Roivant Sciences Ltd. (ROIV) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlights strong financial performance, robust product development with upcoming catalysts, and a solid market strategy with expansion plans. The Q&A section reflects management's confidence in their competitive positioning and market opportunities. Despite some litigation risks, the company's well-capitalized status and focus on shareholder returns, including share buybacks, contribute positively to sentiment. Overall, the positive aspects outweigh concerns, leading to a positive sentiment rating.

Key Financial Performance

Cash and Cash Equivalents $4.4 billion, no year-over-year change mentioned, strong capital position to support pipeline profitability and expansion.

Loss from Continuing Operations $166 million net of tax, no year-over-year change mentioned, straightforward financial quarter.

Share Buybacks Significant share buybacks over the last 18 months, no specific year-over-year change or reasons provided.

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Operating Highlights

Brepocitinib in DM: Phase III data for brepocitinib in dermatomyositis (DM) showed success across all 10 ranked endpoints. The NDA filing is planned for the first half of next year, potentially making it the first novel oral therapeutic in DM.

Batoclimab in Graves' disease: Data from the durable remission portion of the Graves' disease trial demonstrated disease-modifying potential. Patients showed sustained response even after being off the drug for six months.

IMVT-1402: Initiated potentially registrational trials in multiple indications, including Graves', myasthenia gravis, CIDP, difficult-to-treat RA, and Sjögren's, as well as a proof-of-concept trial in CLE.

Graves' disease market: Significant unmet need with 20,000 refractory patients annually and 330,000 prevalent patients in the U.S. who are uncontrolled or intolerant to current therapies.

Dermatomyositis market: 75% of patients rely on steroids or ISTs, with limited therapeutic options available. Brepocitinib could address this underserved market.

Financial position: Strong capital position with $4.4 billion in cash and equivalents, sufficient to support pipeline expansion and profitability.

LNP litigation: Favorable Markman ruling in the Pfizer case and ongoing progress in the Moderna case, with a jury trial scheduled for March 2026.

Pipeline transformation: The company is undergoing a significant transformation with 11 potentially registrational trials and multiple blockbuster indications in the pipeline.

Investor engagement: Investor Day scheduled for December 11, 2025, to provide a comprehensive update on the company's future direction.

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Risk or Challenges

Regulatory Risks: The company is in the process of filing an NDA for brepocitinib in DM, with submission planned for the first half of next year. Regulatory approval processes are inherently uncertain and could delay or impact the launch of the product.

Competitive Pressures: The evolving competitive landscape in TED and Graves' disease has led the company to delay reporting top-line data for TED until the first half of next year. This indicates potential challenges in differentiating their product in a competitive market.

Pipeline Execution Risks: The company has a stacked pipeline with multiple registrational trials and launches planned over the next 36 months. Managing such a broad and complex pipeline poses risks related to execution, resource allocation, and meeting timelines.

Supply Chain and Manufacturing Risks: The company is preparing for multiple product launches, including brepocitinib and batoclimab. Ensuring a reliable supply chain and manufacturing capacity to meet demand could be a challenge.

Economic and Financial Risks: While the company has $4.4 billion in cash and no debt, the significant investment required for pipeline development, clinical trials, and potential product launches could strain financial resources if revenues do not materialize as expected.

Litigation Risks: The company is involved in ongoing LNP litigation with Moderna and Pfizer, with trials scheduled for 2026. Legal outcomes are uncertain and could result in financial liabilities or impact the company's operations.

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Guidance & Outlook

NDA filing for brepocitinib in DM: The NDA filing for brepocitinib in dermatomyositis (DM) remains on track and is planned for the first half of 2026. If approved, it will be the first novel oral therapeutic in DM.

Immunovant's IMVT-1402 program: The company has initiated potentially registrational trials in Graves', myasthenia gravis, CIDP, difficult-to-treat RA, and Sjögren's, as well as a proof-of-concept trial in CLE. The program aims to achieve first-in-class and best-in-class potential in multiple indications.

Pipeline and financial outlook: The company has a strong capital position with $4.4 billion in cash and cash equivalents, which is expected to support the current pipeline to profitability, pipeline expansion, and potential additional capital returns.

Upcoming data readouts and launches: The next 36 months are expected to include multiple registrational data sets and launches, starting with DM and brepocitinib, followed by NIU and brepocitinib, and later 1402 across multiple blockbuster indications, including Graves'.

Graves' disease program: The company demonstrated disease-modifying potential for batoclimab in Graves' disease, with plans to report top-line data for TED studies in the first half of 2026. The evolving competitive landscape has led to a more prudent data reporting strategy.

LNP litigation: The Moderna case is scheduled for trial in March 2026, with international proceedings expected in the first half of 2026. The Pfizer case is ongoing in discovery, with a favorable Markman ruling issued in September 2025.

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Shareholder Return Plan

Dividends: No specific mention of a dividend program or distribution to shareholders was made during the call.

Share Buyback: The company highlighted a $500 million share buyback program that has been authorized. Additionally, it was noted that the share count reflects significant share buybacks conducted over the last 18 months.

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Key Q&A

Q:What should we watch next regarding Pfizer litigation, specifically in international markets and the U.S.?

A:The CEO mentioned that it is tough to comment on ongoing litigation. He noted that there should be a scheduling process for the Pfizer case underway, and they hope to learn more about the timeline, including a potential trial date in the near future.

Q:How does the company feel about argenx stepping into Graves' disease, and does it impact their strategy for 1402?

A:The CEO acknowledged the competitive landscape in Graves' disease and expressed confidence in their higher dose batoclimab data, which showed significant benefits. He also noted that the large patient population allows room for multiple players and that argenx's entry validates their strategy.

Q:What can investors expect from the upcoming Investor Day?

A:The CEO stated that the Investor Day will focus on the company's transformation, commercial strategy, and blockbuster opportunities. While there may be updates or new information, the primary goal is to provide a comprehensive view of the business and its future opportunities.

Q:Is there any way to tease out the impact of starting on high-dose batoclimab in the Graves' study?

A:The CEO emphasized that remission is linked to deeper IgG reductions and noted that their high-dose batoclimab program showed significant speed and depth of response in terms of TRAb lowering. However, he was cautious about revealing too much due to the competitive landscape.

Q:What are the CEO's thoughts on the Moderna litigation and the U.S. government's involvement?

A:The CEO explained that the litigation involves complex issues, including the U.S. government's role in vaccine distribution. He noted that Moderna's claims involve less than half of their U.S. COVID vaccine sales, which is a small fraction of the total global sales. The final decision will depend on the judge.

Q:Can the company contextualize how FcRns can differentiate in Sjögren's disease and whether they could be first-in-class?

A:The CEO expressed excitement about the Sjögren's market opportunity and noted that FcRns have shown competitive data. He believes their deeper IgG suppression could yield better benefits, and while they aim to launch close to first-in-class, they are focused on differentiating based on their profile.

Q:What is the company's perspective on the competitive landscape in Graves' disease and sequencing decisions?

A:The CEO highlighted the well-suited nature of FcRn for Graves' disease and noted its safety and tolerability advantages. He also mentioned that the competitive activity in the space is beneficial for raising awareness and improving treatment options.

Q:What is the company's confidence in the translatability of Pulmovant data from PAH to PH-ILD?

A:The CEO expressed cautious optimism, noting that PVR reductions have generally translated well between indications. He acknowledged the risk but emphasized the potential for significant clinical benefit in PH-ILD patients.

Q:What is the status of overseas trials in the Moderna litigation?

A:The CEO mentioned that several overseas actions are ongoing, including in Europe, Canada, and Japan. He noted that some jurisdictions could provide outcomes as early as 2026.

Q:What are the expectations for the TED data and its impact on development decisions?

A:The CEO stated that the TED data will inform their decisions, particularly in the context of the competitive landscape. He emphasized the importance of understanding the interaction between Graves' and TED and noted that final decisions will be made in consultation with their partner.

Q:How does the company view the opportunity in Graves' disease compared to MG for FcRns?

A:The CEO noted that the Graves' population is significantly larger and offers a substantial opportunity. He emphasized the importance of being first to market and learning from their ongoing studies to optimize their approach.

Q:What are the CEO's thoughts on the competitive landscape in DM and potential expansion to other subtypes of myositis?

A:The CEO expressed confidence in their head start in DM and noted the potential for their oral therapy to define the market. He acknowledged the possibility of exploring other subtypes of myositis but emphasized their focus on market-defining opportunities.

Q:What are the CEO's comments on the IL-6 class data in TED and the overseas study with 1402?

A:The CEO refrained from commenting on the approvability of IL-6 data but noted the high placebo response. He emphasized their focus on Graves' disease and mentioned that overseas studies are being used to inform indication selection and study design.

Q:What are the expectations for the DM launch and its cadence?

A:The CEO stated that there are no perfect analogs for the DM launch but emphasized the large market opportunity and high unmet need. He noted that the focus is on long-term trajectory rather than immediate launch speed.

Q:How does the company size the uncontrolled Graves' disease opportunity compared to MG?

A:The CEO highlighted the large number of uncontrolled Graves' patients and noted that the opportunity is substantial. He emphasized the importance of being first to market and learning from their ongoing studies.

Q:Review of Unclear Management Responses

A:Management avoided providing direct answers to questions about the timing of Pfizer litigation in international markets, specific details on the impact of high-dose batoclimab in Graves' remission rates, and the status of overseas trials in the Moderna litigation. They also refrained from commenting on the approvability of IL-6 data in TED and provided limited details on the expectations for the DM launch cadence.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

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The earnings call summary presents a mixed outlook. Basic financial performance and product development updates are promising, but ongoing litigation and vague responses in the Q&A raise concerns. The market strategy and shareholder return plan lack clarity, and there's no strong catalyst like a new partnership or record revenue. With no market cap provided, it's assumed to be a mid-cap stock, leading to a neutral prediction as the positive and negative factors balance each other.

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