Immunovant(US:IMVT)2023-05-22 11:10Part I Business Immunovant is a clinical-stage biopharmaceutical company focused on developing treatments for autoimmune diseases, with a pipeline centered on two anti-FcRn monoclonal antibodies, batoclimab and IMVT-1402 Overview and Pipeline Immunovant is a clinical-stage biopharmaceutical company developing therapies for autoimmune diseases, with lead product candidates batoclimab and IMVT-1402 targeting FcRn to reduce pathogenic IgG antibody levels * The company's core focus is on its two anti-FcRn antibodies, batoclimab and IMVT-1402, for treating IgG-mediated autoimmune diseases28 Development Pipeline as of March 31, 2023 | Product Candidate | Target Indication / Therapeutic Area | Stage of Development | | :--- | :--- | :--- | | Batoclimab | Myasthenia Gravis | Pivotal Phase 3 | | | Thyroid Eye Disease | Pivotal Phase 3 | | | Chronic Inflammatory Demyelinating Polyneuropathy | Phase 2b | | | Graves' Disease | Phase 2 | | IMVT-1402 | Autoimmune Disease | Phase 1 | * IMVT-1402 is designed to be a potentially best-in-class FcRn inhibitor by demonstrating minimal or no impact on albumin and LDL cholesterol levels in nonclinical studies, a key differentiator from batoclimab3077 * The company has received orphan drug designation for batoclimab for the treatment of MG from both the FDA and the European Commission40 Clinical Programs The company is advancing multiple clinical trials, with batoclimab Phase 3 MG data expected in H2 2024, TED results in H1 2025, CIDP initial data in H1 2024, and IMVT-1402 Phase 1 data in Q3 2023 * The Phase 3 trial for MG will evaluate both induction (680 mg QW) and maintenance (340 mg QW and Q2W) dosing regimens, with top-line data expected in the second half of calendar year 20244849 * The Phase 3 program for TED consists of two trials, with top-line results anticipated in the first half of calendar year 202559 * A pivotal Phase 2b trial for CIDP was initiated, with initial data from the open-label period expected in the first half of calendar year 202465 * A Phase 1 trial for IMVT-1402 was initiated in Q2 2023, with initial single-ascending dose data expected in August or September 2023 and multiple-ascending dose data in October or November 202378 Key Agreements and Relationships Immunovant's operations are supported by a license agreement with HanAll Biopharma for batoclimab and IMVT-1402, a commercial supply agreement with Samsung Biologics, and its status as a majority-owned subsidiary of Roivant Sciences Ltd * Under the HanAll Agreement, Immunovant is obligated to pay up to an aggregate of $432.5 million in future development, regulatory, and sales milestones, plus tiered royalties93 * A $10.0 million development and regulatory milestone was achieved and paid to HanAll in the fiscal year ended March 31, 202393 * The company has a commercial manufacturing agreement with Samsung Biologics for batoclimab, with a remaining minimum purchase commitment of approximately $33.3 million as of March 31, 20239799 * Immunovant is a majority-owned subsidiary of Roivant Sciences Ltd (RSL) and benefits from access to RSL's centralized functions, technology platforms, and expertise100 Competition and Intellectual Property The company faces intense competition from other biopharmaceutical firms developing anti-FcRn inhibitors, including argenx and Johnson & Johnson, and relies on in-licensed and owned patents for intellectual property protection * Key competitors in the anti-FcRn class include argenx SE (efgartigimod), Johnson & Johnson (nipocalimab), and UCB (rozanolixizumab)105 * The in-licensed patent family covering batoclimab composition of matter has a projected expiration of 2035, while the family for IMVT-1402 is projected to expire in 2043113116 * The company also owns patent families directed to methods of treating specific diseases like TED, GD, and CIDP with anti-FcRn antibodies, with projected expirations between 2039 and 2043115117 Government Regulation The company's products are subject to extensive regulation by the FDA and comparable authorities abroad, covering all stages from R&D to post-approval marketing, including specific requirements for combination products and adherence to healthcare laws * The company must navigate the FDA's BLA process for biologics and similar MAA processes in the EU before marketing its products123125 * Pre-filled syringe and autoinjector presentations of the company's products are regulated as combination products, requiring review of both biologic and device components124 * The company is subject to U.S healthcare laws, including the federal Anti-Kickback Statute, False Claims Act, and the Sunshine Act, which regulate interactions with healthcare professionals and payors175176181 * Recent healthcare reforms, such as the Inflation Reduction Act of 2022 (IRA), are expected to impact drug pricing and reimbursement through measures like Medicare price negotiation and inflation-based rebates197199 Human Capital As of March 31, 2023, Immunovant had 164 full-time employees, with approximately 82% in R&D and over half of the workforce and senior management being women, fostering a collaborative and inclusive culture Employee Statistics as of March 31, 2023 | Metric | Value | | :--- | :--- | | Full-time employees | 164 | | Employees in R&D | ~82% | | Employees with advanced degrees | ~70% | | Women in workforce | >50% | | Women in senior management | >50% | * The company expects significant growth in employee numbers, particularly in clinical development, quality, and regulatory affairs, as its product candidates progress207 Risk Factors The company's business faces high risks, including dependence on successful development of batoclimab and IMVT-1402, clinical trial uncertainties, intense competition, reliance on third parties, financial losses, and control by Roivant Sciences Ltd * The business is highly dependent on the success of its two product candidates, batoclimab and IMVT-1402212 * Adverse events, such as the previously observed elevations in total cholesterol and LDL with batoclimab, could delay or prevent regulatory approval or limit market acceptance217219 * The company faces significant competition from other FcRn inhibitors, including the FDA-approved VYVGART™ (efgartigimod), and other therapies for autoimmune diseases249250 * Roivant Sciences Ltd (RSL) owns approximately 56.6% of the company's common stock, making Immunovant a "controlled company" and giving RSL significant influence over corporate matters440 * The company has a history of significant losses, expects to incur more losses, and will require additional capital to fund operations, which may not be available on favorable terms307319 * Reliance on the HanAll Agreement is critical; termination or loss of rights under this agreement would severely impact the development of batoclimab and IMVT-1402324 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC * None469 Properties The company's headquarters are in New York, NY, with operations in Durham, NC, and subsidiary offices in Bermuda, London, and Basel, Switzerland, with New York subleases expiring in 2024 * The company's principal executive offices are located at 320 West 37th Street, New York, New York 10018470 Legal Proceedings The company is involved in a putative securities class action lawsuit filed in February 2021, alleging violations related to batoclimab's safety, which it intends to vigorously defend without recording a liability * A putative securities class action complaint was filed against the Company in February 2021, alleging false and misleading statements regarding the safety of batoclimab669 * The company is unable to reasonably estimate possible losses and has not recorded a liability for this lawsuit669 Mine Safety Disclosures This item is not applicable to the company * Not applicable474 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on The Nasdaq Global Select Market under 'IMVT', with three holders of record as of May 17, 2023, and no history or plans for cash dividends * Common stock trades on The Nasdaq Global Select Market under the ticker symbol 'IMVT'476 * The company has never declared or paid dividends and does not plan to in the foreseeable future478 Management's Discussion and Analysis of Financial Condition and Results of Operations For fiscal year ended March 31, 2023, Immunovant reported a net loss of $211.0 million, driven by increased R&D expenses for clinical trials, with $376.5 million in cash expected to fund operations into H2 2025 Results of Operations For fiscal year ended March 31, 2023, net loss increased to $211.0 million from $156.7 million, primarily due to a $58.4 million rise in R&D expenses for clinical trials and a $10.0 million milestone payment to HanAll Comparison of Operations (in thousands) | | Years Ended March 31, | Change | | :--- | :--- | :--- | | | 2023 | 2022 | $ | | Research and development | $160,257 | $101,808 | $58,449 | | Acquired in-process R&D | $10,000 | $0 | $10,000 | | General and administrative | $48,019 | $54,225 | $(6,206) | | Total operating expenses | $218,276 | $156,033 | $62,243 | | Net loss | $(210,960) | $(156,730) | $(54,230) | * The increase in R&D expenses was primarily driven by $19.1 million in costs for the CIDP trial and $18.7 million for the MG trial, including higher contract manufacturing costs514 * A $10.0 million milestone payment was made to HanAll for batoclimab in MG, recorded as acquired in-process R&D517 Liquidity and Capital Resources As of March 31, 2023, the company had $376.5 million in cash and cash equivalents, bolstered by a $70.2 million equity offering, expected to fund operations into H2 2025, with future commitments including $33.3 million to Samsung and up to $432.5 million to HanAll Cash Position | | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $376.5 million | $493.8 million | * The company expects its cash balance of $376.5 million to fund operating expenses and capital requirements into the second half of calendar year 2025540 * In October 2022, the company raised approximately $70.2 million in net proceeds from an underwritten public offering523 * Future material cash requirements include a remaining minimum commitment of $33.3 million to Samsung and potential milestone payments up to $432.5 million to HanAll533534 Quantitative and Qualitative Disclosures About Market Risk The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a 'smaller reporting company' under SEC rules * As a 'smaller reporting company', the company is exempt from providing quantitative and qualitative disclosures about market risk546 Financial Statements and Supplementary Data The consolidated financial statements for fiscal years ended March 31, 2023 and 2022, show a net loss of $211.0 million for fiscal 2023, with total assets at $405.8 million and stockholders' equity at $362.5 million Financial Highlights For fiscal year ended March 31, 2023, the company reported a net loss of $211.0 million, or ($1.71) per share, with cash and cash equivalents of $376.5 million and total stockholders' equity of $362.5 million Key Financial Data (in thousands, except per share data) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Statement of Operations | | | | Research and development | $160,257 | $101,808 | | General and administrative | $48,019 | $54,225 | | Net loss | $(210,960) | $(156,730) | | Net loss per share | $(1.71) | $(1.43) | | Balance Sheet (as of Mar 31) | | | | Cash and cash equivalents | $376,532 | $493,817 | | Total assets | $405,838 | $515,564 | | Total liabilities | $43,344 | $45,739 | | Total stockholders' equity | $362,494 | $469,825 | Notes to Financials Key notes detail material agreements including HanAll and Samsung commitments, related party transactions with Roivant, significant net operating loss carryforwards with full valuation allowance, and the ongoing securities class action lawsuit * The company has a remaining minimum purchase commitment of approximately $33.3 million under its manufacturing agreement with Samsung622 * As of March 31, 2023, the company has significant net operating loss carryforwards, including $447.6 million in Switzerland and $27.7 million in the U.S, which are fully offset by a valuation allowance632633 * In October 2022, the company raised approximately $70.2 million in net proceeds from an underwritten offering, which included participation from its majority shareholder, RSL648 * The company is defending a putative securities class action lawsuit filed in February 2021; an outcome cannot be reasonably estimated at this time669 Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of March 31, 2023, with no material changes during the fourth fiscal quarter * Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023677 * Management concluded that the company's internal control over financial reporting was effective as of March 31, 2023681 * The report does not include an attestation report from the independent registered public accounting firm on internal controls, as the company is a smaller reporting company and a non-accelerated filer682 Part III Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees Information for Items 10 through 14 is incorporated by reference from the company's forthcoming 2023 Annual Meeting of Stockholders proxy statement, to be filed within 120 days of fiscal year-end * Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, related party transactions, and principal accountant fees and services is incorporated by reference from the forthcoming 2023 Proxy Statement688689691692693694 Part IV Exhibit and Financial Statement Schedules This section lists financial statements and exhibits filed as part of the Annual Report on Form 10-K, with all financial statement schedules omitted as information is included in notes or not applicable * The financial statements are included in Part II, Item 8. All financial statement schedules are omitted696697 * A list of exhibits is provided, incorporating by reference key documents such as the HanAll License Agreement, Samsung Services Agreements, and various equity incentive plans698699 Form 10-K Summary The company reports that there is no Form 10-K summary * None702