Roivant Sciences Ltd

F:87S

Earnings Call Transcript 2024-Q4

[Operator]

Good day, and thank you for standing by. Welcome to the Roivant Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Abby Beyer. Please go ahead.

[Unknown Executive]

Good morning, and thanks for joining today's call to review Roivant's financial results for the fourth quarter and fiscal year ended March 31, 2024, along with a business update. I'm Abby Beyer 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 investors.roivant.com. We'll also be providing the 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 along with our Form 10-K for the fiscal year ended March 31, 2024, which we will file after market closed today 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, executive]

Thank you, Abby. Good morning, everybody, and thank you for joining our fiscal year March 31 call. I'm going to start just briefly on Slide 4 with a run for what we're going to talk about, and then we'll go through the presentation. So we'll talk a little bit today about where we are in the year. It's been an exciting fiscal year for us already, even though we're only a couple of months in as well as what our plans are for the balance.

We're going to give some updates at Immunovant who also filed their earnings yesterday who aren't doing a conference call. We'll review the brepocitinib data in noninfectious uveitis that we generated during the quarter. We'll talk a little bit about the ongoing VTAMA launch. And actually, we'll spend a minute or 2 on renegotiation of some of the VTAMA's fixed obligations and debt that will take a significant amount of burn out of the cost of that program. We'll spend some time on some upcoming catalysts and on a financial update, and then we'll go to Q&A. Thank you, everybody.

So I'll start on Slide 5 and just to say, 2024 was always planned to be a year of expansion and growth and you're planning for the future from us. And that includes some updates that we'll talk about today and exciting updates coming through the balance of this fiscal year out of view to that, where we have a bunch of important clinical data coming that we're going to continue to advance the rest of our pipeline, including, for example, the data we generated already in brepocitinib as well as data coming later this year in sarcoidosis and others. We continue to make progress at Dermavant with VTAMA's SMDA now in for atopic dermatitis with a PDUFA date at the end of this year, and we continued plans to grow in psoriasis where we're already on the market. And then we're very active in our late-stage business development activities and are looking forward to continuing to provide updates there, including the program that we've in-licensed that haven't yet to try, which we'll talk more about later this year. And finally, one thing that we intend to do this year that I think we've made major progress on is to communicate about -- just to finalize and communicate about our plans to return some capital to shareholders. And as you'll know, within the last couple of months, we announced a buyback program of up to [ $1.5 ]and repurchased stock from Sumitomo, what we think was an attractive price.

So on Slide 6, before we get into the specific programs, I'll just say I am incredibly excited about the pipeline that we have today and the way that it is shaping up. Obviously, if VTAMA's launch atopic dermatitis will be an important event for us. The TFCM franchise in Immunovant, I have never felt better about that franchise than I do right now. The clinical data that we continue to generate including the data that we're going to share in grades later this year underscores what we have. As does the uniqueness of our data relative to what we've seen in the competitive landscape in recent days, weeks and months. We just feel like we're in a really, really strong position there. And on top of that, we've had -- and I'll talk more about this in a minute, a very important type of meeting with FDA that sets forth the clinical development plan for MVT-1402 that really establishes it as our lead program at Immunovant, then we've got brepocitinib, our dual inhibitor TYK2 and JAK1, which now has pretty obviously best ever demonstrated data, at least in a Phase II study in noninfectious uveitis. An ongoing pivotal program in dermatomyositis, just a really great set of data on which to build an exciting franchise and open all immune. And then we have some other readouts coming, including enilumab in sarcoidosis later this year, and some data and expect our future plans in this undisclosed program that I mentioned.

So I'm going to go first into updates on Immunovant on Slide 8. So there's a lot of progress in the Immunovant portfolio and Immunovant put out the earnings release yesterday with some of that highlighted. I just want to hit what I think are really the key highlights here on Slide 8. First of all, and perhaps most exciting to me. We have held a successful Type B meeting with FDA on 1402, which really covered a lot of the important topics around future development of 1402 in the clinic. And with that, we feel fully on track to initiate 4 to 5 potentially registrational programs for that antibody over this fiscal year. With that behind us, we're now comfortable saying 1402 is really our lead program at Immunovant. It is, we think, a potentially best-in-class anti-FcRn antibody, a target that we think is going to matter to a ton of patients and where we think we can deliver a lot of value.

Batoclimab development efforts are being optimized to a point to inform 1402 development plan, so to serve as better and more robust Phase II studies in many cases to inform what we can do with pivotal program in 1402. But notably, because the way those studies are designed, we retain full optionality for registration with batoclimab if the data is supportive. And then finally, I think an underappreciated fact about 1402 is that relatively recently, we've been issued a patent that gives us composition of matter, method of use of message on manufacturing IP out to June of 2043 and that's notably before any user pattern extension. So designating that our lead program, we have a really long time here with a very exciting antibody with a lot of really promising clinical development underway in a target that is obviously going to matter broadly in immunology.

So overall, updates that I think are been positive in establishing what Immunovant looks like over the coming months and years. There are some program-specific updates in Immunovant on Slide 9. One is perhaps most importantly from my perspective, we're now announcing that we're planning to disclose detailed results from batoclimab study in Graves disease. This fall, together with an overview or upcoming development plan. As you know, we've seen some of that data and are excited about it, but have declined to share detail thus far due to competitive reasons, and we expect to be ready to share that data this fall, and we think it will set up for a lot of clarity on what we believe Graves can be. Top line data for [indiscernible] and MG is expected this fiscal year. And notably, Immunovant is expecting also to begin registrational development in MG with 1402 in the same time frame.

So again, we retain full registrational flexibility with bato we think MG is an important enough indication and 1402 is an important enough program that it deserves to be developed in MG. [indiscernible] has decided to extend the run time effectively of the CIDP study in bato by about 2 quarters prior to unblinding the period 1 data. This really is to optimize the potentially pivotal plans for 1402 in CIDP. And that is to treat the sort of period 1 more as a robust Phase II for 1402 and to get as much information as we can about dose response. That's in particular, informed by trying to make sure that we continue to enroll the most severe patients into that study and really understand the profile of that patient population. And finally, we are on track to produce the potential registrational data intent in the first half of next year, and that will be a first-in-class opportunity and another indication where we think it's relatively clear that deeper IgG suppression will produce better efficacy.

That point, I want to underscore again on Slide 10. This is not a new slide, but I think it's a really important framing point to keep in mind as we generate data to come this year. And that is -- it has been very consistently shown across different anti-FcRn antibodies across different indications that deeper IgG suppression matters, it's been true at a patient level in MG, but across our competitor programs at argenx and J&J. It's been true to a significant degree in our own thyroid eye disease data. We stated, and we'll show better this fall that it is true with the data that we have generated in Graves' disease. It's been true in the data that UCB has generated in ITP, and it's been true that patients with greater IgG reduction have correlated with greater auto antibody reduction and greater clinical response in J&J's RA data. So we say over and over again that we think 1402 is a best-in-class drug. But I want to remind everybody, the data we are generating this year, in particular, in MG this fiscal year, is among the very important possible proof points to demonstrate that deeper IgG suppression, could yield meaningfully better clinical efficacy. And we think there's a lot of supportive evidence to suggest that data set matters.

And then the last point I want to underscore on Slide 11 as we get sort of closer to the fall is we're excited about Graves disease. It's an indication, obviously, that requires a little bit more imagination than MG because there is not yet any approved product. But that is also other than sort of any thyroid's drugs. But that's also the opportunity for us is that it's real white space where we can deliver a significant clinical benefit to patients with high unmet need. What we've said so far is that results from the initial cohort of patients in that ongoing 24-week trial meaningfully exceeded our target response rates and that we saw numerically higher responses, both for dose tapering and discontinuation in patients at 680 as compared with patients with 340 further supporting our more better hypothesis. And so -- and also that we continue to demonstrate best-in-class IgG reduction with a mean of 81% meaningfully greater than what we saw at the 40-milligram dose. And as good or better as anything we've seen from, frankly, any competitor inside or outside of our class. And then finally, as I said, we expect to produce detailed data along with the development plans this fall to underscore where we are in Graves to give people a picture for what that's going to look like in the future as an important indication for the program.

So I'm sure there will be questions on Immunovant we'll come back to. I'm going to move to other elements in the pipeline now. I'm going to take a few minutes to recapitulate or go over some of the data that the Priovant team presented on our call earlier this spring on brepocitinib in noninfectious uveitis because it's an opportunity we think is really exciting. It's a larger market than we think most people appreciate. And frankly, we're really proud of the data that we've generated to date.

So uveitis is not a widely discussed indication, obviously, in our industry. There's not a lot of approved therapies. It is, however, the fourth leading cause of blindness among the working age population it's a significant severe disease with difficult morbidities. There are -- and this is an updated claims analysis that we've continued to define about 40,000 patients both with non-interior NIU on biologics. Which includes adalimumab, which is the only approved therapy as well as a number of off-label therapies. And we continue to see rapid growth in those scripts. So we're excited about the already existing biologics population. That's against a backdrop that we'll talk about in a second, that those therapies do not work particularly well. And so far, what we've seen in Phase II, our data looks meaningfully better. And notably, there are no competitors currently in Phase III in uveitis with only a limited number of competitors in Phase II. So we think at any kind of orphan price point with our kind of differentiated data this is a multibillion-dollar peak sales potential opportunity even in a post biologic refractory population with additional opportunities in a broader non-interior population.

This is on Slide 14. I think interestingly, we feel like NIU is a little bit where something like HS or even Ted was a few years ago, where there's an understanding of the population. But again, as I said earlier, this is -- the imagination is required, and so people don't fully see the first for the treatment. But if you look at the overall prevalence of the disease, the prevalence in our relevant subpopulation. If you think about whether this is a sort of TNF approved market and you think about the level of morbidity of the disease and the size of the competitive opportunity or the number of competitors against us. This is an indication that [indiscernible] to get the same level of attention as other severe diseases, including something like HS, but also including something like Ted where the need is high or it's another ocular disease. And as a reminder, doctors just have no tolerance for things like ocular inflammation and patients really want good treatment options.

So the study that we completed that we've now put out on Slide 15, was a Phase II randomized double mass dose-ranging study, that studied both 15 milligrams and 45 milligrams. And the endpoint is a thing called treatment failure rate, which is what it sounds like. It's patients who have effectively a worsening or non improvement of disease while on therapy. One background point of note on Slide 16 that we talked about on our prior call. The way these studies all work because there is so little tolerance for ocular inflammation, if these patients show up with disease and are put on a high dose burst of prednisone, which has then tapered quickly. And we used a quite aggressive steroid taper. Meaningfully more aggressive than the HUMIRA studies in order to give our drug the hardest test in Phase II so that we would understand what we had and the goal here is to be able to preserve or improve benefit even after the steroid taper, which is sort of the name of the game here and the basis on which HUMIRA was effectively approved.

So on Slide 17, you can see the data. I know we've put this out before, but it's a slide that I really enjoy looking at. This is a really, really good data by our own measure on the left side here, which includes treatment discontinuations on the treatment failure calculation. HUMIRA had about a 62% treatment failure rate. At our high dose, we had a 29% treatment failure rate. So effectively twice as low and a really exciting result.

On the right-hand side, you can see the data as HUMIRA presents it in their label. They are they exclusive treatment discontinuation rates and treatment failures. So they have about a 50% treatment failure rate there, we had a sub-20% treatment failure rate and a nice dose response both on this and on the other sort of subcomponent endpoints that gives us some confidence that this data should be translatable to a placebo-controlled study.

One last point on the data on Slide 18. I think that there's a question like how to think about this. Maybe put another way, in HUMIRA, after about 6 months, half of HUMIRA page, which after about 11 months, half of our patients have developed macular edema. And after about 6 months, half of placebo patients that develop macular edema. And these are mutations who didn't have a macular edema baseline. We had 10 such patients in our 45-milligram arm and none of them had macular edema by week 24. And then of patients who came in with macular edema, 3 of those patients had resolution of the macular edema by week 24, whereas in HUMIRA, it was about 22% and resolution.

So again, just another way of thinking about this data that in our opinion underscores the uniqueness of our data set and the opportunity we have. Yes. I think on Slide 19, just to reiterate, this is a large commercial opportunity. This supports a differentiated product profile with a real early treatment option. The physicians look to intervene aggressively to prevent blindness. And if you call these docs, I think the thing you'll find over and over again is the tolerance for inflammation to be in is basically 0. And in our opinion, there's really no agents, certainly no nonsteroidal agent. That has shown an ability to reduce or mitigate ocular inflammation as well as brepocitinib has so far. So we are incredibly excited about this opportunity. we'll continue to talk about it, and we're paring for a pivotal program to begin later this year, and we'll share more about that sign and timeline as it comes together.

So now I'm going to transition to VTAMA. On Slide 21, which kept the results for the fiscal year to about $75 million in net product revenue, a gross net yield of about 24% for the quarter. We expect those numbers to continue to improve and grow over time. We'll talk more about that guidance as time goes on. And we're sort of expecting steady progress in psoriasis. Most notably, as we get closer to the end of this year, we feel like we have a strong foundation for a quite rapid launch in atopic dermatitis. First of all, we have a proven ability on slide 22 to drive switches from standard of care just based on the existing VTAMA patterns in psoriasis and 75% of the early adopter health care providers in AD, the ones who writes novel mechanisms early have already been engaged with in our psoriasis launch. So we know these docs. And this is against the backdrop on the right-hand side, of a topical market in AD that is frankly growing a lot faster than the topical market in psoriasis with many more scripts to begin with.

So we think the AD market dynamics are meaningfully different than the psoriasis market dynamics. And we think our data set, which we've talked about before, we won't spend a lot of time on today as well as the sort of commercial infrastructure that we've built set us up for an exciting possible launch in atopic dermatitis. Again, as a reminder, our PDUFA date is in the fourth quarter of this year. And then one important update that I suspect is not high on people's minds is Dermavant had some debt and royalty obligations that came from the early acquisition of the program actually represented a relatively meaningful portion of our burn on Dermavant during this prelaunch and sort of early launch period. We have successfully renegotiated those obligations with the counterparties that includes NovaQuest and a number of other lenders. And this renegotiation has reduced our potential payments by up by about $300 million, of which about $225 million, we expect to realize over the next 3 fiscal years saw a pretty meaningful reduction in the expected burn at Dermavant that overall gets to 1 of the theme that I'll hit in a minute, which is that we are focused on maximizing the longevity of our capital and our ability to deploy it either on buying our own stock or on investing in valuable programs to the maximum extent possible. And so we're really focused on in this period where we are cash rich being as dogmatically efficient around capital as we possibly can be and this renegotiation is certainly a part of that commitment.

So we have some pretty important catalysts coming on Slide 25. And we're through at this point, the exciting data from repricitinib. We're through the sNDA filing for VTAMA. We have the upcoming Graves data from [ INBormetoclanab ] and an overview of our 1402 development plans this fall. We have top line data from our Phase II trial in [indiscernible] at namilunab in the fourth quarter. And then by the end of this fiscal year, we have upcoming top line data from mistingravis as well as potentially that data from period 1 of the Phase IIb study in CIDP and Immunovant expects to initiate 4 to 5 potentially registrational studies for 1402 on the back of the recent positive FDA interactions.

We also, this quarter on 26, as a reminder, announced this $1.5 billion share repurchase program, including our repurchase of the entire VTAMA stake at a price of $9.10 a share. We continue to be excited about that commitment, and we have that program outstanding. We will use it to buy back stock at attractive prices. I expect the visit in the coming months to be thoughtful around continuing to take advantage of that opportunity, and it's a way that we expect to be efficient with our capital. And frankly, we think our shares are, I'll just say, attractively priced at the moment.

On Slide 27, not expecting to spend a lot of time on this, I have not spent a lot of time on it historically, but we continue to have some really exciting work ongoing in early-stage drug discovery. In this case, at where we have a set of tools for probably the best out there capability for modeling and predicting protein-protein interactions. We really do think we may be the best in the world of this thing. And notably, I think this is clear to the most. We have mostly been funding our discovery efforts through external partnership and external investment, and that continues to be true with Vant AI, where we've recently recently entered into partnerships with [ Bristol-Myers Squibb ] and Blueprint that are both important for developing our capabilities and are providing a significant portion of the capital required to continue to progress Vant AI.

Finally, 2 other business updates on Page 28. One is something that we did a lot of questions about over time, which is our patent ligation with Moderna. In April of this year, as many of you know, the court agreed with our proposed constructions for most of the distributed terms against Moderna in our Markman ruling, which sets us up with a clear set of favorable boundaries in the playing field as we get through the rest of the free trial disputes through the rest of the year, and we are in the midst of back to expert discovery. We're expecting a filing of summary judgment motions late this year and a trial date less than a year from now. So looking forward to that. And then finally, [ Cinven ] has fully enrolled at this point that we've announced publicly our Phase II potentially registrational study for [indiscernible] and cercoidosis. We're expecting that to read out in the fourth quarter, that is a high SKU opportunity that I think most people have not paid a lot of attention to historically. We'll talk more about it as it gets a little closer and especially as we generate that data. But needless to say, if that is successful, it would be a potentially first novel therapy for pulmonary sarcoidosis, which is another 1 of these large untapped orphan disease markets.

So finally, I'll wrap up here with a financial update. I won't go through all of the numbers on Slide 30. I'll point out a couple of things here. One is that our net cash utilization for the quarter was $108 million, which is a function of a number of things, including streamlined burn and the fact that we generate meaningful interest on our cash balance. So we're excited about that. And it's, again, a part of our significant commitment here to being efficient with our capital as we focus on deploying on the most valuable opportunities. We ended the quarter again, this was prior to the Sumitomo repurchase with $6.6 billion in cash and I'll point out that the carrying value of our debt in this 10-K does not yet reflect the renegotiation with [indiscernible]. So you will see that renegotiation reflected on our 10-Q for the 6/30 financials.

So with that, I'll leave off on Slide 32 and just say in addition to everything we've talked about for catalyst perspective, there's just a bunch of interesting data and a bunch of opportunities coming. And all this is in addition to pipeline growth for our pipeline that we excited to talk about on an ongoing basis and in some cases, as soon as it happens. So stay tuned. We're really excited about what we see in that opportunity set. And I've never felt better about that either in terms of the space of opportunities that we may be able to access.

With that, I will wrap up the prepared remarks portion of this call, and I will hand it back over to the operator for Q&A. Thank you, everybody, for joining this morning, and I look forward to your questions.

[Operator]

[Operator Instructions] Our first question comes from the line of David Risinger with Leerink Partners.

[David Risinger, analyst]

Yes. Thanks very much, and thank you for all of the updates. So I just wanted to ask a little bit more about [indiscernible] readout. So could you please add some more color on what was surprising in the CIDP trial? And I guess, whether your level of confidence for that asset and CIDP is unchanged. And then also if you could discuss the slight delay in the MG readout for etokimab, that would be helpful as well. And then separately, Matt, you mentioned the the very unique modeling capabilities you have for protein-protein interactions. Is that solely for facilitating larger drug companies drug development via partnerships or would your organization ever design its own drugs with those capabilities and patent drugs to be developed by Roivant.

[Matthew Gline, executive]

Yes. Thanks, Dave. Those are great questions, and I appreciate them. I'll start with the Immunovant questions. First of all, I want to be clear. We haven't seen any of the data for either [indiscernible] and MG or [indiscernible] and CIDP and certainly, the biology continues to be supportive. The competitive data continues to be supportive. So I would say, there is absolutely no change in our level of conviction around what [indiscernible] or NTF antibodies can do and I think the main thing behind these changes, especially on the CIDP side, is actually increased conviction in what we think 1402 is going to be able to do, including increased conviction based on the regulatory interactions that we're going to be able to move really quickly with that development plan. And so a desire to get the most possible information out of that study. in order to inform that plan as it falls into place. And notably, this won't create any delays with the 1402 CIDP study because that would have begun sort of by the end of this fiscal year effectively anyway. Look, I think -- the short answer to the CIDP question you're asking is, I think we believe we are successfully enrolling quite severe patients. These studies are complex, and it's hard to know exactly, and we don't have exact data, but we continue to see some discontinuations. This has been observed in the organic program as well. This is an early learning of theirs. Frequently, in patients who either has not yet been dosed to etokimab or we've only had minimal early dosing of [indiscernible]. So nothing to do with etokimab, but these are exactly the patients who are severe and active and you want in the study. And so we want to make sure we have enough of these patients and enough data from these patients. Frankly, specifically to understand the dose response that we'll generate in period 1, so as to inform a proper design for 1402 where we can get a maximum efficacy benefit from that program. So that's what I'd say on etokimab overall. I think the sort of small delay, to the extent there is 1 in MG is really just a function of why getting a little bit closer to full enrollment on that study and understand exactly when the patients are coming in. I don't think there's anything particularly material in that timing shift. And we haven't finished enrollment yet. So in theory is possible, that can still be on time. We just got to see what that looks like on the Vant AI point, yes, look, it's a great question. It's not something we talk a lot about these days. Certainly, the reason that we continue to invest time and energy in Vant AI and the other drug discovery events that we've built, is because we see pipeline optionality for ourselves and value and continue to invest in these technologies. And frankly, we think the sort of predictive generative modeling approaching for interactions, something we've been working on for years. It's starting to get more billing now because it's something that [indiscernible] has been able to do to some degree. And we think it's going to be incredibly important, obviously, for things like where we've historically spent time and effort header by functional in particular molecular Blues for protein degradation. But also for lots of other systems that involve protein merchant interaction. So I think the short answer to your question is while it's currently largely externally funded through partnership and other things. Absolutely, we constantly reevaluate opportunities to develop and advance programs for our own pipeline using those technologies.

[Operator]

Our next question comes from the line of Louise Chen with Cantor.

[Louise Chen, analyst]

Congratulations on the progress this quarter. So I wanted to ask you how you think about the peak sales for atopic dermatitis and the pace of the uptake of that potential approval later this year? And then do you have any updates on your capital allocation strategy? I know in the past, you kind of broke out what you thought about share repurchase, M&A, internal investment. Any thoughts there?

[Matthew Gline, executive]

Yes. Thanks, Louise. Those are both great questions. Thank you for listening this morning. On AD, I'd say, look, I think we are excited about the AD opportunity. We continue to reiterate, we feel like it has true blockbuster potential AD is a big market. It is qualitatively different in size and dynamics from psoriasis. And we think VTAMA has phenomenal data that stacks up even better competitively than our data in psoriasis. So Unquestionably, we think AD has the potential to be a blockbuster market. We think it has the potential to ramp faster than psoriasis has ramped. That's true for a number of reasons. It's true because the market dynamics of the market is wrong, because of more scripts. It's true because many of the docs now have familiarity with become up from the psoriasis side. It's true because there are other novel topicals that have conditioned docs to write things other than steroids. And so for a variety of reasons, we are really excited about the AD market dynamics and think we have a potential for a reasonably rapid blockbuster potential drug. So enough set on AD. On the capital allocation strategy point, I think we've obviously made significant progress here with our share repurchase authorization, and we expect to continue to use that authorization to be opportunistic and focused in returning capital. I'd say like, overall, the broad buckets that we had laid out before remain unchanged. So about $2 billion of the original total for our existing pipeline. A lot of that focused on Immunovant as of now. About $2 billion, these are really round rough numbers focused on mostly clinical development related to newly in-licensed programs, and we see some great things on a racket and then the remainder are subject sort of narrowing those error bars down available for return or share repurchase, et cetera, in the coming months and years.

Thanks, Luis, those are both very good questions.

[Operator]

Our next question comes from the line of Allison Bratzel with Piper Sandler.

[Allison Bratzel, analyst]

So just first following up on the Immunovant strategic update, where you're prioritizing 1402 over batoclimab. Can you just talk more -- help us understand what went into that calculus a change in competitive landscape or the FDA meeting, something else? And just why you're making that decision now? And just help us understand if there are any scenarios in which batoclimab would be filed for approval in any indications, what would that look like? And then just separately on brepocitinib, kind of a bigger picture question. I think we hear your excitement on the potential market size in NIU plus B&M, other indications. Just what gives you confidence that the current ownership structure of Privance is optimal, any scenarios where you would be open to revisiting that with Pfizer? Or just help us understand your thinking there.

[Matthew Gline, executive]

Yes. Thanks, Ali. Those are both great questions, well, and I appreciate it. On Immunovant, I'll reiterate, nothing about any of these updates reflect any loss of confidence or change in conviction around batoclimab, which is a great drug. We don't have the data on CIDP,so I can't say what it's going to look like. But what we think is a compelling opportunity. And to be clear, we have absolute flexibility to launch it in any of these indications if the data is supportive. And that, as with every decision we make will be a data-driven decision at the time.

I think the update around 1402, which I think some people think is maybe a long time coming, came for us, I'd say, for a number of different reasons. Some of that related to what we've seen in the Graves' data and our increased enthusiasm for what -- it looks like we've always been enthusiastic, but obviously, in terms you see it in patients, you don't know what you've got. And then, frankly, the FDA interaction of the type meeting was important because it allowed us to discuss many of the issues around the pace of 1402 development with the agency and get comfortable that we're going to be able to move quickly there. And I think that's a really important step. And I think it sort of affects how we think about the franchise with having a clear understanding around the speed in which we're going to be able to develop working to -- so I think those are sort of the main factors. That said, again, I think we're going to make a data-driven decision on batoclimab in these various indications. And I think the data, for example, in MG on dose response is going to be both informative for the potential profile of that as an MG drug and also informative for what 1402 looks like. And again, we have, at this point, increasing and high conviction the 1402 has the potential to be a true best-in-class antibody in a class that is -- in an area of biology that is obviously growing with every passing week and month.

I'm sorry. And then on brepocitinib. Look, I think we are really excited about what we're doing with brepocitinib. Pfizer is a good partner. We talk to them all the time about a lot of things. I think if we continue to develop brepocitinib a 75-25 partnership with Pfizer, that will be great. But I would say everything is certainly on the table from our perspective, and we would be certainly happy to own more brepocitinib as we'd be happy to own more of a number of our programs, just given our level of prediction in the data. Thank you.

[Operator]

Our next question comes from the line of Karan Johnson with Goldman Sachs.

[Unknown Analyst]

Maybe a question on the path to profitability comment, I think, for the press release. I guess what are the assumptions that factor into that comment? And is this reliant on the VTAMA sales, sales other products, which ones? And then how do you think about that comment when you're contemplating potential deals, would you sort of forgo path to profitability in order to acquire something interesting? Or is that a priority over over BD.

[Matthew Gline, executive]

Yes. Thanks, Sharen. That's a great question. Look, I guess I'd say a few things. One is, how is the predicting profitability for a business like ours is a challenging exercise. That said, a little bit of everything goes into the forecast in the sense that there's sort of probability weighted estimates for a variety of our programs and some of them like VTAMA have high probability associated with clinical success and some variability in the commercial forecast. Although, again, we have a lot of enthusiasm for VTAMA and AD. Some of them have lower probabilities of success, but all of them are sort of in there to some degree. I guess the second thing I'd say is I would feel pretty embarrassed if I couldn't sit here today and say that with $5.5 billion, we could be profitable or that with $5.5 billion, we can do BD and also be profitable.

So I think I believe both of those things, I believe them comfortably. That having been said, we are going to make ruthless economic decisions about everything in our portfolio and around new opportunities. And I think, I guess it is imaginable that a program could come along that would change that picture. I don't foresee such a thing. But if it did, you'd have to believe it would be a really good program and worth investing that kind of capital in. So I don't think it's like sacrosanct, but I also feel like we have enough capital on our balance sheet right now to ensure we can do everything we need to do.

[Unknown Analyst]

Yes. On the deal front, I guess, we had expected maybe some deals earlier this year. Maybe you could talk a little bit about what you're seeing in terms of conversations and the difference between kind of sourcing ideas versus executing on a final deal?

[Matthew Gline, executive]

I mean I think the answer is -- and we said this before, and my view on it is either unchanged or slightly improved. This is among the best or the best deal environment we have ever been in. That's true because of the shifts and changes going on at big pharma, it's true because of the King green explosion of new biology and B cell immunology, it's true in a lot of different ways. And we see opportunities we like in immunology, in cardiometabolic disease, in pulmonology and rare and orphan disease in lots of different areas. We are in all stages of discussions from economic negotiations all the way down to idea generation. And I expect there will be multiple fruitful elements coming out of those discussions in the coming, call it, months. So look, overall, we feel tremendously tremendously lucky to be in the position that we're in at this moment in time, and we're working really, really hard to capitalize on it expediently while making sure that we bring in the right programs, not just to bring something in, but for something that we're excited to own forever.

[Operator]

Our next question comes from the line of Brian Chan with JPMorgan.

[Unknown Analyst]

Just first, on the back of your FDA meeting, can you give us a sense of how the rollout of your plan of to 4 to 5 potentially pivotal program will look like over the next 10 years? And what was the key take from the Type B meeting with the FDA was the Type B meeting for all 4 to 5 programs? And I have a quick follow-up.

[Matthew Gline, executive]

Yes, thanks. Maybe I'll hand it over to Frank. I'll just say, we haven't commented which division of FDA we met with on the Type B meeting.

Frank, do you want to take this one?

[Frank Torti, executive]

Brian, I just want to make sure. I think what you said was kind of over the rollout over the next 10 years, did you mean over the next 10 years? Or sort .

[Unknown Analyst]

Sorry, the next 10 months, The next 10 months because you'll be teeing up the prototype programs by March, sorry.

[Frank Torti, executive]

Sure. Well, I think you can imagine that they will roll out toward the later part of the year. And we've been progressing them reasonably in parallel. So there'll be some operational staggering of those things as they roll out, but we've focused on indications where we think we need to have a foundation in the space and also where we can do some novel things. And we look forward to talking about a little -- it's a little more specificity exactly what those are later in the year.

[Unknown Analyst]

Great. And then a quick follow-up is on [indiscernible] update on the TRSA data yesterday. Just curious what's your view and your standing on their data.

[Matthew Gline, executive]

Thanks, Brian. Look, I think this is important biology. There's patients that are in need. Our general hope is to root for our competitors successes because arriving [indiscernible] boats. It's obviously that investors were disappointed with [indiscernible] update yesterday. I don't think that's a controversial comment. Look, I think the main thing, competitor data generally over the past few months has underscored for me is as FCRM has target, has gracefully cleared a fairly high bar and I think it cleared it so gracefully that lots of people and other mechanisms, I think, assumed the bar was lower. We didn't totally know where it was because the bar doesn't reveal itself when you clear it. But I think what we're now seeing is it's challenging this biology is challenging, they're predicting the translation of this biology from animal models, the humans is challenging. And there's just a lot of work to do. So look, I think that the main thing that competitor data updates have shown us in the past few months is that a target [indiscernible] ticket here. And FCR is really the only mechanism that is clinically validated in many patients, across many indications to be able to deliver in this category of biology. And I am sure there will be others to be. This is not like FCR is not the only mechanism that will succeed. I'm also sure that it will take time and effort as it did with FcRn for that to materialize. So maybe that's what I can say on competitor data.

[Operator]

Our next question comes from the line of Yaron Werber with TD Cowen.

[Yaron Werber, analyst]

Great -- so maybe I have a couple of questions. The first 1 just on Graves' disease. Can you give us a sense how much data are we going to see in the fall? Is it going to be the full data? Is it going to be in a medical presentation? And then secondly, from that study, do you have enough -- will you have enough sense in dose response to really be able to design a pivotal Phase III. And maybe just on [indiscernible], I know this is a drug you really have not talked much about your kind of positioning as an upside potential, so to speak. Without a lot of downside to the stock. But how strong do you feel about this mechanism, sort of anti-GM-CSF for sarcoidosis.

[Matthew Gline, executive]

Yes. Thanks, On the first one, and Frank, I'll ask if you have any back. I think the short answer is we're going to share a fairly comprehensive data set this fall that will reveal, I'd say, like our performance and something about our dose response and the performance of [indiscernible] different measures for these patients. And this design, which I think you know, was patients were started on a dose and then move to a lower dose after a certain number of weeks of therapy was specifically designed to allow us to see a dose response, test the lower better hypothesis and just answer questions about the pathophysiology of Graves' patients. I believe this study design is sufficient for us to move and design a pivotal from here, a pivotal program from here.

Frank, anything you would add to that?

[Frank Torti, executive]

No, I think it's well said. .

[Matthew Gline, executive]

Great. And then on namilumab, Look, this is different than studying FcRn even in a novel indication. And the FcRn is validated biology. We understand exactly how it works. And these diseases are relatively straightforward in many cases, cause it linked to auto antibodies. Obviously, sarcoid is a complicated multifactorial disease. That said, macrophages plainly play a role in the formation of [indiscernible] in [indiscernible] and GM-CSF has balanced relevance to that. Probably the success is still comparatively low, just given the biology and the nature of the disease. But if it does work, it's a huge commercial opportunity. And so I think we feel pretty good about it.

[Operator]

Our next question comes from the line of Yatin Suneja with Guggenheim.

[Yatin Suneja, analyst]

Question on the immunoinfont. So there are indications like myasthenia gravis and Ted, where you have a pivotal program ongoing with 1401. Could you talk about what are the key metrics for you to decide if the data are positive that you will file a BLA or you will advance 1402? Or could you do both of them help us understand? Because I think the 1 question that we generally get from investors is that, look, you have 2 assets. On 1 hand, you're saying you're going to really advance 1402 across all indications, but you do have to deal with these 2 pivotal studies ongoing, and then there are certain investors that care about being on the market for us. So help us understand how those decisions will be made? Is there a potential that you will file the BLA for GMG and if the data are positive, and then how should we think about 1402 for those at least 2 indications?

[Matthew Gline, executive]

Yes. Thank you. Thanks for the questions. They're good questions, obviously relevant. Look, I think the short answer is -- we are going to make ruthless data-driven decisions around whether or not to file Beto in any of these indications. These studies continue to be designed as potentially registrational studies. There is no change in any of that. And if the data are supportive of an attractive commercial profile, we will launch the program. I don't think that fact would stop us from parallel prosecuting registrational develop with 1402 given the profile of 1402. So I think to answer your question, both is definitely possible. And I think what we're trying to do here is in indications where we can catch up, we'd obviously rather be out with 1402 with its profile, given where we are. And so we're also just trying to set ourselves up for the maximum likelihood of being able to get to, frankly, get to first store in the front pack everywhere that we can. And in places like MG and CIDP, where Argenx is plainly ahead of us. We're going to evaluate our positioning based on the data we see and make what we think will be a smart decision at the time.

[Operator]

Our next question comes from the line of Douglas Tsao with H.C. Wainwright.

[Douglas Tsao, analyst]

Maybe, Matt, just on repositinib. Just curious, when you think about the differentiation we saw in your study and you look ahead to Phase III. I'm just curious, do you have a thought in terms of where you want to lean into in terms of that differentiation. Obviously, you used a shorter steroid tapering period in your study. I'm just curious, would you want to replicate that? Or would you perhaps just sort of go with the same steroid tapering that they use in the HUMIRA studies in which would potentially or should, in theory, give you even better treatment failure rates?

[Matthew Gline, executive]

Yes. Thanks, Doug. It's a great question. Obviously happy to talk about about because we're really excited about it. Look, I think given how well the study works, and given that a steeper stepper ought to continue to provide good separation or perhaps better separation from placebo when we add 1 into a study. I think given how well it were here, I suspect we will be in time to continue to go differentiation beyond that, not selling down perspective, but oral is obviously a big advantage for brepocitinib and NIU, although it pales in comparison to the potential treatment efficacy benefit and look, I think what we're looking for at this point is parsimony. We're looking for a fast efficient study that will -- in an ideal world, replicate if we can just replicate what we saw in Phase II or even come poster replicating what we saw in Phase lI, I think basically everything else in is going to sort of sell out.

[Operator]

Our next question comes from the line of Andy Chan with Wolfe Research.

[Unknown Analyst]

So Matt, the question is on the optionality with batoclimab. So you have 4 indications on the table. And let's say, hypothetically, we know the data from MG. We know the data from CIDP. The data is that batoclimab is equal or slightly better than [indiscernible] on efficacy. I'm just curious if you can rank order the 4 indications, which ones are you more excited about? Which ones are you less excited about, because not all of these are the same, right? Because like some indications are more competitive. In some indications, safety is more important. If you can talk about like where each indication stands with batoclimab, that would be great. And then a follow-up on VTAMA. So I know you have your NBRx data here on the slide. Can you talk about like the drop off, like how sticky is this business in psoriasis right now? How much do you lose over time to Zoros and biologics?

[Matthew Gline, executive]

Thanks, Andy, I am tempting to throw this question to Frank because it's a fun curveball. But I think can I rank order the indications? Probably not. I probably can't rank order the indications, especially because setting everything else aside, I think the ordering of the commercial plans will depend on the data that we generate in the studies, all of which are designed to be interesting.

Obviously, these indications have different price points. Obviously, they have different competitive environments. Those are obviously factors. But if our data and energy is extraordinary and handle beats the competitors, I think that's a pretty interesting picture. So there's lots of different optionality here. And I think -- the reason I call it optionality is precisely because we're going to have to wait and see on the specific profile. On -- so maybe that's what I'll say about that. On VTAMA, look, I think there is a group of docs that write this product that have been writing it since the beginning of launch that are excited about the products that write a lot of it that represents a pretty significant bulk of the prescriptions [indiscernible]. And if you call them ask about the product, say they love the product. And so in that sense, I think it's sticky. Dermatology is promotionally sensitive. We still have to get out there and be out there. There's obviously competitors who are also talking about their product, the landscape shifts constantly. But in general, I'd say the docs loves the product, keep writing the product. And 1 of our 1 of our biggest opportunities is to increase that set of docs and get more docs excited about it and using it in daily practice. That's been hard because many of these docs have a real steroid habit. But breaking that habit and getting into right VTAMA instead represents a big opportunity even in psoriasis. And obviously, the ag dynamics are exciting to contemplate.

[Operator]

Our next question comes from the line of Dennis Ding with Jefferies.

[Unknown Analyst]

This is Anthea on for Dennis. Two questions from us. In terms of BD with the $14 million upfront deal done last year, what's the gating factor for disclosing this? And could you just comment on details from this program? And then on sarcoidosis, could you talk about what you're measuring in the Phase II? What's a positive result? And if you will have to do another study?

[Matthew Gline, executive]

Appreciate the question. Mike, do you want to take the question on BD and the new program?

[Mayukh Sukhatme, executive]

Sure. Yes. I mean the -- really, the only reason we haven't talked about it yet is purely as a competitive strategic consideration. That's all I had.

[Matthew Gline, executive]

We've said historically, there's a big pharma company with another program in the same mechanism as a different indication. And basically, we're waiting to get our own study up and running. It will be announced later in this calendar year. On sarcoid, I think -- we haven't given a lot of guidance on exactly what we're looking for there. I do think it's a relatively straightforward. We'll know when we see its situation. The competitive bar is low. There are not a lot of other programs. The -- the primary endpoint of the study is effectively a proportion of subjects requiring rescue for worsening of disease. But we're also looking at FTC. We're also looking at time to rescue we're also measuring various sort of steroid taper or the ability to achieve steroid taper. I think all of these are relevant to the treatment of these patients. So more to say once we have the actual data, but extended the possibility of in recruitment option for these patients

[Operator]

Thank you. I would now like to turn the conference call back over to Matt Gline for closing remarks.

[Matthew Gline, executive]

Great. Well, thank you, everybody, again, for listening today. Thank you to obviously the entire Roivant team, we put together these results and who made everything happen in the course of the last 12 months. Thank you to our investors and supporters. Thank you, perhaps most of all are in a significant way to the patients and investigators, which will make our trials happen and will allow us to continue to generate this data. We are tremendously excited about where we are in the business. I've never been more excited about our FcRn franchise than I am today. and many other aspects of our pipeline as well. And I look forward to catching up again soon on scheduled or unscheduled future conference calls. Have a great day.

[Operator]

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