BASEL, Switzerland and LONDON and NEW YORK and BOSTON, Feb. 13, 2023 (GLOBE NEWSWIRE) -- Roivant Sciences (Nasdaq: ROIV) today reported its financial results for the third quarter ended December 31, 2022, and provided an update on the Company’s operations.
Roivant’s Chief Executive Officer, Matt Gline, noted: “This past quarter was a significant one for the company. We announced the in-licensing of our potentially first-in-class and best-in-class TL1A program RVT-3101 along with highly encouraging Phase 2 induction data. Earlier this month we completed a $230M equity financing to further advance our TL1A programs in Phase 3 and Phase 2 for ulcerative colitis and Crohn’s disease, respectively. Additionally, we reported strong growth in VTAMA net revenue and made significant progress on payor coverage with a majority of commercial lives now covered. These recent developments and our strengthened balance sheet continue to support Roivant’s growing leadership in immunological and inflammatory diseases and point to an incredibly catalyst-rich year ahead.”
Recent Developments
Major Upcoming Milestones
Third Quarter Ended December 31, 2022 Financial Summary
Cash Position
As of December 31, 2022, the company had cash, cash equivalents and restricted cash of approximately $1.5 billion. Giving effect to Roivant’s February 2023 follow-on offering for $230 million in gross proceeds, and $115 million in expected proceeds from the planned sale of the Myovant top-up shares in connection with the pending acquisition of Myovant by Sumitomo Pharma, Roivant’s consolidated cash, cash equivalents and restricted cash would have been approximately $1.9 billion. The Myovant transaction is expected to close in the quarter ending March 2023, subject to customary closing conditions.
Research and Development Expenses
Research and development (R&D) expenses decreased by $11.8 million to $125.5 million for the three months ended December 31, 2022 compared to $137.3 million for the three months ended December 31, 2021, primarily due to decreases in share-based compensation of $10.8 million and program-specific costs of $8.0 million, partially offset by increases in personnel-related expenses of $4.1 million and other expenses of $2.8 million.
The decrease of $8.0 million in program-specific costs largely reflects the discontinued development of several programs, including ARU-1801, LSVT-1701, DMVT-502, DMVT-503, DMVT-504, and CVT-TCR-01. These decreases were partially offset by increases reflecting the progression of our programs, including Immunovant’s anti-FcRn franchise.
Non-GAAP R&D expenses were $117.4 million for the three months ended December 30, 2022, compared to $118.9 million for the three months ended December 30, 2021.
Acquired In-Process Research and Development Expenses
Acquired in-process research and development increased by $81.6 million to $97.7 million for the three months ended December 31, 2022, compared to $16.1 million for the three months ended December 31, 2021, primarily due to consideration for the purchase of IPR&D of $87.7 million relating to the acquisition of RVT-3101 by a newly formed subsidiary in November 2022. Additionally, the achievement of a development milestone relating to Immunovant’s batoclimab program resulted in a one-time milestone expense of $10.0 million. Acquired in-process research and development expense for the three months ended December 31, 2021 was primarily driven by consideration for the purchase of IPR&D of $14.1 million relating to the acquisition of RVT-2001 by Hemavant.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $52.7 million to $168.3 million for the three months ended December 31, 2022, compared to $115.5 million for the three months ended December 31, 2021, primarily due to higher selling, general and administrative expenses at Dermavant as a result of the commercial launch of VTAMA.
Non-GAAP SG&A expenses were $115.9 million for the three months ended December 31, 2022, compared to $61.4 million for the three months ended December 30, 2021. The majority of non-GAAP SG&A expenses of $115.9 million were related to Dermavant’s SG&A and ongoing VTAMA commercial launch activities.
Net Loss
Net loss was $384.9 million for the three months ended December 31, 2022, compared to $306.1 million for the three months ended December 31, 2021. On a per common share basis, net loss was $0.49 for the three months ended December 31, 2022 and $0.41 for the three months ended December 31, 2021. Non-GAAP net loss was $297.5 million for the three months ended December 31, 2022, compared to $173.1 million for the three months ended December 31, 2021.
ROIVANT SCIENCES LTD.
Selected Balance Sheet Data
(unaudited, in thousands)
December 31, 2022 | March 31, 2022 | ||||
Cash, cash equivalents and restricted cash | $ | 1,541,037 | $ | 2,074,034 | |
Total assets | 2,202,960 | 2,585,129 | |||
Total liabilities | 775,822 | 523,695 | |||
Total shareholders’ equity | 1,427,138 | 2,038,943 | |||
Total liabilities, redeemable noncontrolling interest and shareholders’ equity | 2,202,960 | 2,585,129 | |||
ROIVANT SCIENCES LTD.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except share and per share amounts)
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue, net | $ | 17,052 | $ | 24,341 | $ | 33,904 | $ | 46,063 | ||||||||
Operating expenses: | ||||||||||||||||
Cost of revenues | 3,586 | 1,384 | 8,953 | 8,507 | ||||||||||||
Research and development (includes $6,888 and $17,669 of share-based compensation expense for the three months ended December 31, 2022 and 2021 and $26,548 and $47,441 for the nine months ended December 31, 2022 and 2021, respectively) | 125,533 | 137,345 | 393,358 | 347,958 | ||||||||||||
Acquired in-process research and development | 97,749 | 16,105 | 97,749 | 138,377 | ||||||||||||
Selling, general and administrative (includes $50,741 and $53,547 of share-based compensation expense for the three months ended December 31, 2022 and 2021 and $165,771 and $440,356 for the nine months ended December 31, 2022 and 2021, respectively) | 168,261 | 115,530 | 474,996 | 636,060 | ||||||||||||
Total operating expenses | 395,129 | 270,364 | 975,056 | 1,130,902 | ||||||||||||
Loss from operations | (378,077 | ) | (246,023 | ) | (941,152 | ) | (1,084,839 | ) | ||||||||
Change in fair value of investments | (25,948 | ) | 38,036 | 53,277 | 14,382 | |||||||||||
Gain on sale of investment | — | — | — | (443,754 | ) | |||||||||||
Change in fair value of debt and liability instruments | 62,360 | 23,017 | 90,032 | 40,747 | ||||||||||||
Gain on termination of Sumitomo Options | — | — | — | (66,472 | ) | |||||||||||
Gain on deconsolidation of subsidiaries | (12,514 | ) | — | (29,276 | ) | — | ||||||||||
Other (income) expense, net | (19,898 | ) | (1,029 | ) | (9,567 | ) | 2,529 | |||||||||
Loss before income taxes | (382,077 | ) | (306,047 | ) | (1,045,618 | ) | (632,271 | ) | ||||||||
Income tax expense | 2,819 | 38 | 8,983 | 532 | ||||||||||||
Net loss | (384,896 | ) | (306,085 | ) | (1,054,601 | ) | (632,803 | ) | ||||||||
Net loss attributable to noncontrolling interests | (32,882 | ) | (21,549 | ) | (79,188 | ) | (57,603 | ) | ||||||||
Net loss attributable to Roivant Sciences Ltd. | $ | (352,014 | ) | $ | (284,536 | ) | $ | (975,413 | ) | $ | (575,200 | ) | ||||
Net loss per common share—basic and diluted | $ | (0.49 | ) | $ | (0.41 | ) | $ | (1.39 | ) | $ | (0.87 | ) | ||||
Weighted average shares outstanding—basic and diluted | 713,319,399 | 686,589,478 | 703,054,773 | 662,268,788 | ||||||||||||
ROIVANT SCIENCES LTD.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited, in thousands)
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||
Note | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Net loss | $ | (384,896 | ) | $ | (306,085 | ) | $ | (1,054,601 | ) | $ | (632,803 | ) | |||||||
Adjustments: | |||||||||||||||||||
Cost of revenues | |||||||||||||||||||
Amortization of intangible assets | (1) | 2,228 | — | 5,170 | — | ||||||||||||||
Research and development: | |||||||||||||||||||
Share-based compensation | (2) | 6,888 | 17,669 | 26,548 | 47,441 | ||||||||||||||
Depreciation and amortization | (3) | 1,258 | 778 | 3,558 | 2,301 | ||||||||||||||
Selling, general and administrative: | |||||||||||||||||||
Share-based compensation | (2) | 50,741 | 53,547 | 165,771 | 440,356 | ||||||||||||||
Depreciation and amortization | (3) | 1,664 | 592 | 4,176 | 1,925 | ||||||||||||||
Other: | |||||||||||||||||||
Change in fair value of investments | (4) | (25,948 | ) | 38,036 | 53,277 | 14,382 | |||||||||||||
Gain on sale of investment | (5) | — | — | — | (443,754 | ) | |||||||||||||
Change in fair value of debt and liability instruments | (6) | 62,360 | 23,017 | 90,032 | 40,747 | ||||||||||||||
Gain on termination of Sumitomo Options | (7) | — | — | — | (66,472 | ) | |||||||||||||
Gain on deconsolidation of subsidiaries | (8) | (12,514 | ) | — | (29,276 | ) | — | ||||||||||||
Estimated income tax impact from adjustments | (9) | 756 | (689 | ) | 410 | (629 | ) | ||||||||||||
Adjusted net loss (Non-GAAP) | $ | (297,463 | ) | $ | (173,135 | ) | $ | (734,935 | ) | $ | (596,506 | ) | |||||||
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
Note | 2022 | 2021 | 2022 | 2021 | |||||||||||
Research and development expenses | $ | 125,533 | $ | 137,345 | $ | 393,358 | $ | 347,958 | |||||||
Adjustments: | |||||||||||||||
Share-based compensation | (2) | 6,888 | 17,669 | 26,548 | 47,441 | ||||||||||
Depreciation and amortization | (3) | 1,258 | 778 | 3,558 | 2,301 | ||||||||||
Adjusted research and development expenses (Non-GAAP) | $ | 117,387 | $ | 118,898 | $ | 363,252 | $ | 298,216 | |||||||
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
Note | 2022 | 2021 | 2022 | 2021 | |||||||||||
Selling, general and administrative expenses | $ | 168,261 | $ | 115,530 | $ | 474,996 | $ | 636,060 | |||||||
Adjustments: | |||||||||||||||
Share-based compensation | (2) | 50,741 | 53,547 | 165,771 | 440,356 | ||||||||||
Depreciation and amortization | (3) | 1,664 | 592 | 4,176 | 1,925 | ||||||||||
Adjusted selling, general and administrative expenses (Non-GAAP) | $ | 115,856 | $ | 61,391 | $ | 305,049 | $ | 193,779 |
Notes to non-GAAP financial measures:
(1) Represents non-cash amortization of intangible assets associated with milestone payments made in connection with regulatory approvals.
(2) Represents non-cash share-based compensation expense.
(3) Represents non-cash depreciation and amortization expense, other than amortization of intangible assets associated with milestone payments made in connection with regulatory approvals.
(4) Represents the unrealized (gain) loss on equity investments in unconsolidated entities that are accounted for at fair value with changes in value reported in earnings.
(5) Represents a one-time gain on sale of investment resulting from the merger of Datavant and CIOX Health in July 2021.
(6) Represents the change in fair value of debt and liability instruments, which is non-cash and primarily includes the unrealized loss relating to the measurement and recognition of fair value on a recurring basis of certain liabilities.
(7) 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”).
(8) Represents the one-time gain on deconsolidation of subsidiaries.
(9) 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 condensed consolidated statements of operations. Prior period amounts have been revised to conform to the current presentation.
For the three and nine months ended December 31, 2022, acquired IPR&D expense was $97.7 million. For the three and nine months ended December 31, 2021, acquired IPR&D expense was $16.1 million and $138.4 million, respectively.
Investor Conference Call Information
Roivant will host a live conference call and webcast at 8:00 a.m. EST on Monday, February 13, 2023 to report its financial results for the fiscal quarter ended December 31, 2022 and provide a corporate update.
To access the conference call by phone, please register online using this registration link. 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.
Upcoming Investor Events
Roivant also announced that it will participate in two additional upcoming investor conferences:
A live webcast of each presentation will be available under “Events & Presentations” in the Investors section of the Roivant website.
About Roivant Sciences
Roivant's mission is to improve the delivery of healthcare to patients by treating every inefficiency as an opportunity. Roivant develops transformative medicines faster by building technologies and developing talent in creative ways, leveraging the Roivant platform to launch "Vants" – nimble and focused biopharmaceutical and health technology companies.
Roivant Sciences Forward-Looking Statements
This press release contains forward-looking statements. Statements in this press release may include statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are usually identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and variations of such words or similar expressions. Such words may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act.
Our forward-looking statements include, but are not limited to, statements regarding the terms and completion of the proposed public offering, our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, and statements that are not historical facts, including statements about the clinical and therapeutic potential of our products and product candidates, the availability and success of topline results from our ongoing clinical trials and any commercial potential of our products and product candidates. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.
Although we believe that our plans, intentions, expectations and strategies as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a number of risks, uncertainties and assumptions, including, but not limited to, those risks set forth in the Risk Factors section of our filings with the U.S. Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment in which new risks emerge from time to time. These forward-looking statements are based upon the current expectations and beliefs of our management as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Except as required by applicable law, we assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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