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What changed in Roivant Sciences Ltd.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Roivant Sciences Ltd.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+906 added−926 removedSource: 10-K (2023-06-28) vs 10-K (2022-06-28)

Top changes in Roivant Sciences Ltd.'s 2023 10-K

906 paragraphs added · 926 removed · 594 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

242 edited+160 added−153 removed397 unchanged
Biggest changeVTAMA commercial sale; to be paid using $160M RIPSA funding received in June 2022 • Up to CAD$75M in remaining commercial milestones to Welichem, with CAD$35M payable upon VTAMA first U.S. commercial sale for atopic dermatitis and the remainder payable as first commercial sales are achieved in various ex-U.S. countries • Additional milestones owed to NovaQuest in connection with two 2018 financings that are accounted for as debt • Low single-digit to high single-digit tiered percentage of quarterly revenues based on achievement of specified net sales thresholds, up to a $344M cap, to be paid to an investor group in exchange for $160M RIPSA funding received in June 2022, following VTAMA approval Immunovant IMVT-1401 • Up to a maximum of $442.5M upon the achievement of certain development, regulatory and sales milestone events • Tiered royalties on net sales ranging from mid-single digits to mid-teens Priovant Brepocitinib • Mid tens-of-millions sales milestone payment if aggregate net sales in a given year exceed a mid hundred-of-millions amount • Tiered sub-teens royalty on net sales Kinevant Namilumab • Up to $40M upon the achievement of certain milestones • Tiered royalties on net sales ranging from sub-teens to mid-teens Hemavant RVT-2001 • Up to $65M in development and regulatory milestones for the first indication; up to $18M in payments for each additional indication; up to $295M in commercial milestone payments • Tiered high single-digit to sub-teens royalty on net sales Note: The summaries above do not purport to be complete.
Biggest changeKey Business Highlights • VTAMA • Secured FDA approval of VTAMA® (tapinarof) cream, 1% for plaque psoriasis in adults, the Company’s first commercial product and first topical novel chemical entity for psoriasis in the U.S. in 25 years. • Successfully launched with drug in channel within days of FDA approval and became the most prescribed branded topical for psoriasis only eight weeks into launch. • Met the primary and all secondary endpoints in two Phase 3 studies, evaluating 813 moderate-to-severe atopic dermatitis patients with no new safety or tolerability signals observed in this population, which included children as young as 2 years old. • Generated net product revenue of $13.7 million for the fourth quarter and $28.0 million for the fiscal year ended March 31, 2023. • Expanded coverage with 125 million U.S. commercial lives covered, or 76% of total, as of June 2023. • RVT-3101 • Announced partnership with Pfizer to form new company around RVT-3101, a potential first-in-class and best-in-class anti-TL1A antibody for ulcerative colitis and Crohn’s disease. • Reported statistically significant and clinically meaningful results from the induction period of TUSCANY-2, a large global phase 2b study of subcutaneous RVT-3101 for the treatment of ulcerative colitis. • Demonstrated improved efficacy results from the induction to chronic period in the TUSCANY-2 study and was well tolerated with a favorable safety profile across all doses. • Initiated a Phase 2 study of RVT-3101 in Crohn’s disease, with topline data expected in the fourth quarter of calendar year 2024. • Anti-FcRn Franchise • Initiated a Phase 3 study of batoclimab in thyroid eye disease (“TED”) and a Phase 2b study in chronic inflammatory demyelinating polyneuropathy (“CIDP”). • Unveiled IMVT-1402, a next generation anti-FcRn which showed deep IgG lowering similar to batoclimab with no or minimal impact observed on albumin and LDL (low-density lipoprotein) levels in animal studies. • Initiated a Phase 1 study for IMVT-1402, with initial data expected in August / September 2023. • Brepocitinib • Announced Priovant Therapeutics, a new Vant partnered with Pfizer and dedicated to developing and commercializing novel therapies for autoimmune diseases with lead compound, brepocitinib, a first-in-class dual, selective inhibitor of TYK2 and JAK. • Initiated a Phase 3 study developing oral brepocitinib for the treatment of dermatomyositis. • Completed enrollment for its ongoing potentially registrational global study evaluating oral brepocitinib for the treatment of SLE in August 2022. 7 Table of Contents The table below summarizes select potential future payment obligations from acquisitions, in-licensings and subsequent financings for select products and product candidates: Vant Product or Product Candidate Milestones Royalty Dermavant VTAMA (tapinarof) • Up to CAD$75M in remaining commercial milestones to Welichem, with CAD$35M payable upon VTAMA first U.S. commercial sale for atopic dermatitis and the remainder payable as first commercial sales are achieved in various ex-U.S. countries • Low single-digit to high single-digit tiered percentage of quarterly revenues based on achievement of specified net sales thresholds, up to a $344M cap, to be paid to an investor group in exchange for $160M RIPSA funding received in June 2022, following VTAMA approval ; accounted for as debt with a net carrying value of $174M as of March 31, 2023 • Additional milestones owed to NovaQuest in connection with two 2018 financings that are accounted for as debt with a fair value of $208M as of March 31, 2023 Immunovant Anti-FcRn Franchise • Up to a maximum of $432.5M (after an aggregate amount of $20.0M of milestone achievements as of March 31, 2023) upon the achievement of certain development, regulatory and sales milestone events • Tiered royalties on net sales ranging from mid-single digits to mid-teens Telavant RVT-3101 • None • Mid-single-digit royalty on net sales Priovant Brepocitinib • Mid tens-of-millions sales milestone payment if aggregate net sales in a given year exceed a mid hundred-of-millions amount • Tiered sub-teens royalty on net sales Kinevant Namilumab • Up to $40M upon the achievement of certain milestones • Tiered royalties on net sales ranging from sub-teens to mid-teens Hemavant RVT-2001 • Up to $65M in development and regulatory milestones for the first indication; up to $18M in payments for each additional indication; up to $295M in commercial milestone payments • Tiered high single-digit to sub-teens royalty on net sales Note: The summaries above do not purport to be complete.
Nucleic acid therapeutics circumvent the question of whether or not a target is undruggable by impacting protein expression itself. The field of nucleic acid therapeutics has gained significant momentum in recent years, with FDA approval of Alnylam’s Onpattro and Givlaari (givosiran), and approval of multiple mRNA COVID-19 vaccines.
Nucleic acid therapeutics circumvent the question of whether or not a target is undruggable by impacting protein expression itself. The field of nucleic acid therapeutics has gained significant momentum in recent years, with FDA approval of Alnylam’s Onpattro and Givlaari (givosiran) and multiple mRNA COVID-19 vaccines.
Second- and third-line treatment options, including immunosuppressive therapies and biologics, are limited by slow onset, safety risk, inconsistent effectiveness, and reimbursement challenges, leaving significant unmet medical need that could be met by a novel biologic. • Clinical data: • Early clinical data in pharmacokinetic/pharmacodynamic (PK/PD) and subsequent Phase 2 studies showed namilumab to be well-tolerated with a single subcutaneous injection given up to every four weeks. • In a Phase 1 study of healthy volunteers with a single subcutaneous injection, namilumab was observed to be generally well-tolerated. • In a Phase 2 trial in patients with moderate to severe rheumatoid arthritis conducted by Takeda, namilumab demonstrated decreased disease activity compared to placebo.
Second- and third-line treatment options, including immunosuppressive therapies and biologics, are limited by slow onset, safety risk, inconsistent effectiveness, and reimbursement challenges, leaving significant unmet medical need that could be met by a novel biologic. • Clinical data : o Early clinical data in pharmacokinetic/pharmacodynamic (PK/PD) and subsequent Phase 2 studies showed namilumab to be well-tolerated with a single subcutaneous injection given up to every four weeks. o In a Phase 1 study of healthy volunteers with a single subcutaneous injection, namilumab was observed to be generally well-tolerated. o In a Phase 2 trial in patients with moderate to severe rheumatoid arthritis conducted by Takeda, namilumab demonstrated decreased disease activity compared to placebo.
Among the changes made by the ACA to preexisting law of importance to the pharmaceutical industry are that the ACA: • made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs to 23.1% of average manufacturer price (“AMP”), and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP. • imposed a requirement on manufacturers of branded drugs to provide a 70% (increased pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale discount off the negotiated price of branded drugs dispensed to Medicare Part D beneficiaries in the coverage gap (i.e., “donut hole”) as a condition for a manufacturer’s outpatient drugs being covered under Medicare Part D. • extended a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations. • expanded the entities eligible for discounts under the 340B Drug Discount Program. • established a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected. • imposed an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain government healthcare programs. • established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Among the changes made by the ACA to preexisting law of importance to the pharmaceutical industry are that the ACA: • made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs to 23.1% of average manufacturer price (“AMP”), and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP. 64 Table of Contents • imposed a requirement on manufacturers of branded drugs to provide a 70% (increased pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale discount off the negotiated price of branded drugs dispensed to Medicare Part D beneficiaries in the coverage gap (i.e., “donut hole”) as a condition for a manufacturer’s outpatient drugs being covered under Medicare Part D. • extended a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations. • expanded the entities eligible for discounts under the 340B Drug Discount Program. • established a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected. • imposed an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain government healthcare programs. • established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Market research with HCPs and third-party analysis of claims data suggest that approximately 25% of diagnosed and treated pulmonary sarcoidosis would be eligible for treatment with second-line or later therapy. • Limitations of current treatments: • Corticosteroids are the most widely used treatment for sarcoidosis, but they carry significant side effects when used longer-term.
Market research with HCPs and third-party analysis of claims data suggest that approximately 25% of diagnosed and treated pulmonary sarcoidosis would be eligible for treatment with second-line or later therapy. • Limitations of current treatments : o Corticosteroids are the most widely used treatment for sarcoidosis, but they carry significant side effects when used longer-term.
The process generally involves the following: • completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an IRB, or independent ethics committee at each clinical trial site before each human trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations and requirements, GCP requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; • submission to the FDA of an NDA or BLA; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review; • satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug or biologic will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug or biologic’s identity, strength, quality and purity; • potential FDA inspection of the clinical trial sites that generated the data in support of the NDA or BLA and/or us as the sponsor; • payment of user fees for FDA review of the NDA or BLA (unless a fee waiver applies); • agreement with FDA on the final labeling for the product and the design and implementation of any required REMS; and • FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the United States.
The process generally involves the following: • completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an IRB, or independent ethics committee at each clinical trial site before each human trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations and requirements, GCP requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; • submission to the FDA of an NDA or BLA; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review; 54 Table of Contents • satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug or biologic will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug or biologic’s identity, strength, quality and purity; • potential FDA inspection of the clinical trial sites that generated the data in support of the NDA or BLA and/or us as the sponsor; • payment of user fees for FDA review of the NDA or BLA (unless a fee waiver applies); • agreement with FDA on the final labeling for the product and the design and implementation of any required REMS; and • FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the United States.
Under the Japan Tobacco Agreement, DSG has received (i) an upfront payment of $60.0 mllion in January 2020 and (ii) a payment of $10.0 million in December 2021 related to development milestones that were achieved, and DSG may receive up to an additional $43.0 million upon the achievement of certain development milestones for tapinarof in psoriasis and atopic dermatitis.
Under the Japan Tobacco Agreement, DSG has received (i) an upfront payment of $60.0 million in January 2020 and (ii) a payment of $10.0 million in December 2021 related to development milestones that were achieved, and DSG may receive up to an additional $43.0 million upon the achievement of certain development milestones for tapinarof in psoriasis and atopic dermatitis.
Our patents are directed to: • Lipid structures, including cationic and PEG-lipids; • Particle compositions, including commonly used ranges of lipid ratios for nucleic acid-containing particles; • Nucleic acid-containing particles with certain structural characteristics; • mRNA-containing LNP formulations; and • Various aspects of our manufacturing process. 38 Table of Contents Priovant Overview • Overview : • Priovant is developing brepocitinib, a potent small molecule inhibitor of TYK2 and JAK1, for the treatment of dermatomyositis (“DM”), systemic lupus erythematosus (“SLE”) and other immune-mediated diseases. • Lead program : • Brepocitinib is a potentially first-in-class, orally administered, small molecule inhibitor of TYK2 and JAK1 that suppresses signaling of TYK2- and JAK1-dependent cytokines linked to autoimmunity, including type I and type II interferon, IL-6, IL-12, and IL-23. • Disease overview : • DM is a chronic, immune-mediated disease of the skin and muscles.
Our patents are directed to: • lipid structures, including cationic and PEG-lipids • particle compositions, including commonly used ranges of lipid ratios for nucleic acid-containing particles • nucleic acid-containing particles with certain structural characteristics • mRNA-containing LNP formulations • various aspects of our manufacturing process 36 Table of Contents Priovant Overview • Overview : • Priovant is developing brepocitinib, a potent small molecule inhibitor of TYK2 and JAK1, for the treatment of dermatomyositis (“DM”), systemic lupus erythematosus (“SLE”) and other immune-mediated diseases. • Lead program : • Brepocitinib is a potentially first-in-class, orally administered, small molecule inhibitor of TYK2 and JAK1 that suppresses signaling of TYK2- and JAK1-dependent cytokines linked to autoimmunity, including type I and type II interferon, IL-6, IL-12, and IL-23. • Disease overview : • DM is a chronic, immune-mediated disease of the skin and muscles.
GM-CSF, a key pathogenic cytokine, has been implicated in multiple parts of the granulomatous response. • Sarcoidosis affects approximately 200,000 people in the United States, with over 90% of cases presenting with pulmonary involvement. • An estimated 54% of pulmonary sarcoidosis patients are diagnosed, and approximately 90% of these patients receive some form of treatment.
GM-CSF, a key pathogenic cytokine, has been implicated in multiple parts of the granulomatous response. o Sarcoidosis affects approximately 200,000 people in the United States, with over 90% of cases presenting with pulmonary involvement. o An estimated 54% of pulmonary sarcoidosis patients are diagnosed, and approximately 90% of these patients receive some form of treatment.
In all five of these studies, treatment with brepocitinib was associated with statistically significant and clinically meaningful efficacy. 39 Table of Contents Study Population N 1 Brepocitinib Dose Primary Endpoint Result Statistical Significance Psoriatic Arthritis 218 30 mg once daily 23.4% placebo-adjusted ACR20 RR at week 16 P = 0.0197 Plaque Psoriasis 212 30 mg once daily -10.1 placebo-adjusted CFB in PASI score at week 12 P Ulcerative Colitis 167 30 mg once daily -2.28 placebo-adjusted CFB in Mayo Score at week 8 P = 0.0005 Alopecia Areata 94 2 30 mg once daily 3 49.18 placebo-adjusted CFB in SALT Score at week 24 P 4 Hidradenitis Suppurativa 100 45 mg once daily 5 18.7% placebo-adjusted HiSCR rate at week 16 P = 0.0298 4 1.
In all five of these studies, treatment with brepocitinib was associated with statistically significant and clinically meaningful efficacy. 37 Table of Contents Study Population N 1 Brepocitinib Dose Primary Endpoint Result Statistical Significance Psoriatic Arthritis 218 30 mg once daily 23.4% placebo-adjusted ACR20 RR at week 16 P = 0.0197 Plaque Psoriasis 212 30 mg once daily -10.1 placebo-adjusted CFB in PASI score at week 12 P Ulcerative Colitis 167 30 mg once daily -2.28 placebo-adjusted CFB in Mayo Score at week 8 P = 0.0005 Alopecia Areata 94 2 30 mg once daily 3 49.18 placebo-adjusted CFB in SALT Score at week 24 P 4 Hidradenitis Suppurativa 100 45 mg once daily 5 18.7% placebo-adjusted HiSCR rate at week 16 P = 0.0298 4 1.
For example, a rule enacted under the Trump Administration known as the “Most Favored Nations” rule would set Medicare Part B reimbursement at an amount no higher than the lowest price that a drug manufacturer receives on a particular product in an index of foreign countries.
For example, a rule enacted under the Trump Administration known as the “Most Favored Nations” rule would have set Medicare Part B reimbursement at an amount no higher than the lowest price that a drug manufacturer receives on a particular product in an index of foreign countries.
A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs. 63 Table of Contents A drug or biologic product can also obtain pediatric market exclusivity in the United States.
A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs. 59 Table of Contents A drug or biologic product can also obtain pediatric market exclusivity in the United States.
Novel ligands can successfully deliver siRNA and certain other oligonucleotides to hepatocytes, and our expertise enables the design of novel ligands with the potential to expand delivery capability to other cell types such as hepatic stellate cells. Our ligand conjugate technology has demonstrated equal or better preclinical potency, assessed by duration and magnitude of knockdown compared to current industry benchmark.
Novel ligands can successfully deliver siRNA and certain other oligonucleotides to hepatocytes, and our expertise enables the design of novel ligands with the potential to expand delivery capabilities to other cell types such as hepatic stellate cells. Our ligand conjugate technology has demonstrated equal or better preclinical potency, assessed by duration and magnitude of knockdown compared to current industry benchmark.
MDS patients are at risk for symptoms related to anemia, infection and bleeding, and they have variable survival expectations and rates of progression to acute myeloid leukemia.
MDS patients are at risk for symptoms related to anemia, infection and bleeding, and they have variable survival expectations and rates of progression to acute myeloid leukemia (“AML”).
As an EGC, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation. 81 Table of Contents
As an EGC, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation. 75 Table of Contents
ACR20: American College of Rheumatology 20% Improvement; RR: Response Rate; CFB: Change From Baseline; PASI: Psoriasis Area and Severity Index; SALT: Severity of Alopecia Tool; HiSCR: Hidradenitis Suppurativa Clinical Response • Brepocitinib’s safety database includes over 1,000 exposed participants evaluated in 14 completed Phase 1 and Phase 2 studies and three ongoing Phase 1 and Phase 2 studies.
ACR20: American College of Rheumatology 20% Improvement; RR: Response Rate; CFB: Change From Baseline; PASI: Psoriasis Area and Severity Index; SALT: Severity of Alopecia Tool; HiSCR: Hidradenitis Suppurativa Clinical Response • Brepocitinib’s safety database includes over 1,400 exposed participants evaluated in 14 completed Phase 1 and Phase 2 studies and three ongoing Phase 1 and Phase 2 studies.
This rule currently was the subject of litigation, and was formally rescinded the Biden Administration in August 2021. Other initiatives under the Trump administration have taken effect.
This rule was the subject of litigation and was formally rescinded the Biden Administration in August 2021. Other initiatives under the Trump Administration have taken effect.
In 2020, Reblozyl (luspatercept) became the only FDA-approved therapy for lower-risk MDS patients who are ring sideroblast positive and who have failed an ESA. Although Reblozyl can lead to transfusion independence, it is ineffective in over 50% of patients and is most effective in patients with a low transfusion burden.
In 2020, Reblozyl (luspatercept) became the only FDA-approved therapy for lower-risk MDS patients who are ring sideroblast positive and who have failed an ESA. Although Reblozyl can lead to transfusion independence, it is ineffective in over 50% of second line patients and is most effective in patients with a low transfusion burden.
In August 2018, in connection with the GSK Agreement, DSG and GlaxoSmithKline Trading Services Limited (“GSK Trading”) entered into a clinical manufacturing and supply agreement for VTAMA pursuant to which DSG obtained an existing supply of VTAMA drug product and drug substance as well as additional supply of VTAMA drug product for clinical trials on a cost plus basis.
In August 2018, in connection with the GSK Agreement, DSG and GlaxoSmithKline Trading Services Limited (“GSK Trading”) entered into a clinical manufacturing and supply agreement (the “Clinical Supply Agreement”) for VTAMA pursuant to which DSG obtained an existing supply of VTAMA drug product and drug substance as well as additional supply of VTAMA drug product for clinical trials on a cost plus basis.
Pursuant to the Pfizer License Agreement, Pfizer granted Priovant (i) an exclusive, worldwide, sublicensable, royalty-bearing license under certain patents and (ii) a non-exclusive, worldwide, sublicensable, royalty-bearing license under certain know-how, in each case, to develop, manufacture and commercialize Brepo and TYK2 compounds and products incorporating such compounds for all human and animal uses.
Pursuant to the Pfizer-Priovant License Agreement, Pfizer granted Priovant (i) an exclusive, worldwide, sublicensable, royalty-bearing license under certain patents and (ii) a non-exclusive, worldwide, sublicensable, royalty-bearing license under certain know-how, in each case, to develop, manufacture and commercialize brepocitinib and TYK2 compounds and products incorporating such compounds for all human and animal uses.
These patents and pending applications, if issued, are expected to expire between 2021 and 2039, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees.
These patents and pending applications, if issued, are expected to expire between 2023 and 2039, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees.
Regulation of Companion Diagnostics Success of certain product candidates may depend, in part, on the development and commercialization of a companion diagnostic. A companion diagnostic is a medical device, often an in vitro device, which provides information that is essential for the safe and effective use of a corresponding drug or biological product.
Regulation of Companion Diagnostics Success of certain product candidates may depend, in part, on the development and commercialization of a companion diagnostic. A companion diagnostic is a medical device, typically an in vitro device, which provides information that is essential for the safe and effective use of a corresponding drug or biological product.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the drug or biologic, suspension of the approval, complete withdrawal of the drug from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of drug or biologic approvals; • drug or biologic seizure or detention, or refusal to permit the import or export of drugs; or • injunctions or the imposition of civil or criminal penalties; or • debarment from producing or marketing drug products or biologics.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the drug or biologic, suspension of the approval, complete withdrawal of the drug from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; 60 Table of Contents • refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of drug or biologic approvals; • drug or biologic seizure or detention, or refusal to permit the import or export of drugs; • injunctions or the imposition of civil or criminal penalties; or • debarment from producing or marketing drug products or biologics.
There are two main types of marketing authorizations for innovative medicinal products, which, however, are based on largely identical regulatory rules, requirements and timelines, including the requirements concerning the presentation and content of the application for marketing authorization. • The centralized MA is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use (the “CHMP”), of the EMA, 74 Table of Contents and is valid throughout the entire territory of the EEA.
There are two main types of marketing authorizations for innovative medicinal products, which, however, are based on largely identical regulatory rules, requirements and timelines, including the requirements concerning the presentation and content of the application for marketing authorization. • The centralized MA is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use (the “CHMP”), of the EMA, and is valid throughout the entire territory of the EEA.
After evaluation of the available safety data and following discussions with multiple regulatory agencies, we are continuing the clinical development of batoclimab. • In 2019, we initiated an open-label, single-arm Phase 2a clinical trial of batoclimab for the treatment of TED.
After evaluation of the available safety data and following discussions with multiple regulatory authorities, we are continuing the clinical development of batoclimab. • In 2019, we initiated an open-label, single-arm Phase 2a clinical trial of batoclimab for the treatment of TED.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable deterioration over their shelf life. 59 Table of Contents FDA Review Process Following completion of the clinical trials, data are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable deterioration over their shelf life. FDA Review Process Following completion of the clinical trials, data are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses.
According to the ruling, the competent authorities of EU Member States may, under certain strict conditions, bring claims to their national courts against a company for breaches of the GDPR, including unlawful cross-border processing activities, even 77 Table of Contents such company does not have an establishment in the EU member state in question and the competent authority bringing the claim is not the lead supervisory authority.
According to the ruling, the competent authorities of EU Member States may, under certain strict conditions, bring claims to their national courts against a company for breaches of the GDPR, including unlawful cross-border processing activities, even such company does not have an establishment in the EU member state in question and the competent authority bringing the claim is not the lead supervisory authority.
The Vant model is designed to facilitate rapid decision making and calculated risk taking, by empowering, aligning and incentivizing Vant teams around the outcomes of their specific products or product candidates. • Developing and deploying proprietary technologies: We believe we are able to develop transformative medicines faster by building and applying computational tools to drug discovery, development and commercialization.
The Vant model is designed to facilitate rapid decision making and calculated risk taking, by empowering, aligning and incentivizing Vant teams around the outcomes of their specific products or product candidates. 6 Table of Contents • Developing and deploying proprietary technologies: We believe we are able to develop transformative medicines faster by building and applying computational tools to drug discovery, development and commercialization.
MG Phase 3 Trial Design (N ~ 210) QW = weekly, Q2W = once every two weeks, SC = subcutaneous injection 24 Table of Contents Batoclimab for the Treatment of TED TED overview TED, also referred to as Graves’ Ophthalmopathy or GO, is a sight-threatening autoimmune inflammatory disorder that affects the muscles and tissues surrounding the eyes.
MG Phase 3 Trial Design (N ~ 210) QW = weekly, Q2W = once every two weeks, SC = subcutaneous injection 20 Table of Contents Batoclimab for the Potential Treatment of TED TED overview TED, also referred to as Graves’ Ophthalmopathy or GO, is a sight-threatening autoimmune inflammatory disorder that affects the muscles and tissues surrounding the eyes.
Later discovery of previously unknown problems with a drug or biologic, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to 64 Table of Contents comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
Later discovery of previously unknown problems with a drug or biologic, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
RNA molecules cannot passively cross most cell membranes given their large size and negative charge, and therefore must be administered in conjunction with a delivery technology to ensure transport to target cell types. We work with two proprietary technologies, LNP delivery and ligand conjugate delivery, to improve the likelihood of clinical success of nucleic acid therapeutics.
RNA molecules cannot passively cross most cell membranes given their large size and negative charge, and therefore must be administered in conjunction with a delivery technology to ensure transport to target cell types. 33 Table of Contents We work with two proprietary technologies, LNP delivery and ligand conjugate delivery, to improve the likelihood of clinical success of nucleic acid therapeutics.
ISG is also obligated to pay HanAll tiered royalties ranging from the mid-single digits to mid-teens on net sales of licensed products, subject to standard offsets and reductions as set forth in the HanAll Agreement.
ISG is also obligated to pay HanAll tiered royalties ranging from the mid-single digits to mid-teens percentage of net sales of licensed products, subject to standard offsets and reductions as set forth in the HanAll Agreement.
This DS patent has a natural expiration date in 2038, without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.
This DS patent has a natural expiration date in 2038 assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees and without taking into account any possible patent term adjustments or extensions.
This has led to significant variations in the Member State regimes. Under this regime, before a clinical trial can be initiated it must be 73 Table of Contents approved in each of the EU/UK countries where the trial is to be conducted by two distinct bodies: the National Competent Authority (the “NCA”), and one or more Ethics Committees (“ECs”).
This has led to significant variations in the Member State regimes. Under this regime, before a clinical trial can be initiated it must be approved in each of the EU/UK countries where the trial is to be conducted by two distinct bodies: the National Competent Authority (the “NCA”), and one or more Ethics Committees (“ECs”).
For a period of two years from January 1, 2021 (although this may be extended), the Medicines and Healthcare products Regulatory Agency (the “MHRA”), the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new MA in the centralized procedure, in order to more quickly grant a new MA valid in Great Britain.
For a period of three years from January 1, 2021 (although this may be further extended), the Medicines and Healthcare products Regulatory Agency (the “MHRA”), the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new MA in the centralized procedure, in order to more quickly grant a new MA valid in Great Britain.
Additionally, recent FDA action regarding JAK inhibitors has resulted in restrictive labeling and black box warnings relating to safety concerns with the product class, both oral and topical forms, including for the topical treatment of atopic dermatitis. We believe VTAMA has the potential to fill the need for a long-term treatment option for atopic dermatitis.
Additionally, recent FDA action regarding JAK inhibitors has resulted in restrictive labeling and black box warnings relating to safety concerns with the product class, both oral and topical forms, including for the topical treatment of atopic dermatitis. 16 Table of Contents We believe VTAMA has the potential to fill the need for a long-term treatment option for atopic dermatitis.
Overall study N represents patients randomized to all brepocitinib dose levels or placebo and excludes patients randomized to other agents. 2. Includes patients from initial 24-week study period only. 3. 60 mg QD for 4 weeks followed by 30 mg QD for 20 weeks. 4. One-sided p-value (pre-specified statistical analysis). 5.
Overall study N represents patients randomized to all brepocitinib dose levels or placebo and excludes patients randomized to other agents. 2. Includes patients from initial 24-week study period only. 3. 60 mg once daily for 4 weeks followed by 30 mg once daily for 20 weeks. 4. One-sided p-value (pre-specified statistical analysis). 5.
Additionally, a drug or biologic may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening 62 Table of Contents condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Additionally, a drug or biologic may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
As part of its review of the PMA, the FDA will typically conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the Quality System Regulation (the “QSR”), which requires manufacturers to follow design, testing, control, corrective and 65 Table of Contents preventative action, documentation, and other quality assurance procedures.
As part of its review of the PMA, the FDA will typically conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the Quality System Regulation (the “QSR”), which requires manufacturers to follow design, testing, control, corrective and preventative action, documentation, and other quality assurance procedures.
If we expand our presence 78 Table of Contents outside of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.
If we expand our presence outside of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.
Nucleic Acid Therapeutics Nucleic acid therapeutics represent an emerging modality that we believe may overcome challenges associated with traditional small molecule drug development in the treatment of genetically defined disease. The 31 Table of Contents vast majority of human proteins are considered “undruggable” by small molecules based on their protein structure.
Nucleic Acid Therapeutics Nucleic acid therapeutics represent an emerging modality that we believe may overcome challenges associated with traditional small molecule drug development in the treatment of genetically defined disease. The vast majority of human proteins are considered “undruggable” by small molecules based on their protein structure.
The most recent agents approved for MG are eculizumab and ravulizumab-cwvz, two complement C5 inhibitors, the use of which are limited to patients refractory to available therapy with anti-AChR-positive MG. Efgartigimod, an anti-FcRn antibody fragment, was recently approved for the treatment of MG in adult patients who are anti-acetylcholine receptor (AChR) antibody positive.
The most recent agents approved for MG are eculizumab and ravulizumab-cwvz, two complement C5 inhibitors, the use of which is limited to patients refractory to available therapy with anti-AChR-positive MG. Efgartigimod, an anti-FcRn antibody fragment, was recently approved for the treatment of MG in adult patients who are anti-AChR antibody positive.
Our issued patents and those that may issue in the future may be challenged, narrowed, circumvented or invalidated, which could limit our ability to stop competitors from marketing related products or technologies 53 Table of Contents or limit the length of the term of patent protection that we may have for our current and future products and product candidates and technologies.
Our issued patents and those that may issue in the future may be challenged, narrowed, circumvented or invalidated, which could limit our ability to stop competitors from marketing related products or technologies or limit the length of the term of patent protection that we may have for our current and future products and product candidates and technologies.
In the future, we may apply for 72 Table of Contents restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA.
In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA.
Drug manufacturers can be held liable under the federal civil False Claims Act, which imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented to federal programs 67 Table of Contents (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
Drug manufacturers can be held liable under the federal civil False Claims Act, which imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the product candidate. 58 Table of Contents • Phase 2 clinical trials involve studies in disease-affected patients to evaluate proof of concept and/or determine the dose required to produce the desired benefits.
The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the product candidate. • Phase 2 clinical trials involve studies in disease-affected patients to evaluate proof of concept and/or determine the dose required to produce the desired benefits.
The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations when making decisions on approval. The FDA likely will reanalyze the clinical trial data, 60 Table of Contents which could result in extensive discussions between the FDA and the applicant during the review process.
The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations when making decisions on approval. The FDA likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.
Genevant LNP Outperformed Third-Party LNPs in Head-to-Head Study * Key lipid of first FDA-approved siRNA-LNP (Alnylam’s Onpattro) In addition, Genevant LNP technology has entered the clinic with more than a dozen distinct product candidates, representing hundreds of subjects of clinical experience. 33 Table of Contents Substantial clinical experience with Genevant LNP technology With this track record of success, we are now also focusing our LNP capabilities on historically challenging cell and tissue types, including hepatic stellate cells (“HSCs”).
Genevant LNP Outperformed Third-Party LNPs in Head-to-Head Study * Key lipid of first FDA-approved siRNA-LNP (Alnylam’s Onpattro) In addition, Genevant LNP technology has entered the clinic with more than a dozen distinct product candidates, representing hundreds of subjects of clinical experience. 34 Table of Contents With this track record of success, we are now also focusing our LNP capabilities on historically challenging cell and tissue types outside of hepatocytes, including hepatic stellate cells (“HSCs”).
FDA approval of an NDA or BLA must be obtained before a drug or biologic may be marketed in the United States. Under the Prescription Drug User Fee Act (the “PDUFA”), as amended, each NDA or BLA must be accompanied by a user fee. FDA adjusts the PDUFA user fees on an annual basis.
FDA approval of an NDA or BLA must be obtained before a drug or biologic may be marketed in the United States. 56 Table of Contents Under the Prescription Drug User Fee Act (the “PDUFA”), as amended, each NDA or BLA must be accompanied by a user fee. FDA adjusts the PDUFA user fees on an annual basis.
Complexities associated with the larger, and often more complex, structure of biological products as compared to small molecule drugs, 66 Table of Contents as well as the processes by which such products are manufactured, pose significant hurdles to implementation that are still being worked out by the FDA.
Complexities associated with the larger, and often more complex, structure of biological products as compared to small molecule drugs, as well as the processes by which such products are manufactured, pose significant hurdles to implementation that are still being worked out by the FDA.
The data protection, if granted, prevents generic or biosimilar applicants from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference innovative product when applying for a generic or biosimilar MA in the EEA/UK, for a period of eight 75 Table of Contents years from the date of authorization of the reference product.
The data protection, if granted, prevents generic or biosimilar applicants from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference innovative product when applying for a generic or biosimilar MA in the EEA/UK, for a period of eight years from the date of authorization of the reference product.
In December 2018, Immunovant Sciences GmbH, (“ISG”) obtained and assumed all rights, title, interest and obligations under the HanAll Agreement from RSG, including all rights to IMVT-1401 in the HanAll Licensed Territory, for an aggregate purchase price of $37.8 million.
In December 2018, Immunovant Sciences GmbH, (“ISG”) obtained and assumed all rights, title, interest and obligations under the HanAll Agreement from RSG, including all rights to batoclimab and IMVT-1402 in the HanAll Licensed Territory, for an aggregate purchase price of $37.8 million.
The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for 61 Table of Contents a subsequent human drug or biologic application after the date of approval of the rare pediatric disease drug product, referred to as a priority review voucher (a “PRV”).
The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug or biologic application after the date of approval of the rare pediatric disease drug product, referred to as a priority review voucher (a “PRV”).
This formulation patent includes 113 claims directed to topical, homogeneous, oil-in-water micro-emulsions containing VTAMA, an oil phase, a surfactant and other specific ingredients. DSG also owns an issued patent in the United States covering methods of using the patented formulations to treat inflammatory diseases, including psoriasis and atopic dermatitis.
This formulation patent includes 113 claims directed to topical, homogeneous, oil-in-water micro-emulsions containing VTAMA, an oil phase, a surfactant and other specific ingredients. DSG also owns an issued patent in the U.S. covering methods of using the patented formulations to treat inflammatory diseases, including psoriasis and atopic dermatitis.
One of these patent families is directed to the topical formulation of VTAMA, and its use to treat plaque psoriasis, that Dermavant has evaluated in Phase 3 clinical trials, as well as its use to treat atopic dermatitis which has been evaluated in Phase 2b clinical trials, which includes a patent that was issued in the United States and has a natural expiration date in 2036, without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.
One of these patent families is directed to the topical formulation of VTAMA, and its use to treat plaque psoriasis, that Dermavant has evaluated in Phase 3 clinical trials, as well as its use to treat atopic dermatitis which has been evaluated in Phase 2b clinical trials, which includes a patent that was issued in the U.S. and has a natural expiration date in 2036, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. European Union and United Kingdom Drug Review and Approval In the EEA, medicinal products can only be commercialized after obtaining a marketing authorization (“MA”).
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. 68 Table of Contents European Union and United Kingdom Drug Review and Approval In the EEA, medicinal products can only be commercialized after obtaining a marketing authorization (“MA”).
Generally, before a new drug, biologic or diagnostic can be marketed, considerable data demonstrating its quality, safety and efficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved, authorized, or cleared by the applicable regulatory authority. 56 Table of Contents U.S.
Generally, before a new drug, biologic or diagnostic can be marketed, considerable data demonstrating its quality, safety and efficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved, authorized, or cleared by the applicable regulatory authority. U.S.
Although PSOARING 3 was not a vehicle-controlled study like the PSOARING 1 and PSOARING 2 studies, we believe these data provide supportive evidence regarding 16 Table of Contents VTAMA’s potential therapeutic effect beyond the 12-week double-blind treatment periods utilized in the prior PSOARING studies.
Although PSOARING 3 was not a vehicle-controlled study like the PSOARING 1 and PSOARING 2 studies, we believe these data provide supportive evidence regarding VTAMA’s potential therapeutic effect beyond the 12-week double-blind treatment periods utilized in the prior PSOARING studies.
These patents and pending applications, if issued, are expected to expire between 2024 and 2041, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees.
These patents and pending applications, if issued, are expected to expire between 2029 and 2042, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees.
In addition, under the GSK Agreement, DSG assumed all obligations under the Welichem Agreement, including initially up to CAD$180.0 million in potential development and commercial milestone payments, of which CAD$80.0 million have been achieved and paid as of March 31, 2022.
In addition, under the GSK Agreement, DSG assumed all obligations under the Welichem Agreement, including initially up to CAD$180.0 million in potential development and commercial milestone payments, of which CAD$105.0 million have been achieved and paid as of March 31, 2023.
Subsequently, FDA has attempted to encourage collaboration between in vitro diagnostic test developers and therapeutic developers and to clarify FDA expectations as to companion diagnostic labeling, particularly through guidance in the oncology area. In June 2021, the Verifying Accurate Leading-edge IVCT Development Act of 2021 (the “VALID Act”) was introduced in the U.S. House of Representatives and Senate.
Subsequently, FDA has attempted to encourage collaboration between in vitro diagnostic test developers and therapeutic developers and to clarify FDA expectations as to companion diagnostic labeling, particularly through guidance in the oncology area. In March 2023, the Verifying Accurate Leading-edge IVCT Development Act of 2023 (the “VALID Act”) was introduced in the U.S. House of Representatives.
We are targeting a genetically defined subpopulations by enrolling only lower-risk MDS patients with SF3B1 mutations.
We are targeting a genetically defined subpopulation by enrolling only lower-risk MDS patients with SF3B1 mutations.
Under new rules promulgated by CMS that will take effect January 1, 2023, such accumulator adjustment (or similar) programs could affect the amount of rebates owed by manufacturers under the Medicaid Drug Rebate Program or affect our ability to offer various forms of patient support, including copay assistance.
Under new rules promulgated by CMS that would have taken effect January 1, 2023, such accumulator adjustment (or similar) programs could affect the amount of rebates owed by manufacturers under the Medicaid Drug Rebate Program or affect our ability to offer various forms of patient support, including copay assistance.
The patents and pending patent applications, if granted, currently licensed under the Arbutus Cross-License Agreement are expected to expire as early as 2023, and as late as 2039, without giving effect to any potential patent term extensions or patent term adjustments.
The patents and pending patent applications, if granted, currently licensed under the Arbutus Cross-License Agreement begin to expire as early as 2023, ending as late as 2039, without giving effect to any potential patent term extensions or patent term adjustments.
Similar to the 2020 iteration of the bill, among other things, the VALID Act would likely classify all companion diagnostic tests as requiring FDA premarket review and would formalize and arguably expand FDA’s regulatory authority over diagnostic testing.
Similar to previous iterations of the bill, among other things, the VALID Act would likely classify all companion diagnostic tests as requiring FDA premarket review and would formalize and arguably expand FDA’s regulatory authority over diagnostic testing.
However, our analysis of exploratory endpoints from this trial increased our confidence in the anti-FcRn mechanism of action for patients with TED, and they provide part of the basis for our interest in moving forward with further development of in this indication. • In 2019, we initiated a multi-center, randomized, blinded, placebo-controlled Phase 2a clinical trial of batoclimab for the treatment of MG.
However, our analysis of exploratory endpoints from the Phase 2b trial, in addition to the findings from the Phase 2a trial, increased our confidence in the anti-FcRn mechanism of action for patients with TED, and they provide part of the basis for our interest in moving forward with further development in TED. • In 2019, we initiated a multi-center, randomized, blinded, placebo-controlled Phase 2a clinical trial of batoclimab for the treatment of MG.
Subjects in the study will include those who have previously completed treatment with VTAMA or vehicle in ADORING 1 or ADORING 2, as well as 18 Table of Contents subjects who have completed a maximal use PK study, and those pediatric subjects who would not qualify for inclusion in ADORING 1 or 2 due to milder or more severe disease.
Subjects in the study include those who have previously completed treatment with VTAMA or vehicle in ADORING 1 or ADORING 2, as well as subjects who have completed a maximal use PK study, and those pediatric subjects who would not qualify for inclusion in ADORING 1 or 2 due to milder or more severe disease.
This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013, following passage of the Bipartisan Budget Act of 2013, and will remain in effect through 2029 unless additional congressional action is taken.
This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013, following passage of the Bipartisan Budget Act of 2013, and will remain in effect through the first six months of 2032 unless additional Congressional action is taken.
EU Directive 2001/83/EC, which is the Directive governing medicinal products for human use, further provides that, where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy.
EU Directive 2001/83/EC further provides that, where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy.
In addition, our RNAi 2.0 platform: • Contains intrinsic endosomolytic properties • Has demonstrated marked in vivo enhancement in potency • Has maintained a subcutaneous dosing regimen and is expected to be dosed subcutaneously in clinical trials • Remains compatible with other ligand types 36 Table of Contents Next Generation RNAi 2.0 Conjugate Platform Shows Improved Potency, Magnitude and Duration of Knockdown Strategy Genevant seeks to partner with other pharmaceutical or biotechnology companies in the development of RNA therapeutics, crafting mutually beneficial collaborations that allow collaboration partners to access innovative technologies while providing Genevant the opportunity to leverage our expertise to expand the technology and its therapeutic application.
In addition, our RNAi 2.0 platform: • Contains intrinsic endosomolytic properties • Has demonstrated marked in vivo enhancement in potency • Has maintained a subcutaneous dosing regimen and is expected to be dosed subcutaneously in clinical trials • Remains compatible with other ligand types 35 Table of Contents Strategy Genevant seeks to partner with other pharmaceutical or biotechnology companies in the development of RNA therapeutics, crafting mutually beneficial collaborations that allow collaboration partners to access innovative technologies while providing Genevant the opportunity to leverage our expertise to expand the technology and its therapeutic application.
Under the HanAll Agreement, RSG received (i) the non-exclusive right to manufacture and (ii) the exclusive, royalty-bearing right to develop, import and use the antibody referred to as IMVT-1401 and certain back-up and next-generation antibodies, and products containing such antibodies, and to commercialize such products, in the United States, 49 Table of Contents Canada, Mexico, the E.U., the U.K., Switzerland, the Middle East, North Africa and Latin America (the “HanAll Licensed Territory”), for all human and animal uses.
Under the HanAll Agreement, RSG received (i) the non-exclusive right to manufacture and (ii) the exclusive, royalty-bearing right to develop, import and use the antibody referred to as batoclimab and certain back-up and next-generation antibodies (including IMVT-1402), and products containing such antibodies, and to commercialize such products, in the United States, Canada, Mexico, the E.U., the U.K., Switzerland, the Middle East, North Africa and Latin America (the “HanAll Licensed Territory”), for all human and animal uses.
IMVT-1401 Following ISG’s assumption of all rights, title, interest and obligations under the HanAll Agreement from RSG in December 2018, by virtue of the license of patent rights under the HanAll Agreement, ISG is the exclusive licensee of technology directed to IMVT-1401, and certain back-up and next-generation antibodies, and products containing such antibodies, in the licensed territory.
Anti-FcRn Franchise Following ISG’s assumption of all rights, title, interest and obligations under the HanAll Agreement from RSG in December 2018, by virtue of the license of patent rights under the HanAll Agreement, ISG is the exclusive licensee of technology directed to batoclimab, IMVT-1402 and certain back-up and next-generation antibodies, and products containing such antibodies, in the licensed territory.
For this and other risks related to our proprietary technology, inventions, improvements, platforms and product candidates, please see the section entitled “Risk Factors—Risks Related to Roivant’s Business and Industry—Risks Related to Our Intellectual Property.” Patents and Patent Applications Dermavant As of May 1, 2022, DSG is the exclusive owner of patent families that include six issued U.S. patents and at least 10 pending U.S. patent applications, as well as more than 25 issued patents and more than 50 pending patent applications in other jurisdictions, including the European Union and Japan, relating to VTAMA, the synthesis of VTAMA, intermediates made in the synthesis, the drug substance crystal form, topical formulations of VTAMA and uses thereof in certain diseases and disorders.
For this and other risks related to our proprietary technology, inventions, improvements, platforms and product candidates, please see the section entitled “Risk Factors—Risks Related to Roivant’s Business and Industry—Risks Related to Our Intellectual Property.” Patents and Patent Applications Dermavant As of March 31, 2023, DSG is the exclusive owner of patent families that include 10 issued U.S. patents and at least 10 pending U.S. patent applications, as well as more than 85 issued patents and more than 55 pending patent applications in other jurisdictions, including the European Union and Japan, relating to VTAMA, the synthesis of VTAMA, intermediates made in the synthesis, the drug substance crystal form, topical formulations of VTAMA and uses thereof in certain diseases and disorders.
We seek to create nimble, entrepreneurial Vants that operate similarly to independent biotechnology companies where each management team, comprised of world-class drug developers and clinical operators, is solely focused on their respective Vant’s mission.
Our nimble, entrepreneurial Vants operate similarly to independent biotechnology companies where each management team, comprised of world-class drug developers and clinical operators, is solely focused on their respective Vant’s mission.
Later onset disease usually occurs in individuals over 50 years old and predominantly affects males. As with many autoimmune diseases, there are no known genetic alterations that specifically cause MG, and in most patients, it arises spontaneously.
Early onset disease usually occurs in individuals between 10 to 30 years old and predominantly affects females. Later onset disease usually occurs in individuals over 50 years old and predominantly affects males. As with many autoimmune diseases, there are no known genetic alterations that specifically cause MG, and in most patients, it arises spontaneously.
For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a form of drug utilization management, for Part B drugs beginning January 1, 2020. 70 Table of Contents Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a form of drug utilization management, for Part B drugs, which took effect on January 1, 2020. Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
In addition, topical PDE4 inhibitors 19 Table of Contents developed to treat atopic dermatitis have been associated with side effects including application site burning and stinging.
In addition, topical PDE4 inhibitors developed to treat atopic dermatitis have been associated with side effects including application site burning and stinging.
In 2019, we initiated a randomized, masked, placebo-controlled Phase 2b clinical trial of batoclimab in TED. Our voluntary pause in dosing in February 2021 resulted in unblinding this trial and the primary 21 Table of Contents endpoint was not significant.
In 2019, we also initiated a randomized, masked, placebo-controlled Phase 2b clinical trial of batoclimab for the treatment of TED. Our voluntary pause in dosing in February 2021 resulted in unblinding this trial and the primary endpoint was not significant.
Dermavant Financing Agreements—Dermavant Credit Agreement with XYQ Luxco In May 2021, our subsidiaries Dermavant Sciences Ltd. (“DSL”), Dermavant Holdings Limited, Dermavant Sciences IRL Limited and DSG, as borrowers (the “Borrowers”), and certain other subsidiaries of DSL, as initial guarantors, entered into a credit agreement (the “Credit Agreement”) with XYQ Luxco, as lender, and U.S. Bank National Association, as collateral agent.
(“DSL”), Dermavant Holdings Limited, Dermavant Sciences IRL Limited and DSG, as borrowers (the “Borrowers”), and certain other subsidiaries of DSL, as initial guarantors, entered into a credit agreement (the “Credit Agreement”) with XYQ Luxco, as lender, and U.S. Bank National Association, as collateral agent.
Additionally, the federal Physician Payments Sunshine Act (the “Sunshine Act”), within the ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians, certain other healthcare professionals, and teaching hospitals and to report annually certain ownership and investment interests held by physicians, certain other healthcare professionals, 68 Table of Contents and their immediate family members.
Failure to comply with these laws can result in the imposition of significant civil and criminal penalties. 63 Table of Contents Additionally, the federal Physician Payments Sunshine Act (the “Sunshine Act”), within the ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians, certain other healthcare professionals, and teaching hospitals and to report annually certain ownership and investment interests held by physicians, certain other healthcare professionals, and their immediate family members.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese provisions provide for: • a classified board of directors with staggered three-year terms; 157 Table of Contents • the ability of our board of directors to determine the powers, preferences and rights of preference shares and to cause us to issue the preference shares without shareholder approval; • the ability of our board of directors to prevent the transfer of capital stock, or the exercise of rights with respect to our capital stock, if the effect of such transfer or exercise of rights would result in a shareholder holding more than 9.9% of the total issued and outstanding shares of our capital stock on a fully diluted basis; and • requiring advance notice for shareholder proposals and nominations and placing limitations on convening shareholder meetings.
Biggest changeThese provisions provide for: • a classified board of directors with staggered three-year terms; • the ability of our board of directors to determine the powers, preferences and rights of preference shares and to cause us to issue the preference shares without shareholder approval; and • requiring advance notice for shareholder proposals and nominations and placing limitations on convening shareholder meetings. 133 Table of Contents These provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
For example, even though VTAMA for the treatment of adults with plaque psoriasis has received regulatory approval in the U.S., we can provide no assurances that we will be able to achieve profitability based on sales in that indication alone or that we will be able to receive approval of and commercialize VTAMA in other indications or in other jurisdictions.
For example, even though VTAMA for the treatment of adults with plaque psoriasis has received regulatory approval in the U.S., we can provide no assurances that we will be able to achieve profitability based on sales in that indication alone or that we will be able to receive approval of and commercialize VTAMA for other indications or in other jurisdictions.
Our ability to generate meaningful product revenue and achieve profitability is dependent on the ability to complete the development of our products and product candidates, obtain necessary regulatory approvals for our current and future products and product candidates and manufacture and successfully market our current and future products and product candidates alone or in collaboration with others.
Our ability to generate meaningful product revenue and achieve profitability is dependent on our ability to complete the development of our products and product candidates, obtain necessary regulatory approvals for our current and future products and product candidates and manufacture and successfully market our current and future products and product candidates alone or in collaboration with others.
Whether approval of a biological product qualifies for reference product exclusivity turns on whether FDA consider the approval a “first licensure.” Not every licensure of a biological product is considered a “first licensure” that gives rise to its own exclusivity period.
Whether approval of a biological product qualifies for reference product exclusivity turns on whether the FDA consider the approval a “first licensure.” Not every licensure of a biological product is considered a “first licensure” that gives rise to its own exclusivity period.
When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties currently ranging from $11,803 to $23,607 for each false claim or statement for penalties assessed after December 13, 2021, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs; • the federal health care fraud statute (established by Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false or fraudulent statements relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the Administrative Simplification provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information on health plans, health care clearing houses and most healthcare providers (collectively, “covered entities”), and such covered entities’ “business associates,” defined as independent contractors or agents of covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of the covered entity; • various privacy, cybersecurity and data protection laws, rules and regulations at the international, federal, state and local level impose obligations with respect to safeguarding the privacy, security, and cross-border transmission of personal data and health information; • the federal Civil Monetary Penalties Law, which authorizes the imposition of substantial civil monetary penalties against an entity that engages in activities including, among others (1) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (2) arranging for or contracting with an individual or entity that is excluded 115 Table of Contents from participation in federal health care programs to provide items or services reimbursable by a federal health care program; (3) violations of the federal Anti-Kickback Statute; or (4) failing to report and return a known overpayment; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians, certain other healthcare providers, and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (covered manufacturers are required to submit reports to the government by the 90th day of each calendar year); and • analogous state and EU and foreign national laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and several recently passed state laws that require disclosures related to state agencies and/or commercial purchasers with respect to certain price increases that exceed a certain level as identified in the relevant statutes, some of which contain ambiguous requirements that government officials have not yet clarified; and EU and foreign national laws prohibiting promotion of prescription-only medicinal products to individuals other than healthcare professionals, governing strictly all aspects of interactions with healthcare professionals and healthcare organizations, including prior notification, review and/or approval of agreements with healthcare professionals, and requiring public disclosure of transfers of value made to a broad range of stakeholders, including healthcare professionals, healthcare organizations, medical students, physicians associations, patient organizations and editors of specialized press.
When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties currently ranging from $11,803 to $23,607 for each false claim or statement for penalties assessed after December 13, 2021, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs; • the federal health care fraud statute (established by Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false or fraudulent statements relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the Administrative Simplification provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information on health plans, health care clearing houses and most healthcare providers (collectively, “covered entities”), and such covered entities’ “business associates,” defined as independent contractors or agents of covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of the covered entity; • various privacy, cybersecurity and data protection laws, rules and regulations at the international, federal, state and local level impose obligations with respect to safeguarding the privacy, security, and cross-border transmission of personally identifiable data, including personal health information; • the federal Civil Monetary Penalties Law, which authorizes the imposition of substantial civil monetary penalties against an entity that engages in activities including, among others (1) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (2) arranging for or contracting with an individual or entity that is excluded from participation in federal health care programs to provide items or services reimbursable by a federal health care program; (3) violations of the federal Anti-Kickback Statute; or (4) failing to report and return a known overpayment; 101 Table of Contents • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians, certain other healthcare providers, and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (covered manufacturers are required to submit reports to the government by the 90th day of each calendar year); and • analogous state and EU and foreign national laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and several recently passed state laws that require disclosures related to state agencies and/or commercial purchasers with respect to certain price increases that exceed a certain level as identified in the relevant statutes, some of which contain ambiguous requirements that government officials have not yet clarified; and EU and foreign national laws prohibiting promotion of prescription-only medicinal products to individuals other than healthcare professionals, governing strictly all aspects of interactions with healthcare professionals and healthcare organizations, including prior notification, review and/or approval of agreements with healthcare professionals, and requiring public disclosure of transfers of value made to a broad range of stakeholders, including healthcare professionals, healthcare organizations, medical students, physicians associations, patient organizations and editors of specialized press.
The commencement and completion of preclinical studies and clinical trials may be delayed by several factors, including: • failure to obtain regulatory authorization to commence a clinical trial or reaching consensus with regulatory authorities regarding the design or implementation of our studies; • other regulatory issues, including the receipt of any inspectional observations on FDA’s Form-483, Warning or Untitled Letters, clinical holds, or complete response letters or similar communications/objections by other regulatory authorities; • unforeseen safety issues, or subjects experiencing severe or unexpected adverse events; • occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors; • lack of effectiveness during clinical trials; • resolving any dosing issues, including those raised by the FDA or other regulatory authorities; • inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial; • failure to add a sufficient number of clinical trial sites; • unanticipated impact from changes in or modifications to protocols or clinical trial design, including those that may be required by the FDA or other regulatory authorities; • inability or unwillingness of clinical investigators or study participants to follow our clinical and other applicable protocols or applicable regulatory requirements; • an IRB or EC refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • premature discontinuation of study participants from clinical trials or missing data; 93 Table of Contents • failure to manufacture or release sufficient quantities of our product candidates or failure to obtain sufficient quantities of active comparator medications for our clinical trials, if applicable, that in each case meet our quality standards, for use in clinical trials; • inability to monitor patients adequately during or after treatment; or • inappropriate unblinding of trial results.
The commencement and completion of preclinical studies and clinical trials may be delayed by several factors, including: • failure to obtain regulatory authorization to commence a clinical trial or reaching consensus with regulatory authorities regarding the design or implementation of our studies; • other regulatory issues, including the receipt of any inspectional observations on FDA’s Form-483, Warning or Untitled Letters, clinical holds, or complete response letters or similar communications/objections by other regulatory authorities; • unforeseen safety issues, or subjects experiencing severe or unexpected adverse events; • occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors; 84 Table of Contents • lack of effectiveness during clinical trials; • resolving any dosing issues, including those raised by the FDA or other regulatory authorities; • inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial; • failure to add a sufficient number of clinical trial sites; • unanticipated impact from changes in or modifications to protocols or clinical trial design, including those that may be required by the FDA or other regulatory authorities; • inability or unwillingness of clinical investigators or study participants to follow our clinical and other applicable protocols or applicable regulatory requirements; • an IRB or EC refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • premature discontinuation of study participants from clinical trials or missing data; • failure to manufacture or release sufficient quantities of our product candidates or failure to obtain sufficient quantities of active comparator medications for our clinical trials, if applicable, that in each case meet our quality standards, for use in clinical trials; • inability to monitor patients adequately during or after treatment; or • inappropriate unblinding of trial results.
These requirements include submissions of safety and other post-marketing information and reports, establishment of registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of drug product samples to physicians, prior notification/review and/or approval of advertising and promotional materials by the competent authorities, record-keeping and GCP requirements for any clinical trials that we conduct post-approval.
These requirements include submissions of safety and other post-marketing information and reports, establishment of registration and drug listing requirements, continued compliance with cGMP or equivalent requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of drug product samples to physicians, prior notification/review and/or approval of advertising and promotional materials by the competent authorities, record-keeping and GCP requirements for any clinical trials that we conduct post-approval.
If any such events were to happen, the trading shares of our Common Shares could decline, and you could lose all or part of your investment. Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Roivant” and the “Company” refer to Roivant Sciences Ltd. and its subsidiaries and affiliates.
If any such events were to happen, the trading shares of our Common Shares could decline, and you could lose all or part of your investment. Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Roivant” and the “Company” refer to Roivant Sciences Ltd. and its subsidiaries and affiliates, as the context requires.
District Court for the District of Delaware against Moderna, Inc. and an affiliate seeking damages for infringement of U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19 (the “Moderna Action”).
District Court for the District of Delaware against Moderna and an affiliate seeking damages for infringement of U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19 (the “Moderna Action”).
Under some circumstances, the FDA, the EMA or other comparable regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Slight deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls.
Under some circumstances, the FDA, the EMA, the MHRA or other comparable regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Slight deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls.
We have not generated significant revenue from our operations since inception, and there is no guarantee that we will do so in the future. We are a newly commercial-stage biopharmaceutical and healthcare technology company with a limited operating history upon which you can evaluate our business and prospects.
We have not generated significant revenue from our operations since inception, and there is no guarantee that we will do so in the future. We are a commercial-stage biopharmaceutical and healthcare technology company with a limited operating history upon which you can evaluate our business and prospects.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and reputational damage and the commercialization efforts for our products and further development of any product candidate could be delayed.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or in an inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and reputational damage and the commercialization efforts for our products and further development of any product candidate could be delayed.
Further, as we continue to develop and seek regulatory approval of additional product and products candidates, as well as additional indications for VTAMA, and to pursue regulatory approvals for VTAMA and other products and product candidates outside the U.S., it could be difficult for us to obtain and devote the resources necessary to successfully manage our commercialization efforts.
As we continue to develop and seek regulatory approval of additional products and product candidates, as well as additional indications for VTAMA, and to pursue regulatory approvals for VTAMA and other products and product candidates outside the U.S., it could be difficult for us to obtain and devote the resources necessary to successfully manage our commercialization efforts.
For example, the California Confidentiality of Medical Information Act (the “CMIA”), a statute similar to HIPAA that expressly applies to pharmaceutical companies as well as companies that provide certain technologies for processing personal health information, imposes stringent data privacy and security requirements and obligations with respect to the personal health information of California residents.
For example, the California Confidentiality of Medical Information Act (the “CMIA”), a statute similar to the HIPAA privacy and security regulations, expressly applies to pharmaceutical companies (as well as companies that provide certain technologies for processing personal health information), and imposes stringent data privacy and security requirements and obligations with respect to the personal health information of California residents.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims, including the Moderna Action and the Acuitas Action, may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims, including the Moderna Action, the Pfizer Action and the Acuitas Action, may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
Due to the small number of employees at some of the Vants, the loss of a key employee may have a larger impact on our business. In particular, we rely on a limited number of employees in certain key jurisdictions, including the United Kingdom (the “U.K.”), Switzerland and Bermuda.
Due to the small number of employees at some of the Vants, the loss of a key employee may have a larger impact on our business. In particular, we rely on a limited number of employees in certain key jurisdictions, including the United Kingdom (the “U.K.”) and Switzerland.
Our management will have the ability to require holders of our Warrants to exercise such Warrants on a cashless basis, which will cause holders to receive fewer Common Shares upon their exercise of the Warrants than they would have received had they been able to exercise their Warrants for cash.
Our management has the ability to require holders of our Warrants to exercise such Warrants on a cashless basis, which will cause holders to receive fewer Common Shares upon their exercise of the Warrants than they would have received had they been able to exercise their Warrants for cash.
The results of our clinical trials may not support our proposed claims for our products or product candidates, or regulatory approvals on a timely basis or at all, and the results of earlier studies and trials may not be predictive of future trial results.
The results of our preclinical studies and clinical trials may not support our proposed claims for our products or product candidates, or regulatory approvals on a timely basis or at all, and the results of earlier studies and trials may not be predictive of future trial results.
Further, we, the FDA or other regulatory authorities may suspend our clinical trials in an entire country at any time, or an IRB/EC may suspend our clinical trial sites within any country, if it appears that we or our collaborators are failing to conduct a trial in accordance with the protocol, applicable regulatory requirements, including Good Clinical Practice (“GCP”) regulations, that we are exposing participants to unacceptable health risks, or if the FDA or other regulatory authority finds deficiencies in our IND or equivalent applications for other countries or in the manner in which clinical trials are conducted.
Further, we, the FDA or other regulatory authorities may suspend our clinical trials in an entire country at any time, or an IRB/EC may suspend our clinical trial sites within any country, if it appears that we or our collaborators, or the principal investigator, are failing to conduct a trial in accordance with the protocol, applicable regulatory requirements, including Good Clinical Practice (“GCP”) regulations, that we are exposing participants to unacceptable health risks, or if the FDA or other regulatory authority finds deficiencies in our IND or equivalent applications for other countries or in the manner in which clinical trials are conducted.
We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet the FDA, the EU or other applicable standards or specifications with consistent and acceptable production yields and costs.
We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet the FDA, the EU, the UK or other applicable standards or specifications with consistent and acceptable production yields and costs.
In addition, the FDA, the EMA and other regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time.
In addition, the FDA, the EMA, the MHRA and other regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time.
In addition, the degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. 152 Table of Contents Moreover, if a third-party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights.
In addition, the degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. 129 Table of Contents Moreover, if a third-party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights.
Furthermore, if any of our products, or any future product candidates that are approved, cause serious or unexpected side effects, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw, suspend, vary, or limit their approval of the product or require a REMS (or equivalent outside the United States) to impose restrictions on its distribution or other risk management measures; • regulatory authorities may require that we recall a product; • additional restrictions being imposed on the distribution, marketing or manufacturing processes of the products or any components thereof, including a “black box” warning or contraindication on product labels or communications containing warnings or other safety information about the product; • regulatory authorities may require the addition of labeling statements, such as warnings or contraindications, require other labeling changes of a product or require field alerts or other communications to physicians, pharmacies or the public; • we may be required to change the way a product is administered or distributed, conduct additional clinical trials, change the labeling of a product or conduct additional post-marketing studies or surveillance; • we may be required to repeat preclinical studies or clinical trials or terminate programs for a product candidate, even if other studies or trials related to the program are ongoing or have been successfully completed; • we may be sued and held liable for harm caused to patients, or may be subject to fines, restitution or disgorgement of profits or revenues; • physicians may stop prescribing a product; • reimbursement may not be available for a product; • we may elect to discontinue the sale of our products; • our products may become less competitive; and • our reputation may suffer.
Furthermore, if any of our products, or any future product candidates that are approved, cause serious or unexpected side effects, a number of potentially significant negative consequences could result, including: 93 Table of Contents • regulatory authorities may withdraw, suspend, vary, or limit their approval of the product or require a REMS (or equivalent outside the United States) to impose restrictions on its distribution or other risk management measures; • regulatory authorities may require that we recall a product; • additional restrictions being imposed on the distribution, marketing or manufacturing processes of the products or any components thereof, including a “black box” warning or contraindication on product labels or communications containing warnings or other safety information about the product; • regulatory authorities may require the addition of labelling statements, such as warnings or contraindications, require other labelling changes of a product or require field alerts or other communications to physicians, pharmacies or the public; • we may be required to change the way a product is administered or distributed, conduct additional clinical trials, change the labelling of a product or conduct additional post-marketing studies or surveillance; • we may be required to repeat preclinical studies or clinical trials or terminate programs for a product candidate, even if other studies or trials related to the program are ongoing or have been successfully completed; • we may be sued and held liable for harm caused to patients, or may be subject to fines, restitution or disgorgement of profits or revenues; • physicians may stop prescribing a product; • reimbursement may not be available for a product; • we may elect to discontinue the sale of our products; • our products may become less competitive; and • our reputation may suffer.
Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior preclinical studies and earlier clinical trials.
Success in preclinical studies and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior preclinical studies and earlier clinical trials.
There is a degree of uncertainty regarding the overall impact that Brexit will have on (i) the marketing of pharmaceutical products, (ii) the process to obtain regulatory approval in the United Kingdom for product candidates or (iii) the award of exclusivities that are normally part of the EU legal framework (for instance Supplementary Protection Certificates, Pediatric Extensions or Orphan exclusivity).
There is a degree of uncertainty regarding the overall impact that Brexit will have on (i) the marketing of pharmaceutical products, (ii) the process to obtain regulatory approval in the United Kingdom or Great Britain for product candidates or (iii) the award of exclusivities that are normally part of the EU legal framework (for instance Supplementary Protection Certificates, Pediatric Extensions or Orphan exclusivity).
Such laws include, without limitation: • the federal Anti-Kickback Statute, which is a criminal law that prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, 114 Table of Contents directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under a federal healthcare program (such as Medicare and Medicaid).
Such laws include, without limitation: • the federal Anti-Kickback Statute, which is a criminal law that prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under a federal healthcare program (such as Medicare and Medicaid).
We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Common Shares is equal to or exceeds $18.00 per share (as adjusted for share sub divisions, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day 156 Table of Contents period ending on the third trading day prior to the date they send the notice of redemption to the warrant holders.
We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Common Shares is equal to or exceeds $18.00 per share (as adjusted for share sub divisions, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders.
The degree of market acceptance for any product or product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such products and product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments, including any similar generic treatments; • the ability to offer these products for sale at competitive prices; • the ability to offer appropriate patient financial assistance programs, such as commercial insurance co-pay assistance; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product or product candidate is approved by FDA or comparable non-U.S. regulatory agencies; • product labeling or product insert requirements of the FDA or other comparable non-U.S. regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling; • restrictions on how the product is dispensed or distributed; • the timing of market introduction of competitive products; • publicity concerning these products or competing products and treatments; • the strength of marketing and distribution support; • favorable third-party coverage and sufficient reimbursement; and • the prevalence and severity of any side effects or adverse events.
The degree of market acceptance for any product or product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: 98 Table of Contents • the efficacy and safety of such products and product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments, including any similar generic treatments; • the ability to offer these products for sale at competitive prices; • the ability to offer appropriate patient financial assistance programs, such as commercial insurance co-pay assistance; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product or product candidate is approved by FDA or comparable non-U.S. regulatory agencies; • product labelling or product insert requirements of the FDA or other comparable non-U.S. regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labelling; • restrictions on how the product is dispensed or distributed; • the timing of market introduction of competitive products; • publicity concerning these products or competing products and treatments; • the strength of marketing and distribution support; • favorable third-party coverage and sufficient reimbursement; and • the prevalence and severity of any side effects or adverse events.
In addition, later discovery of previously unknown adverse events or other problems with our products or product candidates, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may negatively impact our business and the price of our Common Shares and may yield various results, including: • restrictions on the manufacture of such products or product candidates; • restrictions on the labeling or marketing of such products or product candidates, including a “black box” warning or contraindication on the product label or communications containing warnings or other safety information about the product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials, or any regulatory holds on our clinical trials; • requirement of a REMS (or equivalent outside the United States); • Warning or Untitled Letters or similar communications from other relevant regulatory authorities; 108 Table of Contents • withdrawal of the product or product candidates from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products or product candidates; • fines, restitution or disgorgement of profits or revenues; • suspension, variation or withdrawal of marketing approvals; • refusal to permit the import or export of our products or product candidates; • seizure of our products or product candidates; or • lawsuits, injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown adverse events or other problems with our products or product candidates, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may negatively impact our business and the price of our Common Shares and may yield various results, including: 95 Table of Contents • restrictions on the manufacture of such products or product candidates; • restrictions on the labelling or marketing of such products or product candidates, including a “black box” warning or contraindication on the product label or communications containing warnings or other safety information about the product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials, or any regulatory holds on our clinical trials; • requirement of a REMS (or equivalent outside the United States); • Warning or Untitled Letters or similar communications from other relevant regulatory authorities; • withdrawal of the product or product candidates from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products or product candidates; • fines, restitution or disgorgement of profits or revenues; • suspension, variation, revocation or withdrawal of marketing approvals; • refusal to permit the import or export of our products or product candidates; • seizure of our products or product candidates; or • lawsuits, injunctions or the imposition of civil or criminal penalties.
Based on the foregoing, with respect to the taxable year that ended on March 31, 2022, we believe that we were not a PFIC based in part on our belief that we were not classified as a CFC in the taxable year that ended on March 31, 2022 and based upon the fair market value of our assets, including any goodwill and intangible property, and the nature and composition of our income and assets.
Based on the foregoing, with respect to the taxable year that ended on March 31, 2023, we believe that we were not a PFIC based in part on our belief that we were not classified as a CFC in the taxable year that ended on March 31, 2023 and based upon the fair market value of our assets, including any goodwill and intangible property, and the nature and composition of our income and assets.
While we have received regulatory approval for one product candidate, VTAMA for the treatment of adults with plaque psoriasis in the U.S., we have yet to receive marketing approval for any of our other product candidates anywhere in the world and we have not generated meaningful product revenues from the commercial sale of our biopharmaceutical products.
While we have received regulatory approval for one product candidate, VTAMA for the treatment of adults with plaque psoriasis in the U.S., we have yet to receive marketing approval for any of our other product candidates anywhere in the world and we have not generated significant product revenues from the commercial sale of our biopharmaceutical products.
Our investment strategy and plans for future growth rely on a number of assumptions, including, in the case of our products and product candidates, assumptions related to adoption of a particular therapy, incidence and prevalence of an indication, use of a product or product candidate versus competitor therapies and size of the addressable patient populations.
Our business strategy and plans for future growth rely on a number of assumptions, including, in the case of our products and product candidates, assumptions related to adoption of a particular therapy, incidence and prevalence of an indication, use of a product or product candidate versus competitor therapies and size of the addressable patient populations.
We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personally-identifying information, which among other things, impose certain requirements relating to the privacy, security and transmission of personal information. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide.
We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personally-identifying information, which among other things, impose requirements relating to the privacy, security, transmission and disposal of personal information. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide.
If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable non-U.S. regulatory authorities may reject our marketing authorization applications and require us to perform additional clinical trials before approving our marketing applications.
If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or non-U.S. regulatory authorities may reject our marketing authorization applications and require us to perform additional clinical trials to generate additional data before approving our marketing applications.
Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security.
Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security protections.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory 99 Table of Contents approval for, or successfully commercialize any product or product candidate that we develop.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product or product candidate that we develop.
Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern 154 Table of Contents District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.
Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.
The FDA and other relevant regulatory authorities closely regulate the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling and that promotional and advertising materials and communications are truthful and non-misleading.
The FDA and other relevant regulatory authorities closely regulate the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labelling and that promotional and advertising materials and communications are truthful and non-misleading.
Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements.
Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labelling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements.
If a third-party is found to be infringing such patents, we and our direct subsidiaries may not be able to permanently enjoin the third-party from making, using, offering for sale or selling the infringing product or activity for the remaining life of such patent in the United States or other jurisdictions 144 Table of Contents when the patent is assigned to a subsidiary, which is not the entity that is or would be commercializing a potentially competitive product or service.
If a third-party is found to be infringing such patents, we and our direct subsidiaries may not be able to permanently enjoin the third-party from making, using, offering for sale or selling the infringing product or activity for the remaining life of such patent in the United States or other jurisdictions when the patent is assigned to a subsidiary, which is not the entity that is or would be commercializing a potentially competitive product or service.
Failure by any future CROs to properly execute study protocols in accordance with applicable law could also create product liability and healthcare regulatory risks for us as sponsors of those studies. Our CROs are independent, third-party organizations and we do not control whether they devote sufficient time, attention and resources to our clinical and nonclinical programs.
Failure by any future CROs to properly execute study protocols in accordance with applicable law could also create product liability and healthcare regulatory risks for us as sponsors of those studies. 88 Table of Contents Our CROs are independent, third-party organizations and we do not control whether they devote sufficient time, attention and resources to our clinical and nonclinical programs.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology, products or product candidates and compete 136 Table of Contents directly with us, without payment to us, result in our inability to manufacture or commercialize products and, if approved, product candidates without infringing third-party patent rights or result in our breach of agreements pursuant to which we license such rights to our collaborators or licensees.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology, products or product candidates and compete directly with us, without payment to us, result in our inability to manufacture or commercialize products and, if approved, product candidates without infringing third-party patent rights or result in our breach of agreements pursuant to which we license such rights to our collaborators or licensees.
A non-U.S. corporation is considered a CFC if more than 50% of (1) the total combined voting power of all classes of stock of such corporation entitled to vote, or (2) the total value of the stock of such corporation, is 162 Table of Contents owned, or is considered as owned by applying certain constructive ownership rules, by U.S. shareholders (U.S. persons who own stock representing 10% or more of the combined voting power or value of all outstanding stock of such non-U.S. corporation) on any day during the taxable year of such non-U.S. corporation.
A non-U.S. corporation is considered a CFC if more than 50% of (1) the total combined voting power of all classes of stock of such corporation entitled to vote, or (2) the total value of the stock of such corporation, is owned, or is considered as owned by applying certain constructive ownership rules, by U.S. shareholders (U.S. persons who own stock representing 10% or more of the combined voting power or value of all outstanding stock of such non-U.S. corporation) on any day during the taxable year of such non-U.S. corporation.
If we call the Public Warrants for redemption after the redemption criteria have been satisfied, our management will have the option to require any holder that wishes to exercise their warrant (including any Warrants held by the MAAC Sponsor, MAAC’s former officers or directors, other purchasers of MAAC’s founders’ units, or their permitted transferees) to do so on a “cashless basis.” If our management chooses to require holders to exercise their Warrants on a cashless basis, the number of Common Shares received by a holder upon exercise will be fewer than it would have been had such holder exercised his warrant for cash.
If we call the Public Warrants for redemption after the redemption criteria have been satisfied, our management will have the option to require any holder that wishes to exercise their warrant (including any Warrants held by Patient Square, MAAC’s former officers or directors, other purchasers of MAAC’s founders’ units, or their permitted transferees) to do so on a “cashless basis.” If our management chooses to require holders to exercise their Warrants on a cashless basis, the number of Common Shares received by a holder upon exercise will be fewer than it would have been had such holder exercised his warrant for cash.
The total value of our assets for purposes of the PFIC asset test frequently (though not invariably) may be inferred using the market price of our ordinary shares, which may fluctuate considerably and thereby affect the determination of our PFIC status for future taxable year.
The total value of our assets for purposes of the PFIC asset test frequently (though not invariably) may be inferred using the market price of our ordinary shares, which may fluctuate considerably and thereby affect the determination of our PFIC status for future taxable years.
While we have launched VTAMA in the U.S., we have limited experience as a commercial company and therefore face significant risks and uncertainties relating to the commercialization of VTAMA and any future products that receive marketing approval, including: • our ability to recruit and retain effective sales, marketing and customer service personnel; • our ability to obtain access to physicians or persuade adequate numbers of physicians to prescribe VTAMA and any future products; • the inability to manufacture and to price VTAMA and any future products at a price point sufficient to ensure an adequate and attractive level of profitability; • the extent to which coverage and adequate reimbursement for these products will be available from government health administration authorities, private health insurers and other organizations; 85 Table of Contents • the risks associated with potential co-promotion or partnership agreements, including the failure to realize the expected benefits of such arrangements; and • other unforeseen costs, expenses and risks associated with the commercialization of biopharmaceutical products, including compliance costs.
While we have launched VTAMA in the U.S., we have limited experience as a commercial company and therefore face significant risks and uncertainties relating to the commercialization of VTAMA and any future products that receive marketing approval in the U.S. or another jurisdiction, including: • our ability to recruit and retain effective sales, marketing and customer service personnel; • our ability to obtain and retain access to physicians or persuade adequate numbers of physicians to prescribe VTAMA and any future products; • the inability to manufacture and to price VTAMA and any future products at a price point sufficient to ensure an adequate and attractive level of profitability; • the extent to which coverage and adequate reimbursement for VTAMA and any future products will be available from government health administration authorities, private health insurers and other organizations; • the risks associated with potential co-promotion or partnership agreements, including the failure to realize the expected benefits of such arrangements; and • other unforeseen costs, expenses and risks associated with the commercialization of biopharmaceutical products, including compliance costs.
Several 95 Table of Contents factors could cause production interruptions, including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of our suppliers. Our biologic product candidates may require processing steps that are more complex than those required for most small molecule drugs.
Several factors could cause production interruptions, including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of our suppliers. Our biologic product candidates may require processing steps that are more complex than those required for most small molecule drugs.
Patents 8,058,069, 8,492,359, 8,822,668, 9,006,417, 9,364,435, 9,404,127, 9,504,651, 9,518,272, and 11,141,378 are not infringed by the manufacture, use, offer for sale, sale or importation into the United States of COMIRNATY, Pfizer’s and BioNTech’s vaccine for COVID-19 and are otherwise invalid (the “Acuitas Action”).
Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,006,417, 9,364,435, 9,404,127, 9,504,651, 9,518,272, and 11,141,378 are not infringed by the manufacture, use, offer for sale, sale or importation into the United States of COMIRNATY, Pfizer’s and BioNTech’s vaccine for COVID-19 and are otherwise invalid (the “Acuitas Action”).
This decentralized model could also make compliance with applicable laws and regulations more challenging to monitor and may expose us to increased costs that could, in turn, harm our business, financial condition, results of operations or prospects. In addition, a single or limited number of the Vants may, now or in the future, comprise a large proportion of our value.
This decentralized model could also make compliance with applicable laws and regulations more challenging to monitor and may expose us to increased costs that could, in turn, harm our business, financial condition, results of operations or prospects. 81 Table of Contents In addition, a single or limited number of the Vants may, now or in the future, comprise a large proportion of our value.
Any of the factors listed below could have a material adverse effect on the price of our Common Shares. 153 Table of Contents Factors affecting the trading price of our Common Shares may include: • actual or anticipated fluctuations in our quarterly and annual financial results or the quarterly and annual financial results of companies perceived to be similar to it; • changes in the market’s expectations about operating results; • our operating results failing to meet market expectations in a particular period; • a Vant’s operating results failing to meet market expectations in a particular period, which could impact the market prices of shares of a public Vant or the valuation of a private Vant, and in turn adversely impact the trading price of our Common Shares; • receipt of marketing approval for a product or product candidate in one or more jurisdictions, or the failure to receive such marketing approval; • the results of clinical trials or preclinical studies conducted by us and the Vants; • changes in financial estimates and recommendations by securities analysts concerning us, the Vants or the biopharmaceutical industry and market in general; • operating and stock price performance of other companies that investors deem comparable to us; • changes in laws and regulations affecting our and the Vants’ businesses; • the outcome of litigation or other claims or proceedings, including governmental and regulatory proceedings, against us or the Vants; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of our Common Shares available for public sale and the relatively limited free float of our Common Shares; • any significant change in our board of directors or management; • sales of substantial amounts of our Common Shares by directors, executive officers or significant shareholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
Factors affecting the trading price of our Common Shares may include: • actual or anticipated fluctuations in our quarterly and annual financial results or the quarterly and annual financial results of companies perceived to be similar to it; • changes in the market’s expectations about operating results; • our operating results failing to meet market expectations in a particular period; • a Vant’s operating results failing to meet market expectations in a particular period, which could impact the market prices of shares of a public Vant or the valuation of a private Vant, and in turn adversely impact the trading price of our Common Shares; 130 Table of Contents • receipt of marketing approval for a product or product candidate in one or more jurisdictions, or the failure to receive such marketing approval; • the results of clinical trials or preclinical studies conducted by us and the Vants; • changes in financial estimates and recommendations by securities analysts concerning us, the Vants or the biopharmaceutical industry and market in general; • operating and stock price performance of other companies that investors deem comparable to us; • changes in laws and regulations affecting our and the Vants’ businesses; • the outcome of litigation or other claims or proceedings, including governmental and regulatory proceedings, against us or the Vants; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of our Common Shares available for public sale and the relatively limited free float of our Common Shares; • any significant change in our board of directors or management; • sales of substantial amounts of our Common Shares by directors, executive officers or significant shareholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
We are incorporated under the laws of Bermuda. As a result, our corporate affairs are governed by the Bermuda Companies Act 1981, as amended (the “Companies Act”), which differs in some material respects from laws typically applicable to U.S. corporations and shareholders, including the provisions relating to interested directors, amalgamations, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
As a result, our corporate affairs are governed by the Bermuda Companies Act 1981, as amended (the “Companies Act”), which differs in some material respects from laws typically applicable to U.S. corporations and shareholders, including the provisions relating to interested directors, amalgamations, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products and product candidates, which could make it difficult for us to stop the 147 Table of Contents infringement of our patents or marketing of competing products or product candidates in violation of our proprietary rights generally.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products and product candidates, which could make it difficult for us to stop the infringement of our patents or marketing of competing products or product candidates in violation of our proprietary rights generally.
Failure to manage the risks associated with such changes, or misinterpretation of the laws providing such changes, could result in costly audits, interest, penalties, and reputational damage, which could adversely affect our business, results of our operations, and our financial condition. Our actual effective tax rate may vary from our expectation and that variance may be material.
Failure to manage the risks associated with such changes, or misinterpretation of the laws providing such changes, could result in costly audits, interest, penalties, and reputational damage, which could adversely affect our business, results of our operations, and our financial condition. 136 Table of Contents Our actual effective tax rate may vary from our expectation and that variance may be material.
The European Commission, on the basis of a scientific opinion by the EMA’s Committee for Orphan Medicinal Products grants Orphan Drug Designation to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threatening or chronically debilitating condition affecting not more 110 Table of Contents than five in 10,000 persons in the EU.
The European Commission, on the basis of a scientific opinion by the EMA’s Committee for Orphan Medicinal Products grants Orphan Drug Designation to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EU.
If the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event and to develop and implement protections to prevent future events of this nature from occurring.
If the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such incidents and to develop and implement protections to prevent future events of this nature from occurring.
By the terms of certain open source licenses, if 149 Table of Contents portions of our proprietary software are determined to be subject to an open source license or if we combine our proprietary software with open source software in a certain manner, we could be required to release the source code of our proprietary software and to make our proprietary software available under open source licenses, each of which could reduce or eliminate the effectiveness of our computational discovery efforts.
By the terms of certain open source licenses, if portions of our proprietary software are determined to be subject to an open source license or if we combine our proprietary software with open source software in a certain manner, we could be required to release the source code of our proprietary software and to make our proprietary software available under open source licenses, each of which could reduce or eliminate the effectiveness of our computational discovery efforts.
In addition, while it is our policy to require our employees, contractors and other third parties who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to 150 Table of Contents us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
In addition, while it is our policy to require our employees, contractors and other third parties who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
Any of the foregoing could harm our business, financial condition, results of operations and prospects. We may not be successful in obtaining necessary intellectual property rights to future product candidates through acquisitions and in-licenses. A third-party may hold intellectual property, including patent rights, that are important or necessary to the development of our product candidates.
Any of the foregoing could harm our business, financial condition, results of operations and prospects. 128 Table of Contents We may not be successful in obtaining necessary intellectual property rights to future product candidates through acquisitions and in-licenses. A third-party may hold intellectual property, including patent rights, that are important or necessary to the development of our product candidates.
For example, if we are unable to identify programs that ultimately result in approved products, we may spend material amounts of our capital and other resources evaluating, acquiring and developing products that ultimately do not provide a return on our investment. 87 Table of Contents We face risks associated with the Vant structure.
For example, if we are unable to identify programs that ultimately result in approved products, we may spend material amounts of our capital and other resources evaluating, acquiring and developing products that ultimately do not provide a return on our investment. We face risks associated with the Vant structure.
The availability of our competitors’ products could limit the demand, and the price we are able to charge, for our products and, if approved, any product candidates we may develop. 124 Table of Contents The markets in which our healthcare technology Vants participate are competitive, and if we do not compete effectively, our business and operating results could be adversely affected.
The availability of our competitors’ products could limit the demand, and the price we are able to charge, for our products and, if approved, any product candidates we may develop. The markets in which our healthcare technology Vants participate are competitive, and if we do not compete effectively, our business and operating results could be adversely affected.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • delays in or an inability to commercialize VTAMA, and any future products for which we obtain marketing approval; • impairment of our business reputation and significant negative media attention; • delay or termination of clinical trials, or withdrawal of participants from our clinical trials; • significant costs to defend the related litigation; • distraction of management’s attention from our primary business; • substantial monetary awards to patients or other claimants; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • decreased demand for our products, existing product candidates or any future product candidate, if approved; and • loss of revenue.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • delays in or an inability to commercialize VTAMA, and any future products for which we obtain marketing approval; • impairment of our business reputation and significant negative media attention; • delay or termination of clinical trials, or withdrawal of participants from our clinical trials; • significant costs to defend the related litigation; • distraction of management’s attention from our primary business; • substantial monetary awards to patients or other claimants; • product recalls, withdrawals or labelling, marketing or promotional restrictions; • decreased demand for our VTAMA, and current or future product candidates, if approved; and • loss of revenue.
Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, would prevent us from or delay us commercializing our products and, if approved, product candidates in the United Kingdom and/or the EEA and restrict our ability to generate revenue and achieve and sustain profitability.
Any delay in obtaining, or an inability to obtain, any marketing approvals or necessary modifications to such approvals, as a result of Brexit or otherwise, would prevent us from or delay us commercializing our products and, if approved, product candidates in the United Kingdom and/or the EEA and restrict our ability to generate revenue and achieve and sustain profitability.
The risks associated with patent rights generally apply to patent rights that we in-license now or in the future, as well as patent rights that we may own now or in the future. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
The risks associated with patent rights generally apply to patent rights that we in-license now or in the future, as well as patent rights that we may own now or in the future. 115 Table of Contents It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
Composition-of-matter patents on the active pharmaceutical ingredient (“API”) in prescription drug products are generally considered to be the strongest form of intellectual property protection for drug products because those types of patents provide protection without regard to any particular method of use or manufacture 137 Table of Contents or formulation of the API used.
Composition-of-matter patents on the active pharmaceutical ingredient (“API”) in prescription drug products are generally considered to be the strongest form of intellectual property protection for drug products because those types of patents provide protection without regard to any particular method of use or manufacture or formulation of the API used.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act” or “ACA”), includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”), which created an abbreviated approval pathway under section 351(k) of the Public Health Service Act (“PHSA”) for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act” or “ACA”), includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”), which created an abbreviated approval pathway under section 351(k) of the PHSA for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
European data protection authorities may 128 Table of Contents interpret the GDPR and national laws differently and impose additional requirements, which contributes to the complexity of processing personal data in or from the EEA. In June 2021, the CJEU issued a ruling that expanded the scope of the “one stop shop” under the GDPR.
European data protection authorities may interpret the GDPR and national laws differently and impose additional requirements, which contributes to the complexity of processing personal data in or from the EEA. In June 2021, the CJEU issued a ruling that expanded the scope of the “one stop shop” under the GDPR.
The FDA or other regulatory authorities may also not agree with the scope of our proposed investigational plan. For example, they may find that our proposed development program is not sufficient to support a marketing 92 Table of Contents authorization application, or that the proposed indication is considered to be too broad.
The FDA or other regulatory authorities may also not agree with the scope of our proposed investigational plan. For example, they may find that our proposed development program is not sufficient to support a marketing authorization application, or that the proposed indication is considered to be too broad.
When a product or product candidate receives marketing approval, the accompanying label may limit the approved use of the drug or the FDA or other regulatory authorities may require that contraindications, warnings or precautions, including in some cases, a boxed warning, be included in the product labeling, which could limit sales of the product.
When a product or product candidate receives marketing approval, the accompanying label may limit the approved use of the drug or the FDA or other regulatory authorities may require that contraindications, warnings or precautions, including in some cases, a boxed warning, be included in the product labelling or accompanying documentation, which could limit sales of the product.
We may not be granted an 138 Table of Contents extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time-period or the scope of patent protection afforded could be less than we request.
We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time-period or the scope of patent protection afforded could be less than we request.
The initiation of a claim against a 143 Table of Contents third-party may also cause the third-party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
The initiation of a claim against a third-party may also cause the third-party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
In either case, such a license may not be available on commercially reasonable terms or at all. Claims that we have 141 Table of Contents misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.
In either case, such a license may not be available on commercially reasonable terms or at all. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.
The general permission or the specific permission would cease to apply if we were to cease to be listed on the Nasdaq or another appointed stock exchange. We may become subject to unanticipated tax liabilities and higher effective tax rates. We are incorporated under the laws of Bermuda.
The general permission or the specific permission would cease to apply if we were to cease to be listed on the Nasdaq or another appointed stock exchange. 135 Table of Contents We may become subject to unanticipated tax liabilities and higher effective tax rates. We are incorporated under the laws of Bermuda.
Obtaining marketing approval of a new drug is an extensive, lengthy, expensive and inherently uncertain process and the FDA or other non-U.S. regulatory authorities may delay, limit or deny approval of a product candidate for many reasons, including: • we may not be able to demonstrate that a product candidate is safe and effective as a treatment for the targeted indications, and in the case of our product candidates regulated as biological products, that the product candidate is safe, pure and potent for use in its targeted indication, to the satisfaction of the FDA or other relevant regulatory authorities; • the FDA or other relevant regulatory authorities may require additional pre-approval studies or clinical trials, which would increase costs and prolong development timelines; • the results of clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatory authorities for marketing approval; • the FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of clinical trials, including the design of proposed preclinical and early clinical trials of any future product candidates; • the CROs that we retain to conduct clinical trials may take actions outside of our control, or otherwise commit errors or breaches of protocols, that adversely impact the clinical trials and ability to obtain marketing approvals; 103 Table of Contents • the FDA or other relevant regulatory authorities may not find the data from nonclinical, preclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of a product candidate outweigh its safety risks; • the FDA or other relevant regulatory authorities may disagree with an interpretation of data or significance of results from nonclinical, preclinical studies or clinical trials or may require additional studies; • the FDA or other relevant regulatory authorities may not accept data generated at clinical trial sites; • if an NDA, BLA or a similar application is reviewed by an advisory committee, the FDA or other relevant regulatory authority, as the case may be, may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend that the FDA or other relevant regulatory authorities, as the case may be, require, as a condition of approval, additional nonclinical, preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; • the FDA or other relevant regulatory authorities may require development of a risk evaluation and mitigation strategy (“REMS”) or its equivalent, as a condition of approval; • the FDA or other relevant regulatory authorities may require additional post-marketing studies and/or patient registries for product candidates; • the FDA or other relevant regulatory authorities may find the chemistry, manufacturing and controls data insufficient to support the quality of our product candidates; • the FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers; or • the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.
Obtaining marketing approval of a new drug is an extensive, lengthy, expensive and inherently uncertain process and the FDA or other non-U.S. regulatory authorities may delay, limit or deny approval of a product candidate for many reasons, including: 91 Table of Contents • we may not be able to demonstrate that a product candidate is safe and effective as a treatment for the targeted indications, and in the case of our product candidates regulated as biological products, that the product candidate is safe, pure and potent for use in its targeted indication, to the satisfaction of the FDA or other relevant regulatory authorities; • the FDA or other relevant regulatory authorities may require additional pre-approval studies or clinical trials, which would increase costs and prolong development timelines; • the results of clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatory authorities for marketing approval; • the FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of clinical trials, including the design of proposed preclinical and early clinical trials of any future product candidates; • the CROs that we retain to conduct clinical trials may take actions outside of our control, or otherwise commit errors or breaches of protocols, that adversely impact the clinical trials and ability to obtain marketing approvals; • the FDA or other relevant regulatory authorities may not find the data from nonclinical, preclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of a product candidate outweigh its safety risks; • the FDA or other relevant regulatory authorities may disagree with an interpretation of data or significance of results from nonclinical, preclinical studies or clinical trials or may require additional studies; • the FDA or other relevant regulatory authorities may not accept data generated at clinical trial sites, including in situations where the authorities deem that the data was not generated in compliance with GCP, ethical standards or applicable data protection laws; • if an NDA, BLA or a similar application is reviewed by an advisory committee, the FDA or other relevant regulatory authority, as the case may be, may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend that the FDA or other relevant regulatory authorities, as the case may be, require, as a condition of approval, additional nonclinical, preclinical studies or clinical trials, limitations on approved labelling or distribution and use restrictions; • the FDA or other relevant regulatory authorities may require development of a risk evaluation and mitigation strategy (“REMS”) or its equivalent, as a condition of approval; • the FDA or other relevant regulatory authorities may require additional post-marketing studies and/or patient registries for product candidates; • the FDA or other relevant regulatory authorities may find the chemistry, manufacturing and controls data insufficient to support the quality of our product candidates; • the FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers; or • the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.
The FDA, the European Medicines Agency (“EMA”) or the European Commission or other relevant regulatory authority may also find that the benefits of any product candidate in any applicable indication do not outweigh its risks in a manner sufficient to grant regulatory approval.
The FDA, the European Medicines Agency (“EMA”), the European Commission, the Medicines and Healthcare product Regulatory Agency (“MHRA”) or other relevant regulatory authority may also find that the benefits of any product candidate in any applicable indication do not outweigh its risks in a manner sufficient to grant regulatory approval.
Among other things, the CMIA requires that a pharmaceutical company obtain a signed, written authorization from a patient or company employee in order to disclose his or her personal health information, with limited exceptions, and requires security measures to protect such information.
Among other things, the CMIA, with limited exceptions, requires that a pharmaceutical company obtain a signed, written authorization from a patient or company employee in order to disclose his or her personal health information and requires pharmaceutical companies to maintain reasonable security measures to protect such information.
The resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual property or technology, or affect financial or other obligations under the relevant agreement, either of 139 Table of Contents which could harm our business, financial condition, results of operations and prospects.
The resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual property or technology, or affect financial or other obligations under the relevant agreement, either of which could harm our business, financial condition, results of operations and prospects.
In addition, our status may also depend, in part, on how quickly we utilize our cash on-hand and cash from future financings in our business. 163 Table of Contents Treasury regulations adopted in 2021, or the (the “2021 Regulations”), modify certain of the rules described above.
In addition, our status may also depend, in part, on how quickly we utilize our cash on-hand and cash from future financings in our business. 137 Table of Contents Treasury regulations adopted in 2021 (the “2021 Regulations”) modify certain of the rules described above.
Our limited experience as a commercial-stage company means that there is limited information about our ability to overcome many of the risks and uncertainties encountered by companies commercializing products in the biopharmaceutical industry, including the risks and uncertainties outlined above.
Our limited experience as a commercial-stage company means that there is limited information about our ability to overcome many of the risks and uncertainties encountered by companies commercializing products in the biopharmaceutical industry, including those outlined herein.
For certain of our products and product candidates, including batoclimab, which targets certain rare autoimmune indications, there are limited patient 96 Table of Contents pools from which to draw in order to complete our clinical trials in a timely and cost-effective manner.
For certain of our products and product candidates, including batoclimab, which targets certain rare autoimmune indications, there are limited patient pools from which to draw in order to complete our clinical trials in a timely and cost-effective manner.
In addition, new investors could gain rights superior to our existing shareholders. Pursuant to our 2021 Equity Incentive Plan (the “2021 EIP”), we are authorized to grant options and other share-based awards to our employees, directors and consultants.
In addition, new investors could gain rights superior to our existing shareholders. Pursuant to our 2021 Equity Incentive Plan (the “2021 EIP”), we are authorized to grant options, restricted stock units and other share-based awards to our employees, directors and consultants.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal executive offices are located at Suite 1, 3rd Floor, 11-12 St. James’s Square, London, United Kingdom SW1Y 4LB. Our registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Certain of our subsidiaries and affiliates also have business operations in New York, New York, Boston, Massachusetts and Basel, Switzerland.
Biggest changeITEM 2. PROPERTIES Our principal executive offices are located at 7th Floor, 50 Broadway, London SW1H 0DB, United Kingdom. Our registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Certain of our subsidiaries and affiliates also have business operations in New York, New York, Boston, Massachusetts and Basel, Switzerland.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, depending on the nature and timing of a given dispute, an unfavorable resolution could materially affect our current or future results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 165 Table of Contents PART II
Biggest changeHowever, depending on the nature and timing of a given dispute, an unfavorable resolution could materially affect our current or future results of operations or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference.
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference. Sales of Unregistered Securities and Use of Proceeds None. Issuer Repurchases of Equity Securities None. 140 Table of Contents ITEM 6. [RESERVED]
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Shares began trading on The Nasdaq Global Market (“Nasdaq”) under the symbol “ROIV” on October 1, 2021. Prior to that date, there was no public trading market for our Common Shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES Market Information Our Common Shares began trading on The Nasdaq Global Market (“Nasdaq”) under the symbol “ROIV” on October 1, 2021. Prior to that date, there was no public trading market for our Common Shares.
Holders As of June 21, 2022, there were 145 holders of record of our Common Shares and two holders of record of warrants to purchase our Common Shares.
Holders As of June 26, 2023, there were 100 holders of record of our Common Shares and two holders of record of warrants to purchase our Common Shares.
Removed
Sales of Unregistered Securities and Use of Proceeds On February 15, 2022, we issued 145,986 Common Shares to CF Principal Investments, LLC in consideration for its irrevocable commitment to purchase Common Shares pursuant to a Common Shares Purchase Agreement, dated as of February 14, 2022, by and between us and CF Principal Investments, LLC in connection with an equity line facility with an aggregate line of $250.0 million.
Removed
On April 21, 2022, we issued 1,455,719 Common Shares to Silicon Therapeutics LLC in connection with the Agreement and Plan of Merger, dated as of February 2, 2021, by and among Roivant, Silicon Insite, Inc., Silicon TX China and Silicon Therapeutics LLC, as consideration in connection with the transaction, with an aggregate value of approximately $5.4 million.
Removed
We issued the foregoing securities in transactions not involving an underwriter and not requiring registration under Section 5 of the Securities Act of 1933, as amended, in reliance on the exemption afforded by Section 4(a)(2) thereof.
Removed
Except as set forth above or reported in our Quarterly Reports on Form 10-Q for the quarters ended September 30, 2021 and December 31, 2021, there were no other sales of unregistered securities for the year ended March 31, 2022. 166 Table of Contents ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the years ended March 31, 2022 and 2021 The following table sets forth our results of operations for the years ended March 31, 2022 and 2021: Years Ended March 31, 2022 2021 Change (in thousands) Revenue, net $ 55,286 $ 23,795 $ 31,491 Operating expenses: Cost of revenues 8,966 2,057 6,909 Research and development 483,035 236,626 246,409 Acquired in-process research and development 139,894 596,132 (456,238 ) General and administrative 775,033 259,878 515,155 Total operating expenses 1,406,928 1,094,693 312,235 Loss from operations (1,351,642 ) (1,070,898 ) (280,744 ) Change in fair value of investments 87,291 (95,533 ) 182,824 Gain on sale of investment (443,754 ) — (443,754 ) Change in fair value of debt and liability instruments (3,354 ) 29,845 (33,199 ) Gain on termination of Sumitomo Options (66,472 ) — (66,472 ) Gain on deconsolidation of subsidiary and consolidation of unconsolidated entity (5,041 ) (115,364 ) 110,323 Other expense, net 3,435 8,701 (5,266 ) Loss before income taxes (923,747 ) (898,547 ) (25,200 ) Income tax expense 369 1,686 (1,317 ) Net loss (924,116 ) (900,233 ) (23,883 ) Net loss attributable to noncontrolling interests (78,854 ) (90,999 ) 12,145 Net loss attributable to Roivant Sciences Ltd. $ (845,262 ) $ (809,234 ) $ (36,028 ) 172 Table of Contents Variance analysis for years ended March 31, 2022 and 2021 Revenue, net Years Ended March 31, 2022 2021 Change (in thousands) Revenue, net $ 55,286 $ 23,795 $ 31,491 Revenue, net increased by $31.5 million to $55.3 million for the year ended March 31, 2022 compared to $23.8 million for the year ended March 31, 2021.
Biggest changeChanges in the amount of net loss attributable to noncontrolling interests are directly impacted by the net loss of our consolidated entities and changes in ownership percentages. 144 Table of Contents Results of Operations Comparison of the years ended March 31, 2023 and 2022 The following table sets forth our results of operations for the years ended March 31, 2023 and 2022 : Years Ended March 31, 2023 2022 Change (in thousands) Revenues: Product revenue, net $ 28,011 $ — $ 28,011 License, milestone and other revenue 33,269 55,286 (22,017 ) Revenue, net 61,280 55,286 $ 5,994 Operating expenses: Cost of revenues 13,128 8,966 4,162 Research and development 525,215 483,035 42,180 Acquired in-process research and development 97,749 139,894 (42,145 ) Selling, general and administrative 600,506 775,033 (174,527 ) Total operating expenses 1,236,598 1,406,928 (170,330 ) Loss from operations (1,175,318 ) (1,351,642 ) 176,324 Change in fair value of investments 20,815 87,291 (66,476 ) Gain on sale of investment — (443,754 ) 443,754 Change in fair value of debt and liability instruments 78,001 (3,354 ) 81,355 Gain on termination of Sumitomo Options — (66,472 ) 66,472 Gain on deconsolidation of subsidiaries (29,276 ) (5,041 ) (24,235 ) Interest income (32,184 ) (369 ) (31,815 ) Interest expense 27,968 7,041 20,927 Other income, net (15,808 ) (3,237 ) (12,571 ) Loss from continuing operations before income taxes (1,224,834 ) (923,747 ) (301,087 ) Income tax expense 5,190 369 4,821 Loss from continuing operations, net of tax (1,230,024 ) (924,116 ) (305,908 ) Income from discontinued operations, net of tax 114,561 — 114,561 Net loss (1,115,463 ) (924,116 ) (191,347 ) Net loss attributable to noncontrolling interests (106,433 ) (78,854 ) (27,579 ) Net loss attributable to Roivant Sciences Ltd. $ (1,009,030 ) $ (845,262 ) $ (163,768 ) Variance analysis for years ended March 31, 2023 and 2022 Product revenue, net Years Ended March 31, 2023 2022 Change (in thousands) Product revenue, net $ 28,011 $ — $ 28,011 Product revenue, net was $28.0 million for the year ended March 31, 2023 , consisting of net product revenues from the sale of VTAMA, following the approval of VTAMA for the treatment of plaque psoriasis in adult patients by the FDA in May 2022.
Change in fair value of debt and liability instruments Change in fair value of debt and liability instruments primarily includes the unrealized (gain) loss relating to the measurement and recognition of fair value on a recurring basis of certain liabilities, including debt issued by a wholly-owned subsidiary of Dermavant Sciences Ltd. to NovaQuest Co-Investment Fund VIII, L.P.
Change in fair value of debt and liability instruments Change in fair value of debt and liability instruments primarily includes the unrealized loss (gain) relating to the measurement and recognition of fair value on a recurring basis of certain liabilities, including debt issued by a wholly-owned subsidiary of Dermavant Sciences Ltd. to NovaQuest Co-Investment Fund VIII, L.P.
These increases will likely include salaries, sales incentive compensation, share-based compensation and travel expenses associated with our sales force, which began promoting VTAMA cream in the United States following approval by the FDA in May 2022, as well as expected costs associated with the further build out of our commercial operations functions.
These increases will likely include salaries, sales incentive compensation, share-based compensation and travel expenses associated with our sales force, which began promoting VTAMA in the United States following approval by the FDA in May 2022, as well as expected costs associated with the further build out of our commercial operations functions.
Additionally, during the years ended March 31, 2021 and 2020, Immunovant issued shares of common stock for an aggregate net proceeds of $384.9 million (including an aggregate of $27.5 million of shares of common stock purchased by us) in private financings, underwritten public offerings, and warrant exercises.
During the years ended March 31, 2021 and 2020, Immunovant issued shares of common stock for an aggregate net proceeds of $384.9 million (including an aggregate of $27.5 million of shares of common stock purchased by us) in private financings, underwritten public offerings, and warrant exercises.
We anticipate that our expenses will increase substantially as we: • fund preclinical studies and clinical trials for our product candidates, which we are pursuing or may choose to pursue in the future; • fund the manufacturing of drug substance and drug product of our product candidates in development; • seek to identify, acquire, develop and commercialize additional product candidates; • invest in activities related to the discovery of novel drugs and advancement of our internal programs; • integrate acquired technologies into a comprehensive regulatory and product development strategy; • maintain, expand and protect our intellectual property portfolio; • hire scientific, clinical, quality control and administrative personnel; • add operational, financial and management information systems and personnel, including personnel to support our drug development efforts; • achieve milestones under our agreements with third parties that will require us to make substantial payments to those parties; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • build out our sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize VTAMA and any drug candidates for which we may obtain regulatory approval; and • operate as a public company.
We anticipate that our expenses will increase substantially as we: • fund preclinical studies and clinical trials for our product candidates, which we are pursuing or may choose to pursue in the future; • fund the manufacturing of drug substance and drug product of our product candidates in development; • seek to identify, acquire, develop and commercialize additional product candidates; • invest in activities related to the discovery of novel drugs and advancement of our internal programs; • integrate acquired technologies into a comprehensive regulatory and product development strategy; • maintain, expand and protect our intellectual property portfolio; • hire scientific, clinical, quality control and administrative personnel; • add operational, financial and management information systems and personnel, including personnel to support our drug development efforts; • achieve milestones under our agreements with third parties that will require us to make substantial payments to those parties; • seek regulatory approvals for any product candidates that successfully complete clinical trials; 154 Table of Contents • build out our sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize VTAMA and any drug candidates for which we may obtain regulatory approval; and • operate as a public company.
The duration, costs and timing of preclinical studies and clinical trials of our product candidates will depend on a variety of factors that include, but are not limited to, the following: • the scope, rate of progress, expense and results of our preclinical development activities, any future clinical trials of our product candidates, and other research and development activities that we may conduct; • the number and scope of preclinical and clinical programs we decide to pursue; • the uncertainties in clinical trial design and patient enrollment or drop out or discontinuation rates; • the number of doses that patients receive; • the countries in which the trials are conducted; • our ability to secure and leverage adequate CRO support for the conduct of clinical trials; • our ability to establish an appropriate safety and efficacy profile for our product candidates; 169 Table of Contents • the timing, receipt and terms of any approvals from applicable regulatory authorities; • the potential additional safety monitoring or other studies requested by regulatory agencies; • the significant and changing government regulation and regulatory guidance; • our ability to establish clinical and commercial manufacturing capabilities, or make arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully; • the impact of any business interruptions to our operations due to the COVID-19 pandemic; and • our ability to maintain a continued acceptable safety profile of our product candidates following approval of our product candidates.
The duration, costs and timing of preclinical studies and clinical trials of our product candidates will depend on a variety of factors that include, but are not limited to, the following: • the scope, rate of progress, expense and results of our preclinical development activities, any future clinical trials of our product candidates, and other research and development activities that we may conduct; • the number and scope of preclinical and clinical programs we decide to pursue; • the uncertainties in clinical trial design and patient enrollment or drop out or discontinuation rates; • the number of doses that patients receive; • the countries in which the trials are conducted; • our ability to secure and leverage adequate CRO support for the conduct of clinical trials; • our ability to establish an appropriate safety and efficacy profile for our product candidates; • the timing, receipt and terms of any approvals from applicable regulatory authorities; • the potential additional safety monitoring or other studies requested by regulatory agencies; • the significant and changing government regulation and regulatory guidance; • our ability to establish clinical and commercial manufacturing capabilities, or make arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully; • the impact of any business interruptions to our operations due to the COVID-19 pandemic or other epidemics; and • our ability to maintain a continued acceptable safety profile of our product candidates following approval of our product candidates.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the first sale of Roivant common shares pursuant to an effective registration statement or (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), and (2) the date on which (x) we are deemed to be a large accelerated filer, which means the market value of Roivant common shares that are held by non-affiliates exceeds $700 million as of the prior September 30th, or (y) the date on which we have issued more than $1.0 billion in nonconvertible debt during the prior three-year period. 183 Table of Contents Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the first sale of Roivant common shares pursuant to an effective registration statement or (b) in which we have total annual gross revenue of at least $1.235 billion (as adjusted for inflation pursuant to SEC rules from time to time), and (2) the date on which (x) we are deemed to be a large accelerated filer, which means the market value of Roivant common shares that are held by non-affiliates exceeds $700 million as of the prior September 30th, or (y) the date on which we have issued more than $1.0 billion in nonconvertible debt during the prior three-year period. 158 Table of Contents Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
Research and development expenses primarily include the following: • Program-specific costs, including direct third-party costs, which include expenses incurred under agreements with contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), manufacturing costs in connection with producing materials for use in conducting nonclinical and clinical studies, the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, and any other third-party expenses directly attributable to the development of our product candidates. • Unallocated internal costs, including: • employee-related expenses, such as salaries, share-based compensation, and benefits, for research and development personnel; and • other expenses that are not allocated to a specific program.
Research and development expenses primarily include the following: 141 Table of Contents • Program-specific costs, including direct third-party costs, which include expenses incurred under agreements with contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), manufacturing costs in connection with producing materials for use in conducting nonclinical and clinical studies, the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, and any other third-party expenses directly attributable to the development of our product candidates. • Unallocated internal costs, including: ◦ employee-related expenses, such as salaries, share-based compensation, and benefits, for research and development personnel; and ◦ other expenses that are not allocated to a specific program.
Change in fair value of debt and liability instruments for the year ended March 31, 2022 primarily consisted of an unrealized gain of $30.8 million 175 Table of Contents relating to the warrant and earn-out share liabilities issued as part of the Business Combination, partially offset by an unrealized loss of $27.3 million relating to the NovaQuest facility, which was largely due to the passage of time and increased probabilities of success as a result of advancement in the stage of development of the product candidate.
Change in fair value of debt and liability instruments for the year ended March 31, 2022 primarily consisted of an unrealized gain of $30.8 million relating to the warrant and earn-out share liabilities issued as part of the Business Combination, partially offset by an unrealized loss of $27.3 million relating to the NovaQuest facility, which was largely due to the passage of time and increased probabilities of success as a result of advancement in the stage of development of the product candidate.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of 179 Table of Contents these securities may include liquidation or other preferences that adversely affect your rights as a common shareholder.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common shareholder.
We expect to continue to finance our cash needs through a combination of our cash on hand and future equity offerings, debt financings, sales of subsidiaries, and collaborations, strategic alliances or marketing, distribution, licensing or similar arrangements with third parties.
We expect to continue to finance our cash needs through a combination of our cash on hand and future equity offerings, debt financings, sales of subsidiaries, and proceeds received from collaborations, strategic alliances or marketing, distribution, licensing or similar arrangements with third parties.
Consolidated Vant Equity Financing Transactions Since inception, we have completed multiple Vant equity financing transactions, including the following: Immunovant In December 2019, Immunovant raised $111.0 million (including $5.1 million related to common shares purchased by us) through a business combination with Health Sciences Acquisition Corporation, a special purpose acquisition company.
Consolidated Vant Equity Financing Transactions Since inception, we have completed multiple Vant equity financing transactions, including the following: 153 Table of Contents Immunovant In December 2019, Immunovant raised $111.0 million (including $5.1 million related to common shares purchased by us) through a business combination with Health Sciences Acquisition Corporation, a special purpose acquisition company.
(“Sumitovant”), a wholly-owned subsidiary of Sumitomo. In addition, in connection with the Sumitomo Transaction, we (i) granted Sumitomo options to purchase all, or in the case of Dermavant, 75%, of our ownership interests in six other subsidiaries and (ii) provided Sumitomo and Sumitovant with certain rights over and access to our proprietary technology platforms, DrugOme and Digital Innovation.
In addition, in connection with the Sumitomo Transaction, we (i) granted Sumitomo options to purchase all, or in the case of Dermavant, 75%, of our ownership interests in six other subsidiaries and (ii) provided Sumitomo and Sumitovant with certain rights over and access to our proprietary technology platforms, DrugOme and Digital Innovation.
(“Palantir”) totaling $30.0 million related to a master subscription agreement entered in May 2021 for access to Palantir’s proprietary software for a five-year period; and 176 Table of Contents • certain commitments to Samsung Biologics Co., Ltd.
(“Palantir”) totaling $30.0 million related to a master subscription agreement entered in May 2021 for access to Palantir’s proprietary software for a five-year period; • certain commitments to Samsung Biologics Co., Ltd.
Research and development activities will continue to be central to our business model. We anticipate that our research and development expenses will increase for the foreseeable future as we advance our product candidates through preclinical studies and clinical trials, as well as acquire new product candidates.
Research and development activities will continue to be central to our business model. We anticipate that our research and development expenses will increase for the foreseeable future as we advance our product candidates and our recently in-licensed assets through preclinical studies and clinical trials, as well as acquire or discover new product candidates.
Cash flow from operating activities is derived from adjusting our net loss for non-cash items and changes in working capital. For the year ended March 31, 2022, cash used in operating activities increased by $125.6 million to $677.7 million compared to the year ended March 31, 2021.
Cash flow from operating activities is derived from adjusting our net loss for non-cash items and changes in working capital. For the year ended March 31, 2023 , cash used in operating activities increased by $165.7 million to $843.4 million compared to the year ended March 31, 2022 .
Cash Flows The following table sets forth a summary of our cash flows for the years ended March 31, 2022 and 2021: Years Ended March 31, 2022 2021 (in thousands) Net cash used in operating activities $ (677,729 ) $ (552,138 ) Net cash provided by (used in) investing activities $ 303,295 $ (31,702 ) Net cash provided by financing activities $ 306,792 $ 456,264 Operating Activities Cash flow from operating activities represents the cash receipts and disbursements related to all of our activities other than investing and financing activities.
Cash Flows The following table sets forth a summary of our cash flows for the years ended March 31, 2023 and 2022 : Years Ended March 31, 2023 2022 (in thousands) Net cash used in operating activities $ (843,393 ) $ (677,729 ) Net cash (used in) provided by investing activities $ (44,269 ) $ 303,295 Net cash provided by financing activities $ 499,462 $ 306,792 Operating Activities Cash flow from operating activities represents the cash receipts and disbursements related to all of our activities other than investing and financing activities.
Our short-term and long-term liquidity requirements as of March 31, 2022 included: • Contractual payments related to our long-term debt (see Note 7, “Long-Term Debt and Loan Commitment” of our audited financial statements); • obligations under our operating leases (see Note 12, “Leases” of our audited financial statements); • certain commitments to Palantir Technologies Inc.
Our short-term and long-term liquidity requirements as of March 31, 2023 included: • Contractual payments related to our long-term debt (see Note 9, “Long-Term Debt” of our audited financial statements); • obligations under our leases (see Note 15, “Leases” of our audited financial statements); • certain commitments to Palantir Technologies Inc.
Gain on termination of Sumitomo Options Years Ended March 31, 2022 2021 Change (in thousands) Gain on termination of Sumitomo Options $ (66,472 ) $ — $ (66,472 ) Gain on termination of Sumitomo Options was $66.5 million for the year ended March 31, 2022 due to the completion of transactions contemplated by the Asset Purchase Agreement entered into with Sumitomo and SPC.
Gain on termination of Sumitomo Options Years Ended March 31, 2023 2022 Change (in thousands) Gain on termination of Sumitomo Options $ — $ (66,472 ) $ 66,472 Gain on termination of Sumitomo Options was $66.5 million for the year ended March 31, 2022 due to the completion of transactions contemplated by an Asset Purchase Agreement entered into with Sumitomo Pharma Co., Ltd. and its subsidiary Sumitomo Pharmaceuticals (Suzhou) Co., Ltd.
Under the terms of the RIPSA, the Purchasers procured a capped single-digit revenue interest in net sales of tapinarof for all dermatological indications in the United States, up to a cap of $344.0 million, in exchange for $160.0 million in committed funding to be paid to Dermavant, conditional based on the approval of tapinarof by the FDA.
Under the terms of the RIPSA, Dermavant is obligated to pay royalties based on a capped single-digit revenue interest in net sales of tapinarof for all dermatological indications in the United States, up to a cap of $344.0 million, in exchange for the $160.0 million in committed funding to be paid to Dermavant, conditioned on the approval of tapinarof by the FDA, which was achieved in May 2022.
Additionally, we expect to incur significant commercialization expenses with respect to VTAMA cream. Our operating results, including our net losses, may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, our expenditures on other research and development activities and our commercialization efforts.
Our operating results, including our net losses, may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, our expenditures on other research and development activities and our commercialization efforts.
For the year ended March 31, 2022, cash flow from investing activities changed by $335.0 million to net cash provided by investing activities of $303.3 million from net cash used in investing activities of $31.7 million for the year ended March 31, 2021.
For the year ended March 31, 2023 , cash flow from investing activities changed by $347.6 million to net cash used in investing activities of $44.3 million from net cash provided by investing activities of $303.3 million for the year ended March 31, 2022 .
The estimation of the fair value of the common shares considered factors including the following: • the prices of our common shares sold to investors in arm’s length transactions; • the estimated present value of our future cash flows; • our business, financial condition and results of operations; • our forecasted operating performance; • the illiquid nature of our common shares; • industry information such as market size and growth; • market capitalization of comparable companies and the estimated value of transactions such companies have engaged in; and • macroeconomic conditions.
The estimation of the fair value of the common shares considered factors including the following: • the prices of our common shares sold to investors in arm’s length transactions; • the estimated present value of our future cash flows; • our business, financial condition and results of operations; • our forecasted operating performance; • the illiquid nature of our common shares; • industry information such as market size and growth; • market capitalization of comparable companies and the estimated value of transactions such companies have engaged in; and • macroeconomic conditions. 157 Table of Contents We apply a similar methodology to estimate the fair value of the shares of common stock underlying share-based awards issued by our privately held Vants.
Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred. We accrue expense for preclinical studies and clinical trial activities performed by vendors based upon estimates of the proportion of work completed.
We expense research and development costs as incurred. We accrue expense for preclinical studies and clinical trial activities performed by vendors based upon estimates of the proportion of work completed.
(“Samsung”) pursuant to a Product Service Agreement entered between Immunovant and Samsung by which Samsung will manufacture and supply Immunovant with batoclimab drug substance for commercial sale and perform other manufacturing-related services with respect to batoclimab. The minimum purchase commitment related to this agreement is estimated to be approximately $36.0 million.
(“Samsung”) pursuant to a Product Service Agreement entered between Immunovant and Samsung by which Samsung will manufacture and supply Immunovant with batoclimab drug substance for commercial sale and perform other manufacturing-related services with respect to batoclimab.
Expected term —We have generally elected to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). 182 Table of Contents Expected volatility —Prior to the closing of the Business Combination, we were a privately held company and did not have any trading history for our common shares; accordingly, the expected volatility was estimated based on the average volatility for comparable publicly traded biotechnology companies over a period equal to the expected term of the stock option grants.
Expected volatility —Prior to the closing of the Business Combination, we were a privately held company and did not have any trading history for our common shares; accordingly, the expected volatility was estimated based on the average volatility for comparable publicly traded biotechnology companies over a period equal to the expected term of the stock option grants.
The change of $182.8 million was primarily driven by changes in the public share prices of Arbutus and Sio as well as the change in fair value of our investment in Datavant following the completion of the Datavant Merger in July 2021.
The change of $66.5 million was primarily driven by changes in the public share prices of our equity investments, including Arbutus, as well as the change in fair value of our investment in Datavant following the completion of the Datavant Merger (as defined below) in July 2021.
Change in fair value of debt and liability instruments Years Ended March 31, 2022 2021 Change (in thousands) Change in fair value of debt and liability instruments $ (3,354 ) $ 29,845 $ (33,199 ) Change in fair value of debt and liability instruments was an unrealized gain of $3.4 million and unrealized loss of $29.8 million for the years ended March 31, 2022 and 2021, respectively.
Change in fair value of debt and liability instruments Years Ended March 31, 2023 2022 Change (in thousands) Change in fair value of debt and liability instruments $ 78,001 $ (3,354 ) $ 81,355 Change in fair value of debt and liability instruments was an unrealized loss of $78.0 million and unrealized gain of $3.4 million for the years ended March 31, 2023 and 2022 , respectively.
The gain of $5.0 million for the year ended March 31, 2021 resulted from the deconsolidation of a subsidiary.
Gain on deconsolidation of subsidiaries was $5.0 million for the year ended March 31, 2022 and resulted from the deconsolidation of a subsidiary in January 2022.
In June 2021, we completed a transaction with Sumitomo pursuant to which Sumitomo terminated its existing options to acquire our equity interests in certain of our subsidiaries. See “Components of Results of Operations—Gain on termination of Sumitomo Options” above for additional information.
In June 2021, we completed a transaction with Sumitomo pursuant to which Sumitomo terminated its existing options to acquire our equity interests in certain of our subsidiaries.
Other expense, net Other expense, net consists of interest expense resulting from interest accrued on long-term debt and the amortization of debt discount and issuance costs, losses from our equity method investment prior to consolidation in July 2020, interest income on our cash and cash equivalents, and other miscellaneous (income) expense. 171 Table of Contents Income tax expense Income tax expense is recorded for the jurisdictions in which we do business.
Interest income Interest income consists of interest earned on our cash equivalents. Interest expense Interest expense results from interest accrued on long-term debt and the amortization of debt discount and issuance costs. 143 Table of Contents Income tax expense Income tax expense is recorded for the jurisdictions in which we do business.
Change in fair value of investments Years Ended March 31, 2022 2021 Change (in thousands) Change in fair value of investments $ 87,291 $ (95,533 ) $ 182,824 Change in fair value of investments was an unrealized loss of $87.3 million and unrealized gain of $95.5 million for the years ended March 31, 2022 and 2021, respectively.
Change in fair value of investments Years Ended March 31, 2023 2022 Change (in thousands) Change in fair value of investments $ 20,815 $ 87,291 $ (66,476 ) Change in fair value of investments was an unrealized loss of $20.8 million and unrealized loss of $87.3 million for the years ended March 31, 2023 and 2022 , respectively.
The increase was primarily due to increases in share-based compensation expense of $438.9 million primarily as a result of the achievement of the liquidity event vesting condition for certain equity instruments upon the closing of the Business Combination in September 2021, resulting in the recognition of a one-time catch-up expense of $350.0 million relating to cumulative service rendered between the grant date of the respective awards and completion of the Business Combination and continued recognition of expense over the requisite service periods.
The decrease in share-based compensation resulted from the achievement of the liquidity event vesting condition for certain equity instruments upon the closing of the Business Combination in September 2021, resulting in the recognition of a one-time catch-up expense of $350.0 million for the year ended March 31, 2022 for cumulative service rendered between the grant date of the respective awards and completion of the Business Combination.
The payment obligations under the asset acquisition and license agreements are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones, and we will be required to make milestone payments and royalty payments in connection with the sale of products developed under these agreements.
Under these agreements we are required to make milestone payments upon successful completion and achievement of certain development, regulatory and commercial milestones. The payment obligations under the asset acquisition and license agreements are contingent upon future events, such as our achievement of specified development, regulatory and commercial milestones, and the amount, timing, and likelihood of such payments are not known.
Our operations to date have been financed primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements.
See “Forward-Looking Statements” and “Risk Factors” in this Annual Report on Form 10-K. Our operations to date have been financed primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements.
Gain on sale of investment Years Ended March 31, 2022 2021 Change (in thousands) Gain on sale of investment $ (443,754 ) $ — $ (443,754 ) Gain on sale of investment was $443.8 million for the year ended March 31, 2022 due to the Datavant Merger in July 2021 at which point we received approximately $320 million in cash and a minority equity stake in the combined company.
Gain on sale of investment Years Ended March 31, 2023 2022 Change (in thousands) Gain on sale of investment $ — $ (443,754 ) $ 443,754 148 Table of Contents Gain on sale of investment was $443.8 million for the year ended March 31, 2022 and resulted from Datavant’s merger with a wholly-owned subsidiary of Heracles Parent, L.L.C., the parent company of CIOX Health, (the “Datavant Merger”) in July 2021 at which point we received approximately $320 million in cash and a minority equity stake in the combined company.
Implications of Being an Emerging Growth Company and Smaller Reporting Company We are an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Recently Adopted Accounting Pronouncements We did not adopt any material accounting pronouncements during the year ended March 31, 2023. Implications of Being an Emerging Growth Company and Smaller Reporting Company We are an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Other Datavant In July 2021, we received approximately $320 million in cash as a result of the Datavant Merger. Funding Requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the discovery efforts, preclinical activities, clinical trials and potential commercialization of our product candidates.
Funding Requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the discovery efforts, preclinical activities, clinical trials and potential commercialization of our product candidates. Additionally, we expect to incur significant commercialization expenses with respect to VTAMA.
Net loss attributable to noncontrolling interests Net loss attributable to noncontrolling interests consists of the portion of net loss of those consolidated entities that is not allocated to us. Changes in the amount of net loss attributable to noncontrolling interests are directly impacted by the net loss of our consolidated entities and changes in ownership percentages.
Net loss attributable to noncontrolling interests Net loss attributable to noncontrolling interests consists of the portion of net loss of those consolidated entities that is not allocated to us.
If awards with graded-vesting features contain performance or market conditions, then we record share-based compensation expense using the accelerated attribution method.
We may grant awards with graded-vesting features. When such awards have only service vesting requirements, we elected to record share-based compensation expense on a straight-line basis. If awards with graded-vesting features contain performance or market conditions, then we record share-based compensation expense using the accelerated attribution method.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common shares held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
We may continue to be a smaller reporting company as long as either (i) the market value of our common shares held by non-affiliates is less than $250 million as of the end of that year's second fiscal quarter, or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common shares held by non-affiliates is less than $700 million as of the end of that year’s second fiscal quarter.
In May 2021, all amounts outstanding under the Hercules Loan Agreement were repaid using the proceeds from the $40.0 million senior secured credit facility entered into by Dermavant in May 2021, and Dermavant terminated the Hercules Loan Agreement. 178 Table of Contents Following the approval of VTAMA cream by the FDA in May 2022, Dermavant received $160.0 million in June 2022 pursuant to the terms of the revenue interest purchase and sale agreement entered with XYQ Luxco, NovaQuest Co-Investment Fund XVII, L.P., an affiliate of NovaQuest Capital Management, LLC, and MAM Tapir Lender, LLC, an affiliate of Marathon Asset Management, L.P., together with U.S.
Following the approval of VTAMA by the FDA in May 2022, Dermavant received $160.0 million in June 2022 pursuant to the terms of the RIPSA entered with XYQ Luxco, NovaQuest Co-Investment Fund XVII, L.P., an affiliate of NovaQuest Capital Management, LLC, and MAM Tapir Lender, LLC, an affiliate of Marathon Asset Management, L.P., together with U.S.
This change in cash flow from investing activities is primarily due to approximately $320 million in cash we received as a result of the Datavant Merger. 180 Table of Contents Financing Activities For the year ended March 31, 2022, cash provided by financing activities decreased by $149.5 million to $306.8 million compared to the year ended March 31, 2021.
This change in cash flow from investing activities is primarily related to $320 million in cash we received as a result of the Datavant Merger during the year ended March 31, 2022 .
We anticipate these expenses to further increase if any of our other current or future product candidates receives regulatory approval in the United States or another jurisdiction. Change in fair value of investments Change in fair value of investments includes the unrealized loss (gain) on equity investments in publicly-traded companies, including Sio Gene Therapies Inc.
We anticipate these expenses to further increase if any of our other current or future product candidates receives regulatory approval in the United States or another jurisdiction.
Bank National Association, as collateral agent, partially offset by cash used to repay all amounts outstanding under a previously existing loan and security agreement with Hercules Capital, Inc. During the year ended March 31, 2021, cash provided by financing activities was primarily driven by the issuance of equity by our majority-owned subsidiaries, Immunovant and Proteovant.
Bank National Association, as collateral agent, partially offset by cash used to repay all amounts outstanding under a previously existing loan and security agreement with Hercules Capital, Inc.
Cost of revenues Through March 31, 2022, our cost of revenues primarily relates to subscription and service-based revenue recognized for the use of technology developed and consists primarily of employee, hosting, and third-party data costs. Our cost of revenues through March 31, 2022 has not been significant.
Our cost of revenues also relates to subscription and service-based revenue recognized for the use of technology developed and consists primarily of employee, hosting, and third-party data costs. Research and development expenses Research and development expenses consist mainly of costs incurred in connection with the discovery and development of our product candidates.
The increase of $41.1 million in share-based compensation expense was primarily due to the achievement of the liquidity event vesting condition for certain equity instruments upon the closing of the Business Combination in September 2021, resulting in the recognition of a one-time catch-up expense of $22.9 million relating to cumulative service rendered between the grant date of the respective awards and completion of the Business Combination and continued recognition of expense over the requisite service periods.
The decrease of $32.8 million in share-based compensation expense was primarily due to the achievement of the liquidity event vesting condition for certain equity instruments upon the closing of the Business Combination in September 2021, resulting in the recognition of a one-time catch-up expense of $22.9 million relating to cumulative service rendered between the grant date of the respective awards and completion of the Business Combination and continued recognition of expense over the requisite service periods . 147 Table of Contents Acquired in-process research and development expenses Years Ended March 31, 2023 2022 Change (in thousands) Consideration for the purchase of IPR&D $ 87,749 $ 97,412 $ (9,663 ) Development milestone payments 10,000 42,482 (32,482 ) Total acquired in-process research and development expenses $ 97,749 $ 139,894 $ (42,145 ) Acquired in-process research and development expenses decreased by $42.1 million to $97.7 million for the year ended March 31, 2023 , compared to $139.9 million for the year ended March 31, 2022 .
General and administrative expenses also consist of legal and accounting fees, consulting services and other operating costs relating to corporate matters and daily operations. Additionally, general and administrative expenses include costs incurred relating to the identification, acquisition or in-license and technology transfer of promising drug candidates along with costs incurred relating to the integration of new technologies.
SG&A employees include those responsible for the identification and acquisition or in-license of new drug candidates as well as for managing Vant operations and facilitating the use of our platform and technologies at the Vants. SG&A expenses also consist of marketing programs, advertising, legal and accounting fees, consulting services, and other operating costs relating to corporate matters and daily operations.
Research and development expenses will also be driven by the number of drug candidates from Roivant Discovery that we advance through preclinical studies and clinical trials. We expect higher employee-related expenses, including higher share-based compensation expenses, as well as higher consulting costs as we hire additional resources to support increasing development activity.
We expect higher employee-related expenses, including share-based compensation expenses, as well as higher consulting costs as we hire additional resources to support increasing development activity.
If the actual timing of the performance of services or the level of effort varies from the estimate, the accrual is adjusted accordingly.
If the actual timing of the performance of services or the level of effort varies from the estimate, the accrual is adjusted accordingly. Nonrefundable advance payments for goods and services are deferred and recognized as expense in the period that the related goods are consumed or services are performed.
The increase was primarily related to payments received in connection with license agreements and the license of technology. Additionally, we recognized revenue relating to the sales of clinical product as well as milestone income at Dermavant. Revenue generated was not significant in either period presented.
During the year ended March 31, 2022 , license, milestone and other revenue primarily related to payments received in connection with license agreements and the licensing of technology as well as revenue relating to the sales of clinical product and milestone income at Dermavant pursuant to a collaboration and license agreement with Japan Tobacco Inc.
The grant date fair value of the stock-based awards is recognized over the requisite service period, which is generally the vesting period of the respective awards. We may grant awards with graded-vesting features. When such awards have only service vesting requirements, we elected to record share-based compensation expense on a straight-line basis.
Share-Based Compensation We recognize compensation costs related to share-based awards granted to employees, directors, and consultants based on the estimated fair value of the awards on the date of grant. The grant date fair value of the stock-based awards is recognized over the requisite service period, which is generally the vesting period of the respective awards.
Acquired IPR&D expenses include consideration for the purchase of IPR&D through asset acquisitions and license agreements as well as payments made in connection with asset acquisitions and license agreements upon the achievement of development milestones. These expenses were previously recorded in “Research and development” on the consolidated statements of operations.
Acquired in-process research and development expenses Acquired in-process research and development (“IPR&D”) expenses include consideration for the purchase of IPR&D through asset acquisitions and license agreements as well as payments made in connection with asset acquisitions and license agreements upon the achievement of development milestones. 142 Table of Contents Consideration for the purchase of IPR&D through asset acquisitions and license agreements includes cash upfront payments, shares and other liability instruments issued, and fair value of future contingent consideration payments.
Cost of revenues Years Ended March 31, 2022 2021 Change (in thousands) Cost of revenues $ 8,966 $ 2,057 $ 6,909 Cost of revenues increased by $6.9 million to $9.0 million for the year ended March 31, 2022 compared to $2.1 million for the year ended March 31, 2021, consistent with increased revenue.
Cost of revenues For the years ended March 31, 2023 and 2022, our cost of revenues consisted of the following: Years Ended March 31, 2023 2022 Change (in thousands) Cost of product and other revenues $ 5,660 $ 8,966 $ (3,306 ) Amortization of intangible assets 7,468 — 7,468 Cost of revenues $ 13,128 $ 8,966 $ 4,162 Cost of revenues increased by $4.2 million to $13.1 million for the year ended March 31, 2023 , compared to $9.0 million for the year ended March 31, 2022 .
Through March 31, 2022, we have not generated any revenues from the sale of our product candidates. Through our subsidiary Dermavant, we have launched our first commercial product, VTAMA cream, following approval by the FDA in May 2022.
As of March 31, 2023 , we had cash and cash equivalents of approximately $1.7 billion and our accumulated deficit was approximately $3.8 billion . Through our subsidiary Dermavant, we launched our first commercial product, VTAMA, following approval by the FDA in May 2022.
As of March 31, 2022, $250.0 million of our common shares remained available for sale under the Facility. Sumitomo Transaction In December 2019, we closed the Sumitomo Transaction, including the transfer of our ownership interest in five Vants—Myovant Sciences Ltd., Urovant Sciences Ltd., Enzyvant Therapeutics Ltd., Altavant Sciences Ltd., and Spirovant Sciences Ltd.—to Sumitovant Biopharma Ltd.
Net proceeds to us were approximately $216.9 million after deducting underwriting discounts and commissions and offering expenses. Sumitomo Transaction In December 2019, we closed the Sumitomo Transaction, including the transfer of our ownership interest in five Vants – Myovant, Urovant Sciences Ltd., Enzyvant Therapeutics Ltd., Altavant Sciences Ltd., and Spirovant Sciences Ltd. – to Sumitovant, a wholly-owned subsidiary of Sumitomo.
RSL Equity Financing Transactions Since inception, we have completed multiple equity financing transactions, including the following: In December 2019, in connection with the Sumitomo Transaction, we raised net proceeds of approximately $999.2 million in connection with the sale of our common shares to Sumitomo.
In connection with the Sumitomo Transaction, we raised net proceeds of approximately $999.2 million due to the sale of our common shares to Sumitomo. In September 2021, we completed our Business Combination with MAAC, a special purpose acquisition company, as well as concurrent PIPE Financing.
With the approval of VTAMA cream for the treatment of plaque psoriasis in adult patients by the FDA in May 2022, we began to recognize cost of product revenues after our initial product launch. Research and development expenses Research and development expenses consist mainly of costs incurred in connection with the discovery and development of our product candidates.
Components of Results of Operations Product revenue, net With the FDA approval of VTAMA for the treatment of plaque psoriasis in adult patients and our initial product launch in May 2022, we began to recognize product revenues. We record product revenue net of estimated chargebacks, discounts, rebates, returns, and other allowances associated with the respective sales.
We expect expenses to increase in future periods as we continue to expand our sales and marketing infrastructure and general administrative functions.
Additionally, SG&A expenses include costs incurred relating to the identification, acquisition or in-license and technology transfer of promising drug candidates along with costs incurred relating to the integration of new technologies. We expect SG&A expenses to increase in future periods as we continue to expand our sales and marketing infrastructure and general administrative functions.
Components of Results of Operations Revenue, net Through March 31, 2022, we have not generated any revenues from the sale of our product candidates. Our revenue through March 31, 2022 primarily includes the recognition of upfront payments received in connection with license agreements. Revenue is also generated by subscription and service-based fees.
License, milestone and other revenue License, milestone and other revenue includes the recognition of upfront payments received in connection with license agreements as well as revenue generated by subscription and service-based fees. Cost of revenues We began to recognize cost of product revenues after the initial product launch of VTAMA in May 2022.
Liquidity and Capital Resources For the years ended March 31, 2022 and 2021, we incurred net losses of $924.1 million and $900.2 million, respectively. As of March 31, 2022, we had cash and cash equivalents of approximately $2.1 billion and our accumulated deficit was approximately $2.8 billion.
Refer to Note 11, “Discontinued Operations” of our audited financial statements for additional information. 150 Table of Contents Liquidity and Capital Resources For the years ended March 31, 2023 and 2022 , we incurred losses from continuing operations of approximately $1.2 billion and $924.1 million , respectively.
This increase was primarily driven by an increase in cash required to fund operations, particularly as a result of the progression of Vant programs and payments made for a one-time milestone expense and purchases of clinical product as we prepared for a commercial launch of VTAMA cream and incurred costs associated with our Phase 3 clinical program in atopic dermatitis at Dermavant.
This increase was primarily driven by an increase in cash required to fund operations, particularly as a result of the progression of clinical programs, and to support the commercial launch of VTAMA. Investing Activities Cash flow from investing activities includes cash used for milestone payments; purchase of property and equipment; and proceeds from sale of investment and other equity securities.
Gain on deconsolidation of subsidiary and consolidation of unconsolidated entity Years Ended March 31, 2022 2021 Change (in thousands) Gain on deconsolidation of subsidiary and consolidation of unconsolidated entity $ (5,041 ) $ (115,364 ) $ 110,323 Gain on deconsolidation of subsidiary and consolidation of unconsolidated entity was $5.0 million and $115.4 million for the years ended March 31, 2022 and 2021, respectively.
Gain on deconsolidation of subsidiaries Years Ended March 31, 2023 2022 Change (in thousands) Gain on deconsolidation of subsidiaries $ (29,276 ) $ (5,041 ) $ (24,235 ) Gain on deconsolidation of subsidiaries was $29.3 million for the year ended March 31, 2023 and resulted from the deconsolidation of certain subsidiaries in November 2022 and July 2022.
Change in fair value of debt and liability instruments for the year ended March 31, 2021 primarily consisted of an unrealized loss of $61.0 million relating to the NovaQuest Facility, partially offset by an unrealized gain of $33.5 million relating to the Sumitomo Options.
Change in fair value of debt and liability instruments for the year ended March 31, 2023 primarily consisted of an unrealized loss of $59.6 million relating to the NovaQuest facility, which was primarily due to the impact of VTAMA approval in psoriasis, and an unrealized loss of $24.1 million relating to the warrant and earn-out share liabilities issued as part of the Business Combination.
Following the approval of VTAMA cream by the FDA in May 2022, Dermavant Sciences Ltd. (together with its wholly owned subsidiaries, “Dermavant”) received $160.0 million in June 2022 pursuant to the terms of the revenue interest purchase and sale agreement (the “RIPSA”) as described in Note 7, “Long-Term Debt and Loan Commitment” of our audited financial statements.
The increase primarily resulted from Dermavant’s revenue interest purchase and sale agreement (the “RIPSA”), pursuant to which funding of $160.0 million was received in June 2022 following the approval of VTAMA by the FDA in May 2022.
Through our subsidiary Dermavant Sciences Ltd., we have launched our first commercial product, VTAMA ® (tapinarof) cream, following approval by the FDA in May 2022. Through March 31, 2022, our revenue, primarily generated through license agreements as well as from subscription and service-based fees, has not been significant.
We began generating product revenue, net from sales of VTAMA in the United States in May 2022. We also have generated revenue through license agreements as well as from subscription and service-based fees.
However, we have based this estimate on assumptions that may prove to be wrong, which may require us to use our capital resources sooner than expected. See “Forward-Looking Statements” and “Risk Factors” in this Annual Report on Form 10-K.
We had cash, cash equivalents and restricted cash of approximately $1.7 billion at March 31, 2023, which we expect to support cash runway into the second half of calendar year 2025. However, we have based this estimate on assumptions that may prove to be wrong, which may require us to use our capital resources sooner than expected.
During the year ended March 31, 2022, acquired in-process research and development expenses included consideration for the purchase of IPR&D of $82.1 million relating to the acquisition of brepocitinib by Priovant and $14.1 million relating to a license agreement entered by Hemavant Sciences GmbH with Eisai Co., Ltd.
Acquired in-process research and development expenses for the year ended March 31, 2023 was driven by consideration for the purchase of IPR&D of $87.7 million relating to the acquisition of RVT-3101 and the achievement of a development milestone relating to batoclimab, which resulted in a one-time milestone expense of $10.0 million.
(the “NovaQuest Facility”), and other liability instruments, including warrant and earn-out share liabilities issued in connection with our business combination with Montes Archimedes Acquisition Corp. (“MAAC”) as well as options granted to Sumitomo Dainippon Pharma Co., Ltd. (“Sumitomo”) to purchase our ownership interests in certain subsidiaries (the “Sumitomo Options”) before the termination of those options in June 2021.
(the “NovaQuest Facility”), and other liability instruments, including warrant and earn-out share liabilities issued in connection with our business combination (the “Business Combination”) with Montes Archimedes Acquisition Corp. (“MAAC”), a special purpose acquisition company. Gain on deconsolidation of subsidiaries Gain on deconsolidation of subsidiaries resulted from the determination that we no longer had a controlling financial interest in certain subsidiaries.
Research and development expenses For the years ended March 31, 2022 and 2021, our research and development expenses consisted of the following: Years Ended March 31, 2022 2021 Change (in thousands) Program-specific costs: Batoclimab $ 67,181 $ 49,236 $ 17,945 Tapinarof 64,496 34,002 30,494 Brepocitinib 24,890 — 24,890 ARU-1801 23,312 24,347 (1,035 ) AFVT-2101 12,657 3,782 8,875 ARU-2801 12,031 784 11,247 LSVT-1701 11,067 3,383 7,684 Namilumab 8,745 820 7,925 Other program-specific costs 60,660 45,558 15,102 Total program-specific costs 285,039 161,912 123,127 Unallocated internal costs: Share-based compensation 63,735 22,637 41,098 Personnel-related expenses 103,827 45,646 58,181 Other expenses 30,434 6,431 24,003 Total research and development expenses $ 483,035 $ 236,626 $ 246,409 173 Table of Contents Research and development expenses increased by $246.4 million to $483.0 million for the year ended March 31, 2022 compared to $236.6 million for the year ended March 31, 2021, primarily due to increases in program-specific costs of $123.1 million, personnel-related expenses of $58.2 million, and share-based compensation of $41.1 million.
Research and development expenses For the years ended March 31, 2023 and 2022 , our research and development expenses consisted of the following: 146 Table of Contents Years Ended March 31, 2023 2022 (1) Change (in thousands) Program-specific costs: Anti-FcRn franchise (2) $ 88,747 $ 52,009 $ 36,738 Tapinarof 45,201 64,496 (19,295 ) Brepocitinib 38,627 24,890 13,737 RVT-2001 16,075 1,132 14,943 AFVT-2101 15,628 12,657 2,971 ARU-1801 12,940 23,312 (10,372 ) Namilumab 11,757 8,745 3,012 RVT-3101 7,559 — 7,559 LSVT-1701 7,173 11,067 (3,894 ) ARU-2801 3,456 12,031 (8,575 ) Other development and discovery programs 83,680 74,700 8,980 Total program-specific costs 330,843 285,039 45,804 — Unallocated internal costs: Share-based compensation 30,914 63,735 (32,821 ) Personnel-related expenses 131,908 103,827 28,081 Other expenses 31,550 30,434 1,116 Total research and development expenses $ 525,215 $ 483,035 $ 42,180 (1) Certain prior year amounts have been reclassified to conform to current year presentation.
In September 2021, we completed our Business Combination with MAAC, a special purpose acquisition company, as well as concurrent PIPE Financing. In connection with the Business Combination and PIPE Financing, we received approximately $213.4 million in cash at closing. On February 14, 2022, we entered into a committed equity facility (the “Facility”) with an affiliate of Cantor Fitzgerald & Co.
In connection with the Business Combination and PIPE Financing, we received approximately $213.4 million in cash at closing.
Additionally, acquired in-process research and development expenses for year ended March 31, 2022 included a one-time milestone expense of CAD$50.0 million ($39.3 million) due to the achievement of a development milestone relating to Dermavant’s tapinarof program. 174 Table of Contents General and administrative expenses Years Ended March 31, 2022 2021 Change (in thousands) General and administrative $ 775,033 $ 259,878 $ 515,155 General and administrative expenses increased by $515.2 million to $775.0 million for the year ended March 31, 2022 compared to $259.9 million for the year ended March 31, 2021.
Selling, general and administrative expenses Years Ended March 31, 2023 2022 Change (in thousands) Selling, general and administrative $ 600,506 $ 775,033 $ (174,527 ) Selling, general and administrative expenses decreased by $174.5 million to $600.5 million for the year ended March 31, 2023 , compared to $775.0 million for the year ended March 31, 2022 .
General and administrative expenses General and administrative expenses consist primarily of employee-related expenses, such as salaries, share-based compensation, and benefits, for general and administrative personnel, including those responsible for the identification and acquisition or in-license of new drug candidates as well as for overseeing Vant operations and facilitating the use of our platform and technologies at Vants.
Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses consist primarily of employee-related expenses, such as salaries, share-based compensation, sales incentive compensation, and benefits, for employees engaged in SG&A activities.
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Our fiscal year ends on March 31 and our fiscal quarters end on June 30, September 30 and December 31. Overview We are building the next-generation “big pharma” company, organized to harness modern technologies and computational tools as well as the entrepreneurial spirit of nimble biotechnology companies at scale.
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Our fiscal year ends on March 31 and our fiscal quarters end on June 30, September 30 and December 31. Overview Roivant is a commercial-stage biopharmaceutical company that aims to improve the lives of patients by accelerating the development and commercialization of medicines that matter.
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Our mission is to improve the delivery of healthcare to patients by treating every inefficiency as an opportunity. We are a diverse team of experienced drug developers, scientists, physicians, company builders, data scientists and engineers, biopharma investors, physicists and business development professionals dedicated to improving the lives of patients.
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Today, Roivant’s pipeline is concentrated in inflammation and immunology and includes VTAMA, a novel topical approved for the treatment of psoriasis and in development for the treatment of atopic dermatitis; batoclimab and IMVT-1402, fully human monoclonal antibodies targeting the neonatal Fc receptor (“FcRn”) in development across several IgG-mediated autoimmune indications; and RVT-3101, an anti-TL1A antibody in development for ulcerative colitis and Crohn’s disease, in addition to several other therapies in various stages of clinical development.
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At Roivant, we combine our team’s extensive experience and multi-disciplinary expertise with innovative technologies to identify and advance potentially transformative medicines. We deploy a hypothesis-driven approach to identify novel or clinically-validated targets and biological pathways in areas of high unmet medical need. We then seek to acquire, in-license or discover promising drug candidates against those targets or pathways.
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We advance our pipeline by creating nimble subsidiaries or “Vants” to develop and commercialize our medicines and technologies. Beyond therapeutics, Roivant also incubates discovery-stage companies and health technology startups complementary to its biopharmaceutical business.
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Our small molecule discovery engine is powered by leading computational physics and machine learning (“ML”) capabilities for in silico drug design. We develop drugs and drug candidates in subsidiary companies we call “Vants” with a distinct approach to sourcing talent, aligning incentives and deploying technology.

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