|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Not Applicable
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
Trading Symbol(s)
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Name of each exchange on which registered
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||
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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||
Emerging growth company
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Page
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PART I—FINANCIAL INFORMATION
|
||
Item 1.
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6
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||
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6
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||
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7
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||
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8
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9
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11 | |
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12
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Item 2.
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32 | |
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Item 3.
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48 | |
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Item 4.
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49 |
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PART II—OTHER INFORMATION
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||
Item 1.
|
50 |
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|
||
Item 1A.
|
50 |
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|
||
Item 2.
|
123
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||
Item 3.
|
123 | |
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||
Item 4.
|
123 | |
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Item 5.
|
123 | |
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Item 6.
|
124 | |
125
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•
|
Our limited operating history and the inherent uncertainties and risks involved in biopharmaceutical product development may make it difficult for us to execute on our business model and for you to assess
our future viability.
|
•
|
We may never achieve or maintain profitability.
|
•
|
We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to successfully market our products, acquire or in-license new products or product
candidates, complete the development and commercialization of our products and product candidates and continue to pursue our drug discovery efforts.
|
•
|
We have limited experience as a commercial company and the marketing and sale of VTAMA® (tapinarof) or any future products may
be unsuccessful or less successful than anticipated.
|
•
|
Interim, top-line or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification
procedures that could result in material changes in the final data.
|
•
|
We may not be successful in our efforts to acquire, in-license or discover new product candidates.
|
•
|
We face risks associated with the allocation of capital and personnel across our businesses.
|
•
|
We face risks associated with the Vant structure.
|
•
|
The global pandemic resulting from the outbreak of the novel strain of coronavirus, SARS-CoV-2, which causes COVID-19, could adversely impact our business, including the marketing of our products and our
ongoing clinical trials and preclinical studies.
|
•
|
Clinical trials and preclinical studies are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes. We may encounter substantial delays in clinical trials, or may
not be able to conduct or complete clinical trials or preclinical studies on the expected timelines, if at all.
|
•
|
Our approach to the discovery and development of product candidates from our small molecule discovery engine is unproven, which makes it difficult to predict the time, cost of development and likelihood of
successfully developing any product candidates from these platforms.
|
•
|
Certain of our product candidates are novel, complex and difficult to manufacture.
|
•
|
Obtaining approval of a new drug is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or another regulator may delay, limit or deny approval.
|
•
|
Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of product candidates that we may identify and pursue for their intended uses, which would prevent, delay or limit
the scope of regulatory approval and commercialization.
|
•
|
Our products and product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval, cause us to suspend or discontinue clinical trials, abandon
further development or limit the scope of any approved label or market acceptance.
|
•
|
We depend on the knowledge and skills of our senior leaders and may not be able to manage our business effectively if we are unable to attract and retain key personnel.
|
•
|
We will need to expand our organization and may experience difficulties in managing this growth, which could disrupt operations.
|
•
|
If we are unable to obtain and maintain patent and other intellectual property protection for our technology, products and product candidates or if the scope of the intellectual property protection obtained
is not sufficiently broad, we may not be able to compete effectively in our markets.
|
•
|
If the patent applications we hold or have in-licensed with respect to our products or product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide
meaningful exclusivity for our current and future products or product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize our products.
|
•
|
Patent terms and their scope may be inadequate to protect our competitive position on current and future products and product candidates for an adequate amount of time.
|
•
|
If our performance does not meet market expectations, the price of our securities may decline.
|
•
|
We have incurred and will continue to incur increased costs as a result of operating as a public company and our management has devoted and will continue to devote a substantial amount of time to new
compliance initiatives.
|
•
|
Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act could have a material adverse effect on our business.
|
•
|
Anti-takeover provisions in our memorandum of association, bye-laws and Bermuda law could delay or prevent a change in control, limit the price investors may be willing to pay in the future for our Common
Shares and could entrench management.
|
•
|
Our largest shareholders and certain members of our management own a significant percentage of our Common Shares and will be able to exert significant control over matters subject to shareholder approval.
|
•
|
our limited operating history and risks involved in biopharmaceutical product development;
|
•
|
our limited experience as a commercial-stage company and ability to successfully commercialize VTAMA® (tapinarof);
|
•
|
our ability to raise additional capital to fund our business on acceptable terms or at all;
|
•
|
the receipt of proceeds from the sale of the Myovant Top-Up Shares (as defined below) to Sumitomo (as defined below) in connection with the previously announced acquisition of Myovant Sciences Ltd. by
Sumitomo, expected to close in the quarter ended March 31, 2023;
|
•
|
the fact that we will likely incur significant operating losses for the foreseeable future;
|
•
|
the impact of public health outbreaks, epidemics or pandemics (such as the COVID-19 pandemic) on our business (including our clinical trials and preclinical studies), operations and financial condition and
results;
|
•
|
our ability to acquire, in-license or discover new product candidates;
|
•
|
our Vant structure and the potential that we may fail to capitalize on certain development opportunities;
|
•
|
clinical trials and preclinical studies, which are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes;
|
•
|
the unproven nature of our approach to the discovery and development of product candidates from our small molecule discovery engine;
|
•
|
the novelty, complexity and difficulty of manufacturing certain of our products and product candidates, including any manufacturing problems that result in delays in development or commercialization of our
products and product candidates;
|
•
|
difficulties we may face in enrolling and retaining patients in clinical trials and/or clinical development activities;
|
•
|
the results of our clinical trials not supporting our proposed claims for a product candidate;
|
•
|
interim, top-line and/or preliminary data from our clinical trials changing as more data becoming available or data being delayed due to audit and verification processes;
|
•
|
changes in product manufacturing or formulation that could lead to the incurrence of costs or delays;
|
•
|
the failure of any third-party we contract with to conduct, supervise and monitor our clinical trials to perform in a satisfactory manner or to comply with applicable requirements;
|
•
|
the fact that obtaining approvals for new drugs is a lengthy, extensive, expensive and unpredictable process that may end with our inability to obtain regulatory approval by the FDA or other regulatory
agencies in other jurisdictions;
|
•
|
the failure of our clinical trials to demonstrate substantial evidence of the safety and efficacy of our products and product candidates, including, but not limited to, scenarios in which our products and
product candidates may cause adverse effects that could delay regulatory approval, discontinue clinical trials, limit the scope of approval or generally result in negative media coverage of us;
|
•
|
our inability to obtain regulatory approval for a product or product candidate in certain jurisdictions, even if we are able to obtain approval in certain other jurisdictions;
|
•
|
our ability to effectively manage growth and to attract and retain key personnel;
|
•
|
any business, legal, regulatory, political, operational, financial and economic risks associated with conducting business globally;
|
•
|
our ability to obtain and maintain patent and other intellectual property protection for our technology, products and product candidates;
|
•
|
the inadequacy of patent terms and their scope to protect our competitive position;
|
•
|
the failure to issue (or the threatening of their breadth or strength of protection) or provide meaningful exclusivity for our current and future products and product candidates of our patent applications
that we hold or have in-licensed;
|
•
|
the fact that we do not currently and may not in the future own or license any issued composition of matter patents covering certain of our products and product candidates and our inability to be certain
that any of our other issued patents will provide adequate protection for such products and product candidates;
|
•
|
the fact that our largest shareholders (and certain members of our management team) own a significant percentage of our stock and will be able to exert significant control over matters subject to shareholder
approval;
|
•
|
the outcome of any pending or potential litigation, including but not limited to our expectations regarding the outcome of any such litigation and costs and expenses associated with such litigation;
|
•
|
changes in applicable laws or regulations;
|
•
|
the possibility that we may be adversely affected by other economic, business and/or competitive factors; and
|
•
|
any other risks and uncertainties, including those described under Part II, Item 1A. “Risk Factors.”
|
December 31, 2022
|
March 31, 2022
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Investments measured at fair value
|
|
|
||||||
Intangible assets, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Current portion of long-term debt (includes $
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Liability instruments measured at fair value
|
|
|
||||||
Operating lease liabilities, noncurrent
|
|
|
||||||
Long-term debt, net of current portion (includes $
|
|
|
||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 11)
|
||||||||
Redeemable noncontrolling interest
|
|
|
||||||
Shareholders’ equity:
|
||||||||
Common shares, par value $
|
|
|
||||||
Additional paid-in capital
|
|
|||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Shareholders’ equity attributable to Roivant Sciences Ltd.
|
|
|
||||||
Noncontrolling interests
|
|
|
||||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities, redeemable noncontrolling interest and shareholders’ equity
|
$
|
|
$
|
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
|||||||||||||||
2022
|
2021
|
2022 |
2021 |
|||||||||||||
Revenue, net
|
$
|
|
$
|
|
$ | $ | ||||||||||
Operating expenses:
|
||||||||||||||||
Cost of revenues
|
|
|
||||||||||||||
Research and development (includes $
|
|
|
||||||||||||||
Acquired in-process research and development
|
|
|
||||||||||||||
Selling, general and administrative (includes $
|
|
|
||||||||||||||
Total operating expenses
|
|
|
||||||||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Change in fair value of investments
|
(
|
)
|
|
|||||||||||||
Gain on sale of investment
|
( |
) | ||||||||||||||
Change in fair value of debt and liability instruments
|
|
|
||||||||||||||
Gain on termination of Sumitomo Options
|
|
|
( |
) | ||||||||||||
Gain on deconsolidation of subsidiaries
|
( |
) | ( |
) | ||||||||||||
Other (income) expense, net
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
Loss before income taxes
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Income tax expense
|
|
|
||||||||||||||
Net loss
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Net loss attributable to noncontrolling interests
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Net loss attributable to Roivant Sciences Ltd.
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Net loss per common share—basic and diluted(1)
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Weighted average shares outstanding—basic and diluted(1)
|
|
|
(1)
|
|
Three Months Ended
December 31,
|
Nine Months Ended
December 31,
|
|||||||||||||||
2022
|
2021
|
2022 |
2021 |
|||||||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Other comprehensive (loss) income:
|
||||||||||||||||
Foreign currency translation adjustment
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
Total other comprehensive (loss) income
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
Comprehensive loss
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Comprehensive loss attributable to noncontrolling interests
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Comprehensive loss attributable to Roivant Sciences Ltd.
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) |
Shareholders’ Equity
|
||||||||||||||||||||||||||||||||
Redeemable
Noncontrolling
Interest
|
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Noncontrolling
Interests
|
Total
Shareholders’
Equity
|
||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance at March 31, 2022
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||||
Issuance of subsidiary common shares to the Company
|
—
|
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||||||||
Issuance of common shares in connection with equity incentive plans and tax withholding payments
|
—
|
( |
) | ( |
) | |||||||||||||||||||||||||||
Issuance of the Company’s common shares related to settlement of transaction consideration
|
—
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Share-based compensation
|
—
|
—
|
|
|
|
|
|
|
||||||||||||||||||||||||
Foreign currency translation adjustment
|
—
|
—
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Net loss
|
—
|
—
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||
Balance at June 30, 2022
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||
Issuance of subsidiary common shares to the Company and cash contributions to majority-owned subsidiaries
|
— |
— | ( |
) | ||||||||||||||||||||||||||||
Deconsolidation of subsidiary
|
( |
) | — |
— | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common shares in connection with equity incentive plans
|
— |
|||||||||||||||||||||||||||||||
Issuance of the Company’s common shares and other consideration for an acquisition
|
— |
|||||||||||||||||||||||||||||||
Share-based compensation
|
— |
— |
||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
— |
— |
( |
) | ||||||||||||||||||||||||||||
Net loss
|
— |
— |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Balance at September 30, 2022
|
$ | — | $ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||
Issuance of the Company’s common shares, net of issuance costs
|
— |
|||||||||||||||||||||||||||||||
Issuance of common shares in connection with equity incentive plans and tax withholding payments
|
— | ( |
) | ( |
) | |||||||||||||||||||||||||||
Issuance of subsidiary common shares to the Company and cash contributions to majority-owned subsidiaries
|
— | — | ( |
) | ||||||||||||||||||||||||||||
Issuance of subsidiary common shares, net of issuance costs
|
— | — | ||||||||||||||||||||||||||||||
Subsidiary stock options exercised
|
— | — | ||||||||||||||||||||||||||||||
Deconsolidation of subsidiary
|
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuance of subsidiary preferred shares
|
— | — | ||||||||||||||||||||||||||||||
Share-based compensation
|
— | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
Net loss
|
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Balance at December 31, 2022
|
$ | — | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ |
Shareholders’ Equity(1)
|
||||||||||||||||||||||||||||||||||||
Redeemable
Noncontrolling
Interest
|
|
Additional
Paid-in
Capital
|
Subscription
Receivable
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Noncontrolling
Interests
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||
Balance at March 31, 2021
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||||||
Issuance of subsidiary warrants
|
—
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Cash contribution to majority-owned subsidiaries
|
—
|
—
|
|
(
|
)
|
|
|
|
|
|
||||||||||||||||||||||||||
Share-based compensation
|
—
|
—
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Foreign currency translation adjustment
|
—
|
—
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||||||||
Net loss
|
—
|
—
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Balance at June 30, 2021
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||
Issuance of the Company’s common shares upon closing of Business Combination and PIPE Financing, net of issuance costs
|
— |
|||||||||||||||||||||||||||||||||||
Issuance of the Company’s common shares related to settlement of transaction consideration
|
— |
|||||||||||||||||||||||||||||||||||
Issuance of subsidiary preferred shares
|
— |
— |
||||||||||||||||||||||||||||||||||
Issuance of subsidiary common and preferred shares to the Company and cash contribution to majority-owned subsidiaries
|
— |
— |
( |
) | ||||||||||||||||||||||||||||||||
Payment of subscription receivable
|
— |
— |
( |
) | ||||||||||||||||||||||||||||||||
Share-based compensation
|
— |
— |
||||||||||||||||||||||||||||||||||
Repurchase of equity awards
|
— |
— |
( |
) | ( |
) | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
— |
— |
||||||||||||||||||||||||||||||||||
Net loss
|
— |
— |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Balance at September 30, 2021
|
$ | $ | $ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||
Issuance of the Company’s common shares
|
— |
|||||||||||||||||||||||||||||||||||
Cash contribution to majority-owned subsidiaries
|
— | — | ( |
) | ||||||||||||||||||||||||||||||||
Share-based compensation
|
— | — | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net loss
|
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Balance at December 31, 2021
|
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ |
(1)
|
|
Nine Months Ended December 31,
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2022
|
2021
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Cash flows from operating activities:
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Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
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Non-cash acquired in-process research and development
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Share-based compensation
|
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|
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Change in fair value of investments
|
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|
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Gain on sale of investment
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( |
) | ||||||
Change in fair value of debt and liability instruments
|
|
|
||||||
Gain on deconsolidation of subsidiaries
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( |
) | ||||||
Gain on termination of Sumitomo Options
|
|
(
|
)
|
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Depreciation and amortization
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Non-cash lease expense
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Other
|
(
|
)
|
(
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)
|
||||
Changes in assets and liabilities, net of effects from acquisition and divestiture:
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Other current assets
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( |
) | ( |
) | ||||
Accounts payable
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Accrued expenses
|
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|
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Deferred consideration liability
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( |
) | ||||||
Operating lease liabilities
|
(
|
)
|
(
|
)
|
||||
Other
|
|
|
||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities:
|
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Cash decrease upon deconsolidation of subsidiaries
|
( |
) | ||||||
Proceeds from sale of investment
|
||||||||
Milestone payments
|
( |
) | ||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Other
|
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Net cash (used in) provided by investing activities
|
(
|
)
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of the Company’s common shares, net of issuance costs paid
|
||||||||
Proceeds from Business Combination and PIPE Financing
|
||||||||
Proceeds from issuance of subsidiary common shares, net of issuance costs paid
|
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Proceeds from payment of subscription receivable
|
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Proceeds from subsidiary debt financings, net of financing costs paid
|
|
|
||||||
Repayment of debt by subsidiary
|
(
|
)
|
(
|
)
|
||||
Payment of offering and loan origination costs
|
(
|
)
|
(
|
)
|
||||
Repurchase of equity awards
|
( |
) | ||||||
Taxes paid related to net settlement of equity awards
|
(
|
)
|
|
|||||
Proceeds from exercise of the Company’s and subsidiary stock options
|
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Net cash provided by financing activities
|
|
|
||||||
Net change in cash, cash equivalents and restricted cash
|
(
|
)
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
|
$
|
|
||||
Non-cash investing and financing activities:
|
||||||||
Issuance of the Company’s common shares and other consideration for an acquisition
|
$
|
|
$
|
|
||||
Other
|
$
|
|