Roivant Sciences(US:ROIV)2025-08-11 11:31PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) The company reported a $273.9 million net loss for Q2 2025, a reversal from prior year's income, due to lower revenue and higher operating expenses Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $5.03 billion from $5.44 billion, primarily due to a decrease in cash and an increase in marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,238,459 | $2,715,411 | | Marketable securities | $3,264,692 | $2,171,480 | | Total Assets | $5,032,602 | $5,436,940 | | Liabilities & Equity | | | | Total current liabilities | $113,866 | $149,411 | | Total liabilities | $216,696 | $249,742 | | Total shareholders' equity | $4,815,906 | $5,187,198 | | Total Liabilities and Shareholders' Equity | $5,032,602 | $5,436,940 | Condensed Consolidated Statements of Operations Q2 2025 saw a $273.9 million net loss, a significant shift from prior year's $57.5 million net income, driven by lower revenue and higher operating expenses Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $2,170 | $7,990 | | Research and development | $152,919 | $120,507 | | General and administrative | $134,019 | $99,892 | | Loss from operations | ($284,922) | ($102,235) | | Gain on sale of Telavant net assets | — | $110,387 | | Net (loss) income | ($273,911) | $57,490 | | Net (loss) income per share, basic | ($0.33) | $0.13 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities for Q2 2025 was $204.4 million, with significant cash used in investing activities for marketable securities Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($204,383) | ($192,829) | | Net cash used in investing activities | ($1,085,716) | ($965) | | Net cash used in financing activities | ($187,768) | ($660,616) | | Net change in cash, cash equivalents and restricted cash | ($1,477,052) | ($857,150) | Notes to Condensed Consolidated Financial Statements Notes detail business, liquidity, and accounting policies, including a $110.4 million gain from Telavant sale and completion of a $1.5 billion share repurchase program - As of June 30, 2025, the Company had approximately $4.5 billion in cash, cash equivalents, and marketable securities. It incurred a net loss from continuing operations of $273.9 million for the quarter43 - In June 2024, a one-time milestone related to the Telavant sale was achieved, resulting in the company recognizing a gain of $110.4 million for its pro rata portion85 - The company completed its $1.5 billion share repurchase program as of June 30, 2025, having repurchased 20.3 million shares for $208.3 million during the quarter. A new $500 million repurchase program was authorized in June 20259394 - The company's subsidiary, Immunovant, has a minimum purchase commitment of approximately $43.1 million with Samsung Biologics for the manufacturing of batoclimab113 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the biopharmaceutical business, pipeline, $4.5 billion in cash, and Q2 2025 net loss driven by increased R&D and G&A expenses Overview and Recent Developments Roivant advances its pipeline via 'Vant' subsidiaries, with key candidates in Phase 3, and completed a $1.5 billion share repurchase program Selected Product Candidate Pipeline | Product Candidate | Indication | Vant | Modality | Phase | | :--- | :--- | :--- | :--- | :--- | | Brepocitinib | Dermatomyositis | Priovant | Small Molecule | Phase 3* | | Brepocitinib | Non-Infectious Uveitis | Priovant | Small Molecule | Phase 3* | | IMVT-1402 | Graves' Disease | Immunovant | Biologic | Phase 2/3* | | Batoclimab | Thyroid Eye Disease | Immunovant | Biologic | Phase 3* | | Mosliciguat | Pulmonary Hypertension associated with Interstitial Lung Disease | Pulmovant | Inhaled | Phase 2 | - The company reported consolidated cash, cash equivalents, and marketable securities of $4.5 billion at June 30, 2025, supporting a cash runway into profitability153 - Roivant completed its $1.5 billion share repurchase program, reducing outstanding shares by over 15% from March 31, 2024. A new $500 million share repurchase program was approved in June 2025153 Results of Operations Q2 2025 revenue decreased, R&D expenses rose by $32.4 million, and G&A expenses increased by $34.1 million due to executive compensation R&D Expense Breakdown (in thousands) | Program-specific costs | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Anti-FcRn franchise (all indications) | $56,012 | $40,793 | $15,219 | | Brepocitinib | $15,020 | $10,594 | $4,426 | | Mosliciguat | $8,385 | $2,980 | $5,405 | | Total R&D Expenses | $152,919 | $120,507 | $32,412 | - G&A expenses increased by $34.1 million, primarily due to a $34.2 million increase in share-based compensation expense, largely from long-term equity incentive awards under the 2024 Senior Executive Compensation Program176 - Interest income decreased by $23.8 million due to lower cash equivalent balances and lower interest rates180 Liquidity and Capital Resources As of June 30, 2025, the company had $4.5 billion in cash and marketable securities, sufficient to fund operations, and completed a $1.5 billion share repurchase program - As of June 30, 2025, the company had cash, cash equivalents and marketable securities of approximately $4.5 billion184 - The $1.5 billion common share repurchase program was completed as of June 30, 2025. A new $500 million program was authorized on June 24, 2025, with no purchases made under it as of the quarter's end190191 Summary of Cash Flows (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($204,383) | ($192,829) | | Net cash used in investing activities | ($1,085,716) | ($965) | | Net cash used in financing activities | ($187,768) | ($660,616) | Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rates, foreign currency, and equity prices, with a hypothetical 10% change in key investments impacting financials by $28.4 million - The company's primary market risks are related to interest rates, foreign currency, and equity prices206 - A hypothetical 10% increase or decrease in the fair value of investments in Arbutus and Datavant would have impacted their fair value as of June 30, 2025 by approximately $28.4 million209 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Based on an evaluation as of June 30, 2025, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level212 - There were no material changes in the company's internal control over financial reporting during the fiscal quarter ended June 30, 2025213 PART II—OTHER INFORMATION Legal Proceedings The company does not expect any current legal or regulatory proceedings to materially adversely affect its business or financial condition - The company does not currently expect any legal proceedings to have a material adverse effect on its business, operating results or financial condition217 Risk Factors The company faces significant risks related to its business model, financial position, product development, regulatory approval, and intellectual property Risks Related to Our Business and Industry Risks include limited operating history, 'Vant' structure complexities, reliance on in-licensed assets, capital allocation, and global economic instability - The company's limited operating history and the inherent uncertainties of biopharmaceutical development make it difficult to assess future prospects220 - The 'Vant' structure may result in increased costs, complexities, and key employee risks compared to a centralized model236237 - Immunovant's rights to IMVT-1402 and batoclimab depend on the HanAll Agreement, and any termination or breach would severely impact their development and commercialization228 - The company faces risks from its significant holdings of cash and marketable securities, including market volatility and potential for losses249 Risks Related to Our Intellectual Property Success depends on obtaining and enforcing IP rights, facing risks from patent challenges, litigation (e.g., Moderna, Pfizer/BioNTech), and AI-related IP complexities - The company relies on a combination of patents, trade secrets, and confidentiality agreements to protect its intellectual property, but these may not be sufficiently broad or enforceable424 - The company's subsidiary GSG and Arbutus are in active litigation against Moderna and Pfizer/BioNTech for alleged patent infringement related to COVID-19 vaccines. The jury trial in the Moderna case is scheduled for March 2026455456 - The company may not be able to protect its intellectual property rights throughout the world, as laws and enforcement vary by country, potentially allowing competitors to use its technologies in some jurisdictions472473 - The use of AI in drug discovery introduces unresolved legal questions about inventorship and ownership under current patent laws, which could hinder the ability to protect AI-generated innovations499 Risks Related to Our Securities, Our Jurisdiction of Incorporation and Certain Tax Matters Investor risks include stock price volatility, anti-takeover provisions, dilution from future issuances, and adverse tax consequences from Bermuda incorporation and CFC/PFIC status - The company's largest shareholders own a significant percentage of common shares, allowing them to exert substantial control over matters subject to shareholder approval509 - As a Bermuda-incorporated company, shareholder rights are governed by Bermuda law, which may offer less protection than U.S. laws, and it may be difficult for U.S. investors to enforce judgments against the company517518 - The company's non-U.S. subsidiaries are classified as Controlled Foreign Corporations (CFCs), which may result in adverse U.S. federal income tax consequences for U.S. shareholders holding 10% or more of the company's shares527528 - The company believes it was not a Passive Foreign Investment Company (PFIC) for the taxable year ended March 31, 2025, but its status is an annual determination and could change, which would have adverse tax consequences for U.S. holders529531532 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 20.0 million shares for $205.2 million, completing its $1.5 billion program, and authorized a new $500 million repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Common Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased (in millions) | | :--- | :--- | :--- | :--- | | April 1 – 30, 2025 | 13,672,384 | $9.89 | $69.9 | | May 1 – 31, 2025 | 5,453,666 | $11.04 | $9.7 | | June 1 – 30, 2025 | 873,400 | $11.16 | $500.0 | | Total | 19,999,450 | | | - The company's $1.5 billion share repurchase program was fully exhausted as of June 30, 2025. A new $500 million program was authorized in June 2025538 Defaults Upon Senior Securities None - None536 Mine Safety Disclosures Not applicable - Not applicable536 Other Information None - None536 Exhibits This section lists the exhibits filed with the Form 10-Q, including employment agreements, equity incentive plan documents, and officer certifications - The exhibits include various employment agreements, equity plan documents, and required certifications by the Principal Executive Officer and Principal Financial Officer540