Q2 2021 Roivant Sciences Ltd Earnings Call
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Yeah.
Good day, ladies and gentlemen, and welcome to their ROI events second quarter earnings Conference call.
Operator: Good day, ladies and gentlemen, and welcome to the Roy Vand Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode.
At this time, all participants are in listen only mode.
Operator: Later, we will conduct the question and answer session, and instructions will follow at that time.
Later, we will conduct a question and answer session and instructions will follow at that time.
Operator: If anyone should require operator assistance, please press star zero on your touchdown telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference call, Mr. Paul Davis. You may begin.
If anyone should require operator assistance. Please press star zero on your touch don't telephones.
As a reminder, this call may be recorded.
Now I'd like to introduce your host for today's conference call. Mr. Paul Davis, you may begin.
Okay.
Paul Davis: Good morning, and thank you for joining today's call to discuss Roy Vance's second quarter results and business updates. I'm Paul Davis, the head of communications at Roy Vance.
Good morning, and thank you for joining today's call to discuss second quarter results and business updates and Paul Davis, the head of communications that ROI that on the call today, we have Matt Klein, our Chief Executive Officer, who will be presenting we also have Richard <unk>, our chief financial officer, Frank towards <unk>, or Vamp Chair, Eric banker, President and Chief operating.
Paul Davis: On the call today, we have Matt Klein, our chief executive officer, who will be presenting. We also have Richard Pollock, our chief financial officer, Frank Tordi, our Vant chairperson, Eric Banker, president and chief operating officer, Mayukes Sukkak, and chief investment officer, and Todd Zavodnik, the CEO of Dermarvan. 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 www. Investor.organt.com.
Officer, <unk> <unk> President.
President and Chief investment Officer, and Todd to Debottleneck, the CEO of Derma that.
For those dialing in by a conference call you can find the slides being presented today as well as the press release announcing these updates on our IR website at Www Dot investor Dot Dot com.
Paul Davis: We'll also be providing the current slide numbers as we present to help you follow along. I would like to remind you that we will be making certain forward-looking statements during today's presentation that reflect our current views and expectations, including those related to our financial performance and the potential attributes of our product candidates. We strongly encourage you to review the information that we have filed with the SEC, including the earnings release in Form 10-Q filed this morning, for more information regarding these forward-looking statements and related risks and uncertainties.
I'll also be providing the current slide numbers as we present to help you follow along.
I'd like to remind you that we will be making certain forward looking statements. During today's presentation that reflect our current views and expectations, including those related to our financial performance and the potential attributes of our product candidates. We strongly encourage you to review the information that we have filed with the SEC, including the earnings release and Form 10-Q filed this morning for more information regarding these forward looking.
<unk> and related risks and uncertainties, we will begin with Matt Klein, who will review key business updates across for example, the bands including updates from German event immuno event and our event and will provide a financial update we will end the call with a Q&A session and with that I'll turn it over to Matt.
Paul Davis: We'll review key business updates across Royvans and Vance, including updates from Dermavant, Immunivant, and Arrivant, and we'll provide a financial update. We will end the call with a Q&A session. And with that, I'll turn it over to Matt.
Thank you Paul and good morning, everybody and thank you for joining our first earnings call ever in <unk> history.
Matthew Gline: Thank you, Paul, and good morning everybody, and thank you for joining us for our first earnings call ever in Royvance history. It's a pleasure to be talking to you today and to be sharing some updates about the business. Before I talk about the quarter, I want to start on page four with just a reminder of who Roivant is and why we're excited about the business that we're building. What we've said since the beginning of Reuven's history is that we're here to redefine what a big pharma company can be from end to end, focusing in particular on a novel talent model in which we're organized as a family of small, nimble, entrepreneurial biotech companies that we call Vance, as well as focusing on using computational tools and data to differentiate ways to improve.
Pleasure to be talking to you today and to be sharing some updates about the business.
Before I talk about the quarter I want to start on page four with just a reminder, <unk> does and why we're excited about the business that we're building.
What we've said since the beginning of Reagan's history is that we're here to redefine what a big pharma company can be from end to end focusing in particular on a novel talent model in which we're organized as a family of small nimble entrepreneurial biotech companies that we call advance as well as focusing on using computational tools and data in a <unk>.
<unk> way to improve the discovery development and commercialization of new medicines.
Matthew Gline: the discovery, development, and commercialization of new medicine. On page four, I highlight some of the key highlights of our business. Starting with, we have a number of Vance with quite a broad pipeline and a number of different technologies that we think enable us to do better at our business. We are well funded with a $2.5 billion cash balance at the end of the September quarter.
On page four I'll highlight some of the key highlights of our business starting with we have.
A number of advanced with quite a broad pipeline and a number of different technologies that we think enable us to do better at our business. We are well funded with a $2 $5 billion cash balance at the end of the September quarter.
Matthew Gline: We have, and we'll spend some more time later today talking about it. A full chip to clinic discovery platform with, we believe, best in class computational capabilities for simulations and molecular dynamics, which enable us to do a better job at discovering, in particular in the field of novel protein degraders. We have a collection of public equity stakes in Vance and other businesses that we've built over time for $940 million, plus additional private holdings, including an approximately 12% stake in Data Vance, which is a business that we built to solve an important health care data problem, the siloing of health care data that we needed in order to improve our own clinical development.
We have and we'll spend some more time later today talking about it.
Full chip to clinic discovery platform that we believe best in class computational capabilities.
For simulations molecular dynamic simulations, which enable us to do a better job of discovering and particular in the field with novel protein Degraders.
We have a collection of public equity stakes in vans and other businesses that we built over time of $940 million value plus additional private holdings, including.
And approximately 12% stake in data bandwidth, which is a business that we built to solve an important health care data problem silo in your health care data that we needed in order to improve our own clinical development.
And as you May know earlier this year, we merge data vans into a company called <unk> health.
Matthew Gline: And as you may know, earlier this year, we merged Datavant into a company called Syox Health, and in that transaction, we received $320 million in cash proceeds, as well as this approximately 12% ownership stake, assuming a $7 billion value for Datavant, which was the value implied by the investments made by Goldman Sachs and Sixth Street in that transaction. And Datavent is now a business with $700 million in top-line revenue that we expect to grow over time.
That transaction, we received $320 million in cash proceeds as well as this approximately 12% ownership stake assuming a 7 billion dollar value for database, which was the value implied by the investments made by Goldman Sachs and sixth Street in that transaction and database is now a business with $700 million in top line revenue that we expect to grow over time. So that's.
And ownership stake that in addition to providing strategic value erosion.
Matthew Gline: So that's an ownership stake that, in addition to providing strategic value to Roevent, we're excited to have it to continue to optimize. And finally, most importantly, for us as we plan to build a pharma company, we have what we believe is a strong clinical development track record, having run nine registrational phase three studies in total, eight of which I've read out positively. And that our Vant model has now resulted in four FDA-approved products, all of which were advanced launched by Royvindon, now owned by our partner Sumitomo Van Bion by Sumitomo Chemical.
We're excited to have and to continue to optimize and finally, most importantly for US is we're planning to build a pharma company. We have what we believe is a strong clinical development track record having run nine Registrational phase III studies in total eight of which have read out positively.
And that model has now resulted in four FDA approved products all of which advanced launch by Rubens and now owned by our partners can become with any bias to meet demand.
On page five is a little bit of an outline for the topics, we're going to cover today, starting with an update on our commercial plans with some further information about our expected launch of Jupiter off in psoriasis with further opportunity in atopic dermatitis.
I'll talk a little bit about progress at our clinical development pipeline, including initiation of at least four phase two or three trials in 2022 with seven trial is expected to be ongoing by the end of that year.
Matthew Gline: On page five, there is a little bit of an outline for the topics we're going to cover today, starting with an update on our commercial plans with some further information about our expected launch of Pinya off in psoriasis with further opportunity in atopic dermatitis. And I'll talk a little bit about progress in our clinical development pipeline, including initiating at least four phase two or three trials in 2022, with seven trials expected to be ongoing by the end of that year.
I'll provide a brief overview of our small molecule drug discovery platform with our computational capabilities integrated wet lab again focused on the people with targeted protein degradation.
I'll give an update on our financial performance for the quarter, including our cash balance to $5 billion as well as some other key metrics.
And I'll end by providing just a couple of highlights were things that we expect to be important drivers of growth and opportunity for the business in the future.
So thank you very much and as Paul indicated there will be an opportunity for Q&A at the end of the call.
Matthew Gline: I'll provide a brief overview of our small molecule drug discovery platform, with our computational capabilities and integrated wet lab, again focused on the field of targeted protein degradation. Finally, I'll give an update on our financial performance for the quarter, including our cash balance of $2.5 billion, as well as some other key metrics. And I'll end by providing just a couple of highlights for things that we expect to be important with drivers and for open opportunities for the business in the future. So thank you very much, and as Paul indicated, there'll be an opportunity for Q&A at the end of Paul's presentation.
So with that I'm going to start on page seven.
With the discussion of Jupiter off dorm events, a topical therapy for the treatment of psoriasis.
Where we filed our NDA and where we expect a bit of action in the second quarter of 2022.
So this is a medicine that obviously, we are extremely excited about and we view it as an incredibly promising therapy for psoriasis patients we feel that it differentiates along five key attributes.
The first is treatment effect, we showed a strong data in our phase III program, which read out in the summer of 2020, including statistically significant performance in all of the key endpoints, including endpoints typically used to measure the performance of systemic therapy.
Matthew Gline: So with that, I'm going to start on page seven with the discussion of Topinorov, Dermavant's topical therapy for the treatment of psoriasis, where we filed our NDA and where we expect a Padouva action in the second quarter of 2022. So this is a medicine that, obviously, we are extremely excited about, and we see it as an incredibly promising therapy for psoriasis patients We feel that it differentiates on five key attributes.
And then perhaps even more exciting we demonstrated continued improvement.
A high degree of disease clearance over 41 about 41% of patients achieving complete disappearance of PGA sports zero in a long term extension studies sorting through that.
That gets to the second important national Mr. Pinner off which is durability. The continued performance on therapy with no evidence of Tachyphylaxis during a long term extension study.
The third important differentiating attribute of printer offers it's forbidden of effect and so you know long term extension study and we'll talk a little bit more about the state of which was presented this quarter.
Matthew Gline: The first is treatment effect. We showed strong data in our phase three program, which will read out in the summer of 2020, including statistically significant performance in all of the key endpoints, including endpoints typically used to measure the performance of systemic therapy. And then perhaps even more exciting, we demonstrated continued improvement and a high degree of disease clearance, with over 41, about 41% of patients achieving complete disease clearance of a PGA score of zero in our long-term extension study, soaring three.
When patients in our long term extension study cleared there.
So when they achieved a PGA score of zero.
Took them off therapy, and monitor them and we saw a mean duration of remittance that as they stayed clear or mostly clear for 130 days a little over four months, which is something that.
In our opinion.
Effectively unheard of in topical therapy.
And then finally on safety and Tolerability. This is a therapy that avoids many of the safety and tolerability issues associated with the current mainline therapy for psoriasis treatment.
Corticosteroids with no treatment related serious adverse events in any of our studies or across 2200 patients enrolled in 18 clinical trials.
Matthew Gline: That gets to the second important attribute of Pinnoroff, which is durability, the continued performance on therapy with no evidence of tachaflaxis during our long-term extension study. The third important differentiating attribute of Finneroff is its remittive effect.
With AE profile consistent with all of our previous studies.
And with critically no duration of use or skin location limitations, which again is different from the current approved category topical corticosteroids.
So these are five attributes that we think are important.
Matthew Gline: And so in our long-term extension study, and we'll talk a little bit more about this data, which was presented this quarter, when patients in our long-term extension study cleared their psoriasis when they achieved a PGA score of zero, we took them off therapy and monitored them, and we saw a mean duration of remittance, that is they stayed clear or mostly clear for 130 days, over four months, which is something that, in our opinion, is effectively unheard of. topical therapy.
Jupiter off differentiation.
On page eight I provide a reminder, which I think most people are familiar with which is the better off it's really a two in one program targeting <unk> two largest markets in immuno dermatology.
Psoriasis, where I mentioned, we expect an approval decision in the first half of 2022 as well as atopic dermatitis, where we currently have a registrational clinical program underway that I'll talk about a little bit later and these are markets that are expected to reach over $30 billion in the U S and over $40 billion globally by 2026, I want to remind everybody that topical treatment service the bedrock.
Matthew Gline: And then finally, on safety and tolerability, this is a therapy that avoids many of the safety and tolerability issues associated with the current mainline therapy for psoriasis treatment, namely topical corticosteroids, with no treatment-related serious adverse events in any of our studies or across 2,200 patients enrolled in 18 clinical trials, with an A.E. profile consistent with all of our previous studies, and with critically no duration category of the top of the quarter to start right.
Dermatologic treatment in America today, and represent 83% of all U S prescriptions written by Dermatologists in 2020. So this is a type of therapy that we expect will be incredibly impactful to the psoriasis community.
I don't think I need to provide much of a reminder, on page nine given the the common nature of both of these diseases, but these are a brief overview of what both psoriasis and atopic dermatitis looked like.
And I'll say briefly that I personally am a psoriasis patient that's what I experienced many of these symptoms myself and have for most of my adult life.
Yeah.
On page 10, I want to highlight briefly some.
Some data that includes both data we put out some time ago as well as new data we presented at <unk>. This quarter, which is the results of our shoring three long term extension studies. So this was a study that monitored patients on therapy up to a total of 52 weeks and in particular I want to highlight one of the effects and are off that I am most excited about which is the 41%.
Matthew Gline: So these are five attributes that we think are important to Finneroff's differentiation. On page 8, I provide a reminder, which I think most people are familiar with, which is Pitteroff is really a two-in-one program targeting the two largest markets in immunodermatology, psoriasis, where I mentioned we expect an approval decision in the first half of 2022, as well as atopic dermatitis, where we currently have a registrational clinical program underway that I'll talk about a little bit And these are markets that are expected to reach over $30 billion in the U.S. and over $40 billion globally by 2026.
<unk> of patients treated with the spinoff and the program achieved a PGA score of zero that is completely cleared their psoriasis and this effect was consistently observed both for patients who entered the LTE trial.
Clear or became clear.
During the ultimate study. So this is a significant and repeatable effects that we saw in our phase III study in our extension study that was that was exciting to US now equally important on page 11, if some additional data that again presented it needs to be determined 19 presented the ADP.
Which is the debt once we took patients off therapy and I mentioned this at the beginning of the call, but I'll I'll describe it again when patients in the long term extension study achieved a P. J score zero, we took them off therapy and monitor them without treatment.
Matthew Gline: I want to remind everybody that topical treatment is the bedrock of dermatologic treatment in America today and will represent 83% of all U.S. descriptions written by dermatologists in 2020. So this is a type of therapy that we expect will be incredibly impactful to the psoriasis community. I don't think I need to provide much of a reminder on page 9, given the common nature of both of these diseases, but this is a brief overview of what both psoriasis and atopic dermatitis look like.
Just to see what happened and we observed a significant remit of benefit these patients stayed clear or almost clear for a mean of 130 days that's across 312 subjects, who entered with or achieve the PGA of zero. During the extension study. The mean duration of that remit of benefit was 130 days. So these are patients that are going on or off or clearing their psoriasis.
He's Burton and then our remaining well for a long time, which is significantly different than for example, what you would normally corticosteroids, which are a rebound effect you see treatment.
And we'll talk more in a moment about how about the overall profile or steroids.
Matthew Gline: And I'll say briefly that I personally am a psoriasis patient, and so I experience many of these symptoms myself and have for most of my adult life. On page 10, I want to highlight briefly some data that includes both data we put out some time ago as well as new data we presented at EADV this quarter, which are the results of our Soaring Three long-term extension study. So this was a study that monitored patients on therapy for up to a total of 52 weeks.
How we differ.
So on page 12, and this is something that I personally am very familiar with as you may know the current mainline therapy for psoriasis patients a topical corticosteroid. So my medicine cabinet is filled with tubes, a partial use topical corticosteroids. This is really standard therapy for all patients and corticosteroids have some significant limitations.
You can't use them for a long time, because they cause thinning of the skin.
Don't have a durable effect, there's sort of a tapering off of benefit when you go off therapy, you tend to rebound quickly with psoriasis flare ups and there were a safety and tolerability issues, which are the reason that they have duration and location of use restrictions where you can't use for example, the most potent steroids on parts of the skin that are already in or sensitive.
Matthew Gline: And in particular, I want to highlight one of the effects of Pinnaroff that I am most excited about, which is that 41% of patients treated with PINAROF in the program achieved a PGA score of zero that completely cleared their surrogate, and this effect was consistently observed both for patients who entered the LTE trial, were clear, or became clear during the LTE study.
So to finish off effectively addresses basically all of these limitations, we have efficacy that is as good or better than what it has ever been observed in studies with topical corticosteroids, we have true one therapy durability, where our drug continues to work better the longer the patients stay on it in our extension study we have a remit of effects. So when patients go off unlike the rebuy.
Matthew Gline: So this is a significant and repeatable effect that we saw in our phase three study in our attention study, which was exciting to us. Now, equally important on page 11 is some additional data that we presented at EADV, the Dermavant team presented at EADV, which is that once we took patients off therapy. I mentioned this at the beginning of the call, but I'll describe it again. When patients in the long-term extension study achieved a PGA score of zero, we took them off therapy and monitored them without treatment to see what happened.
You observed with topical corticosteroids, our patients stay clear for a long time, and then we have safety and Tolerability profiles that are frankly in our view more benign by a significant amount of what you see the topical corticosteroids without the skin feeling effects in other other issues and that means not only can do stay on therapy chronically stay entrepreneur off for a long time.
That as I said in our 52 week study, but you can use it anywhere you want on the scans and so for example, my most severe psoriasis in my ear Canal, you can't usually important corticosteroid, there, but depend Rob has no locations used to limitations.
Now all of that is.
To speak to Peter off possibility as James mainline therapy for the frequent psoriasis, obviously systemic medicines for psoriasis and received a lot of attention from the dermatologist and investor communities over the past decade, or so the other thing that we've observed is even when patients ultimately with severe psoriasis for moderate to severe psoriasis.
Matthew Gline: And we observed a significant remittive benefit. These patients stayed clear or almost clear for a mean of 130 days. That's across 312 subjects who entered with or achieved a PGA of zero during the extension study. The mean duration of that remittive benefit was 130 days.
Just get put on a systemic therapy to two thirds typically receive a new topical prescription as well and in addition to kinross possibility using mainline therapy for these diseases. We also see it as a good partner along with biologics and systemic therapies.
Matthew Gline: So these are patients that are going on to PINAR off, are clearing their psoriasis disease burden, and then are remaining well for a long time, which is significantly different than, for example, what you observe with corticosteroids, which have a rebound effect, and you cease treatment. And we'll talk more in a moment about the overall profile, protocol of steroids, and how we differ. So on page 12, and this is something that I personally am very familiar with, as you may know, the current mainline therapy for striasis patients is top of corticosteroids. So my medicine cabinet is filled with tubes of partially used topical corticosteroids.
In that setting.
And so I was speaking mostly here to Jupiter, often psoriasis, where we expect the first approval decision I'll highlight on page 13 that we are also currently running a phase III program in atopic dermatitis. The study design is shown here on page three we began the study earlier this year and we said we expect to see data from the study in the first half.
A 2023.
So a significant expansion of the bus the patient population.
And as a reminder.
This study includes a number of patients which patients all the way down to age too.
Matthew Gline: This is really standard therapy for all patients, and corticosteroids have some significant limitations. You can't use them for a long time because they cause thinning of the skin. They don't have a durable effect.
So we think it's that it's potentially an important expansion of the patient population once that data comes out.
Matthew Gline: There's sort of a tapering off of benefit, but when you go off treatment, you tend to rebound quickly with psoriasis flare-ups. And there are safety and tolerability issues, which are the reason that they have duration and location of use restrictions, where you can't use, for example, the most potent steroids on parts of the skin that are already thin or sensitive. So DePirroff effectively addresses basically all of these limitations. We have efficacy that is as good or better than what has ever been observed in studies of topical corticosteroids. We have true on therapy durability, where our drug continues to work better the longer the patients stay on it in our extension study. We have a remitive effect.
On page 14, as a reminder, we have already conducted.
Several phase III studies into a pinner off.
In atopic dermatitis, and we show the results of our phase two data on page 14, which achieved statistical significance that we get endpoint.
We're excited about the prospects for that drug in the atopic dermatitis study.
The thing I'll end with an dorm event on page 15, and you'll have a chance to hear from him and from Todd in the Q&A.
In this area and this is indicative of that model as a whole.
One of the keys to the success of that model is our ability to recruit extraordinary leadership teams with deep therapeutic area specific expertise and I could not choose a better example from a portfolio with a normal event, where Todd and his team have an extraordinarily deep experience in the field of dermatology. They have overseen multiple blockbuster product launches across a number of <unk>.
<unk>.
They are working hard every day to prepare for Japan, Eros launch depending on approval decision. So you'll have a chance to hear from Todd during the Q&A today, but that but I think we are incredibly optimistic about the prospects for this program given the quality of the team that is leading edge.
Matthew Gline: So when patients go off, unlike the rebound that you observe with top corticosteroids, our patients stay clear for a long time. And then we have safety and tolerability profiles that are, frankly, in our view, more benign by a significant amount of what you see in top corticosteroids without the skin thinning effects and other other issues. And that means not only can you stay on therapy chronically, you can stay on Pinteroff for a long time, and we observed that, as I said, in our 52-week study, but you can use it anywhere you want on the skin. And so, for example, my most severe psoriasis is in my outer ear canal.
So from here I'm going to go onto the next topic for today, which is I'm going to talk about.
Progress at our development stage pipeline, including reminding people of the breadth of some of the major programs that are in late stage clinical development.
On page 17, as a reminder, you can see our development stage pipeline, which includes a number of therapies.
And per the flexibility afforded by the fast model you can see that the span different therapeutic areas. They span different modalities, we have biologics topical agents, we have oral small molecules we have antibodies.
Matthew Gline: You can't use a potent corticosterosteroid there, but DePinorov has no location of use limitation. Now, all of that is to speak to Fineroff's possibility as a sort of mainline therapy for the treatment of psoriasis. Obviously, systemic medicines for psoriasis have received a lot of attention from the dermatologist and investor communities over the past decade or so. The other thing that we observe is even when patients ultimately with severe psoriasis or moderate to severe psoriasis get put on systemic therapy, two-thirds typically receive a new topical prescription as well.
A number of different kinds of agents across therapeutic categories and have some flexibility that we feel is afforded to us by the bank model.
So I'll start on page 18, with a reminder, on the progress of the telco map, which is also known as <unk> hundred one our <unk> antibody being studied at immuno fast so I'm going to answer as you know it's also a public company and has provided their own updates recently.
We are excited for this market, we think MTF CRA is an important fundamental biological target affecting very large patient populations and diseases mediated by a pathogenic autoantibodies.
And we think <unk> in particular has some key differentiating attributes including.
Matthew Gline: And in addition to Dupinoros's possibility as a mainline therapy for these diseases, we also see it as a good partner along with biologics and systemic therapies in that setting. So I was speaking mostly here about Pineroff and psoriasis, where we expect a first approval decision. I'll highlight on page 13 that we are also currently running a phase three program in atopic dermatitis. The study design is shown here in phase three.
True simple subcutaneous route of administration with a simple straightforward injection and it was designed for that.
Rather administration from the very beginning.
And it was one of the species on which we in licensed it and then a flexible dosing potential with the possibility to obtain deep rapid IGT suppression in the short term and with the ability to adjust that out could you suppression with flexibility in the long term and that's the sort of thing that winds up being quite important in the treatment of these patients with these diseases as people often think about.
Matthew Gline: We began this study earlier this year, and we said we expected to see data from the study in the first half of 2023. So, a significant expansion of the possible patient population. And as a reminder, this study includes a number of patients, including patients all the way down to 8%. to 2.
Induction and they think about rescue therapy to think about other through flexible attributes of dosing that we think are going to matter.
In the indications that are relevant here. So what we've said with immuno Vantiv said remains true is that we are.
Finalizing our plans to initiate a number of clinical trials in total have next year.
And the final piece of that is that we are awaiting feedback from the FDA, which we expect this quarter.
Matthew Gline: And so we think it's potentially an important expansion of the patient population once that data comes out. On page 14, as a reminder, we have already conducted several phase two studies into Pinnorov in atopic dermatitis, and we show the results of our phase two data on page 14, which achieved statistical significance at a week 8 endpoint. So we're excited about the prospects for that drug in the atopic dermatitis study. The thing I'll end with on Dermavant on page 15, and you'll have a chance to hear from Todd in the Q&A, is in this area, and this is indicative of the Vant model as a whole.
On our proposed trial designs in Soviet event will provide an update before the end of this year on that feedback from FDA on our plans and we look forward to providing an update and to continuing this program in development are important.
I will next starting on pages 19, and talk a little bit about our events, which is our vast developing gene therapies for.
Rare diseases and in particular, where we have two therapies. There one is auto 18 O. One it went to viral gene therapy for sickle cell disease, which we think has unique potency.
Driven by a modified by delivery of the gene for a modified form of fetal hemoglobin that we'll talk more about the efficacy that we've observed but in particular it allows us to get even better anti cyclic properties.
Matthew Gline: One of the keys to the success of the Vant model is our ability to recruit extraordinary leadership teams with deep therapeutic area-specific expertise. And I could not choose a better example from our portfolio than Dermavant, where Todd and his team have extraordinarily deep experience in the field of dermatology. They have overseen multiple blockbuster product launches across a number of companies, and they are working hard every day to prepare for Dependos' launch, pending our approval decision. So, you know, I have a chance to hear from Todd during the Q&A today.
Therefore, even better clinical outcomes than fetal hemoglobin alone and it allows us to do so with less expression of the gene and therefore critical you'll spend a few minutes on this with reduced intensity conditioning, rather than the full myeloid ablation required by other programs in development.
Talk a bit more about that program and then the other program at around RMB 28 O. One isn't Medina viral gene therapy for Hypophosphatasia, which is shown in preclinical data durable increases in tissue nonspecific alkaline phosphatase.
Through 18 months.
It has the possibility to be a onetime prescription or a onetime therapy to replace chronic enzyme replacement therapy to standard of care with NDA, enabling studies currently ongoing.
Matthew Gline: but I think we are incredibly optimistic about the prospects for this program, given the quality of the team that is leading it. So from here, I'm going to go on to the next topic for today, which is progress in our development stage pipeline, including reminding people of the breadth and some of the major programs that are in late stage clinical development. So on page 17, as a reminder, you can see our development stage pipeline, which includes a number of therapies. And, you know, per the flexibility afforded by the Vant Model, you can see that these span different therapeutic areas and different modalities.
Yeah, So I want to talk a little bit on pages 20, and 21 about the efficacy that we've observed in our in our first four patients.
In our phase one two study in a row 18 O one.
And as a reminder, we began process development and improvement work between patients two and patients III when we in licensed this therapy from Cincinnati Childrens Hospital.
And so as you can see on page 20 of these were patients that were <unk>.
Sick at baseline with a significant number of pretreatment vasal occlusive events over the two year periods before and these are patients that have failed a number of different free treatments, including hydroxyurea.
Many different kinds of supportive care for transfusions and so on so these are our six of your sickle cell patients and what you can see on page 21 is that we observed a dramatic improvement in the condition of these patients.
Matthew Gline: We have biologics, we have topical agents, we have oral small molecules, we have antibodies, a number of different kinds of agents across therapeutic categories, and that's some flexibility that we feel is afforded to us by the Vant model. So I'll start on page 18 with a reminder about the progress at Betoklomab, which is also known as IMBD-1401, our anti-FCR antibody being studied at Immuni So Immunivant, as you know, is also a public company and has provided its own updates recently. We are excited about this market. We think anti-FCRN is an important fundamental biological target affecting very large patient populations and diseases mediated by pathogenic autoantibodies.
Even the first few patients on the original academic manufacturing processes are being your complete elimination of Vasal occlusive events and to date and we provided this update your R&D event in September we've observed no basal occlusive events in these patients through 18 months in the case of patient III and through 12 months in the case of patient four so effectively a complete clinical cure.
The symptoms of sickle cell disease. So it's not something that we are extremely excited about.
Now on page 22, which you may know from following the field. There are a number of other people developing promising genetic medicines for the treatment of sickle cell disease.
And there are exciting gene therapies and their exciting gene editing approaches out there the key difference for our therapy and this is something I highlighted a moment ago is that it was originally designed with the idea that this modified form of fetal hemoglobin would allow us to use a reduced intensity pre conditioning regimen and so.
Matthew Gline: And we think Betoklomab in particular has some key differentiating attributes, including a true simple, subcutaneous route of administration with a simple, straightforward injection, and it was designed for that route of administration from the very beginning, and it was one of the pieces on which we enlicensed it. And then flexible dosing potential with the possibility to obtain deep, rapid IGG suppression in the short term and with the ability to adjust that IGG And that's the sort of thing that winds up being quite important in the treatment of these patients with these diseases, as people often think about induction, and they think about rescue therapy, and they think about other sort of flexible attributes of dosing that we think are going to matter in the indications that are relevant here.
All of the other therapies that we are aware of with clinical data have demonstrated that Ada using an intensive malware ablative regimen using consulting as a mile or avoided reconditioning agents, whereas our therapy because with this modified form if you don't hemoglobin, we have been able to dose using a reduced intensity conditioning using in Buffalo based measurement and why does this mean.
Or I mean in short the patient experience on the smartphone based conditioning most of the tolerability issues associated with any of these therapies actually relate directly to the pre conditioning and in the case of yourself in these.
These patients were spending dramatically longer in the hospital. So that's 44 days on median versus somewhere between zero and five days from L. Flynn with the possibility that this will be outpatient procedure.
By the time, our product is approved.
Being a significantly reduced risk of ovarian failure remember these are gung sickle cell patients 30 years to 40% instead of 70% to 80% and one of the major risks associated with yourself and is enormously immune suppressive and so these patients are at significant risk of secondary secondary infections and much much much faster.
Matthew Gline: So what we've said, and what Immunivant has said remains true, is that we are finalizing our plans to initiate a number of clinical trials in Toklab next year. And the final piece of that is we are relating feedback from the FDA, which we expect this quarter, on our proposed trial designs, and so we'll provide an update before the end of this year on that feedback from the FDA on our plans. And we look forward to providing that update and to continuing this program and development. I will next, starting on pages 19, talk a little bit about our event, which is our company developing gene therapies for rare diseases.
Recovery time for about phone based free conditioning significantly reduces that purely risk and then yourself and is also in study has been associated with secondary malignancies overtime.
And that is also a significant issue associated with yourself invasive reconditioning. So our prediction is that these differences will matter enormously doing sickle cell patient community and make for a very differentiated profile.
Even amongst securities genetic medicines in development for sickle cell disease.
So as we've mentioned this in our phase one two study right now we continue to enroll patients in that study we expect to continue to enroll patients into next year. We will provide updates on this program as we get data, including the investigator Pune Malik who's making the presentation with some additional data on our patients at the Ash conference in the coming weeks.
Matthew Gline: And in particular, we have two therapies there. One is R-O-1801, a lentiviral gene therapy for sickle cell disease, which we think has unique potency, driven by the modified delivery of the gene for a modified form of fetal hemoglobin.
And we are trying to continue to provide those updates and we expect to put <unk> into a pivotal study in the beginning of 2023.
So across our portfolio, we expect to initiate at least for phase two and three studies in 2022, including as immuno matches guided multiple pivotal studies in total now.
Matthew Gline: We'll talk more about the efficacy that we observed. But in particular, it allows us to get even better anticycling properties and, therefore, even better clinical outcomes than fetal hemoglob alone. And it allows us to do so with less expression of the gene, and therefore critically, and we'll spend a few minutes on this, with reduced intensity conditioning, rather than the full myeloblation required by other programs in development.
Across multiple indications as well as and we have not spent a lot of time talking about this program, but we will start doing some more in the new year, we remain on track to initiate our phase two trial with the mill of Atlas, our anti GM CSF monoclonal antibody in sarcoidosis at kind of answered the first half of 2022, and that's an important disease.
Matthew Gline: So we'll talk a bit more about that program. And then the other program with Arrovant, Arduk 20801, is an adeniviral gene therapy for hypophysotasia, which has shown in preclinical data durable increases in tissue, not specific alkaline phosphatase, through 18 months. And it has the possibility to be a one-time prescription or a one-time therapy to replace chronic enzyme replacement therapy as standard of care with I&D enabling studies currently ongoing. So I want to talk a little bit on pages 20 and 21 about the efficacy that we've observed in our first four patients in our phase one-two study in R0801.
Port current treatment options and comparatively many patients and so it's something that we are again looking forward to speaking more about as well as a phase II trial in <unk> 17 of one which is our novel into license for the potential treatment of staph aureus bacteremia that again could address significant unmet need and we're excited to begin that trial next year as well.
Yeah.
So moving on from our development stage programs and we look forward to continue providing updates as we have them I want to provide a reminder, about our approach to drug discovery, which is also an important an important pillar of our strategy on a going forward basis.
And as a reminder, first of all.
Much of our clinical pipeline historically in many of the programs we've talked about today.
Matthew Gline: And as a reminder, we began process development and improvement work between patients two and patient three when we in-licensed this therapy from Cincinnati Children's Hospital. As you can see on page 20, these were patients that were quite sick at baseline with a significant number of free treatment of visual occlusive events over the two-year period before. And these are patients that have failed a number of different pre-treatments, including hydroxyurea, many different kinds of supportive care, transfusions, and so on.
That has been assembled by in licensing. So we often we take a targeting opportunities based thesis thesis approach to figuring out which programs to add to our pipeline and we have two teams that really isn't that are responsible for boiling the ocean looking for new therapies that massive issues, we've identified and as we've said.
Over the past several years, we've repeatedly gotten excited about targets and opportunities where when we look for programs in license nothing quite fit the bill and so we started to invest a number of years ago in a discovery platform that could complement our in licensing efforts and allow us to work on a broader set of programs that we've identified.
And so I don't think it's 25 is that sort of just a schematic of what that platform looks like and critically it includes both.
Matthew Gline: So these are our six severe sickle cell patients. And what you can see on page 21 is that we observed a dramatic improvement in the condition of these patients. Even the first two patients on the original academic manufacturing process observed a near complete elimination of vasoeclusive events. And to date, and we provided this update at our R&D event in September, we have observed no vasoeclusive events in these patients through 18 months in the case of patient three and through 12 months in the case of patient four.
We believe a leading computational drug discovery platform, combining molecular dynamics in AI and machine learning.
That allows us to.
Do free energy calculations, and stimulate biological motions, including agonism, including searching for novel allosteric binding sites, all kinds of buy a signaling and why as well and I'll talk about this in a moment as what we believe is the most precise simulation of turnover complexes, which is the combination of a protein and <unk> necessary to achieve protein degradation.
Matthew Gline: So effectively, a complete clinical cure for the symptoms of sickle cell disease. It is, therefore, something that we are extremely excited about. Now, in phase 22, as you may know from following the field, there are a number of other people developing promising genetic medicines for the treatment of sickle cell disease, and there are exciting gene therapies, and there are exciting gene editing approaches out there. But the key difference for our therapy, and this is something I highlighted a moment ago, is that it was originally designed with the idea that this modified form of fetal hemoglobin would allow us to use a reduced intensity
I had to make predictions on the important ingredients and successfully integrating a protein which is one of the reasons. We are focused on the area of targeted protein degradation. Now in addition to the computational platform itself. We believe we have world class teams focused on this area.
From the computational side folks like what are you Sherman our chief computational scientists, who are who comes to us by the acquisition of soaking up the acoustics and who has been responsible for work.
He worked as routing or for a long time building many of the most important tools out there in this area and it's now built a next generation version of our molecular dynamics engine with this team.
Within discovery and then an extraordinary team of wet lab chemists and wet lab biologists and biophysicist working to complement that engine.
Matthew Gline: And so all of the other therapies that we are aware of with clinical data have demonstrated that data using an intensive mildlo-oblative regimen using busulfine as a mildloidic agent, whereas our therapy, because of this modified form of fetal lemogloven, we have been able to dose using a reduced intensity conditioning using a melpholum-based regimen. And, you know, why does this matter?
<unk>.
Across a number of different facilities that enable us to generate novel biology chemistry in biophysics data, which critically our computational platform has been specifically designed to ingest and incorporating that feedback loop. The combination of world class wet lab biophysical data with World class computational tools, we think provides real differentiation.
Matthew Gline: I mean, in short, the patient experience with this melfolin-based conditioning, most of the tolerability issues associated with any of these therapies actually relate directly to the preconditioning. And in the case of gusulfin, these patients are spending dramatically longer in the hospital. So that's 44 days on median versus somewhere between zero and five days from elphalin, with the possibility that this will be an outpatient procedure by the time our product is approved.
Reasonably other computational companies that don't necessarily have the ability to integrate that data as well as vis vis any of the other day greater companies. For example that haven't made this kind of investment the computational tools.
It gives us a unique position in the greater landscape.
So on page 26, I highlight one of the important features there which is.
Our ability to stimulate that I've mentioned this before.
Binding and stability of Turner and complex formation.
Matthew Gline: We are seeing a significantly reduced risk of ovarian failure. Remember, these are young sickle cell patients, 30 to 40% instead of 70 to 80%. And one of the major risks associated with busulfin is, you know, it's not only. It's enormously immunosuppressive.
Which we think has the potential to be very importantly, you can structure based design of novel protein Degraders. So this is we think the most accurate simulations ever made of the position and confirmation of the combination of these rely east with approved with a protein with a greater so that we can start to make predictions about which to greater designs, where most effectively.
Matthew Gline: And so these patients are at significant risk of secondary infections, and the much, much, much faster recovery time for melcholone-based preconditioning significantly reduces that purity risk. And then Buculfan has also, in studies, been associated with secondary malignancies over time, and that is also a significant issue associated with bucolin-based preconditioning. So our prediction is that these differences will matter enormously to the sickle-cell cell patient community and make for a very differentiated profile, even amongst the curative genetic medicines in development for single cells. So as we've mentioned, this is in our Phase 1-2 study right now. We continue to enroll patients in that study, and we expect to continue to enroll patients into next year.
Crude has stabilized hurry complex formation, and which of those in turn will maximize.
Probability and magnitude degradation. So we are already actively using these tools in a number of our degree programs and we show on page 27, our discovery stage pipelines. So we spoke previously about our development stage pipeline, we have a number of programs between proteome, Amgen ROIC and discovery across principally to greater but also occasional other small.
<unk> inhibitor modalities.
Across targets ranging from highly clinically validated targets like our engineered receptor to greater program, which we expect will be the first about the greater prevention. The clinic in 2022 to two other programs across the pipeline.
Combination of biologically validated and novel targets, where we think we have an opportunity either first or best in class. So excited to continue to provide updates on our discovery efforts.
As we advance these and other programs through preclinical discovery.
So I want to say a word on page 29 about our financial results for the quarter.
Matthew Gline: We will provide updates on this program as we get new data, including that investigator Punna-Malek is making a presentation with some additional data on our patients at the Ash conference in the coming weeks, and we are excited to continue to provide those updates. We expect to put RO8101 into a pivotal study at the beginning of 2023. So across our portfolio, we expect to initiate at least four phase two or three studies in 2022, including as Immunabint has guided multiple pivotal studies in Betokinab across multiple indications, as well as, and we have not spent a lot of time talking about this program, but we will start doing so more in the new year. We remain on track to initiate our phase two trial of Nimalab, our anti-GMCSF monocon antibody in sarcoidosis, at Kynib in the first half. From 2022,
So first of all our consolidated cash and cash equivalents increased this quarter from $2 billion as of June $32 $5 billion as of September 30th and that increase was really driven by three things. It was driven by the closing of our stack transaction.
Driven by the funding of the second $100 million of investment and Protium.
By SK holdings, and it was driven by the $320 million in cash proceeds that we received at the time of the closing date advanced merger with <unk> health that I talked about earlier.
As far as our expenses for the quarter.
So our our adjusted non-GAAP R&D expense for the quarter was $104 million, our adjusted non-GAAP G&A expense for the quarter was $69 million and that led to a net non-GAAP adjusted loss for the quarter of $169 million and I'll highlight that the probably the most significant adjustments. We made this quarter is that we get as a rep.
The significant $370 million, one time share based compensation expense charge that was related to the closing of the spin transaction and so.
That was one of the adjustments that we provided you can see a full GAAP to non-GAAP reconciliation in the appendix of this presentation and then finally as I said, we had cash and cash equivalents of approximately $2 5 billion at the end of the quarter.
Matthew Gline: And that's an important disease with poor current treatment options and comparatively many patients. And so it's something that we are, again, looking forward to speaking more about, as well as a phase two trial in LSBT-1701, which is our novel endolycin for the potential treatment of Staphorius bacteremia, that again could address significant unmet needs, and we're excited to begin that trial next year as well. So moving on from our development stage programs, and we look forward to continuing to provide updates as we have them, I want to provide a reminder about our approach to drug discovery, which is also an important pillar of our strategy on a going forward basis.
With debt of approximately $200 million almost entirely related to commercial milestone obligations that don't live Ashford inner off.
And then we had $684 million approximately common shares outstanding as of November 10, 2021.
So before we turn to Q&A I, just want to remind remind everyone of a couple of opportunities for relatively near term growth that we expect to speak more about in the coming weeks and months.
So on page 31, you can see a schematic of relevant today. There are many advanced in our portfolio and we've only had a chance to talk about a few of them. Today. So we look forward to opportunities including conference presentations in other forums, just speaking about more of our more of our development activities and more of our Vance generally.
Matthew Gline: And as a reminder, first of all, much of our clinical pipelines historically for many of the programs we talked about today have been assembled via in licensing. So we often take a target and opportunity-based thesis approach to figuring out which first.
One thing that I'm, particularly excited about is Jennifer <unk>, which has been called out on this slide where we have an LNP platform that is working on novel next generation LNP used to deliver nucleic acid therapeutics.
And we're working in a number of important scientific collaborations to advance that field and we have an extraordinary team there digging back to some of the earliest chemists involved in describing your manufacturing lipid nanoparticles as well as some really exciting scientific collaborations and our broad IP estate.
Matthew Gline: programs to add to our pipeline. And we have teams at Roivant that are responsible for boiling the ocean, looking for new therapies for the massive species we've identified. And as we've said, over the past several years, we've repeatedly gotten excited about targets and opportunities where when we look for programs to in license, nothing quite fits the bill. And so we started to invest a number of years ago in a discovery platform that could complement our in licensing efforts and allow us to work on a broader set of programs that we've identified.
And then the other area that I would flag that we have not talked about today, but we expect to do so in the near future.
The launch of a number of potential new events.
Around in licensing activity around programs that we've identified that we think are interesting.
We mentioned that today that we've been licensed one such program that we're going to talk more about the future, but there will be others as well.
I'm excited about those updates to come I'm excited to share them.
Matthew Gline: And so on page 25 is sort of just a schematic of what that platform looks like. And critically, it includes both, we believe, a leading computational drug discovery platform combining molecular dynamics and AI and machine learning that allows us to do free energy calculations and simulate biological motions, including agonism, including searching for novel allosteric binding sites, all kinds of bias signaling. And as well, and I'll talk about this in a moment, as what we believe is the most precise simic of ternary complexes, which is the combination of a protein and an e3 ligase necessary to achieve protein degradation.
As a final reminder, on page 32, I just want to highlight the rich the rich series of catalysts that we have upcoming in the next year and that includes as mentioned the FDA approval decision entrepreneur offer psoriasis as well as upcoming topline phase III data in our finger off trial in atopic dermatitis. It includes a complete set of updates on the total NAV IBD for keynote one that immune events, including the <unk>.
Initiation of multiple clinical programs as well as announcing new indications and beginning those clinical programs as well.
And then continued updates from our ongoing phase one trial at Ara event in more detail about our initiation of our phase III program. There are multiple other trial initiations and multiple amount in multiple different opportunities to provide data coming out of our preclinical discovery activities. So we are excited about the quarter and the year ahead. We think we will continue to have a number.
A important updates and we look forward to taking every opportunity that we can to communicate them and at this point I want to thank everyone's taking the time to listening today I want to wrap up the presentation portion of this and hand the call back over to the operator for Q&A. So thank you and I look forward to taking your questions.
Matthew Gline: So to make predictions of the important ingredients in successfully degrading a protein, which is one of the reasons we are focused on the area of targeted protein degradation. Now, in addition to the computational platform itself, we believe we have world-class teams focused on this area. From the computational side, folks like Woody Sherman, who comes to us from Silicon Therapeutics and who has been responsible for work at Schrodinger for a long time, building many of the most important tools out there in this area, and has now built the next generation version of a molecular dynamics engine with this team at Northern Discovery.
Thank you.
As a reminder to ask a question. Please press star one on your California Keybanc.
We enjoy a question perhaps get bounty.
Please stand by while we compile the Q&A roster.
Your first question comes from Robyn for Nascar's French foolish Securities. Your line is open.
Great. Thanks for taking my question and congrats on the first earnings call.
So number one for the printer off you noted that a lot of patients and maybe you could restate the percent of patients when they go on their biologic. They also maintained them on that topical.
Matthew Gline: And then an extraordinary team of wet lab chemists and wet lab biologists and biophysicists working to complement that engine across a number of different facilities that enable us to generate novel biology, chemistry, and biophysics data, which, critically, our computational platform has been specifically designed to ingest and incorporate. In that feedback loop, the combination of world-class wet-lab biophysical data with world-class computational tools, we think provides real differentiation vis-a-vis other computational companies that don't necessarily have the ability to integrate that wet-lap data, as well as vis-a-vis any of the other degraded companies, for example, that haven't made this kind of investment in computational tools.
We used to when you're thinking about pricing and I know you said you haven't decided yet.
How much does that factor in to that decision and what's your latest thoughts on pricing given our insights pricing strategy.
And the second question is on the I T philosophy with mature not could you give an update on.
On the case, maybe give us a sense just legally what kind of news flow well here over the next six months.
So I'll start with the better off question. Thanks, Rob and thank you for joining the call I'll start with the defender off question and then I'll come back to the <unk> question. So I'll give Tom a chance to answer most of this question, but I'll just say first of all for all the reasons, we mentioned I'm really excited about what <unk> can do.
Even in sort of main or a first line therapy with psoriasis patients or not just in that concurrent setting and as you said, we haven't given guidance on price, but there's a pretty wide envelope from the lower prices of generic corticosteroids today too.
Matthew Gline: So it gives us a unique position in the greater land. So on page 26, I highlight one of the important features there, which is our ability to simulate, and I mentioned this before, binding and stability of ternary complex formation, which we think has the potential to be very important in the structure-based design of novel protein degraders. So this is, we think, the most accurate simulations ever made of the position and confirmation of the combination of an E3 ligase with a protein with a degrader, so that we can start to make predictions about which degraders will most effectively recruit and stabilize turnerary complex formation, and which of those, in turn, will maximize the probability of magnitude degradation.
<unk> thousand $500 a month I think some of the other therapies at higher prices. So we have a wide range to look at him I'll hand, it over to Todd to give his thoughts on the two questions you asked.
Hey, Thanks, Matt Good morning, Hey, Robyn how are you. Thanks for the questions I think the first response you had asked just to repeat it.
As Matt shared pretty much known in dermatology two thirds of biologic therapy, two thirds are receiving.
A topical medication concurrently so in all of our advisory boards, it's very well shared.
But this is just a normal practice within dermatology keeping in mind that pinner off our label is obviously, we did mild moderate to severe plaque psoriasis and again in our study we took a look at mild at 10%, 80% of the patients moderate and 10% severe.
Matthew Gline: So we are already actively using these tools in a number of our degrader programs, and we show on page 27 our discovery stage pipeline. So we spoke previously about our development stage pipeline. We have a number of programs between proteovant and roivant discovery across principally degrader, but also occasional other small molecule inhibitor modalities, across targets ranging from highly clinically validated targets like our engine and receptor degrator program, which we expect will be the first of our degrader programs in the clinic in 2022, to other programs across the pipeline in a combination of biologically validated and novel targets where we think we have an opportunity to be either first or best in class.
We're really the majority of prescriptions resided mild to moderate so for us. It's just when we talk to physicians, it's a <unk>.
Wide open opportunity of where to Peter off will be used across the spectrum for patients I think your second question on pricing, yes, we have time.
And it is exciting to kind of go back to Matts first point, which is we are bringing not only a novel mechanism of action to the space, but we're bringing a target product profile with that novel mechanism that is unmatched. So when you look at efficacy you look at the durability, Matt talked about.
Really the remittance, that's really where physicians will share. This is a topical with biologic like properties and then safety and Tolerability. So for US really we need to take a look at that when we look at recent medications that were brought to market.
With black boxes, and Youre seeing prices in the $1900 range.
Matthew Gline: I am excited to continue to provide updates on our discovery efforts as we advance these and other programs through pre-clinical discovery. Now, I want to say a word on page 29 about our financial results for the quarter. So first of all, our consolidated cash and cash equivalents increased this quarter from $2 billion as of June 30th to $2.5 billion as of September 30th. And that increase was really driven by three things. It was driven by the closing of our SPAC transaction and the funding of the second $100 million investment in Prote Events by SK Holdings. And it was driven by the wind.
Just going to take a look and do the work that we need to do and price. It accordingly, because the other key point to take away is it's not only the five attributes that differentiate to cut her off.
It's really the two in one transformational asset that it is so it's it's this crossover mechanistically between psoriasis and <unk>. So we have some work in front of us.
Thanks Todd.
Maybe to take the <unk> question so.
So yeah as I think you know Robyn.
So the pending legal processes around.
These appeals in the IPR process. So back in 2018 filed IPR against a number of our beautiful patents.
And after a number of those Ipos were decided and Jennifer has favor there was an appeal hearing in October on the patents number to six 9% and 43 five.
Matthew Gline: the $320 million in cash that we received at the time of the closing of Data-vance's merger with Fyax Health that I talked about earlier. As far as our expenses for the quarter, our adjusted non-gap R&D expense for the quarter was $104 million. Our adjusted non-gap G&A expense for the quarter was $69 million, and that led to a net non-gap adjusted loss for the quarter of $169 million.
I will say, our arbutus and Jennifer <unk> scientists have been leaders in this field for two decades.
And we have strong conviction in the strength of the patent portfolio Theres, a number of different outcomes that could come from that appeal decision.
I think we would expect it on sort of a standard timeline measured in a small number of months.
But I think it would be difficult to potentially inappropriate to speculate on what the outcome of those appeals could be and.
We're looking forward to providing update once we've got it on what that looks like in the process from there.
Okay granted again for the question.
Matthew Gline: And I'll highlight that probably the most significant adjustment we made this quarter was that we had a relatively significant $370 million one-time share-based compensation expense charge that was related to the closing of the SPAC transaction. And so that was one of the adjustments that we provided. And then finally, as I said, we had cash and cash equivalence of approximately $2.5 billion at the end of the quarter with debt of approximately $200 million, almost entirely related to commercial milestone obligations at Nermov for Tepenoroff. And then we had $684 million, or approximately common shares issued outstanding as of November 10th, 2021.
Yeah, Yeah, because you have to do a combo study.
<unk> four combo use when you're growing your biologic you'd have to do any study I know what's carried it seems like that seems easy to do just seem happy to additional work to get that use <unk>.
<unk>.
Okay. Thanks.
Yes at least.
Yeah, Okay, no problem that no Robin I think at the end of the day like I shared our study was was versus placebo with the indication for mild moderate severe so all of plaque psoriasis.
The dermatologist will just get there and I think it's just natural.
Treatment regimen of what we've been shared with our advisory boards I think it's been shared with all companies that are innovating in the nonsteroidal space, which is where this whole market is shifting.
We look to the future so I'm sure that within the phase four the investigated initiated programs there'll be looked at but it's not something we need to do we're not going to be promoting it I think the dermatologists have just educated us that this will naturally happen because it's been happening well before us even coming to market.
Matthew Gline: So before we turn to Q&A, I just want to remind everyone of a couple of opportunities for relatively near-term growth that we expect to speak more about in the coming weeks and months. And so on page 31, you can see a schematic of grovent today. There are many VAMS in our portfolio, and we've only had a chance to talk about a few of them today. So we look forward to opportunities, including conference presentations and other forums, to speaking about more of our development activities and more of our Vance strategy generally.
Thank you.
Thank you Robyn.
Our next question comes from Douglas Tsao from H C Wainwright.
Your line is open.
Hi, good morning, Thanks for taking the question.
Just first maybe on the printer off I'm just curious.
How do you see the product or the product being used differently.
In psoriasis versus to pair off any do you see it being used in combination with biologics more on one versus the other a frontline therapy in one versus the other and does that affect or sort of it.
Matthew Gline: One Vant that I am particularly excited about is Genavant, which has been called out on this slide, where we have an L&P platform that is working on novel next-generation LNPs to deliver nucleic acid therapeutics, and we're working in a number of important scientific collaborations to advance that field. And we have an extraordinary team there, dating back to some of the earliest chemists involved in describing and manufacturing lipid nanoparticles, as well as some really exciting scientific collaborations and a broad intellectual property. You're going.
Fluids, how you think about pricing. Thank you.
Yeah. Thanks, Doug appreciate the question and thanks for thanks for touching on the call. I think your question is do we see to Pinner office being used differently in psoriasis versus.
Atopic dermatitis.
And I think it's a good question Scott.
No. Thanks, Doug for the question no look I think we seek to pair off being used first line.
I think for for patients with psoriasis, and I mean, and that's what we're going to be be promoting it for in the mild to moderate category, where the majority of prescriptions start.
Matthew Gline: And then the other area that I would flag that we have not talked about today, but we expect to do so in the near future, is the launch of a number of potential new events around licensing activity around programs that we've identified that we think are interesting. In fact, we mentioned today that we've been licensed for one such program that we're going to talk more about in your future, but there will be others as well.
I think that the beauty when you launch a product like to pair off with again, despite attributes and a novel mechanism of action that make it totally different is we're not asking the market to change we're not asking physicians to change anything they're doing because the majority of patients have already failed on steroids.
<unk> been looking for a product that's nonsteroidal that has efficacy of a class one steadily but it's also being able to be used anywhere on the body for any length of time.
Matthew Gline: So I'm excited about those updates to come and excited to share them. As a final reminder on page 32, I just want to highlight the rich series of catalysts that we have planned for the next year. And that includes, as mentioned, the FDA approval decision on Topinorov for psoriasis, as well as upcoming top line phase three data from our Topinorov trial in Atopic dermatitis. It includes a complete set of updates on Betokinab, IMBT4101 and Immunivant, including the reinitiation of multiple clinical programs, as well as announcing new indications and. Beginning those clinical programs as well.
And when you stop medication.
Able to provide a benefit where patients are staying clear for our media and timeline of up to 130 days so for us.
I think Doug Youre, not asking people to change what they've been doing you're asking them to increase the level of standard of care for the new future and that's what took center office, bringing I think youre going to see that across psoriasis and youre going to see the same thing across atopic dermatitis.
Okay, Great. That's really helpful and then just and.
And that this is a.
One follow up just as you think about the pipeline and the development.
Of the business.
How do you feel about sort of scaling and you know just given how broad your pipeline already is and between the discovery engine as well as further business development at what point do you think you need to baby so to pump the brakes, a little just make sure that at the business you don't get ahead of yourself. Thank you.
Matthew Gline: And then continued updates from our ongoing phase one and two trials at Aravant and more detail about our initiation of our phase three program there, multiple other trial initiations, and multiple different opportunities to provide data coming out of our preclinical discovery activity. So we are excited about the quarter and the year ahead. We think we will continue to have a number of important updates, and we look forward to taking every opportunity that we can to communicate them.
Yeah. Thanks, Doug that's a good question before I before I jump in I, just one more comment on the spinoff question. You would ask me I think an important point about that to pin it off a <unk> study is it does go down to patients all the way to the age of two and I think the point there is to provide the.
The kind of flexibility to dermatologists and this is exactly the point I was making the kind of flexibility there used to be existing drugs.
So now to your question about sort of expanding the pipeline.
I think the short answer to that question is when you think about our history and I think this is not unique for women at any given moment. It feels like you are.
Matthew Gline: And at this point, I want to thank everyone for taking the time to listen today. And I want to wrap up the presentation portion of this and hand the call back over to the operator for Q&A. So thank you, and I look forward to taking your questions. Thank you. As a reminder, to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press the Pounder. Please stand well while we compile the key with errors. Your first question comes from Robin to Nossi.
Youre always constrained by something relative to where you want to do and it feels like you flip flop between being constrained by talent and I think that's sort of to the scale question being constrained by capital and being constrained by the <unk>.
Number of available opportunities are exciting.
You know I think we've always felt one of those constraints over time.
I feel that we are in a very.
Fortunate capital position right now.
And.
Recently, we've seen some really exciting opportunities come across our desk that word.
Excited to pursue and excited to share so.
Unknown Attendee: Robin Karnaskans from Trueway Securities, E Alliance Open.
I think the main constraining factor to us just to make sure that we can assemble vance who wishes to use fast enough in order to take advantage of the opportunities you see and I think what youll see as we bring in new programs is making sure that we're doing so spooling up leadership teams, including internal and external talent quickly and I think as long as we can keep those three things kind of in lock step with.
Unknown Attendee: Great, thanks for taking my question and congrats on the first earnings call. A few, so number one, to pin her off.
Unknown Attendee: You noted that a lot of patients, and maybe you could restate the percent of patients, when they go on their biologics, they also maintain them on that topical.
One another we see significant opportunity to further grow from this point now part.
Part of that is the event model and the one thing I would tell you is we are a company approaching a major commercial launch with the spin off and the reason that I feel comfortable focusing on other things just because we have such an extraordinary team of derma event.
Unknown Attendee: When you're thinking about pricing, and I know you said you haven't decided yet, how much does that factor in to that decision?
Able to launch that product and we have high conviction in their capability I think that just gets to a proven track record.
Unknown Attendee: and what's your latest thoughts on pricing, given Insights' pricing strategy? And the second question is about the IT lawsuit with Moderna. Could you give an update on the case, maybe give us a sense of just how legal it is?
Recruiting people like Todd and the team around him. So that's kind of how I feel about that.
So the question is with your question.
Thank you.
Yes.
Yeah.
Our next question comes from Yaron Werber from Cowen Your line is open.
Unknown Attendee: and just legally what kind of news flow we will hear over the next six months. Thanks. So I'll start with the Topinorov question. Thanks, Robin. Thank you for joining the call.
Hi, guys. Thanks, very much for taking the question congrats to the team. This is Brendan on for you Ron.
The other one little quick one I'm, sorry to interrupt from us.
Obviously, a lot of interest here on the asset across the board, but just really wanted to kind of.
Matthew Gline: I'll start with the DePineroff question, and then I'll come back to the Genov question. So I'll give Todd a chance to answer most of these questions. But I'll just say, first of all, for all the reasons we mentioned, I'm really excited about what DePinorov can do, even in sort of main or first-line therapy with psoriasis patients, not just in that concurrent setting. And as you said, we haven't given guidance on price, but there's a pretty wide envelope from, you know, lower prices.
Talk a little bit and see what else you can maybe tell us about your interactions with FDA since the filing.
The agency things a little overwhelmed lately with just kind of everything that's going on there. So really any color you can give us on your discussions and meetings with them throughout the process.
Excuse me, thank infection progress et cetera, any of that would be it would be really great.
Yeah, I think in short our interactions have been positive and uneventful as you would want.
I don't know if there's anything specific you would add to that.
No no you're right I think uneventful I think there the feedback has been back and forth positive and we're totally on track for everything we need to do for a mid 2022.
Matthew Gline: of generic corticosteroids today to, you know, a Tesla at $3,500 a month, I think, and some of the other therapies at higher prices. So we have a wide range to look at. I'll hand it over to Todd to give his thoughts on the two questions that you're asking. Hey, thanks, Matt. Good morning. Hey, Robin. How are you?
Okay, Great and then if I could just squeeze one more in just actually about immune event also.
I know a lot of this is a little bit up in the air here, but kind of just trying to get some of your thoughts on I.
Todd Zavodnik: Thanks for the questions. I think the first response you asked just to repeat. I guess Matt shared pretty much what's known in dermatology, two-thirds of patients on biologic therapy, two-thirds are receiving a topical medication concurrently. So on all of our advisory boards, it's very well known that this is just a normal practice within dermatology. Keeping in mind that to Pinteroff, our label is obviously mild, moderate, to severe plaque psoriasis. And again, in our study, we took a look at mild at 10%, 80% of the patient's moderate, and 10% severe, where really the majority of prescriptions reside in mild to moderate. So for us, it's just, you know, when we talk to physicians, it's a wide open opportunity of where Pinterop will be used across the spectrum for patients.
I guess first where youre at in discussions with FDA on the telco and that really what are the final pieces of feedback youre looking to receive to kind of get these studies up and running again.
And then really just maybe kind of your strategy for the expansion opportunities here, obviously, there's some clear efficacy, but that's.
Some other players going on so it really kind of just trying to see where you see the best opportunity for the drug.
Yes.
It's a good question and something we're paying a lot of attention to.
And just kind of entered a fair amount on this publicly as well.
We are excited for the breadth of the possibility for the program. The flexibility there was an incredibly strong attributes the ability to.
Dose relatively higher and get deep fast ITG suppression or dose relatively lower.
And maintain a stable level that you'd use suppression here I think there's just there's a lot going for us in that in that combines well with the other truly differentiate attribute of our program, which is none of the other programs really have the same level of a simple subcutaneous injection that we do so we think the program is well positioned we think there are indications in which our ability or our.
Todd Zavodnik: I think your second question on pricing, yeah, we have time, and it is exciting to go back to Matt's first point, which is that we're bringing not only a novel mechanism of action to the space, but we're bringing a target product profile with that novel mechanism that is unmatched. So when you look at efficacy, you look at the durability Matt talked about, and then really the remittance. That's really where physicians will share.
See our ability to dose higher and get to Steve <unk> question quickly will matter, we think theres indications, where the flexibility most indications the flexibility is going to matter. So I think.
You will see when a unit vantage is prepared to disclose this trial designs, you'll see I think optimizing for all of those features.
It's something that we feel strongly as necessary to do in order to maximize the potential for the program.
Todd Zavodnik: This is a topical with biological-like properties and then safety and tolerability. So for us, really, we need to take a look at that. When we look at recent medications that were brought to market with black boxes, and you're seeing prices in the $1,900 range, we're just going to take a look and do the work that we need to do and price it accordingly because the other key point to take away is it's not only the five attributes that differentiate Peneroth. It's really the two-and-one transformational asset that it is. So it's this crossover mechanism between psoriasis and AD.
In that context.
Obviously, we wouldnt want to sort of announce a strategy for specific clinical program until we got and sign off from FDA for what that looks like and so FDA is expected to provide feedback to us this quarter, it's been I would say.
Normal course interaction with them so far it's not like we've received any particular information one way or the other but we expect to receive that feedback and provide it in due course this quarter and I would say once we've gotten that feedback we should be able to provide a more fulsome update on our strategy across indications because it gives us a pretty clear sense for what our trial designs might look like.
Okay, great. Thanks, very much guys.
Okay.
Thank you.
Our next question comes from Geoffrey Porges from SBB Leerink. Your line is open.
Thank you very much.
Todd Zavodnik: So we have some work in front of us. Thanks, Todd. And maybe to take the Genovant question, so, yeah, as I think you know, Robin, the pending legal process is around these appeals in the IPR process. So back in 2018, we were going to have filed IPRs against a number of Arbutus Genovant patents. And after a number of those IPRs were decided in Genovan's favor, there was an appeal hearing in October on patents numbers 069 and 435.
Congratulations from from US also.
The IPO and the new quarterly cool.
Three questions. If I may 1st on entrepreneur off the FDA is certainly surprised us recently with the caution they've shown with respect to labeling even for topical agents, most obviously with obsolete.
Is there should we expect there to be any form of warning language in the <unk> to pair off label associated with.
Exposure, even at very high levels of exposure to the active.
And then secondly, a couple of financial questions.
You have any intention to change the current ownership structure with respect to immune event or Ara event.
Todd Zavodnik: You know, I'll say, Arbutus and Genovant scientists have been leaders in this field for two decades, and we have strong conviction in the strength of the patent portfolio. There are a number of different outcomes that could come from that appeal decision. I think we would expect it on some sort of standard timeline. We measured it in a small number of months. But I think it would be, you know, difficult to speculate on what the outcome of those appeals could be.
And then lastly, Richard.
Is your 175 million or so expense rate for Q3, the right basis for Q4 and for us to be modeling for next year on a quarterly basis or are there some trends that we should be aware of thank you.
Yeah. Thanks, Geoff those are all great questions I appreciate them.
I'll take them in turn and I'll give Tom a chance to kind of a raw question as well.
Matthew Gline: And, you know, we're looking forward to providing an update once we've got it on what that looks like in the process from there. Okay, great. Thank you. Yeah, you have to do a combo study, you know, for combo use.
From my perspective, and again, Todd chime in if you feel differently I think it's hard to comment on the specific content of a label without having had that discussion with FDA, but I think theres certainly nothing that we've seen in our data that would suggest anything like what you see with absolute or otherwise and I will say, it's very hard to detect meaning we have very sensitive assays for.
Unknown Attendee: For combo use when you go on your biologic, do you have to do any study? I know steroids, it seems like that seems easy to do. Just do you have to do additional work to get that use once you launch? That'll. Yeah, Todd, please.
Systemic absorption of better off and we see.
Basically no systemic absorptions, it's very hard to detect even on picomolar assays any level of systemic absorption of the therapy. So that's kind of where we are with the data.
Todd anything you would add to that.
Todd Zavodnik: Yeah, Todd, please. Yeah, okay, no problem. No, Robin.
No sounds great.
Yes.
So that was the gotcha no that's.
Thanks.
So.
Todd Zavodnik: I think at the end of the day, like I had shared, our study was versus placebo with the indication for mild, moderate, severe, so all of plaque psoriasis. I think the dermatologists will just get there, and I think it's just a natural treatment regimen of what we've been sharing with in our advisory boards. I think it should be shared with all companies that are innovating in the non-steroidal space, which is where this whole market is shifting as we look to the future.
That was the first question.
The second question was do we expect to change anything with respect to our ownership structures are a good event for our event.
<unk>.
Yeah.
So.
I would say.
We made a significant investment in Bureau van during this fiscal quarter.
Investment was designed to do two things one is.
As you might imagine the signal that we think it's an attractively priced opportunity and we wanted to on board with it.
The other is as I mentioned, it's important that.
But that those studies to be run to maximize the opportunity for flexibility and to maximize the number of indications that we can pursue when a competitive field and so we wanted to make sure. We didn't have is well capitalized to do that.
Todd Zavodnik: So I'm sure that within phase four, the investigated initiated programs, they'll be looked at, but it's not something we need to do. We're not going to be promoting it. I think the dermatologists have just educated us that this will naturally happen because it happened well before we even came to market.
We are enthusiastic about the prospects for that program and.
We'd like to continue to be.
A major owner of it.
With element, it's obviously wholly owned by ROI, but with the exception of the peace owned by Cincinnati Children's Hospital.
Operator: Our next question comes from Douglas H.C. Wainwright.
I don't at the moment see any near term need to change that we are opportunistic and we will keep an eye on the possibilities as that sort of continues to develop.
Unknown Attendee: from H.C. Wainwright. Hi, good morning, thanks for taking the questions. Just first maybe on, to pin her off, I'm just curious, how do you see the product, reduce the product being used differently in psoriasis versus Topinoroff, meaning do you see it being used more in combination with biologics more in one versus the other, or front-line therapy in one versus the other? And does that affect or sort of influence how you think about pricing?
And then the last question was for Richard about the.
Cash and I'll hand, it over to him in a second to see if you had any further comments. The one thing I'd. Just note is remember that that $175 million includes.
Our fully consolidated expense so that includes immuno bench trial expenses as well.
And my only other comment on this is just remember that because we are in the business of running large phase III studies, some quarters that will be higher some quarters will be a little bit lower depending on what studies are ongoing.
Unknown Attendee: Yeah, thanks, Judge. Appreciate the question, and thanks for, thanks for talking on the call. I think your question is, do we see Pinteroff as being used differently in psoriasis versus atopic dermatitis? And, you know, I think it's a good question for that. No, thanks, Doug, for the question. No, look, I think we see Pinteroff being used first line.
But in general.
I think.
You can sort of watch our financials, they accomplish if im repeating anything else yet.
We haven't provided any guidance at this point I think I would just wanted to point out on slide 23 that we expect to initiate at least or phase three studies in 2022, So I think depending on how the feedback plays out from the FDA and how those studies.
Todd Zavodnik: I think for patients with psoriasis, and that's what we're going to be promoting it for in the mild to moderate category where the majority of prescriptions start. I think that the beauty when you launch a product like Tepenerov with, again, these five attributes and a novel mechanism of action that make it totally different is that we're not asking the market to change. We're not asking physicians to change anything they're doing because the majority of patients have already failed on steroids.
And up one day end up running that will certainly.
Drive a lot of the impact going forward.
I think we'll be able.
As we initiate clinical programs will be able to give you a sense for what we expect that the cost and how long we expect mistake.
Okay. Thanks I appreciate it.
Sure.
Thank you.
Our next question comes from Dennis Yang from Jefferies. Your line is open.
Hi, good morning, Thanks for taking the question I guess two questions number one can you. Please help frame for investors, how to think about or even value somehow.
Todd Zavodnik: They've been looking for a product that's non-steroidal, that has the efficacy of a class one steroid but is also able to be used anywhere on the body for any length of time. And when you stop medication, you're able to provide a benefit where patients are staying clear for a median timeline of up to 130 days. So for us, I think, Doug, you're not asking people to change what they You're asking them to increase the level of the standard of care for the new future, and that's what Penaroff is bringing.
Of your.
Pass be decent non therapeutics, particularly like silicon therapeutics local event.
Can you just provide some clarity on like how does exposure in these areas.
Contribute to ROI events overall story, particularly over the long term and then as a follow up can you just comment on the internal bar or criteria that you guys use when considering.
Todd Zavodnik: I think you're going to see that across psoriasis, and you're going to see the same thing across atopic dermatide. Okay, great, that's really helpful. And then just, Matt, just as a, you know, one follow-up, just as you think about the pipeline and the development of the business, you know, how do you feel about that sort of scaling and, you know, just given the, you know, how broad your pipeline already is, and between the discovery engine, as well as further business development, at what point do you think you need to maybe sort of pump the brakes a little?
Building out additional plants and are there any interesting areas or technologies that you guys are seeing right now thank you very much.
Yeah. Thanks, Dennis I appreciate the questions, they're both they're both really good questions.
So on the first one on the.
On the sort of non therapeutic investment I would say, there's probably two different categories. There.
As you mentioned look of anti put date event in the category.
Tools that we have built to make us better at developing new drugs.
And to help us design development strategies, better or help us run trials better and that we have made commercially available to other partners. So I think.
Matthew Gline: Don't get ahead of yourself. Thank you.
Matthew Gline: Yeah, thanks, Doug. That's a good question. Before I jump to that, just one more comment on the Topinorov question you would ask. I think an important point about that Depinerov AD study is that it goes down to patients all the way to the age of two. And I think the point there is to provide the kind of flexibility to dermatologists that Todd was making, the kind of flexibility they are used to with existing drugs.
Both of those tools get directly at our ability to be faster and more effective with drug development. Then we would be without them and so there's a sort of direct strategic benefit from them, but I would also just highlight that the outcome with data van because I think pretty good indication of our ability to also generate financial value. Most opportunity. So we have put about I think 42.
Matthew Gline: So, now to your question about sort of expanding the pipeline. You know, I think the short answer to that question is, when you think about our history, and I think this is not unique to live in, at any given moment, it feels like you are, You're always constrained by something relative to what you want to do, and it feels like you flip-flop between being constrained by talent, and I think that's sort of a scale question, being constrained by capital, and being constrained by the number of And, you know, I think we've always felt one of those constraints over time.
$2 million of cash and to date event.
In the merger with tax we took $320 million of cash out and we still own.
At the assumed 7 billion value 12% of the company.
I sit on that board and we are focused on maximizing the value of that continuing to get the benefit from it I think it's a pretty good example of what we're shooting for in sort of the tools area, where we can build tools that make us better and also generate financial value and you know on the silicon therapeutic side, I guess, a little bit different in the sense that that got to be one of the court one of the core pillars of our drug <unk>.
Matthew Gline: I feel that we are in a very fortunate capital position right now, and recently, we've seen some really exciting opportunities come our way. on our desk that we're excited to pursue and excited to share. So I think the main constraining factor for us is to make sure that we can assemble Vance leadership teams fast enough in order to take advantage of the opportunities we see. I think what you'll see as we bring in new programs is making sure that we're doing so by spooling up leadership teams, including internal and external talent, quickly. And I think as long as we can keep those three things kind of in lockstep with one another, we see significant opportunity to further grow from this point. Now, part of that is the model.
<unk> efforts and we think it gets to our ability to discover and design really is engineering.
New small molecule drugs in a differentiated way.
I would say from a value perspective, I, just think about some of our.
Some of our comps who are doing similar work like like <unk> like a short and we're using those platforms for their own drug discovery activities.
And then we are one of the relatively few of them first of all they combine both ml based on molecular dynamics based approaches and then also that combined those tools with specific wet lab expertise, including the chemo proteomics and maturity targeted protein.
Some degradation I think the combination of those data will be differentially powerful for US you mentioned internal criteria I think.
Matthew Gline: And the one thing I would say is, you know, we are a company approaching a major commercial launch with Pinneroff, and the reason that I feel comfortable focusing on other things is because we have such an extraordinary team at Dermavant able to launch that product, and we have high conviction in their capability. I think that just goes to our proven track record of recruiting people like Todd and the team around them. So that's kind of how I feel. Thanks for the questions. A good question.
We have a pretty long track record of investments at this point. So you can see generally.
The kind of the breadth and the scale of opportunities that we like to look at let's say the longer that we've been around the better opportunity set has been so we'll repeat partners with a number of our both big pharma and academic partners.
At this point as a partner of choice, we get access to some of the most important programs in their pipeline that they want to continue to develop and with high quality partners. So I think that the bar has gone up over time only in the sense that our opportunity set.
Operator: Thank you. Our next question comes from Yaron Weber from Cohen, Yelan. Hi guys, thanks very much for taking the questions. Congratulations to the team. This is Brendan on for your own. Another one, just another quick one, sorry, on to pin her off from us. Obviously, there is a lot of interest here in the asset across the board, but just really wanted to kind of poke around a little bit and see what else you can maybe tell us about your interactions with FDA since the filing. Obviously, the agency seems a little overwhelmed lately with just kind of everything that's going on there. So really, any color you can give us in your discussions and meetings with them through
Has improved we remain flexible as respect to indication we remain flexible with respect to therapeutic modality.
It's one of our business principles that we've talked about publicly we remain contrarian and so I think you'll continue to see us going into exciting programs in areas that are important to our partners.
And then maybe on one side of the boat if everyone's on the others.
And so we think it's a good question.
Thank you.
Your next question CONTRAN Nina Quito.
I was hoping.
Hi, This is bill.
Unknown Attendee: the process, maybe site inspection progress, et cetera, any of that would be really great. Yeah, I think, in short, our interactions have been positive and uneventful, as you would want. Todd, I don't know if there's anything specific you would add to that. No, no, I think, you know, on eventful, I think their feedback has been back and forth positive, and we're wholly on track for everything we need to do for a mid-2020 review.
Thanks for taking my question I just had a quick question on what.
What is it.
I will turn around.
<unk> ongoing.
Thank you.
Yes, so we are continuously optimizing our process there.
And it's an important part of any gene therapy development.
We are in the process of tech transfer over Alonza Kumar as a commercial CMO and are looking to do our best to incorporate that into our pivotal program. So.
Matthew Gline: Okay, great. And if I could just squeeze in more and just actually talk about Immunavant also, I know a lot of this is a little bit up in the air here, but kind of just trying to get some of your thoughts on, I guess, first, where you're at in discussions with FDA on Tokomab, and really what are the final pieces of feedback you're looking to receive to kind of get these studies up and running again.
It's an incredibly important area for us Frank I don't do anything you would add to that.
I think it's I think it's well said, Matt we view it as a place where continued.
Iteration and improvement up to a point and then obviously, we want to market before we launched the pivotal program I do think that.
Cogs has been an issue for some gene therapies and you know in the past and we're focused on not just the clinical performance, but the overall product profile that we can deliver there, including the cost of that product.
Matthew Gline: And then maybe kind of your strategy for the expansion opportunities here. Obviously, there's some clear efficacy, but you have some other players going on. So really kind of just trying to see where you see the best opportunity for the drug. Thanks. Yeah, thanks. It's a good question.
To deliver what we think will be potentially.
Potentially curative efficacy for a broad array of patients with much improved side effect profile. So.
Matthew Gline: It's something we'll pay a lot of attention to, and obviously, Immunivant has commented a fair amount on this publicly as well. You know, we are excited about the breadth of the possibilities for the program. The flexibility there is an incredibly strong attribute, the ability to dose relatively higher and get deep, fast IDG suppression or dose relatively lower and maintain a stable level of IDG suppression. You know, I think there's just a lot going for us in that.
That's where we're headed at present.
Thank you I appreciate the question Paul.
Yeah.
There is no further question at this time you may continue.
Great.
You everybody for joining this morning as I said, it's exciting to do our first earnings call as a public company.
Enjoyed it.
Forward to doing more of these in continuing to provide updates on our business.
At conferences and in other forums. So thank you again I appreciate all the good questions and looking forward to speak to everyone. Soon.
Matthew Gline: and that combines well with the other truly differentiated attribute of our program, which is none of the other programs really have the same level of a simple subcutaneous injection that we do. So we think the program is well positioned. We think there are indications in which our ability, our potency, our ability to dose higher and get to steep biage suppression quickly will matter. We think there are indications where the flexibility, most indications the flexibility is going to matter.
This concludes today's conference call. Thank you all for joining you may now disconnect presenters. Please stay on line.
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Any others.
Yes.
Okay.
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Matthew Gline: So I think you will see when Immunivance is prepared to disclose its trial design, you'll see, I think, optimizing for all of those features, and it's something that we feel strongly is necessary to do in order to maximize the potential for the program. You know, in that context, obviously, we wouldn't want to sort of announce a strategy for a specific clinical program until we've gotten sign-off from FDA on what that looks like.
Matthew Gline: And so, you know, FDA is expected to provide feedback to us this quarter. It's been, I would say, a sort of normal course interaction with them so far. It's not like we've received any particular information one way or the other, but we expect to receive that feedback and provide it in due course this quarter. And I would say once we've gotten that feedback, we should be able to provide just a more fulsome update on our strategy across indications because it'll give us a pretty clear sense of what our trial designs are meeting.
Unknown Attendee: Okay, great. Thanks very much, Chris.
Operator: Our next question comes from Jeffrey Porch from SBB Lerink. He lines
Unknown Attendee: Thank you very much, and congratulations from us also on the IPO and the new quarterly call. Three questions, if I may. First, on Topinorov. The FDA is certainly surprised this time with the caution they've shown with respect to labeling, even for topical agents, most obviously with Obselaara. Should we expect there to be any form of warning language in the Topeneroff label associated with exposure or even very high levels of exposure to the active?
Unknown Attendee: And then secondly, a couple of financial questions. Do you have any intention to change the current ownership structure with respect to Immunavant or Aravant? And then lastly, Richard, is your 175 million or so expense rate for Q3 the right basis for Q4 and for us to be modeling for next year on a quarterly basis, or are there some trends that we should be aware of? Thank you. Yeah, thanks, Jim.
Matthew Gline: Yeah, thanks, Jeff. Those are all great questions, so I appreciate them.
Matthew Gline: I'll take them in turn, and I'll give Todd a chance to comment on Pinnarov's question as well. You know, from my perspective, and again, Todd can chime in if you feel differently. I think it's hard to comment on the specific content of a label without having had that discussion with FDA, but I think there's certainly nothing that we've seen in our data that would suggest anything like what you see with Apsolar or otherwise, and I will say it's very hard to detect, meaning we have very sensitive assays for systemic absorption of DePenteron, and we see basically no systemic absorption. It's very hard to detect, even on pico-molar assays, any level of systemic absorption of the therapy.
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Todd Zavodnik: So that's kind of where we are with data. Todd, anything you would add to that? No, sounds great. Yeah, so that was the, go ahead, Jeff. No, that's quite enough, thanks.
Unknown Attendee: So that was the first question. The second question was, do we expect to change anything with respect to our ownership structures of immunovant or Aravant? So, I would say, you know, we made a significant investment in MUNAVant during this fiscal quarter. That investment was designed to do two things.
Matthew Gline: One is, as you might imagine, it's a signal that we think it's an attractively priced opportunity and we wanted to own more of it. And the other is, as I mentioned, it's important that those studies be run to maximize the opportunity for flexibility and to maximize the number of indications that we can pursue in a competitive field, and so we wanted to make sure MUNA was well capitalized to do that. We are enthusiastic about the prospects for that program and, you know, would like to continue to be a major owner of it. And then, you know, with Aravand, it's obviously sort of wholly owned by Rojvant, with the exception of the piece owned by Cincinnati Children's Hospital.
Matthew Gline: I don't at the moment see any near-term need to change that, but we are opportunistic, and we'll keep an eye on the possibilities as that sort of continues to develop. And then the last question was for Richard about the cash, and I'll hand it over to him in a second and see if he has any further comments. The one thing I just want to remind you that that $175 million includes our fully consolidated expenses, so that includes immune advance trial expenses as well.
Matthew Gline: And my only other comment on this is just remember that because we're in the business of running large phase three studies, some quarters that will be higher, some quarters will be a little bit lower depending on which studies are ongoing. But in general, I think you can sort of watch our financials as they develop. Richard, I don't know if you can say.
Richard Pollock: Yeah, we haven't provided any guidance at this point. I think I would just want to point out on slide 23 that we expect initially, at least for phase two, three studies in 2022. So I think depending on how the feedback plays out from the FDA and how those studies end up, one day, running, that will certainly, you know, drive a lot of the impact going forward. And Jim, I think we'll be able, as we initiate clinical programs, to give you a sense for what we expect the cost and how long we expect them to take. Okay, thanks. I appreciate it.
Unknown Attendee: Her next question comes from Dennis Ding from Jeffries. He'll answer it.
Unknown Attendee: Hi, good morning. Thanks for taking the time to answer the question. I guess I have two questions. Number one, can you please help frame for investors, you know, how to think about or even value some of your past BDs and non-therapeutics, particularly like Silicon Therapeutics and Locavant? Can you just provide some clarity on, like, how does exposure in these areas contribute to Roy Van's overall story, particularly over the long term? And then, as a follow-up, can you just comment on the internal?
Unknown Attendee: bar or criteria that you guys use when considering building out additional advances. And, you know, are there any interesting areas or technologies that you guys are seeing right now? Thank you very much. Yeah, thanks, Dennis. I appreciate the question.
Matthew Gline: Yeah, thanks, Dennis. I appreciate the questions. They're both really good questions.
Matthew Gline: So on the first one, on the sort of non-therapeutic investment, I would say there are probably two different categories there. There's, you mentioned Locavant, and I put Data Vant in the category of tools that we have built to make us better at developing new drugs and that help us design development strategies better or help us run trials better, and that we have made commercially available to other partners. So I think, you know, both of those tools get directly at our ability to be faster and more effective at drug development than we would be without them.
Matthew Gline: And so there's a sort of direct strategic benefit from them. But I would also just highlight that the outcome with Datavant is, I think, a pretty good indication of our ability to also generate financial value from those opportunities. So, you know, we put about, I think, $42 million of cash into Datavant. In the merger with Syax, we took $320 million of cash out, and we still own, at the assumed $7 billion value, 12% of the company.
Matthew Gline: And I sit on that board, and we are focused on maximizing the value of that and continuing to get the strategic benefit from it. I think it's a pretty good example of what we're shooting for in sort of the tools area. Where we can build tools that make us better and also generate financial value. And you know, on the Silicon therapeutics side, I think it's a little bit different in the sense that that has to be one of the core pillars of our drug discovery efforts.
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Matthew Gline: And we think it gets to our ability to discover and design, really as engineering, new small molecules in a differentiated way. And there, I say from the value perspective, I just think about some of our competitors who are doing similar work, like a relay or like a shorringer, using those platforms for their own drug discovery activities. And then, you know, we are one of the relatively few.
Matthew Gline: First of all, they combine both ML-based and molecular dynamics-based approaches, and then they also combine those tools with specific wet lab expertise, including chemoproteomics in the field of target protein degradation, and I think the combination of those data will be differentially powerful for us.
Matthew Gline: You know, you mentioned internal criteria. I think, um, we have a pretty long track record of investment at this point, so you can see, generally, the kind, the breadth, and the scale of opportunities that we like to look at. I will say the longer that we've been around, the better our opportunity set has been. So we'll repeat partners with a number of our both big pharma and academic partners. You know, they view us at this point as a partner of choice.
Matthew Gline: We get access to some of the most important programs in their pipelines that they want to continue developing with a high-quality partner. So, you know, I think that the bar has gone up over time, only in the sense that our opportunity set has improved. We remain flexible as respect to indication. We remain flexible as respect to therapeutic modality. And, you know, it's one of our business principles that we've talked about publicly.
Matthew Gline: We remain contrarians, and so I think you will continue to see us going into exciting programs in areas that are important to our partners and, you know, that may be, you know, on one side of the boat if everyone's on the other. So thank you. It's a good question.
Operator: Our next question comes from Nina Vitrito. Hi Bina, this is Bina on behalf of Nina. Thanks for taking my question. I just had a quick question about our exam and what is the print manufacturing turnaround time and if there's any additional optimization ongoing on that front? Thank you.
Unknown Attendee: Yes, so we are continuously optimizing our process there, and it's an important part of any gene therapy development. We are in the process of tech transfer over to Lonza as a commercial CDMO and are looking to do our best to incorporate that into our pivotal program. So it's an incredibly important area for us. Frank, I don't think you would add to that.
Matthew Gline: I think it's well said, Matt. We do it as a place for continued iteration and improvement up to a point, and then, obviously, we want to lock it before we launch the pivotal program. I do think that, you know, um, COGS has been an issue for some gene therapies in the past, and we're focused on, you know, not just the clinical performance but the overall product profile that we can deliver there, including the cost of that product to deliver what we think will be, you know, potentially curative efficacy for a broad array of patients with many approved side effect profiles. So that's where we're headed at present. Thank you. I appreciate the question.
Frank M. Torti: There's no further question this time. You may continue.
Operator: Great. Well, thank you everybody for joining us this morning. As I said, it's exciting to do our first earnings call as a public company. I've enjoyed it.
Matthew Gline: I'm looking forward to doing more of these and continuing to provide updates on our business at conferences and other forums. So thank you again. I appreciate all the good questions.
Operator: I'm looking forward to speaking to everyone soon. This concludes today's conference call. Thank you all for joining. You may now disconnect. Presenters, please stay on.
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