcoming and what's sort of happened recently in our anti-FcRn franchise at Immunovant, starting on slide 18. So we have, as you all know, quite a bit of data coming this year, starting out with MG and CIDP this quarter that we hope can bolster our confidence collectively, including your confidence, that deeper IgG reduction results in better clinical outcomes.

We've obviously now seen this across many clinical trials, across four different FcRn antibodies in seven different indications. But we're going to get another 500 patients' worth of data out of these protocol-enabled studies that we think will help us show how much better we can do with deeper IgG suppression across different indications for which patients and by which metrics. So we're looking forward to generating that data, which, by the way, just as a reminder, nobody at Roivant or Immunovant has seen any of this data. So any interpretation of my tone of voice should be no different from my tone of voice in the last six months. The upcoming data on slide 19 in MG. This is just a reminder of that trial design. It's a trial that we think is well-suited to treating these patients where they're at.

It is a 12-week induction study with two doses, high and low, followed by a re-randomization into a 12-week maintenance period with either the sort of low dose from the first Phase or an every other week version of that. And we think this will give us, hopefully, a clear picture of potential dose response in that first period, as well as an understanding of what chronic treatment of these patients looks like with the possibility of rescue therapy and so on. So feeling good about the trial design. We also have our upcoming batoclimab Phase 2b readout from period one of the CIDP study. That design is shown on page 20. I think you're all very familiar with these designs at this point. These are pretty complicated designs.

But we're looking forward as well to the possibility after that Phase 1, which is the highlighted in red piece here, to being able to answer some questions about possible dose response and response rates in the 12-week randomized period. Look, 1402 on slide 21 continues, in our view, to have a combination of potentially best-in-class attributes that we don't see in other programs. We have deep IgG lowering. Our Phase 1 data suggests we're going to continue to be able to reach about 80% IgG suppression or thereabouts with continued dosing of 600 milligrams delivered by a simple SubQ injection. 1402 does not, in our Phase 1 data, appear to impact albumin or LDLs, so minimal effect there. We have convenient administration. It will be delivered via a market-proven user-friendly auto injector that we will be launching with. We'll highlight that again in a second.

As a reminder, we have IP out to 2043, not including extensions, so a really long runway with a drug that we think could be a best-in-class. On slide 22, as a reminder, we will be starting our pivotal trials or are starting our pivotal trials with a standard autoinjector. It's the only FcRn we think ever developed as a true SubQ injector from inception. It leverages a pretty well-proven technology. It'll be a 2 mL injection volume. And this is a picture of the device. Needless to say, it looks like all of the other sort of widely successful autoinjectors. And we think this is a real benefit. It's also less than 10 seconds in at-home administration, we think, or HCP administration. So looking forward to continuing to progress that form factor.

And then on slide 23, look, the main event to me in the long run here is getting 1402 into indications that really matter. We are tremendously excited about Graves' disease, where we have we think first-in-class and best-in-class potential in an indication with extremely high unmet need, where we have run our own Phase 2 study that shows that we lower autoantibody levels and that we have a high response rate with a good dose response that sets us up well for success. We think both from Immunovant and from the world, you're going to be hearing a lot more about Graves disease in the months and years to come. And we are excited to be at the front of that pack with an agent that we think is maximally positioned to deliver benefit to those patients.

And then we've also announced at Immunovant that we're running a study in difficult-to-treat rheumatoid arthritis. We talked about that late last year. We are excited for that trial. We think it sets us up for a quick answer on how much we can do for these patients who have not a lot of other options once you get into that corner of the RA landscape. As we said, there are six INDs approved, and this is only two of them. We've also talked about MG and CIDP, but that leaves two unannounced, but nonetheless, IND-cleared indications. And we're looking forward to talking about those soon. Obviously, a lot of news coming in the near term on Immunovant, so I'm sure we'll be in touch collectively in the near future.

Finally, in terms of major upcoming milestones in 2025, we've talked only a little bit over time on these calls about the Genevant LNP litigation. We are hoping for the decision from the Pfizer-BioNTech Markman hearing in the first half of this year. So that could be upcoming, obviously not on any fixed calendar. So it could, in theory, come any time. And then in the second quarter, third quarter of this year, we will have the important summary judgment Phase in the Moderna trial, where we will learn from the court important features of how that trial will progress, followed by the jury trial scheduled for September in the second half of this year. So a year where we will really learn a significant piece of the answer to the, at least, Moderna puzzle here. So looking forward to that playing out as well.

So I'll wrap up quickly with a financial update on slide 27, and then open up the Q&A. So relatively straightforward quarter from a financial perspective. R&D expense of $142 million or adjusted $131 million. G&A of $142 million or adjusted $71 million. And end of the quarter, as we said, with $5.2 billion in cash, which excludes the $75 million milestone from the approval of atopic dermatitis for January, as well as $113 million of external capital, which was raised alongside Roivant's investment in the January private placement there. And no debt on our balance sheet following the close of the Organon transaction. And so that's about that on the finance side. Look, on slide 29, we feel like we have a quite rich catalyst calendar coming with a bunch of important milestones, some of which we've talked about for this year, some of which sort of stacking the year beyond.

And again, continue to be excited about adding to our pipeline, hopefully in the near future, with some really exciting things we have on our radar. So with that, I will end my prepared remarks and turn it back over to the operator for Q&A. Thank you again for listening.

Operator (participant)

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question will come from David Risinger with Leerink Partners. Your line is open.

David Risinger (Senior Managing Director)

Great. Thanks very much. So congrats on all the progress, Matt. I have two questions, please. First, could you review the batoclimab efficacy bars for success ahead of the release of results in coming weeks? And then second, could you also discuss the additional batoclimab GD data, the six-month treatment-free remission results that are coming this summer, including what you're hoping to see? Thanks so much.

Matthew Gline (CEO)

Thanks, Dave. I appreciate the question. I confess we anticipated that it would be among the earlier questions asked this morning. Look, we have had a lot to say on this over the past month. And obviously, insofar as all of these questions get to sort of Predata positioning, I think we finished our Predata positioning with the $330 million stock that we bought in January. So I don't have a ton to add. Obviously, our view is that deeper is better has been pretty well established in our own Graves trial, in our own TED study, in J&J's Sjogren's study, in UCB's ITP study, and even at the individual patient level in our own and other people's MG studies.

So I've said over and over again, in some ways, I think this data is a little bit less interesting to us than it seems to be to other people because it mostly is a referendum in my mind on what an MG study is able to show. That said, I think what we're looking for is a nice, clear dose response between the two doses. I think if we saw that, it would give us confidence that an MG study is able to differentiate in a way that sets us up well for best-in-class. And I think we're looking across the evidence for other things that can help us structure our 1402 MG program for maximal success. I'm glad you asked about the six-month remission data for Immunovant, obviously in Graves coming later this year. Look, we are excited about the Graves data we generated in Phase 2.

I think it already offers a completely novel option with significant potential efficacy for a patient population that's had nothing. Obviously, the dream here is that not only can we get these patients under control, but that we can get at least some of the patients who are under control to stay controlled off therapy. And so my hope is that we see, I don't know exactly what the number is, but some reasonable rate, some percentage of the patients who got controlled in the initial study stay controlled off drug for a period of time after the study ended. And that's something that we think will be helpful both for patients who want to know that there's a path off therapy and then also, obviously, for payers and others who I think will look at that data with interest. Thanks, Dave.

David Risinger (Senior Managing Director)

Thank you.

Operator (participant)

The next question will come from Dennis Ding with Jefferies. Your line is open.

Dennis Ding (Equity Research Analyst)

Hi, good morning. Thanks for taking our question. We had a question around the LNP litigation and the upcoming summary judgment. Can you help us understand the range of outcomes as it relates to 1498? Meaning, will the judge rule that either Moderna or the U.S. government will be liable for all the patent infringement liabilities? Or could there be a middle scenario based on terms within the contract where Moderna would only be liable for damages for, I don't know, like 25%, 50%, 75% of the doses? Thank you.

Matthew Gline (CEO)

Yes. Thanks, Dennis. Appreciate the question. A couple of things. First of all, it's obviously a little bit difficult to comment on an ongoing litigation, so my answers will be couched in that or with that predicate. Second of all, just as a reminder for those who are a little bit less close to it on 1498, what 1498 represents is a World War I era section of the U.S. patent code that is designed for government contractors who have been asked by the government to manufacture an infringing product for the government to allow the government to take on infringement liability. For example, if you were manufacturing patented jet engines for U.S. Air Force planes in World War II or something like that. So Moderna has asked for the court to acknowledge that they can use that defense for at least some of the vaccine that they have sold.

They have attempted twice to get claims removed on that basis, first in an initial motion to dismiss, and then the U.S. government filed a statement of interest in the case early in 2023, and in both cases, the court declined their request, so I think that is one piece of evidence. In the statement of interest memo, one thing that happened is Section 1498 has two prongs to it. There's a for-the-government prong, and there's a with authorization and consent of the government prong. And in the statement of interest from the DOJ in early 2023, the government pointed out that of the two contracts they had signed with Moderna, only one of them included express reference to 1498. And therefore, it seemed to them that perhaps that one was not made with authorization and consent. Anyway, we'll learn more about that in the summary judgment Phase.

But suffice it to say, therefore, the answer is there could be a range of outcomes on that point.

Dennis Ding (Equity Research Analyst)

Great. Thank you so much.

Operator (participant)

Our next question will come from Yaron Werber with TD Cowen. Your line's open.

Yaron Werber (Biotechnology Analyst)

Great. Good morning. Thanks for taking, Matt. I got a couple of questions. Maybe just the first one on cutaneous sarcoidosis. This looks like a really interesting opportunity, so thanks for that slide showing us the BEACON trial design, so this is a study that's got 3 to 3 to 2 randomization. Can you give us a little bit of a sense sort of how do you power it? What do you want to see in terms of delta over placebo? And then secondly, just for the Graves' disease in terms of reliability, what would be good data from your KOL checks in terms of remissions at six months? Thank you.

Matthew Gline (CEO)

Yes. Thanks, Yaron. Those are both great questions. I appreciate them both. On cutaneous sarcoid, I think the short answer is this is a proof of concept study. This is less about sort of powering for some specific stat-sig outcome and more bluntly, again, there has not been I mean, there have been some studies run in sarcoid where CSAMI was measured, but there has not been a lot of sort of research into the indication. So we're really trying to get a sense for what the placebo bar looks like, what dose response looks like, how these patients respond to therapy. Obviously, the sort of 100% meaningful improvement rate in the IIT study was encouraging, but there was no placebo in that study. And so I think we're trying to get a sense for what these response rates look like overall.

And I think the benefit of the placebo arm here is to give us something to shoot for in a larger Phase 3 study later once we understand kind of what that patient population looks like. So I think that's really what it is. And the reason we're so heavily randomized in favor of drug, first of all, is we have two doses, but second of all, is because we're looking for this study to enroll pretty quickly so that we can get this information and get on with a bigger later-stage study. On Graves, look, we've had quite a lot of conversations with KOLs about Graves' disease, and we think there's a lot of enthusiasm for a new treatment option. The truth is there's a lot of enthusiasm for a new treatment option among prescribers, even if it does not bring about remission.

But I think patients would be excited to see a remitted benefit. Look, I think therefore any meaningful amount of remission, I think, would be encouraging to see here and would set us up well to detect a signal in the Phase 3 study that we've got designed with a similar outcome in mind. I don't know that we've set a numeric bar at this point. Maybe we'll talk a little bit more about that as we get closer. But my guess is even if a couple of patients who got off therapy managed to stay in remission, we'd be pretty happy with that outcome.

Yaron Werber (Biotechnology Analyst)

Thank you.

Operator (participant)

Our next question will come from Brian Cheng with JPMorgan Chase & Co. Your line is open.

Brian Cheng (Biotech Analyst)

Hey, guys. Thanks for taking our questions this morning. We have two. First on Immunovant. There are certainly a lot of investor questions on how the high-dose batoclimab is going to look compared to the low dose. But just curious if you can tell us the level of your commitment you have today to advance 1402 specifically into MG and CIDP, regardless of what the data show. Will you still proceed in both indication with both pivotal studies?

Matthew Gline (CEO)

Thanks for the question. I appreciate it. Look, I think like any reasonable people, we're going to look at that data and take signal from it in terms of what we think of MG and CIDP and how to develop there. MG and CIDP are huge markets where there is a lot of unmet need, and we bring unique things to the table literally no matter what this data shows in terms of form factor, in terms of dosing schedule relative to some of the other trials. So I don't think this data alone is going to inform that question. But obviously, in terms of how we think we will play in MG and what we think our share will look like, that'll depend on how likely we think we are to be able to differentiate in these studies on efficacy.

One reminder, obviously, we think 340 and 680 are pretty much exactly the same from an IgG suppression perspective as 300 and 600 for 1402. And we think 340 will suppress IgG in the mid-60s. And if it does, that'll be pretty similar to what our competitors do. So we think this study will give us a relatively decent read on what an MG study is capable of showing, for example.

Brian Cheng (Biotech Analyst)

Okay. And then on the cutaneous sarcoidosis indication for Priovant, the Phase 2 BEACON seems to be a relatively small study. So can you give us a sense of the trial's powering on the CSAMI score? How do you assume the placebo will perform in a target population? And just wondering if the choice of sarcoidosis here for Priovant here today has anything to do with the infrastructure they already built with Kinevant? Thanks.

Matthew Gline (CEO)

Yeah. Perfect, Brian. Thanks for that question. We are really excited about cutaneous sarcoidosis. Look, the study's small here. I think for starters, again, the IIT study had a very large effect size. And so I think if it's going to look anything like that, powering is not going to be a question. This is not, though I said this, we're not really about powering for stat-sig on CSAMI, although I hope we hit it, obviously. This is really about signal finding. It's really about understanding the sort of range of parameters and giving us some information about dose ranging that we can use to design a Phase 3 that serves for registration purposes. So I think there's not a lot of studies done historically on CSAMI, so there's not a ton of information.

But docs mostly believe placebo response is going to be pretty low, which sort of makes sense when you think about what the disease looks like and how it presents. So I think that's the hope, but we'll see in the study, obviously.

Brian Cheng (Biotech Analyst)

Thank you.

Matthew Gline (CEO)

Thanks, Brian.

Operator (participant)

And our next question will come from Yatin Suneja with Guggenheim. Your line is open.

Yatin Suneja (Biotechnology Analyst)

Hey, guys. Thank you for taking my question. So the question is on the recent investment you made in Immunovant. Could you just talk about why that investment was made or what was your thought process to make it before the data versus after the data? And then if part of the question is that the valuation is attractive, you made the investment now, why not bring the whole asset in-house and sort of take advantage of the dislocation in pricing?

Matthew Gline (CEO)

Yes. Thank you, Yatin. It's a great set of questions. Obviously, we made the investment because we thought it was attractive. We thought the opportunity was attractive. We thought there was a good possibility that it would be validated with the data that we're going to generate. And so we were excited to be able to put that in place. I think we also felt that in the hopeful event that the MG data is clean and successful, that we'd like for Immunovant to be able to message to the market that the company is funded through Graves' data, if we choose to run it that way. And we think that's a pretty powerful statement to be able to make, especially given just how excited we are about Graves and what we think that could mean as an opportunity.

So I think there was a lot attractive to us about the timing and the setup of that investment. In terms of why not bring the whole asset in-house, look, we participated super pro rata in the financing because we liked the opportunity and wanted to own more of it. I think that's clear. It would be a large investment for us to own the entire thing now. It would require either billions of dollars of cash or billions of dollars of stock. And our stock is not currently valued at a place where we're that excited to issue a ton of it. We've been buying it back. So I think steps in a direction that we care about and continue to be incredibly enthusiastic about what our FcRn franchise could be.

Yatin Suneja (Biotechnology Analyst)

Got it. One more question, if I may, and this is regarding the data, the Immunovant data that's coming up. I think there is increasing focus in terms of the relative better efficacy or a little bit more efficacy that you have to show versus other FcRn. It is our understanding that in many different classes, a drug with similar efficacy and maybe some differentiation can still get significant shares. So do you really need to produce more efficacy than other FcRn players? I'm just curious how you are benchmarking the data relative to the others.

Matthew Gline (CEO)

Yeah. Well, thanks. I appreciate that question. I think, first of all, to be clear, if your question is what is the bar for Immunovant to have a commercially valuable, important therapy across indications, I think there is basically nothing that could come out of this MG study that could take us off that trajectory given the quality of the molecule we have, the depth of IgG suppression, the form factor. I don't think this data is a referendum on the commercial viability of 1402 at all. In MG, where it is more of a referendum, I completely agree with what you just said. I think that if the drug look, we have other competitors in the FcRn space that have showed bluntly less good data than efgartigimod and are still expecting to launch those drugs. Those companies are expected to launch those drugs.

I think those drugs are expected to be commercial successes with pretty meaningful sales, either because they bring a form factor benefit or a dosing regimen benefit, or just because MG is a large market with a lot of different entrants, and there's an opportunity for multiple therapies. We bring a lot to the table that has nothing to do with generating an efficacy differential. We talked about the autoinjector. We bring a simple SubQ autoinjector. We bring chronic dosing in our study. So there's a whole bunch of things that I think we bring to the table that mean that we don't, in my opinion, for commercial viability, need to show a delta. Obviously, the bigger delta we show in efficacy, the more share I expect we will ultimately take in the class. That's sort of tautological.

And I hope we show a meaningful delta that everyone can understand. And I hope that means we're going to be a leader in the class in MG. But I completely agree with the point that you've made that in order to be commercially successful, we don't need that. My impression, to be blunt, when everybody has been asking me about the bar for the MG data has not been that they were asking me, "What do you think the bar is for a commercially successful drug?" The question that I think they've been asking me is, "What do I think the bar is for near-term market reaction?" And my answer mostly has been that I think the people asking me that question are supposed to be better at it than I am. So anyway, but totally agree with the point you're asking about, Yatin. Thank you.

Yatin Suneja (Biotechnology Analyst)

Thank you.

Operator (participant)

Our next question will come from Emma Gutstein with Wolfe Research. Your line is open.

Emma Gutstein (Equity Research Associate)

Hi, good morning. This is Emma on for Andy. Thanks for taking our question. Just one question from us. With the top-line DM readout expected in the second half of 2025 with potential registration on the table and with also Argenx's recent success in DM, I guess, what are your expectations for the Brepo Phase 3 readout and the future just competitive landscape if Argenx successfully completes its Phase 3? Thank you.

Matthew Gline (CEO)

Yeah, thanks. It's a great question, and we're obviously really excited for dermatomyositis. With the exception of IVIG, which has already approved the sort of undisputed first-in-class new mechanism in DM, and we are, if the data are successful and the drug is approved, years ahead of any competitor that we are aware of in dermatomyositis at this point, so I think we get to describe that market, basically, in terms of how it comes together and how it gets positioned. There's obviously always a benefit. At least some patients prefer orals versus injectors, and so regardless of the comparative efficacy, I think we have a form factor differentiation that's going to matter. There's tons of unmet need, and honestly, I think there's room for multiple additional new mechanisms in dermatomyositis if it comes to it, so I think from that perspective, it's all a good setup.

What I think the trial really needs to do is just succeed. I think with that, we will have a big opportunity. That said, because I can't quite help myself, look, JAK inhibitors have been very, very good mechanisms for treating inflammatory disease. I think we have a real shot of delivering meaningful efficacy for these patients. The JAK inhibition has the potential to be, or especially JAK inhibition combined with TYK2 inhibition, has the potential to be a best overall mechanism, at least among the things currently being studied. But obviously, we won't know the answer to that for years and years as those other mechanisms produce data. Thank you.

Emma Gutstein (Equity Research Associate)

Great. I appreciate the response.

Operator (participant)

Our next question will come from Douglas Tsao with H.C. Wainwright. Your line is open.

Douglas Tsao (Managing Director of Equity Research)

Hi, good morning. Thanks for taking the questions. And Matt, I guess just maybe starting with brepocitinib, and obviously, we now have another indication. I'm just curious if you have thoughts on sort of the pace that you would potentially roll out additional indications with brepocitinib, just given the fact that it seems to be an asset that could have fairly broad applicability across a range of organ indications, which I know sort of has been your initial focus? Thank you. And I have a follow-up.

Matthew Gline (CEO)

Yeah, sure. No, that's a great question. Thank you. Look, we're obviously excited about cutaneous sarcoidosis that we've unveiled today, and what I can say is that we are actively evaluating a number of other indications that we think would fit well into the paradigm for brepocitinib, and I think we're not unveiling them at some predetermined pace based on a goal or expectation. We're unveiling them as we get primed, ready, and good to go with each successive new indication, and so I think my hope is that you can expect more in the period to come here, but let's see what we get.

Douglas Tsao (Managing Director of Equity Research)

I mean, I guess, Matt, as a follow-up, I mean, it's like Immunovant has talked about sort of 10 studies over a certain amount of period, and I get you don't want to necessarily commit to that similar timing, but do you think that that's a fair number of opportunities that brepocitinib could ultimately be relevant in?

Matthew Gline (CEO)

Yeah. Look, I think the answer is there is probably a very long list of opportunities that brepocitinib could. I mean, you can ask ChatGPT with deep reasoning for a list of inflammatory orphan indications with tens to low hundreds of thousands of patients. There's a long list of them. And I think we are spoiled for choice in terms of places where patients might benefit. And so I think what we're doing is spending our time picking our spots, figuring out which indications have the right set of competitive dynamics, the right sort of leaning into both JAK1 and TYK2, which is something that creates a competitive moat for us, things that have a patient population that is sized for our competitive landscape and price point.

Then, frankly, making sure that we scale operationally to match the sort of level of activity ongoing at Priovant so that we continue to run good studies and generate good data. Obviously, we're really happy with the job that team has done is doing and are excited to keep investing in them. Look, I think there are a lot of possible places to go. I'm not sort of giving a number today, but I think we're choosing our spots and moving at Roivant's pace, which is to say, hopefully.

Douglas Tsao (Managing Director of Equity Research)

Okay. Great. Thank you.

Matthew Gline (CEO)

Thanks, Doug.

Operator (participant)

I show no further questions in the queue at this time. I would now like to turn the call back over to Matt Gline for closing remarks.

Matthew Gline (CEO)

Great. Well, thank you, everybody, for listening this morning. Thank you to the Roivant team, the Immunovant team, the Priovant team, all of the VANT teams at Roivant for their hard work, the patients and investigators who helped us progress, and looking forward to a big year in 2025 and excited to get back on the phone and talk about more updates probably pretty soon, so thanks, everybody. Have a good day.

Operator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect.