On June 28, 2022 Roivant Sciences Ltd. (Nasdaq: ROIV), a next-generation biopharmaceutical company dedicated to improving the delivery of healthcare to patients, reported its financial results for the fourth quarter and fiscal year ended March 31, 2022 and provided an update on the Company’s operations (Press release, Roivant Sciences, JUN 28, 2022, View Source [SID1234616316]).

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Roivant’s Chief Executive Officer, Matt Gline, noted: "We are thrilled by the FDA approval of VTAMA for the treatment of psoriasis, a first and only-in-class medicine. Our leadership team at Dermavant is wholly focused on the ongoing launch, with a fully operating commercial organization in place and early signs of meaningful physician engagement. With $2.1B in cash, we are fortunate to operate from a position of financial strength, with a projected cash runway of over two years, to aggressively advance our existing programs while opportunistically adding new ones in the future. We continue to focus our capital allocation on the most meaningful opportunities for patients, including newly launched Priovant, while remaining cognizant of the current external environment and prioritizing our spend to deliver the highest return for shareholders."

Recent Developments

Roivant: We have implemented a company-wide cost optimization and pipeline reprioritization initiative to reduce our expected operating expenses and prioritize our capital resources. As part of this initiative, we have discontinued the development of several programs, including ARU-1801, LSVT-1701, DMVT-502, DMVT-503, DMVT-504 and CVT-TCR-01, to focus our capital on the potentially most valuable and meaningful opportunities for patients in our pipeline, including our programs for newly launched Priovant.
Aruvant: We have elected to wind down the development of ARU-1801 after considering the future development costs of the program, the current market environment and the clinical and commercial profile of the drug. We would like to thank the patients and their families, as well as Aruvant employees and investigators for their commitment to finding a cure for sickle cell disease.
Dermavant: The FDA approved VTAMA for the topical treatment of plaque psoriasis in adults. The approval makes VTAMA the first and only FDA-approved steroid-free topical medication in its class. Dermavant also completed a strategic pipeline review and has terminated the development of DMVT-502 for vitiligo and atopic dermatitis, DMVT-503 for acne and DMVT-504 for hyperhidrosis to focus on the potential blockbuster launch of VTAMA for plaque psoriasis and execution of the Phase 3 clinical trials of VTAMA for atopic dermatitis, a potential second blockbuster indication.
Priovant: Priovant initiated a single registrational Phase 3 trial to evaluate brepocitinib for the treatment of dermatomyositis. Brepocitinib is a potential first-in-class dual, selective inhibitor of TYK2 and JAK1 licensed from Pfizer that has been evaluated in 14 completed Phase 1 and Phase 2 trials, including 5 placebo-controlled Phase 2 trials in psoriatic arthritis, plaque psoriasis, ulcerative colitis, alopecia areata and hidradenitis suppurativa that generated statistically significant and clinically meaningful efficacy results. Oral brepocitinib is also in active development in SLE, for which a potentially registrational trial is currently ongoing.
Immunovant: Immunovant initiated a single potentially registrational Phase 3 trial to evaluate batoclimab for the treatment of myasthenia gravis, with topline results expected in the second half of calendar year 2024.
Genevant: In February 2022, Genevant and Arbutus filed a lawsuit against Moderna seeking damages for infringement of several patents in the manufacture and sale of mRNA-1273, Moderna’s vaccine for COVID-19. The patents relate to nucleic acid-lipid particles and lipid vesicles, as well as compositions and methods for their use.
Hemavant: The open-label Phase 1/2 trial evaluating RVT-2001 for the treatment of transfusion-dependent anemia in lower-risk MDS patients is underway, with target enrollment of up to 64 patients with SF3B1 mutations.
Proteovant and VantAI: Proteovant and VantAI entered into several recently announced research collaboration agreements focused on the discovery and development of novel protein degraders and next-generation E3 ligase platforms. Collaborations with Janssen, Blueprint Medicines and Boehringer Ingelheim include aggregate contingent milestone payments of over $1 billion as well as product royalties.
Kinevant: In April 2022, Kinevant initiated a Phase 2 trial evaluating namilumab for the treatment of sarcoidosis.
Major Upcoming Milestones

Dermavant: Dermavant expects to provide updates on the commercial launch of VTAMA for psoriasis on a periodic basis and to report topline data from the Phase 3 clinical trials of VTAMA for the treatment of atopic dermatitis in the first half of calendar year 2023.
Immunovant: Immunovant plans to initiate two Phase 3 trials to evaluate batoclimab for the treatment of thyroid eye disease in the second half of calendar year 2022, with topline results expected in the first half of calendar year 2025. Immunovant also plans to initiate an additional Phase 3 trial in another indication in the second half of calendar year 2022 and announce two new indications by August 2022. Results from the additional cohorts of the batoclimab and atorvastatin drug-drug interaction study are expected to be available by the end of calendar year 2022.
Priovant: Priovant expects to announce topline results from the potentially registrational trial evaluating brepocitinib for the treatment of patients with SLE in the second half of calendar year 2023.
Hemavant: Hemavant expects to announce data from the ongoing open-label Phase 1/2 trial evaluating RVT-2001 for the treatment of transfusion-dependent anemia in lower-risk MDS patients in calendar year 2023.
Kinevant: Kinevant expects to report topline data from the ongoing Phase 2 clinical trial of namilumab for the treatment of sarcoidosis in the first half of calendar year 2024.
Matt Gline added: "Finally, I am excited to welcome Melissa Epperly to our Board of Directors. I look forward to working with her as we focus on advancing the discovery, development and commercialization of important medicines for patients. I would like to thank Pat Machado for his contributions to the Board and Roivant over the past six years."

Melissa Epperly has served as Chief Financial Officer at Zentalis Pharmaceuticals, Inc., a clinical-stage cancer company, since September 2019. She brings extensive experience as a senior financial executive in the life sciences industry. From June 2018 to August 2019, Ms. Epperly served as Chief Financial Officer at PsiOxus Therapeutics Ltd., a clinical-stage gene therapy cancer company, and prior to that, Chief Financial Officer and Head of Business Development at R-Pharm US, a commercial-stage oncology company, from October 2015 to June 2018. Previously, Ms. Epperly was a Director at Anchorage Capital Group, a credit-focused hedge fund; a Vice President at Goldman Sachs in equity research in New York and London; a management consultant with Bain & Company; and a healthcare investment banker at Morgan Stanley. Ms. Epperly currently serves on the boards of directors of Kinnate Biopharma Inc. and Nautilus Biotechnology. Ms. Epperly holds a BA in Biochemistry and Economics from the University of Virginia and an MBA from Harvard Business School.

Fourth Quarter and Fiscal Year Ended March 31, 2022 Financial Summary

Cash Position

As of March 31, 2022, we had cash and cash equivalents of approximately $2.1 billion.

Research and Development Expenses

Research and development (R&D) expenses were $135.1 million for the three months ended March 31, 2022 compared to $74.2 million for the three months ended March 31, 2021. The quarter-over-quarter increase was primarily due to increases in program-specific costs and personnel-related expenses, reflecting the progression of our programs and drug discovery. Non-GAAP R&D expenses were $117.8 million for the three months ended March 31, 2022 compared to $58.2 million for the three months ended March 31, 2021.

R&D expenses were $483.0 million for the year ended March 31, 2022 compared to $236.6 million for the year ended March 31, 2021. The year-over-year increase was primarily due to increases in program-specific costs and personnel-related expenses, reflecting the progression of our programs and drug discovery. Additionally, increased share-based compensation expense compared to the prior year period resulted from a one-time catch-up expense of $22.9 million and ongoing vesting for certain equity instruments following the achievement of the liquidity event vesting condition upon the closing of the business combination with MAAC in September 2021. We did not recognize share-based compensation expense related to these equity instruments during the year ended March 31, 2021 as the liquidity event requirement had not been met and was not deemed probable of being met. Non-GAAP R&D expenses adjusted for non-cash share-based compensation and depreciation and amortization expenses were $416.1 million for the year ended March 31, 2022 compared to $213.5 million for the year ended March 31, 2021.

Acquired In-Process Research and Development Expenses

Acquired In-Process Research and Development (IPR&D) expenses were $1.5 million for the three months ended March 31, 2022 compared to $400.1 million for the three months ended March 31, 2021. Acquired IPR&D expense for the three months ended March 31, 2021 was primarily driven by the acquisition of the business of Silicon Therapeutics.

Acquired IPR&D expenses were $139.9 million for the year ended March 31, 2022 compared to $596.1 million for the year ended March 31, 2021. Acquired IPR&D expense for the year ended March 31, 2022 was primarily driven by acquisitions completed by Priovant and Hemavant, as well as a one-time development milestone expense relating to Dermavant’s tapinarof program. Acquired IPR&D expense for the year ended March 31, 2021 was primarily driven by the acquisitions of the business of Silicon Therapeutics and Oncopia Therapeutics as well as a licensing and strategic collaboration agreement with Affimed N.V. Additionally, acquired IPR&D expense included amounts attributed to IPR&D relating to the consolidation of Genevant.

General and Administrative Expenses

General and administrative (G&A) expenses were $139.0 million for the three months ended March 31, 2022 compared to $81.1 million for the three months ended March 31, 2021. The quarter-over-quarter increase was primarily due to increases in share-based compensation expense as a result of the ongoing vesting of certain equity instruments for which the liquidity event vesting condition was met upon the closing of the business combination with MAAC in September 2021. We did not recognize share-based compensation expense related to these equity instruments during the three months ended March 31, 2021 as the liquidity event requirement had not been met and was not deemed probable of being met. Additionally, G&A expenses for Dermavant increased as we prepared for commercial launch. Non-GAAP G&A expenses were $77.3 million for the three months ended March 31, 2022 compared to $56.8 million for the three months ended March 31, 2021.

G&A expenses were $775.0 million for the year ended March 31, 2022 compared to $259.9 million for the year ended March 31, 2021. The year-over-year increase was primarily due to higher share-based compensation expense as compared to the prior year period, which resulted from a one-time catch-up expense of $350.0 million and ongoing vesting for certain equity instruments following the achievement of the liquidity event vesting condition upon the closing of the business combination with MAAC in September 2021. We did not recognize share-based compensation expense related to these equity instruments during the year ended March 31, 2021 as the liquidity event requirement had not been met and was not deemed probable of being met. Additionally, G&A expenses for Dermavant increased as we prepared for commercial launch. Non-GAAP G&A expenses adjusted for non-cash share-based compensation and depreciation and amortization expenses were $271.1 million for the year ended March 31, 2022 compared to $194.2 million for the year ended March 31, 2021.

Net Loss

Net loss was $291.3 million for the three months ended March 31, 2022 compared to $563.2 million for the three months ended March 31, 2021. On a per common share basis, net loss was $0.39 for the three months ended March 31, 2022 and $0.80 for the three months ended March 31, 2021. Non-GAAP net loss was $187.7 million for the three months ended March 31, 2022 compared to $514.2 million for the three months ended March 31, 2021.

Net loss for the year ended March 31, 2022 was $924.1 million compared to $900.2 million for year ended March 31, 2021. On a per common share basis, net loss was $1.26 for the year ended March 31, 2022 and $1.28 for the year ended March 31, 2021. Non-GAAP net loss was $784.2 million for the year ended March 31, 2022 compared to $992.5 million for the year ended March 31, 2021.

Notes to non-GAAP financial measures:

(1) Represents non-cash share-based compensation expense.

(2) Represents non-cash depreciation and amortization expense.

(3) Represents the unrealized loss (gain) on equity investments in unconsolidated entities that are accounted for at fair value with changes in value reported in earnings. This is a non-cash loss (gain) that has no direct correlation to the operation of Roivant’s business.

(4) Represents a one-time gain on sale of investment resulting from the merger of Datavant and CIOX Health in July 2021.

(5) Represents the change in fair value of debt and liability instruments, which is non-cash and primarily includes the unrealized loss (gain) relating to the measurement and recognition of fair value on a recurring basis of certain liabilities.

(6) Represents the one-time gain on termination of the options held by Sumitomo Pharma Co., Ltd. to purchase Roivant’s ownership interest in certain Vants (the "Sumitomo Options").

(7) Represents the one-time gain on deconsolidation of a subsidiary and the remeasurement of a previously held interest in an unconsolidated entity upon its consolidation.

(8) Represents the estimated tax effect of the adjustments.

Beginning in the fourth quarter of the fiscal year ended March 31, 2022, the Company no longer excludes from its non-GAAP financial measures acquired IPR&D expenses, which include consideration for the purchase of IPR&D through asset acquisitions and license agreements as well as payments made in connection with asset acquisitions and license agreements upon the achievement of development milestones. Previously, these items were excluded from the Company’s non-GAAP financial measures. In conjunction with this change, acquired IPR&D expenses are now reported as a separate line item in its consolidated statements of operations. Prior period amounts have been revised to conform to the current presentation.

For the three months ended March 31, 2022, and March 31, 2021, acquired IPR&D expense was $1.5 million and $400.1 million, respectively. For the year ended March 31, 2022, and March 31, 2021, acquired IPR&D expense was $139.9 million and $596.1 million, respectively.

Investor Conference Call Information

Roivant will host a live conference call and webcast at 8:00 a.m. ET on Tuesday, June 28, 2022 to report its financial results for the fiscal year ended March 31, 2022 and provide a corporate update.

To access the live conference call, please dial +1-844-224-1923 (domestic) or +1-214-989-7105 (international) and use conference ID 1036178. A webcast of the call will also be available under "Events & Presentations" in the Investors section of the Roivant website at https://investor.roivant.com/news-events/events. The archived webcast will be available on Roivant’s website after the conference call.

IMPORTANT SAFETY INFORMATION

Indication: VTAMA (tapinarof) Cream, 1% is an aryl hydrocarbon receptor agonist indicated for the topical treatment of plaque psoriasis in adults. Adverse Events: The most common adverse reactions (incidence ≥ 1%) in subjects treated with VTAMA Cream were folliculitis (red raised bumps around the hair pores), nasopharyngitis (pain or swelling in the nose and throat), contact dermatitis (skin rash or irritation, including itching and redness, peeling, burning, or stinging), headache, pruritus (itching), and influenza (flu).

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit View Source or call 1-800-FDA-1088.