Roivant Sciences Ltd

Previous wording

Roivant is a commercial-stage biopharmaceutical company that aims to improve the lives of patients by accelerating the development and commercialization of medicines that matter. Today, Roivant’s pipeline is concentrated in inflammation and immunology and includes VTAMA, a novel topical approved for the treatment of psoriasis and in development for the treatment of atopic dermatitis; IMVT-1402 and batoclimab, fully human monoclonal antibodies targeting the neonatal Fc receptor (“FcRn”) in development across several IgG-mediated autoimmune indications; and brepocitinib, a potent small molecule inhibitor of TYK2 and JAK1 for the treatment of dermatomyositis and non-infectious uveitis, in addition to several other therapies in various stages of clinical development. We advance our pipeline by creating nimble subsidiaries or “Vants” to develop and commercialize our medicines and technologies. Beyond therapeutics, Roivant also incubates discovery-stage companies and health technology startups complementary to its biopharmaceutical business.

Current wording

Roivant is a biopharmaceutical company that aims to improve the lives of patients by accelerating the development and commercialization of medicines that matter. Roivant’s pipeline includes IMVT-1402 and batoclimab, fully human monoclonal antibodies targeting FcRn in development across several IgG-mediated autoimmune indications; brepocitinib, a potent small molecule inhibitor of TYK2 and JAK1 in development for the treatment of dermatomyositis and non-infectious uveitis; mosliciguat, an inhaled sGC activator in development for pulmonary hypertension associated with interstitial lung disease; and namilumab, an anti-GM-CSF monoclonal antibody in development for the treatment of pulmonary sarcoidosis. We advance our pipeline by creating nimble subsidiaries or “Vants” to develop and commercialize our medicines and technologies. Beyond therapeutics, Roivant also incubates discovery-stage companies and health technology startups complementary to its biopharmaceutical business.

Previous wording

The following table summarizes selected commercial and development-stage pipeline products and product candidates.

Current wording

The following table summarizes selected product candidates from our pipeline.

Previous wording

Note: All clinical stage drugs in our current pipeline are investigational and subject to health authority approval. Our pipeline reflects both ongoing clinical trials and expected upcoming trials.

Current wording

Note: All product candidates in our current pipeline are investigational and subject to health authority approval. The “Phase” for a specific product candidate referenced above reflects both ongoing clinical trials and expected upcoming trials.

Previous wording

The following table summarizes our ownership of certain of our subsidiary companies and affiliates as of June 30, 2024.

Current wording

The following table summarizes our ownership of certain of our subsidiary companies and affiliates as of September 30, 2024, as well as our ownership interest in potential future milestones and royalties related to the Dermavant Transaction (see footnote 4 below).

Previous wording

Note: References are to calendar years. All catalyst timings are based on current expectations and, where applicable, contingent on FDA feedback, and may be subject to change.

Current wording

Note: References under “Expected Timing” are to calendar years unless otherwise noted. References to “FY End” are to Roivant’s fiscal year ending March 31, 2025. All catalyst timings are based on current expectations and, where applicable, contingent on FDA feedback, and may be subject to change. The timing of the litigation-related events noted above is subject to change, including at the discretion of the court.

Previous wording

License, milestone and other revenue includes the recognition of payments received in connection with license agreements, as well as revenue generated by subscription and service-based fees.

Current wording

Revenue, net primarily relates to the recognition of payments received in connection with license agreements, as well as revenue generated by subscription and service-based fees.

Previous wording

Cost of product revenues includes the cost of producing and distributing inventories related to VTAMA product revenue during the respective period, including manufacturing, freight, and indirect overhead costs. Additionally, milestone payments made in connection with regulatory approvals and sales-based milestones are capitalized and amortized to cost of revenue over the remaining useful life of the asset. Our cost of revenues also relates to subscription and service-based revenue recognized for the use of technology developed and consists primarily of employee, hosting, and third-party data costs.

Current wording

Our cost of revenues primarily relates to subscription and service-based revenue recognized for the use of technology developed and consists primarily of employee, hosting, and third-party data costs.

Previous wording

Selling, general and administrative (“SG&A”) expenses consist primarily of employee-related expenses, such as salaries, share-based compensation, sales incentive compensation, and benefits, for employees engaged in SG&A activities. SG&A employees include those responsible for the identification and acquisition or in-license of new drug candidates, as well as for managing Vant operations and facilitating the use of our platform and technologies at the Vants. SG&A expenses also consist of marketing programs, advertising, legal and accounting fees, consulting services, and other operating costs relating to corporate matters and daily operations.

Current wording

General and administrative (“G&A”) expenses consist primarily of employee-related expenses, such as salaries, share-based compensation and benefits, for employees engaged in G&A activities. G&A employees include those responsible for the identification and acquisition or in-license of new drug candidates, as well as for managing Vant operations and facilitating the use of our platform and technologies at the Vants. G&A expenses also consist of legal and accounting fees, consulting services, and other operating costs relating to corporate matters and daily operations.

Previous wording

We expect SG&A expenses to increase in future periods as we continue to expand our sales and marketing infrastructure and general administrative functions. These increases will likely include salaries, sales incentive compensation, share-based compensation and travel expenses associated with our sales force, which promotes VTAMA, as well as expected costs associated with the further build out of our commercial operations functions. We anticipate these expenses to further increase if any of our other current or future product candidates receives regulatory approval in the U.S. or another jurisdiction. Additionally, in July 2024, the Compensation Committee of the Board of Directors approved a multi-year incentive compensation program for each of Matthew Gline, Chief Executive Officer; Mayukh Sukhatme, President and Chief Investment Officer; and Eric Venker, President and Chief Operating Officer. The long-term equity incentive awards granted pursuant to this program may result in significant increases to share-based compensation expense over the vesting period of the awards. Refer to Note 16, "Subsequent Events" of our financial statements for further details.

Current wording

We expect G&A expenses to increase in future periods to support our continued research and development activities and potential commercialization efforts. These increases will likely include additional costs related to the hiring of new personnel, including higher share-based compensation expenses, and fees to outside consultants, as well as other expenses. If any of our current or future product candidates receives regulatory approval in the U.S. or another jurisdiction, we expect that we would incur significantly increased expenses associated with building a sales and marketing team. Additionally, in July 2024, the Compensation Committee of the Board of Directors approved a multi-year incentive compensation program for each of Matthew Gline, Chief Executive Officer; Mayukh Sukhatme, President and Chief Investment Officer; and Eric Venker, President and Chief Operating Officer. The long-term equity incentive awards granted pursuant to this program will result in significant increases to share-based compensation expense over the vesting period of the awards. Refer to Note 9, “Share-Based Compensation” of our financial statements for further details.

Previous wording

Gain on sale of Telavant net assets reflects the gain resulting from the achievement of a one-time milestone in June 2024 related to the sale of our entire equity interest in our majority-owned subsidiary Telavant Holdings, Inc. (“Telavant”) to Roche Holdings, Inc. (“Roche”) (the “Roche Transaction”). In December 2023, Roche acquired all of the issued and outstanding shares of capital stock of Telavant in exchange for approximately $7.1 billion in cash at the closing of the Roche Transaction and a one-time milestone payment of $150 million in cash payable upon the initiation of a Phase 3 trial in UC. Prior to the Roche Transaction, we held 75% of the issued and outstanding shares of common stock and preferred stock of Telavant, and Pfizer Inc. owned the remaining 25%, in each case on an as-converted basis. The $7.1 billion in closing consideration was paid to all of Telavant’s equity holders, including holders of restricted stock units, on a pro rata basis relative to their ownership of Telavant prior to the closing of the Roche Transaction, and this same treatment will be applied to the one-time milestone payment. We recognized a gain on sale of Telavant net assets of approximately $110 million for our pro rata portion of the one-time milestone consideration during the three months ended June 30, 2024. Refer to Note 6, “Recent Transactions and Developments” for further information regarding the Roche Transaction.

Current wording

Gain on sale of Telavant net assets reflects the gain resulting from the achievement of a one-time milestone in June 2024 related to the sale of our entire equity interest in our majority-owned subsidiary Telavant Holdings, Inc. (“Telavant”) to Roche Holdings, Inc. (“Roche”) (the “Roche Transaction”). In December 2023, Roche acquired all of the issued and outstanding shares of capital stock of Telavant in exchange for approximately $7.1 billion in cash at the closing of the Roche Transaction and a one-time milestone payment of $150 million in cash payable upon the initiation of a Phase 3 trial in UC. Prior to the Roche Transaction, we held 75% of the issued and outstanding shares of common stock and preferred stock of Telavant, and Pfizer Inc. owned the remaining 25%, in each case on an as-converted basis. The $7.1 billion in closing consideration was paid to all of Telavant’s equity holders, including holders of restricted stock units, on a pro rata basis relative to their ownership of Telavant prior to the closing of the Roche Transaction, and this same treatment will be applied to the one-time milestone payment. We recognized a gain on sale of Telavant net assets of approximately $110 million for our pro rata portion of the one-time milestone consideration during the six months ended September 30, 2024. Refer to Note 5, “Recent Transactions and Developments” for further information regarding the Roche Transaction.

Previous wording

Change in fair value of debt and liability instruments primarily includes the (gain) loss relating to the measurement and recognition of fair value on a recurring basis of certain liabilities, including debt issued by a wholly-owned subsidiary of Dermavant Sciences Ltd. (“Dermavant”) to NovaQuest Co-Investment Fund VIII, L.P. (the “NovaQuest Facility”), and other liability instruments, including earn-out share liabilities issued in connection with our business combination (the “Business Combination”) with Montes Archimedes Acquisition Corp. (“MAAC”), a special purpose acquisition company.

Current wording

Change in fair value of liability instruments primarily includes the (gain) loss relating to the measurement and recognition of fair value on a recurring basis of certain liabilities, including the earn-out share liabilities issued in connection with our business combination (the “Business Combination”) with Montes Archimedes Acquisition Corp. (“MAAC”), a special purpose acquisition company.

Previous wording

Interest income consists of interest earned on our cash equivalents.

Current wording

Interest income consists of interest earned on our cash, cash equivalents and marketable securities.

Previous wording

Comparison of the three months ended June 30, 2024 and 2023

Current wording

Comparison of the three and six months ended September 30, 2024 and 2023

Previous wording

Variance analysis for three months ended June 30, 2024 and 2023

Current wording

Variance analysis for three and six months ended September 30, 2024 and 2023

Previous wording

Research and development expenses increased by$8.1 million to$133.2 million for the three months ended June 30, 2024, compared to$125.1 million for the three months ended June 30, 2023. This increase was primarily driven by increases in program-specific costs of$4.3 million, share-based compensation of $3.1 million, and personnel-related expenses of $1.6 million.

Current wording

Research and development expenses increased by$28.3 million to$143.1 million for the three months ended September 30, 2024, compared to $114.8 million for the three months ended September 30, 2023. This increase was primarily driven by increases in program-specific costs of $19.2 million, personnel-related expenses of $7.2 million, and share-based compensation of $1.6 million.

Previous wording

Within program-specific costs, the increase of $4.3 million was primarily driven by an increase in expense of $14.8 million related to the anti-FcRn franchise, partially offset by a decrease in expense of$10.9 million related to RVT-3101 for which the rights to further develop and manufacture were sold to Roche in December 2023.

Current wording

Within program-specific costs, the increase of $19.2 million was primarily driven by an increase in expense of $34.2 million related to the anti-FcRn franchise, partially offset by a decrease in expense of $18.6 million related to RVT-3101, which was sold to Roche in December 2023.

Previous wording

Acquired in-process research and development expenses were$12.5 million for the three months ended June 30, 2023 relating to the achievement of development and regulatory milestones for batoclimab.

Current wording

Acquired in-process research and development expenses were $26.5 million for the six months ended September 30, 2023 due to $14.0 million of consideration relating to the asset acquisition of mosliciguat completed by our wholly-owned subsidiary, Pulmovant, and $12.5 million relating to the achievement of development and regulatory milestones for batoclimab.

Previous wording

Gain on sale of Telavant net assets was approximately$110.4 million for the three months ended June 30, 2024 and resulted from the achievement of a one-time milestone achieved in June 2024. Refer to Note 6, “Recent Transactions and Developments” of our financial statements for further information regarding the milestone.

Current wording

Gain on sale of Telavant net assets was approximately $110.4 million for the six months ended September 30, 2024 and resulted from the achievement of a one-time milestone achieved in June 2024. Refer to Note 5, “Recent Transactions and Developments” of our financial statements for further information regarding the milestone.

Previous wording

Change in fair value of investments was an unrealized gain of$15.2 million and an unrealized loss of$7.6 million for the three months ended June 30, 2024 and 2023, respectively. The change of$22.8 million was primarily driven by changes in the public share price of Arbutus and the change in fair value of our investment in Datavant.

Current wording

Change in fair value of investments was an unrealized gain of$48.4 million and an unrealized loss of$45.8 million for the three months ended September 30, 2024 and 2023, respectively. The change of $94.2 million was primarily driven by changes in the public share price of Arbutus and the change in fair value of our investment in Datavant.

Previous wording

Interest income increased by$55.4 million to$72.1 million for the three months ended June 30, 2024, compared to$16.7 million for the three months ended June 30, 2023. The increase is primarily due to higher cash balances in our interest-bearing cash accounts and higher interest rates.

Current wording

Interest income increased by $110.9 million to $141.9 million for the six months ended September 30, 2024, compared to $31.0 million for the six months ended September 30, 2023. The increase is primarily due to higher cash balances in our interest-bearing cash accounts and higher interest rates.

Previous wording

Income tax expense increased by$10.9 million to$12.7 million for the three months ended June 30, 2024, compared to$1.8 million for the three months ended June 30, 2023. The increase is primarily due to our earnings by legal entity in various jurisdictions, which is driven by an increase in interest income.

Current wording

Income tax expense increased by$9.2 million to$12.5 million for the three months ended September 30, 2024, compared to$3.2 million for the three months ended September 30, 2023. The increase is primarily due to our earnings by legal entity in various jurisdictions, which is driven by an increase in interest income.

Previous wording

For thethree months ended June 30, 2024 and 2023, we had net income of $57.5 million and a net loss of$327.8 million, respectively. As of June 30, 2024, we had cash and cash equivalents of approximately$5.7 billion and our retained earnings was$671.5 million. Through our subsidiary Dermavant, we launched our first commercial product, VTAMA, and we began generating product revenue, net from sales of VTAMA in the United States in May 2022. We also have generated revenue through license agreements, as well as from subscription and service-based fees. Our operations to date have been financed primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements.

Current wording

For thesix months ended September 30, 2024 and 2023, we incurred net losses from continuing operations of$268.4 million and$489.9 million, respectively. As of September 30, 2024, we had cash, cash equivalents and marketable securities of approximately $5.4 billion and our retained earnings was $395.6 million. Our operations to date have been financed primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements.

Previous wording

Our board of directors authorized a common share repurchase program, allowing for repurchases of common shares in an aggregate amount of up to $1.5 billion (excluding fees and expenses). The repurchase program is funded by available cash and cash equivalents on hand and does not have an expiration date. In April 2024, pursuant to the share repurchase program, we entered into a share repurchase agreement with Sumitomo Pharma Co., Ltd. (“Sumitomo”) and repurchased all 71,251,083 common shares held by Sumitomo at a purchase price per share of $9.10, for an aggregate purchase price of approximately $648.4 million.

Current wording

Our board of directors authorized a common share repurchase program, allowing for repurchases of common shares in an aggregate amount of up to $1.5 billion (excluding fees and expenses). The repurchase program is funded by available cash and cash equivalents on hand and does not have an expiration date. In April 2024, pursuant to the share repurchase program, we entered into a share repurchase agreement with Sumitomo Pharma Co., Ltd. (“Sumitomo”) and repurchased all 71,251,083 common shares held by Sumitomo at a purchase price per share of $9.10, for an aggregate purchase price of approximately $648.4 million. Repurchases of an additional 9,023,658 shares were made in open market transactions under the share repurchase program in the three months ended September 30, 2024 for an aggregate purchase price of approximately$106.1 million.

Previous wording

We enter into agreements with contract service providers to assist in the performance of its research and development activities. Expenditures to contract research organizations and contract manufacturing organizations represent significant costs in the clinical development of its product candidates. Subject to required notice periods and certain obligations under binding purchase orders, we can elect to discontinue the work under these agreements at any time. We expect to enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.

Current wording

We enter into agreements with contract service providers to assist in the performance of our research and development activities. Expenditures to contract research organizations and contract manufacturing organizations represent significant costs in the clinical development of our product candidates. Subject to required notice periods and certain obligations under binding purchase orders, we can elect to discontinue the work under these agreements at any time. We expect to enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.

Previous wording

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the discovery efforts, preclinical activities, clinical trials and potential commercialization of our product candidates. Additionally, we expect to incur significant commercialization expenses with respect to VTAMA. Our operating results, including our net losses, may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, our expenditures on other research and development activities and our commercialization efforts. We anticipate that our expenses will increase substantially as we:

Current wording

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the discovery efforts, preclinical activities, clinical trials and potential commercialization of our product candidates. Our operating results, including our net losses, may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, our expenditures on other research and development activities and our commercialization efforts. We anticipate that our expenses will increase substantially as we:

Previous wording

In the future, we may require significant additional capital to continue our operations, pursue business opportunities or strategic transactions, or respond to challenges, competition or unforeseen circumstances. Until such time, if ever, that we can generate substantial revenues, we may finance future cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements or other collaborations at Roivant and the Vants. To the extent that we raise additional capital by issuing equity securities at Roivant or the Vants, our existing shareholders’ ownership, or our ownership in the Vants, may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that could harm the rights of our shareholders. Additionally, any agreements for future debt or preferred equity financings, if available, may involve covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our products and product candidates, future revenue streams, research programs or technologies or grant licenses on terms that may not be favorable to us. The foregoing restrictions associated with potential sources of additional capital may make it more difficult for us to raise additional capital or to pursue business opportunities, including potential acquisitions.

Current wording

In the future, we may require significant additional capital to continue our operations, pursue business opportunities or strategic transactions, or respond to challenges, competition or unforeseen circumstances. Until such time, if ever, that we can generate substantial revenues, we may finance future cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements or other collaborations at Roivant and the Vants. To the extent that we raise additional capital by issuing equity securities at Roivant or the Vants, our existing shareholders’ ownership, or our ownership in the Vants, may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that could harm the rights of our shareholders. Additionally, any agreements for future debt or preferred equity financings, if available, may involve covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or technologies or grant licenses on terms that may not be favorable to us. The foregoing restrictions associated with potential sources of additional capital may make it more difficult for us to raise additional capital or to pursue business opportunities, including potential acquisitions.

Previous wording

Finally, as part of our ongoing business strategy we regularly evaluate new acquisition and in-licensing opportunities, as well as our capital structure. We may from time to time use our existing cash to fund such opportunities or to retire outstanding debt obligations or to return capital to shareholders though share repurchases or the issuance of cash dividends on our common shares to optimize our capital structure. See “Risk Factors—Risks Related to Our Business and Industry—We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management” for more information.

Current wording

Finally, as part of our ongoing business strategy we regularly evaluate new acquisition and in-licensing opportunities, as well as our capital structure. We may from time to time use our existing cash to fund such opportunities or to retire outstanding debt obligations or to return capital to shareholders though share repurchases or the issuance of cash dividends on our common shares to optimize our capital structure. See “Risk Factors—Risks Related to Our Business and Industry—We face risks associated with strategic transactions and partnerships and we may not realize the expected benefits of those strategic transactions and partnerships.” for more information.

Previous wording

The following table sets forth a summary of our cash flows for thethree months ended June 30, 2024 and 2023:

Current wording

The following table sets forth a summary of our cash flows for thesix months ended September 30, 2024 and 2023:

Previous wording

For the three months ended June 30, 2024, cash used in operating activities changed by$57.1 million to$192.8 million compared to $249.9 million for thethree months ended June 30, 2023 due to greater cash requirements to fund operations during the three months ended June 30, 2023.

Current wording

For the six months ended September 30, 2024, cash used in operating activities increased by$13.3 million to$459.6 million compared to$446.4 million for thesix months ended September 30, 2023.

Previous wording

For thethree months ended June 30, 2024 and 2023, cash flow from financing activities changed by$668.1 million to net cash used in financing activities of$660.6 million from net cash provided by financing activities of$7.5 million for thethree months ended June 30, 2023. This change in cash flow is primarily due to the repurchase of $648.4 million of our common shares during the three months ended June 30, 2024.

Current wording

For thesix months ended September 30, 2024 and 2023, cash flow from financing activities changed by$985.0 million to net cash used in financing activities of$769.7 million from net cash provided by financing activities of$215.3 million for thesix months ended September 30, 2023. During thesix months ended September 30, 2024, net cash used in financing activities was primarily due to the repurchase of$754.4 million of our common shares during thesix months ended September 30, 2024. During the six months ended September 30, 2023, net proceeds were primarily generated by the issuance of our common shares pursuant to purchase and sale agreements entered with certain institutional investors.