UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended March 31, 2024
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to
Commission File Number:001-40782
(Exact name of Registrant as specified in its Charter)
| Bermuda | 98-1173944 |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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| 7th Floor |
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| 50 Broadway |
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| London SW1H 0DB |
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| United Kingdom | Not Applicable |
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| (Address of principal executive offices) | (Zip Code) |
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+44 207 400 3347
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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| Common Shares, $0.0000000341740141 per share | ROIV | The Nasdaq Global Select Market |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
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| Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes☐ No ☒
As of September 29, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the registrant’s common shares, par value $0.0000000341740141 per share (the “common shares”), held by non-affiliates of the registrant was approximately $8.0 billion, based on the closing price of the common shares on The Nasdaq Global Market on September 29, 2023 of $11.68 per share.
As of May 28, 2024 there were 738,721,807 common shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Specified portions of the registrant’s proxy statement to be issued in conjunction with the registrant’s 2024 Annual Meeting of Shareholders, which is expected to be filed not later than 120 days after the registrant’s fiscal year ended March 31, 2024, are incorporated by reference into Part III of this Annual Report on Form 10-K. Except as expressly incorporated by reference, the registrant’s proxy statement shall not be deemed to be a part of this Annual Report on Form 10-K.
TABLE OF CONTENTS
| Page |
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| PART I. |
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| Item 1. | Business | 6 |
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| Item 1A. | Risk Factors | 52 |
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| Item 1B. | Unresolved Staff Comments | 116 |
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| Item 1C. | Cybersecurity | 116 |
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| Item 2. | Properties | 116 |
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| Item 3. | Legal Proceedings | 117 |
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| Item 4. | Mine Safety Disclosures | 117 |
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| PART II. |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 118 |
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| Item 6. | [Reserved] | 119 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 119 |
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| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 134 |
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| Item 8. | Financial Statements and Supplementary Data | 135 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 173 |
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| Item 9A. | Controls and Procedures | 173 |
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| Item 9B. | Other Information | 174 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 175 |
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| Part III. |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 176 |
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| Item 11. | Executive Compensation | 176 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 176 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 176 |
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| Item 14. | Principal Accountant Fees and Services | 176 |
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| Part IV. |
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| Item 15. | Exhibits, Financial Statement Schedules | 177 |
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| Signatures | 183 |
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Summary Risk Factors
You should consider carefully the risks described under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Roivant” and the “Company” refer to Roivant Sciences Ltd. and its subsidiaries and affiliates, as the context requires. A summary of the risks that could materially and adversely affect our business, financial condition, operating results and prospects include the following:
Risks Related to Our Business and Industry
| • | Our limited operating history and the inherent uncertainties and risks involved in biopharmaceutical product development and commercialization may make it difficult for us to execute on our business model and for you to assess our future viability. We have generated limited revenue from our operations since inception, and there is no guarantee that we will generate significant revenues in the future. |
| • | We may never achieve sustained profitability. |
| • | We have relatively limited experience as a commercial-stage company and the marketing and sale of VTAMA® (tapinarof) or any future products may be unsuccessful or less successful than anticipated. |
| • | Our business is dependent to a significant extent on the successful commercialization of VTAMA and the development, regulatory approval and commercialization of our current and future products and product candidates. |
| • | We may not be successful in our efforts to acquire or in-license new product candidates, and newly acquired or in-licensed product candidates may not perform as expected in clinical trials or be successful in eventually achieving marketing approvals. |
| • | We face risks associated with the allocation of capital and personnel across our businesses. |
| • | We face risks associated with the Vant structure. |
| • | We face risks associated with potential future payments related to our products and product candidates. |
| • | Our business strategy and potential for future growth relies on a number of assumptions, some or all of which may not be realized. |
| • | We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management. |
| • | We face risks associated with the use of our cash, cash equivalents and restricted cash, including any return of capital to shareholders. |
| • | Clinical trials and preclinical studies are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes. We may encounter substantial delays in clinical trials, or may not be able to conduct or complete clinical trials or preclinical studies on the expected timelines, if at all. |
| • | We may encounter difficulties enrolling and retaining patients in clinical trials, and clinical development activities could thereby be delayed or otherwise adversely affected. |
| • | The results of our preclinical studies and clinical trials may not support our proposed claims for our products or product candidates, or regulatory approvals on a timely basis or at all, and the results of earlier studies and trials may not be predictive of future trial results. |
| • | Interim, top-line or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. |
| • | Obtaining approval of a new drug is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or another regulator may delay, limit or deny approval. If we are unable to obtain regulatory approval in one or more jurisdictions for any products or product candidates, our business will be substantially harmed. |
| • | Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of product candidates that we may identify and pursue for their intended uses, which would prevent, delay or limit the scope of regulatory approval and commercialization. |
| • | Our products and product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval, cause us to suspend or discontinue clinical trials, abandon further development or limit the scope of any approved label or market acceptance. |
| • | We depend on the knowledge and skills of our senior leaders and may not be able to manage our business effectively if we are unable to attract and retain key personnel. |
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| • | If we are unable to obtain and maintain patent and other intellectual property protection for our technology, products and product candidates or if the scope of the intellectual property protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. |
| • | If the patent applications we hold or have in-licensed with respect to our products or product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our current and future products or product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize our products. Any such outcome could have a materially adverse effect on our business. Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. |
| • | Patent terms and their scope may be inadequate to protect our competitive position on current and future products and product candidates for an adequate amount of time. |
Risks Related to Our Securities, Our Jurisdiction of Incorporation and Certain Tax Matters
| • | If our performance does not meet market expectations, the price of our securities may decline. |
| • | We have incurred and will continue to incur increased costs as a result of operating as a public company and our management has devoted and will continue to devote a substantial amount of time to new compliance initiatives. |
| • | If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common shares may decline. |
| • | Anti-takeover provisions in our memorandum of association and bye-laws, as well as provisions of Bermuda law, could delay or prevent a change in control, limit the price investors may be willing to pay in the future for our common shares and could entrench management. |
| • | Our largest shareholders own a significant percentage of our common shares and are able to exert significant control over matters subject to shareholder approval. |
| • | Future sales, or the perception of future sales, of our common shares by us or our existing shareholders could cause the market price for our common shares to decline and impact our ability to raise capital in the future. |
Forward-Looking Statements
This Annual Report on Form 10-K contains statements, including matters discussed under Part I, Item 1A. “Risk Factors,” Part I, Item 3. “Legal Proceedings” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this report, that are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, and statements that are not historical facts. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Annual Report on Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to risk associated with:
| • | our relatively limited experience as a commercial-stage company and ability to successfully commercialize VTAMA® (tapinarof); |
| • | our ability to acquire or in-license new product candidates; |
| • | the allocation of capital and personnel across our business; |
| • | our Vant structure and the potential that we may fail to capitalize on certain development opportunities; |
| • | potential future payments related to our products and product candidates; |
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| • | our ability to consummate strategic transactions; |
| • | the use of our cash and cash equivalents, including the proceeds from the Roche Transaction (as defined below); |
| • | clinical trials and preclinical studies, which are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes; |
| • | the novelty, complexity and difficulty of manufacturing certain of our products and product candidates, including any manufacturing problems that result in delays in development or commercialization of our products and product candidates; |
| • | difficulties we may face in enrolling and retaining patients in clinical trials, which could affect or otherwise delay clinical development activities; |
| • | the results of our clinical trials not supporting our proposed claims for a product candidate; |
| • | interim, top-line and/or preliminary data from our clinical trials changing as more data becoming available or data being delayed due to audit and verification processes; |
| • | changes in product manufacturing or formulation that could lead to the incurrence of costs or delays; |
| • | the failure of any third-party we contract with to conduct, supervise and monitor our clinical trials to perform in a satisfactory manner or to comply with applicable requirements; |
| • | the fact that obtaining approvals for new drugs is an extensive, lengthy, expensive and inherently uncertain process that may end with our inability to obtain regulatory approval by the FDA or other regulatory agencies in other jurisdictions; |
| • | the failure of our clinical trials to demonstrate substantial evidence of the safety and efficacy of our products and product candidates, including, but not limited to, scenarios in which our products and product candidates may cause adverse effects that could delay regulatory approval, discontinue clinical trials, limit the scope of approval or generally result in negative media coverage of us; |
| • | our inability to obtain regulatory approval for a product or product candidate in certain jurisdictions, even if we are able to obtain approval in certain other jurisdictions; |
| • | our ability to effectively manage growth and to attract and retain key personnel; |
| • | any business, legal, regulatory, political, operational, financial and economic risks associated with conducting business globally; |
| • | our ability to obtain and maintain patent and other intellectual property protection for our technology, products and product candidates; |
| • | the inadequacy of patent terms and their scope to protect our competitive position; |
| • | the failure to issue (or the threatening of their breadth or strength of protection) or provide meaningful exclusivity for our current and future products and product candidates of our patent applications that we hold or have in-licensed; |
| • | the fact that we do not currently and may not in the future own or license any issued composition of matter patents covering certain of our products and product candidates and our inability to be certain that any of our other issued patents will provide adequate protection for such products and product candidates; |
| • | the fact that our largest shareholders own a significant percentage of our stock and will be able to exert significant control over matters subject to shareholder approval; |
| • | future sales of securities by us or our largest shareholders, or the perception of such sales, and the impact thereof on the price of our common shares; |
| • | the outcome of any pending or potential litigation, including but not limited to our expectations regarding the outcome of any such litigation and costs and expenses associated with such litigation; |
| • | changes in applicable laws or regulations; |
| • | the possibility that we may be adversely affected by other economic, business and/or competitive factors; and |
| • | any other risks and uncertainties, including those described under Part I, Item 1A. “Risk Factors.” |
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These risks are not exhaustive. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://investor.roivant.com/), SEC filings, webcasts, press releases, and conference calls. We use these mediums, including our website, to communicate with our shareholders and the public about our company, our products and product candidates and other matters. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K.
Industry and Market Data
We obtained the industry and market data in this Annual Report on Form 10-K from our own research as well as from industry and general publications, surveys and studies conducted by third parties. Industry and general publications, studies and surveys generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. These third parties may, in the future, alter the manner in which they conduct surveys and studies regarding the markets in which we operate our business. As a result, you should carefully consider the inherent risks and uncertainties associated with the industry and market data contained in this Annual Report on Form 10-K, including those discussed in Part I, Item 1A. “Risk Factors.”
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