01—Abstract
Summary
Summary of the 10-K filed June 28, 2022. Cited figures are marked; the original filing is the authoritative source.
Roivant Sciences Ltd. (ROIV) reports that its first commercial product, VTAMA (tapinarof) cream 1%a, was approved by the FDA in May 2022 for plaque psoriasis in adults and launched that month, with the company's sales force of approximately 100 specialty representatives.
For fiscal year ended March 31, 2022, the company reported revenue, net of $55.3 millionb (versus $23.8 million), a net loss of $924.1 million, and a net loss attributable to Roivant Sciences Ltd. of $845.3 million. Cash and cash equivalents were approximately $2.1 billion and the accumulated deficit approximately $2.8 billion. General and administrative expenses rose to $775.0 million, including a one-time share-based compensation catch-up tied to the September 2021 Business Combination with Montes Archimedes Acquisition Corp. The company operates a "Vant" model of subsidiary biotech companies.
Key pipeline items include batoclimab (Immunovant) in Phase 3 for myasthenia gravis, brepocitinib (Priovant) in a Phase 3 trial in dermatomyositis and a Phase 2B trial in systemic lupus erythematosus, and VTAMA Phase 3 trials in atopic dermatitis with topline data expected in the first half of calendar 2023. The filing also discloses the wind-down of ARU-1801 and several other programs under a cost optimization initiative. Management states that existing cash is expected to fund committed operating expenses for at least the next twelve months, while acknowledging the need to raise additional capital over time.
Investors should weigh the substantial operating losses and dependence on a single approved product, VTAMA, against a diversified pipeline and significant cash reserves. The filing also highlights material legal exposure, including a securities class action against subsidiary Immunovant that names the company as a defendant, and patent litigation involving Genevant and Arbutus against Moderna and Acuitas.
02—Key points
Key Highlights
- FDA approved VTAMA (tapinarof) cream 1% in May 2022 for plaque psoriasis in adults; the company's first commercial product, launched through subsidiary Dermavant.
- FY2022 (year ended March 31, 2022) revenue, net was $55.3 million, up from $23.8 million; net loss was $924.1 million.
- General and administrative expenses increased to $775.0 million from $259.9 million, largely from share-based compensation including a $350.0 million one-time catch-up expense tied to the Business Combination.
- Cash and cash equivalents were approximately $2.1 billion at March 31, 2022, against an accumulated deficit of approximately $2.8 billion.
- Dermavant received $160.0 million in June 2022 under a revenue interest purchase and sale agreement, which it intends to use primarily for milestone payments of about $126 million to GSK and about $20 million to Welichem.
- Pipeline catalysts include VTAMA atopic dermatitis Phase 3 topline data in 1H 2023, brepocitinib SLE Phase 2B data in 2H 2023, and batoclimab MG Phase 3 data in 2H 2024.
- Ongoing litigation includes a securities class action against subsidiary Immunovant, in which the company is a named defendant, and patent suits involving Genevant and Arbutus against Moderna and Acuitas.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed June 28, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $55.29M$23.80M | +132.3% |
| R&D Expenses | $483.04M$236.63M | +104.1% |
| SG&A Expenses | $775.03M— | — |
| Operating Expenses | $1.41B$1.09B | +28.5% |
| Operating Income | -$1.35B-$1.07B | −26.2% |
| Interest Expense | $7.04M$2.81M | +150.7% |
| Net Income | -$845.26M-$809.23M | −4.5% |
| EPS (Basic) | $-1.26$-1.28 | +1.6% |
| EPS (Diluted) | $-1.26— | — |
| Shares Outstanding (Basic) | 669.75M630.05M | +6.3% |
| Shares Outstanding (Diluted) | 669.75M— | — |
05—Questions
Frequently Asked Questions
What is the company's main commercial product and how is it positioned?
The main commercial product is VTAMA (tapinarof) cream 1%, a once-daily, steroid-free topical treatment approved by the FDA in May 2022 for adults with plaque psoriasis. The company says it is the first topical novel chemical entity launched for plaque psoriasis in the U.S. in 25 years. Dermavant has built a team of approximately 100 specialty sales professionals targeting high-decile dermatologists.
How large were the company's losses and what drove the increase in expenses?
The company reported a net loss of $924.1 million for the year ended March 31, 2022, compared with $900.2 million in the prior year. Research and development expenses rose to $483.0 million, and general and administrative expenses rose to $775.0 million, driven in part by share-based compensation recognized upon the closing of the Business Combination in September 2021.
How much cash does the company have and what are its funding plans?
As of March 31, 2022, the company had cash and cash equivalents of approximately $2.1 billion. Management expects this to fund committed operating expenses and capital expenditures for at least the next twelve months. The company also has a $250.0 million committed equity facility with an affiliate of Cantor Fitzgerald, and it states that it expects to need significant additional capital over time through equity, debt, or partnerships.
What are the key near-term pipeline catalysts?
The filing lists VTAMA Phase 3 topline data in atopic dermatitis expected in the first half of calendar 2023, brepocitinib Phase 2B topline data in systemic lupus erythematosus expected in the second half of 2023, and namilumab Phase 2 sarcoidosis data expected in the first half of 2024. Batoclimab Phase 3 topline data in myasthenia gravis is expected in the second half of 2024.
What material legal matters are disclosed?
A putative securities class action filed against subsidiary Immunovant was amended to add the company as a defendant, and motions to dismiss were filed on May 27, 2022. The company says it has not recorded a liability because it cannot reasonably estimate possible losses. Genevant and Arbutus also filed patent infringement suits against Moderna, and Acuitas filed a declaratory judgment action against Genevant and Arbutus relating to Pfizer and BioNTech's COMIRNATY.
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