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|
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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Large accelerated filer
|
☐
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Accelerated filer
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☐
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☒
|
Smaller reporting company
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||
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Emerging growth company
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Page
|
|||
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PART I—FINANCIAL INFORMATION
|
|||
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Item 1.
|
7
|
||
| Condensed Consolidated Balance Sheets as of September 30, 2023 and March 31, 2023 |
7
|
||
|
8
|
|||
|
9
|
|||
|
10
|
|||
|
12
|
|||
|
13
|
|||
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Item 2.
|
29 | ||
|
Item 3.
|
44
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||
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Item 4.
|
45
|
||
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PART II—OTHER INFORMATION
|
|||
|
Item 1.
|
45
|
||
|
Item 1A.
|
45
|
||
|
Item 2.
|
106
|
||
|
Item 3.
|
106
|
||
|
Item 4.
|
106
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||
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Item 5.
|
106
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||
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Item 6.
|
107
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||
|
108
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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 have not generated significant revenue from our operations since inception, and there is no guarantee that we will do so in the future.
|
| • |
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.
|
| • |
We may not be successful in our efforts to acquire or in-license new product candidates.
|
| • |
Our drug discovery efforts may not be successful in identifying 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.
|
| • |
We face risks associated with potential future payments related to our products and product candidates.
|
| • |
We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.
|
| • |
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.
|
| • |
Certain of our products and product candidates are novel, complex and difficult to manufacture. We could experience manufacturing problems that result in
delays in our development or commercialization programs or otherwise harm our business.
|
| • |
We may encounter difficulties enrolling and retaining patients in clinical trials, and clinical development activities could thereby be delayed or otherwise
adversely affected.
|
| • |
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.
|
| • |
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.
|
| • |
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. If we are unable to obtain regulatory approval in one or more jurisdictions for any products or product candidates, our business will be substantially harmed.
|
| • |
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. Any such outcome could have a materially adverse effect on our business. Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications
unless and until a patent issues from such applications.
|
| • |
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 and bye-laws, as well as provisions of 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 own a significant percentage of our Common Shares and are able to exert significant control over matters subject to shareholder
approval.
|
| • |
Future sales, or the perception of future sales, of our Common Shares by us or our existing shareholders in the public market could cause the market price for
our Common Shares to decline and impact our ability to raise capital in the future.
|
| • |
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 fact that we will likely incur significant operating losses for the foreseeable future;
|
| • |
our ability to acquire or in-license new product candidates;
|
| • |
our ability to identify new product candidates through our discovery efforts;
|
| • |
our Vant structure and the potential that we may fail to capitalize on certain development opportunities;
|
| • |
our ability to consummate strategic transactions, including the Roche Transaction (as defined below);
|
| • |
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;
|
| • |
clinical trials and preclinical studies, which are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes;
|
| • |
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 own a significant percentage of our stock and will be able to exert significant control over matters subject to
shareholder approval;
|
| • |
future sales of securities by us or our largest shareholders, or the perception of such sales, and the impact thereof on the price of our common shares;
|
| • |
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.”
|
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
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 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)
|
||||||||
|
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 and shareholders’ equity
|
$
|
|
$
|
|
||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||
|
2023
|
2022
|
2023 |
2022 |
|||||||||||||
|
Revenues:
|
||||||||||||||||
|
Product revenue, net
|
$ | $ | $ | $ | ||||||||||||
|
License, milestone and other revenue
|
||||||||||||||||
|
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
|
|
|
||||||||||||||
|
Change in fair value of debt and liability instruments
|
|
(
|
)
|
|||||||||||||
| Gain on deconsolidation of subsidiaries | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Interest income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Interest expense |
||||||||||||||||
|
Other 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
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
|
Weighted average shares outstanding—basic and diluted
|
|
|
||||||||||||||
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
|
2023
|
2022
|
2023 |
2022 |
|||||||||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
|
Other comprehensive income (loss):
|
||||||||||||||||
|
Foreign currency translation adjustment
|
|
|
( |
) | ||||||||||||
|
Total other comprehensive income (loss)
|
|
|
( |
) | ||||||||||||
|
Comprehensive loss
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
|
Comprehensive loss attributable to noncontrolling interests
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
|
Comprehensive loss attributable to Roivant Sciences Ltd.
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
|
Shareholders’ Equity
|
||||||||||||||||||||||||||||
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Loss
|
Accumulated
Deficit
|
Noncontrolling
Interests
|
Total
Shareholders’
Equity
|
||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||||||||||||||
|
Balance at March 31, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||
|
Issuance of the Company’s common shares in connection with equity incentive plans and tax withholding payments
|
||||||||||||||||||||||||||||
|
Subsidiary stock options exercised
|
—
|
|
|
|
|
|
|
|||||||||||||||||||||
| Cash contributions to majority-owned subsidiaries |
— | ( |
) | |||||||||||||||||||||||||
| Dividend declared by subsidiary |
— | ( |
) | ( |
) | |||||||||||||||||||||||
|
Share-based compensation
|
—
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Foreign currency translation adjustment
|
—
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Balance at June 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||
| Issuance of the Company’s common shares, net of issuance costs | ||||||||||||||||||||||||||||
| Issuance of the Company’s common shares related to settlement of warrants | ||||||||||||||||||||||||||||
| Issuance of the Company’s common shares under employee stock purchase plan | ||||||||||||||||||||||||||||
| Issuance of the Company’s common shares in connection with equity incentive plans, net of forfeitures, and tax withholding payments |
||||||||||||||||||||||||||||
|
Deconsolidation of subsidiaries
|
— | ( |
) | ( |
) | |||||||||||||||||||||||
| Subsidiary stock options exercised |
— | |||||||||||||||||||||||||||
| Cash contributions to majority-owned subsidiaries |
— | ( |
) | |||||||||||||||||||||||||
|
Share-based compensation
|
— | |||||||||||||||||||||||||||
|
Foreign currency translation adjustment
|
— | |||||||||||||||||||||||||||
|
Net loss
|
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
|
Balance at September 30, 2023
|
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||
|
Shareholders’ Equity
|
||||||||||||||||||||||||||||||||
|
Redeemable
Noncontrolling
Interest
|
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income
|
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 the Company’s 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 the Company’s common shares in connection with equity incentive plans |
— | |||||||||||||||||||||||||||||||
| Issuance of the Company’s common shares and other consideration for an acquisition |
— | |||||||||||||||||||||||||||||||
| Issuance of subsidiary common shares to the Company and cash contributions to majority-owned subsidiaries |
— | — | ( |
) | ||||||||||||||||||||||||||||
| Deconsolidation of subsidiary |
( |
) | — | |||||||||||||||||||||||||||||
|
Share-based compensation
|
— | — | ||||||||||||||||||||||||||||||
|
Foreign currency translation adjustment
|
— | — | ( |
) | ||||||||||||||||||||||||||||
|
Net loss
|
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
|
Balance at September 30, 2022
|
$ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||
|
Six Months Ended September 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Share-based compensation
|
|
|
||||||
|
Change in fair value of investments
|
|
|
||||||
|
Change in fair value of debt and liability instruments
|
|
|
||||||
|
Gain on deconsolidation of subsidiaries
|
( |
) | ( |
) | ||||
|
Depreciation and amortization
|
||||||||
|
Non-cash lease expense
|
||||||||
|
Other
|
|
|
||||||
|
Changes in assets and liabilities, net of effects from acquisition and divestiture:
|
||||||||
|
Other current assets
|
( |
) | ( |
) | ||||
|
Accounts payable
|
|
|
||||||
|
Accrued expenses
|
(
|
)
|
|
|||||
|
Operating lease liabilities
|
(
|
)
|
(
|
)
|
||||
|
Other
|
|
|
||||||
|
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
|
Cash flows from investing activities:
|
||||||||
|
Milestone payments
|
( |
) | ||||||
|
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
|
Proceeds from sale of subsidiary interests
|
||||||||
|
Cash decrease upon deconsolidation of subsidiaries
|
( |
) | ( |
) | ||||
|
Other
|
||||||||
|
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from issuance of the Company’s common shares, net of issuance costs paid
|
||||||||
|
Proceeds from subsidiary debt financings, net of financing costs paid
|
|
|
||||||
|
Payment of subsidiary dividend
|
( |
) | ||||||
|
Repayment of debt by subsidiary
|
(
|
)
|
(
|
)
|
||||
|
Payment of offering costs and loan origination costs
|
|
(
|
)
|
|||||
|
Payments on principal portion of finance lease obligations
|
( |
) | ||||||
|
Proceeds from exercise of the Company’s and subsidiary stock options
|
||||||||
|
Taxes paid related to net settlement of equity awards
|
(
|
)
|
(
|
)
|
||||
|
Proceeds from issuance of the Company’s common shares under employee stock purchase plan
|
||||||||
|
Proceeds from exercise of the Company’s warrants
|
||||||||
|
Payment for redemptions of the Company’s warrants
|
( |
) | ||||||
|
Net cash provided by financing activities
|
|
|
||||||
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
( |
|||||||
|
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:
|
||||||||
|
Cashless exercise of the Company’s warrants
|
$ | $ | ||||||
|
Issuance of the Company’s common shares and other consideration for an acquisition
|
$ | $ | ||||||
|
Other
|
$
|
|
$
|
|
||||
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||
|
Restricted cash (included in “Other current assets”)
|
|
|
||||||
|
Restricted cash (included in “Other assets”)
|
||||||||
|
Cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
|
•
|
Level 1-Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
|
|
•
|
Level 2-Valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models
for which all significant inputs are observable, either directly or indirectly.
|
|
•
|
Level 3-Valuations are based on inputs that are unobservable (supported by little or no market activity) and significant to the overall fair value measurement.
|
|
Remaining Weighted
Average Estimated Useful Lives
(in years)
|
September 30, 2023
(in thousands)
|
||||||
|
Gross amount
|
|
$
|
|
||||
|
Less: accumulated amortization
|
(
|
)
|
|||||
|
Net book value
|
$
|
|
|||||
| (A) |
Asset Acquisition
|
| (B) |
Deconsolidation of Subsidiaries
|
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Prepaid expenses
|
$
|
|
$
|
|
||||
|
Trade receivables, net
|
|
|
||||||
| Restricted cash | ||||||||
| Inventory |
||||||||
|
Income tax receivable
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total other current assets
|
$
|
|
$
|
|
||||
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Research and development expenses
|
$
|
|
$
|
|
||||
|
Compensation-related expenses
|
|
|
||||||
| Sales allowances | ||||||||
|
Other expenses
|
|
|
||||||
|
Total accrued expenses
|
$
|
|
$
|
|
||||
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Deferred revenue
|
$
|
|
$
|
|
||||
|
Income tax payable
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total other current liabilities
|
$
|
|
$
|
|
||||
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Fair value of long-term debt
|
$
|
|
$
|
|
||||
|
Less: current portion
|
(
|
)
|
(
|
)
|
||||
|
Total long-term debt, net
|
$
|
|
$
|
|
||||
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Principal amount
|
$
|
|
$
|
|
||||
|
Exit fee
|
|
|
||||||
|
Less: unamortized discount and debt issuance costs
|
(
|
)
|
(
|
)
|
||||
|
Total debt, net
|
|
|
||||||
|
Less: current portion
|
|
|
||||||
|
Total long-term debt, net
|
$
|
|
$
|
|
||||
|
September 30, 2023
|
March 31, 2023
|
|||||||
|
Carrying balance
|
$
|
|
$
|
|
||||
|
Less: unamortized issuance costs
|
(
|
)
|
(
|
)
|
||||
|
Total debt, net
|
|
|
|
|
||||
|
Less: current portion
|
(
|
)
|
(
|
)
|
||||
|
Total long-term debt, net
|
$
|
|
$
|
|
||||
|
Number of Options
|
||||
|
Options outstanding at March 31, 2023
|
|
|||
|
Granted
|
|
|||
| Exercised |
( |
) | ||
|
Forfeited/Canceled
|
(
|
)
|
||
|
Options outstanding at September 30, 2023
|
|
|||
|
Options exercisable at September 30, 2023
|
|
|||
|
Number of Shares
|
||||
|
Non-vested balance at March 31, 2023
|
|
|||
|
Granted
|
|
|||
|
Vested
|
(
|
)
|
||
|
Forfeited
|
(
|
)
|
||
|
Non-vested balance at September 30, 2023
|
|
|||
|
Number of CVARs
|
||||
|
Non-vested balance at March 31, 2023
|
|
|||
|
Vested
|
(
|
)
|
||
|
Forfeited
|
(
|
)
|
||
|
Non-vested balance at September 30, 2023
|
|
|||
|
a.
|
|
|
b.
|
|
c.
|
The remaining number of common shares issued to the MAAC Sponsor and each of MAAC’s independent director are not subject to the vesting conditions described above (the “Retained Shares”).
|
|
As of September 30, 2023
|
As of March 31, 2023
|
|||||||||||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Balance as of
September 30,
2023
|
Level 1
|
Level 2
|
Level 3
|
Balance as of
March 31,
2023
|
|||||||||||||||||||||||||
|
Assets:
|
||||||||||||||||||||||||||||||||
|
Money market funds
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Investment in Datavant Class A units
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Investment in Arbutus common shares
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Liabilities:
|
||||||||||||||||||||||||||||||||
|
Debt issued by Dermavant to NovaQuest
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Liability instruments measured at fair value(1)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total liabilities at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
(1)
|
|
|
Balance at March 31, 2022
|
$ | |||
|
|
( |
) | ||
|
Balance at September 30, 2022
|
$ | |||
|
Balance at March 31, 2023
|
$
|
|
||
|
|
(
|
)
|
||
|
Balance at September 30, 2023
|
$
|
|
| Balance at March 31, 2022 |
$
|
|
||
| Payments related to long-term debt | ( |
) | ||
|
|
||||
|
Balance at September 30, 2022
|
$
|
|
||
| Balance at March 31, 2023 |
$
|
|
||
| Payments related to long-term debt | ( |
) | ||
| Exercise of Private Placement Warrants | ( |
) | ||
| Balance at September 30, 2023 | $ |
|
Point Estimate Used
|
||||||||
|
Input
|
As of September 30, 2023
|
As of March 31, 2023
|
||||||
|
Volatility
|
|
|
|
|
||||
|
Risk-free rate
|
|
|
|
|
||||
|
Point Estimate Used
|
||||||||
|
Input
|
As of September 30, 2023
|
As of March 31, 2023
|
||||||
|
Volatility
|
|
|
|
|
||||
|
Risk-free rate
|
|
|
|
|
||||
|
Point Estimate Used
|
||||
|
Input
|
As of March 31, 2023
|
|||
|
Volatility
|
|
|
||
|
Risk-free rate
|
|
|
||
|
Term (in years)
|
|
|||
|
September 30, 2023
|
September 30, 2022
|
|||||||
|
Stock options and performance stock options
|
|
|
||||||
|
Restricted stock units and performance stock units (non-vested)
|
|
|
||||||
|
March 2020 CVARs(1)
|
|
|
||||||
|
November 2021 CVARs (non-vested)
|
|
|
||||||
|
Restricted common stock (non-vested)
|
|
|
||||||
|
Earn-Out Shares (non-vested)
|
|
|
||||||
|
Private Placement Warrants
|
|
|
||||||
|
Public Warrants
|
|
|
||||||
| Other stock based awards and instruments issued | ||||||||
|
(1)
|
|
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Product/Product Candidate
|
Indication
|
Vant
|
Modality
|
Phase
|
||||
|
VTAMA (tapinarof)
|
Psoriasis
|
Dermavant
|
Topical
|
Commercial
|
||||
|
VTAMA (tapinarof)
|
Atopic Dermatitis
|
Dermavant
|
Topical
|
Phase 3 Completed*
|
||||
|
RVT-3101
|
Ulcerative Colitis
|
Telavant
|
Biologic
|
Phase 3*+
|
||||
|
RVT-3101
|
Crohn’s Disease
|
Telavant
|
Biologic
|
Phase 2+
|
||||
|
Brepocitinib
|
Dermatomyositis
|
Priovant
|
Small Molecule
|
Phase 3*
|
||||
|
Brepocitinib
|
Systemic Lupus Erythematosus
|
Priovant
|
Small Molecule
|
Phase 2*
|
||||
|
Brepocitinib
|
Other Indications
|
Priovant
|
Small Molecule
|
Phase 2
|
||||
|
Batoclimab
|
Myasthenia Gravis
|
Immunovant
|
Biologic
|
Phase 3*
|
||||
|
Batoclimab
|
Thyroid Eye Disease
|
Immunovant
|
Biologic
|
Phase 3*
|
||||
|
Batoclimab
|
Chronic Inflammatory Demyelinating Polyneuropathy
|
Immunovant
|
Biologic
|
Phase 2*
|
||||
|
Batoclimab
|
Graves’ Disease
|
Immunovant
|
Biologic
|
Phase 2
|
||||
|
IMVT-1402
|
Numerous Indications
|
Immunovant
|
Biologic
|
Phase 1
|
||||
|
Namilumab
|
Sarcoidosis
|
Kinevant
|
Biologic
|
Phase 2*
|
||||
|
RVT-2001
|
Transfusion-Dependent Anemia in Patients with Lower-Risk MDS
|
Hemavant
|
Small Molecule
|
Phase 1/2
|
|
Roivant Ownership
|
||||||||
|
Vant
|
Basic1
|
Fully Diluted2
|
||||||
|
Dermavant
|
100
|
%
|
85
|
%
|
||||
|
Immunovant
|
56
|
%3
|
49
|
%3
|
||||
|
Telavant
|
75
|
%†
|
74
|
%†
|
||||
|
Priovant
|
75
|
%
|
68
|
%
|
||||
|
Genevant
|
83
|
%
|
65
|
%
|
||||
|
Kinevant
|
96
|
%
|
90
|
%
|
||||
|
Hemavant
|
100
|
%
|
99
|
%
|
||||
|
Covant
|
100
|
%
|
92
|
%
|
||||
|
Psivant
|
100
|
%
|
87
|
%
|
||||
|
Arbutus
|
23
|
%3
|
21
|
%3
|
||||
|
Lokavant
|
65
|
%
|
56
|
%
|
||||
|
VantAI
|
60
|
%
|
50
|
%
|
||||
|
Datavant
|
*
|
*
|
||||||
| 1. |
Basic ownership refers to Roivant’s percentage ownership of the issued and outstanding common and preferred shares (if applicable) of the entity.
|
| 2. |
Fully diluted ownership refers to Roivant’s percentage ownership of all outstanding equity interests of the entity, including unvested RSUs as well as options and warrants, in each case
whether vested or unvested.
|
| 3. |
Denotes entities that are publicly traded. Immediately following the closing of Immunovant’s financing on October 2, 2023, Roivant held a 55% Basic and 49% Fully Diluted ownership interest
in Immunovant.
|
| † |
Subject to a definitive agreement to sell Telavant to Roche. For more information on the Roche Transaction, please refer to Note 15 to Roivant’s unaudited condensed consolidated financial
statements included in this Quarterly Report on Form 10-Q.
|
| * |
As of September 30, 2023, the Company’s minority equity interest in Datavant represented approximately 17% of the outstanding Class A units. Datavant’s capital structure includes several
classes of preferred units that, among other features, have liquidation preferences and conversion features. Upon conversion of such preferred units into Class A units, the Company’s ownership interest would be diluted. For more information
on Roivant’s ownership interest in Datavant, please refer to Note 3 to Roivant’s unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
|
|
Program
|
Vant
|
Catalyst
|
Expected Timing
|
||||
|
VTAMA (tapinarof) cream
|
Dermavant
|
Updates on commercial launch of VTAMA in psoriasis
|
Ongoing
|
||||
|
Roivant pipeline growth
|
Roivant
|
New mid/late-stage in-licensing announcements
|
Ongoing
|
||||
|
LNP platform
|
Genevant
|
Updates to LNP patent litigation
|
Ongoing
|
||||
|
IMVT-1402
|
Immunovant
|
Data from IMVT-1402 MAD 600mg SC cohort
|
Nov. 2023
|
||||
|
Brepocitinib
|
Priovant
|
Topline data from potentially registrational Phase 2B trial in systemic lupus erythematosus
|
4Q 2023
|
||||
|
Batoclimab
|
Immunovant
|
Initial data from Phase 2 trial in Graves’ disease
|
Year-end 2023
|
||||
|
RVT-2001
|
Hemavant
|
Data from RVT-2001 Phase 1/2 trial in lower-risk myelodysplastic syndrome
|
1Q 2024
|
||||
|
VTAMA (tapinarof) cream
|
Dermavant
|
Expected sNDA filing for VTAMA in atopic dermatitis
|
1Q 2024
|
||||
|
Brepocitinib
|
Priovant
|
Topline data from proof-of-concept trial in noninfectious uveitis
|
1Q 2024
|
||||
|
Batoclimab
|
Immunovant
|
Initial data from period 1 of Phase 2B trial in chronic inflammatory demyelinating polyneuropathy
|
1H 2024
|
||||
|
Namilumab
|
Kinevant
|
Topline data from Phase 2 trial in sarcoidosis
|
2H 2024
|
||||
|
Batoclimab
|
Immunovant
|
Topline data from Phase 3 trial in myasthenia gravis
|
2H 2024
|
||||
|
Batoclimab
|
Immunovant
|
Topline data from Phase 3 trials in thyroid eye disease
|
1H 2025
|
||||
|
Brepocitinib
|
Priovant
|
Topline data from Phase 3 trial in dermatomyositis
|
2025
|
| • |
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:
|
| o |
employee-related expenses, such as salaries, share-based compensation, and benefits, for research and development personnel; and
|
| o |
other expenses that are not allocated to a specific program.
|
| • |
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.
|
|
Three Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Revenues:
|
||||||||||||
|
Product revenue, net
|
$
|
18,424
|
$
|
4,969
|
$
|
13,455
|
||||||
|
License, milestone and other revenue
|
18,677
|
7,564
|
11,113
|
|||||||||
|
Revenue, net
|
37,101
|
12,533
|
24,568
|
|||||||||
|
Operating expenses:
|
||||||||||||
|
Cost of revenues
|
3,266
|
3,641
|
(375
|
)
|
||||||||
|
Research and development
|
131,984
|
131,995
|
(11
|
)
|
||||||||
|
Acquired in-process research and development
|
13,950
|
—
|
13,950
|
|||||||||
|
Selling, general and administrative
|
164,355
|
157,663
|
6,692
|
|||||||||
|
Total operating expenses
|
313,555
|
293,299
|
20,256
|
|||||||||
|
Loss from operations
|
(276,454
|
)
|
(280,766
|
)
|
4,312
|
|||||||
|
Change in fair value of investments
|
45,849
|
54,678
|
(8,829
|
)
|
||||||||
|
Change in fair value of debt and liability instruments
|
21,533
|
(13,541
|
)
|
35,074
|
||||||||
|
Gain on deconsolidation of subsidiaries
|
(17,354
|
)
|
(16,762
|
)
|
(592
|
)
|
||||||
|
Interest income
|
(14,299
|
)
|
(5,670
|
)
|
(8,629
|
)
|
||||||
|
Interest expense
|
9,247
|
8,335
|
912
|
|||||||||
|
Other expense, net
|
5,931
|
5,950
|
(19
|
)
|
||||||||
|
Loss before income taxes
|
(327,361
|
)
|
(313,756
|
)
|
(13,605
|
)
|
||||||
|
Income tax expense
|
3,757
|
2,165
|
1,592
|
|||||||||
|
Net loss
|
(331,118
|
)
|
(315,921
|
)
|
(15,197
|
)
|
||||||
|
Net loss attributable to noncontrolling interests
|
(26,791
|
)
|
(24,331
|
)
|
(2,460
|
)
|
||||||
|
Net loss attributable to Roivant Sciences Ltd.
|
$
|
(304,327
|
)
|
$
|
(291,590
|
)
|
$
|
(12,737
|
)
|
|||
|
Six Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Revenues:
|
||||||||||||
|
Product revenue, net
|
$
|
35,083
|
$
|
5,110
|
$
|
29,973
|
||||||
|
License, milestone and other revenue
|
23,642
|
11,742
|
11,900
|
|||||||||
|
Revenue, net
|
58,725
|
16,852
|
41,873
|
|||||||||
|
Operating expenses:
|
||||||||||||
|
Cost of revenues
|
7,480
|
5,367
|
2,113
|
|||||||||
|
Research and development
|
257,117
|
267,825
|
(10,708
|
)
|
||||||||
|
Acquired in-process research and development
|
26,450
|
—
|
26,450
|
|||||||||
|
Selling, general and administrative
|
320,545
|
306,735
|
13,810
|
|||||||||
|
Total operating expenses
|
611,592
|
579,927
|
31,665
|
|||||||||
|
Loss from operations
|
(552,867
|
)
|
(563,075
|
)
|
10,208
|
|||||||
|
Change in fair value of investments
|
53,413
|
79,225
|
(25,812
|
)
|
||||||||
|
Change in fair value of debt and liability instruments
|
76,045
|
27,672
|
48,373
|
|||||||||
|
Gain on deconsolidation of subsidiaries
|
(17,354
|
)
|
(16,762
|
)
|
(592
|
)
|
||||||
|
Interest income
|
(31,014
|
)
|
(7,651
|
)
|
(23,363
|
)
|
||||||
|
Interest expense
|
18,159
|
10,947
|
7,212
|
|||||||||
|
Other expense, net
|
1,338
|
7,035
|
(5,697
|
)
|
||||||||
|
Loss before income taxes
|
(653,454
|
)
|
(663,541
|
)
|
10,087
|
|||||||
|
Income tax expense
|
5,509
|
6,164
|
(655
|
)
|
||||||||
|
Net loss
|
(658,963
|
)
|
(669,705
|
)
|
10,742
|
|||||||
|
Net loss attributable to noncontrolling interests
|
(62,820
|
)
|
(46,306
|
)
|
(16,514
|
)
|
||||||
|
Net loss attributable to Roivant Sciences Ltd.
|
$
|
(596,143
|
)
|
$
|
(623,399
|
)
|
$
|
27,256
|
||||
|
Three Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Product revenue, net
|
$
|
18,424
|
$
|
4,969
|
$
|
13,455
|
||||||
|
License, milestone and other revenue
|
18,677
|
7,564
|
11,113
|
|||||||||
|
Revenue, net
|
$
|
37,101
|
$
|
12,533
|
$
|
24,568
|
||||||
|
Six Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Product revenue, net
|
$
|
35,083
|
$
|
5,110
|
$
|
29,973
|
||||||
|
License, milestone and other revenue
|
23,642
|
11,742
|
11,900
|
|||||||||
|
Revenue, net
|
$
|
58,725
|
$
|
16,852
|
$
|
41,873
|
||||||
|
Three Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Cost of product and other revenues
|
$
|
867
|
$
|
1,441
|
$
|
(574
|
)
|
|||||
|
Amortization of intangible assets
|
2,399
|
2,200
|
199
|
|||||||||
|
Cost of revenues
|
$
|
3,266
|
$
|
3,641
|
$
|
(375
|
)
|
|||||
|
Six Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Cost of product and other revenues
|
$
|
2,711
|
$
|
2,425
|
$
|
286
|
||||||
|
Amortization of intangible assets
|
4,769
|
2,942
|
1,827
|
|||||||||
|
Cost of revenues
|
$
|
7,480
|
$
|
5,367
|
$
|
2,113
|
||||||
|
Three Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Program-specific costs:
|
||||||||||||
|
Anti-FcRn franchise(1)
|
$
|
25,919
|
$
|
19,464
|
$
|
6,455
|
||||||
|
RVT-3101
|
18,553
|
—
|
18,553
|
|||||||||
|
Tapinarof
|
9,351
|
12,543
|
(3,192
|
)
|
||||||||
|
Brepocitinib
|
8,755
|
8,592
|
163
|
|||||||||
|
RVT-2001
|
3,739
|
4,646
|
(907
|
)
|
||||||||
|
Namilumab
|
3,331
|
5,091
|
(1,760
|
)
|
||||||||
|
Other development and discovery programs
|
12,867
|
31,021
|
(18,154
|
)
|
||||||||
|
Total program-specific costs
|
82,515
|
81,357
|
1,158
|
|||||||||
|
Unallocated internal costs:
|
||||||||||||
|
Share-based compensation
|
8,877
|
7,417
|
1,460
|
|||||||||
|
Personnel-related expenses
|
29,841
|
35,268
|
(5,427
|
)
|
||||||||
|
Other expenses
|
10,751
|
7,953
|
2,798
|
|||||||||
|
Total research and development expenses
|
$
|
131,984
|
$
|
131,995
|
$
|
(11
|
)
|
|||||
|
Six Months Ended September 30,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Program-specific costs:
|
||||||||||||
|
Anti-FcRn franchise(1)
|
$
|
54,957
|
$
|
30,136
|
$
|
24,821
|
||||||
|
RVT-3101
|
29,478
|
—
|
29,478
|
|||||||||
|
Tapinarof
|
18,894
|
22,983
|
(4,089
|
)
|
||||||||
|
Brepocitinib
|
16,518
|
20,894
|
(4,376
|
)
|
||||||||
|
RVT-2001
|
7,561
|
6,769
|
792
|
|||||||||
|
Namilumab
|
6,633
|
6,109
|
524
|
|||||||||
|
Other development and discovery programs
|
21,193
|
74,969
|
(53,776
|
)
|
||||||||
|
Total program-specific costs
|
155,234
|
161,860
|
(6,626
|
)
|
||||||||
|
Unallocated internal costs:
|
||||||||||||
|
Share-based compensation
|
16,830
|
19,660
|
(2,830
|
)
|
||||||||
|
Personnel-related expenses
|
63,443
|
69,715
|
(6,272
|
)
|
||||||||
|
Other expenses
|
21,610
|
16,590
|
5,020
|
|||||||||
|
Total research and development expenses
|
$
|
257,117
|
$
|
267,825
|
$
|
(10,708
|
)
|
|||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Acquired in-process research and development
|
$
|
13,950
|
$
|
—
|
$
|
13,950
|
$
|
26,450
|
$
|
—
|
$
|
26,450
|
||||||||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Selling, general and administrative
|
$
|
164,355
|
$
|
157,663
|
$
|
6,692
|
$
|
320,545
|
$
|
306,735
|
$
|
13,810
|
||||||||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Change in fair value of investments
|
$
|
45,849
|
$
|
54,678
|
$
|
(8,829
|
)
|
$
|
53,413
|
$
|
79,225
|
$
|
(25,812
|
)
|
||||||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Change in fair value of debt and liability instruments
|
$
|
21,533
|
$
|
(13,541
|
)
|
$
|
35,074
|
$
|
76,045
|
$
|
27,672
|
$
|
48,373
|
|||||||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Gain on deconsolidation of subsidiaries
|
$
|
(17,354
|
)
|
$
|
(16,762
|
)
|
$
|
(592
|
)
|
$
|
(17,354
|
)
|
$
|
(16,762
|
)
|
$
|
(592
|
)
|
||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Interest income
|
$
|
(14,299
|
)
|
$
|
(5,670
|
)
|
$
|
(8,629
|
)
|
$
|
(31,014
|
)
|
$
|
(7,651
|
)
|
$
|
(23,363
|
)
|
||||||
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
|
Interest expense
|
$
|
9,247
|
$
|
8,335
|
$
|
912
|
$
|
18,159
|
$
|
10,947
|
$
|
7,212
|
||||||||||||
|
•
|
contractual payments related to our long-term debt (see Note 7, “Long-Term Debt” of our condensed consolidated financial statements);
|
|
•
|
obligations under our leases;
|
|
•
|
certain commitments to Palantir Technologies Inc. (“Palantir”) totaling $19.1 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. (“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 $18.7 million; and
|
|
•
|
certain commitments to GSK pursuant to a commercial supply agreement entered between Dermavant and GSK. In conjunction with Dermavant’s entry into the GSK Agreement in 2018, Dermavant entered into a clinical supply agreement pursuant
to which GSK would provide a supply of tapinarof and clinical product at an agreed upon price during our clinical trials. In April 2019, Dermavant entered into a commercial supply agreement with GSK to continue to provide certain
quantities of tapinarof and commercial product at agreed upon minimum quantities and price. The commercial supply agreement commenced in April 2022 upon completion of certain quality and regulatory conditions. In July 2022, Dermavant
and GSK amended the terms of the clinical supply and commercial supply agreements which released GSK of certain commitments to supply tapinarof and released Dermavant of certain commitments to purchase tapinarof in exchange for a
supplementary fee. Other supply and purchase commitments under the agreements remain in effect. In addition, Dermavant and Thermo Fisher Scientific (“TFS”) entered into a Commercial Manufacturing and Supply Agreement for which TFS
agreed to provide a supply of tapinarof to Dermavant at an agreed upon price. The agreements discussed above require Dermavant to purchase certain quantities of inventory over a period of five years. The minimum purchase commitment
related to these agreements is estimated to be approximately $42.6 million.
|
| • |
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.
|
|
Six Months Ended September 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
(in thousands)
|
||||||||
|
Net cash used in operating activities
|
$
|
(446,359
|
)
|
$
|
(441,712
|
)
|
||
|
Net cash used in investing activities
|
$
|
(36,346
|
)
|
$
|
(154,311
|
)
|
||
|
Net cash provided by financing activities
|
$
|
215,349
|
$
|
134,635
|
||||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk.
|
| Item 4. |
Controls and Procedures.
|
| Item 1. |
Legal Proceedings.
|
| Item 1A. |
Risk Factors.
|
| • |
successfully continue to commercialize VTAMA;
|
| • |
identify new acquisition or in-licensing opportunities;
|
| • |
successfully complete ongoing preclinical studies and clinical trials and obtain regulatory approvals for our current and future products and product candidates;
|
| • |
successfully identify new product candidates through our discovery efforts and advance those product candidates into preclinical studies and clinical trials;
|
| • |
successfully grow our healthcare technology Vants and market the products and services offered by those Vants;
|
| • |
raise additional funds when needed and on terms acceptable to us;
|
| • |
attract and retain experienced management and advisory teams;
|
| • |
add operational, financial and management information systems and personnel, including personnel to support clinical, preclinical manufacturing and commercialization efforts and operations;
|
| • |
launch commercial sales of future product candidates, whether alone or in collaboration with others, including establishing sales, marketing and distribution systems;
|
| • |
initiate and continue relationships with third-party suppliers and manufacturers and have commercial quantities of products and product candidates manufactured at acceptable cost and quality levels and in
compliance with FDA and other regulatory requirements;
|
| • |
set acceptable prices for products and product candidates and obtain coverage and adequate reimbursement from third-party payors;
|
| • |
achieve market acceptance of products and product candidates in the medical community and with third-party payors and consumers; and
|
| • |
maintain, expand and protect our intellectual property portfolio.
|
| • |
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.
|
| • |
our ability to successfully implement and execute on a marketing strategy for VTAMA and to commercialize any of our product candidates in the United States and internationally, if approved, whether alone or
in collaboration with others;
|
| • |
acceptance by physicians, payers, and patients of the benefits, safety, and efficacy of VTAMA or any product candidates, if approved, including relative to alternative and competing treatments;
|
| • |
timely completion of our nonclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party
contractors;
|
| • |
whether we are required by the FDA or similar foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our
product candidates or any future product candidates;
|
| • |
acceptance of our proposed indications and primary and secondary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities;
|
| • |
the prevalence, duration, and severity of potential side effects or other safety issues experienced with VTAMA or our product candidates;
|
| • |
the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;
|
| • |
achieving, maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to
VTAMA or any of our product candidates;
|
| • |
the willingness of physicians and patients to utilize or adopt VTAMA and our product candidates, if approved;
|
| • |
the ability of third parties upon which we rely to manufacture clinical trial and commercial supplies of VTAMA or any of our product candidates to remain in good standing with relevant regulatory authorities
and to develop, validate, and maintain commercially viable manufacturing processes that are compliant with Current Good Manufacturing Practice (“cGMP”);
|
| • |
the availability of coverage and adequate reimbursement from private third-party payers and governmental healthcare programs, such as Medicare and Medicaid;
|
| • |
patient demand for any approved products;
|
| • |
our ability to establish and enforce intellectual property rights in and to any current and future products and product candidates;
|
| • |
our ability to avoid third-party patent interference, intellectual property challenges, or intellectual property infringement claims; and
|
| • |
the ability to raise any additional required capital on acceptable terms, or at all.
|
| • |
the time and costs necessary to complete our ongoing, planned and future clinical trials;
|
| • |
the time and costs necessary to pursue regulatory approvals for our current and future product candidates;
|
| • |
the costs associated with future acquisitions or in-licensing transactions;
|
| • |
the approval, progress, timing, scope and costs of our preclinical studies, clinical trials and other related activities, including the ability to enroll
patients in a timely manner for our ongoing and planned clinical trials and potential future clinical trials;
|
| • |
the costs associated with our ongoing, planned and future preclinical studies and other drug discovery activities;
|
| • |
our ability to successfully identify and negotiate acceptable terms for third-party supply and contract manufacturing agreements with contract manufacturing
organizations (“CMOs”);
|
| • |
the costs of obtaining adequate clinical and commercial supplies of raw materials and drug products for our products and product candidates;
|
| • |
our ability to successfully commercialize VTAMA, including:
|
| • |
the manufacturing, selling and marketing costs associated with VTAMA, including the cost and timing of expanding sales and marketing capabilities or entering
into strategic collaborations with third parties; and
|
| • |
the amount and timing of sales and other revenues from VTAMA, including the sales price and the availability of adequate third-party reimbursement;
|
| • |
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights, including current and future patent
infringement actions brought against third parties;
|
| • |
the cost of pursuing and defending potential intellectual property disputes, including patent infringement actions with third parties relating to our current
or future products or product candidates; and
|
| • |
our ability to hire, attract and retain qualified personnel.
|
| • |
disrupting the supply chain and the manufacture or shipment of drug substances and finished drug products for our product candidates for use in our research, preclinical studies and clinical trials;
|
| • |
delaying, limiting or preventing our employees and CROs from continuing research and development activities;
|
| • |
impeding our clinical trial initiation and recruitment and the ability of patients to continue in clinical trials, including the risk that participants enrolled in our clinical trials will contract COVID-19
while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;
|
| • |
impeding testing, monitoring, study procedures (such as endoscopies that are deemed non-essential), data collection and analysis and other related activities that may impact the integrity of subject data and
clinical study endpoints; and
|
| • |
affecting the business of the FDA, European Medicines Agency (“EMA”) or other regulatory authorities, which could result in delays in meetings related to ongoing or planned clinical trials.
|
| • |
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;
|
| • |
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.
|
| • |
inability to meet our product specifications and quality requirements consistently;
|
| • |
delay or inability to procure or expand sufficient manufacturing capacity;
|
| • |
manufacturing and product quality issues related to scale-up of manufacturing;
|
| • |
costs and validation of new equipment and facilities required for scale-up;
|
| • |
failure to comply with applicable laws, regulations and standards, including cGMP and similar standards;
|
| • |
deficient or improper record-keeping;
|
| • |
inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;
|
| • |
termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;
|
| • |
reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficient supply of these product components, we will be unable to
manufacture and sell our products or product candidates in a timely fashion, in sufficient quantities or under acceptable terms;
|
| • |
lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier;
|
| • |
operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier or other regulatory
sanctions related to the manufacturer of another company’s product candidates;
|
| • |
carrier disruptions or increased costs that are beyond our control; and
|
| • |
failure to deliver our products or product candidates under specified storage conditions and in a timely manner.
|
| • |
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.
|
| • |
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 request or 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.
|
| • |
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.
|
| • |
monitoring and assuring regulatory compliance for clinical trials, manufacturing and testing of good applicable practice (“GxP”) (e.g., GCP, GLP and GMP regulated) products;
|
| • |
monitoring and providing oversight of all GxP suppliers (e.g., contract development manufacturing organizations and CROs);
|
| • |
establishing and maintaining an integrated, robust quality management system for clinical, manufacturing, supply chain and distribution operations; and
|
| • |
cultivating a proactive, preventative quality culture and employee and supplier training to ensure quality.
|
| • |
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.
|
| • |
the inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other support personnel;
|
| • |
the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products;
|
| • |
the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors;
|
| • |
the inability to price products at a sufficient price point to ensure an adequate and attractive level of profitability;
|
| • |
restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population;
|
| • |
the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
|
| • |
unforeseen costs and expenses associated with creating an independent commercialization organization.
|
| • |
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). The term “remuneration” has been broadly interpreted by the federal government to include anything of value. Although there are a number of
statutory exceptions and regulatory safe harbors protecting certain activities from prosecution, the exceptions and safe harbors are drawn narrowly, and arrangements may be subject to scrutiny or penalty if they do not fully satisfy all
elements of an available exception or safe harbor. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception
or safe harbor. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including
items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Violations of the federal Anti-Kickback Statute may result in civil monetary
penalties up to $100,000 for each violation. Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations can also result in criminal penalties, including criminal fines and imprisonment of up to
10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid;
|
| • |
the federal false claims laws, including the False Claims Act, which imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly
presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent; knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim;
or knowingly making or causing to be made, a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. 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 $13,508 to $27,018 for each false claim or statement for penalties assessed after January 30, 2023, 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;
|
| • |
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 demand for our products and, if approved, product candidates;
|
| • |
our ability to receive or set a price that we believe is fair for our products;
|
| • |
our ability to generate revenue and achieve or maintain profitability;
|
| • |
the amount of taxes that we are required to pay; and
|
| • |
the availability of capital.
|
| • |
multiple conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental
approvals, permits and licenses;
|
| • |
failure by us or our collaborators to obtain appropriate licenses or regulatory approvals for the sale or use of our products or, if approved, product candidates, in various countries;
|
| • |
difficulties in managing operations in different jurisdictions;
|
| • |
complexities associated with managing multiple payor-reimbursement regimes or self-pay systems;
|
| • |
financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to currency exchange rate fluctuations;
|
| • |
varying protection for intellectual property rights;
|
| • |
natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and
|
| • |
failure to comply with the United States Foreign Corrupt Practices Act (the “FCPA”), including its books and records provisions and its anti-bribery provisions, the United Kingdom Bribery Act 2010 (the “U.K.
Bribery Act”), and similar anti-bribery and anti-corruption laws in other jurisdictions, for example by failing to maintain accurate information and control over sales or distributors’ activities.
|
| • |
ZORYVE (roflumilast), a topical PDE4 inhibitor, a potential competitor to VTAMA;
|
| • |
OPZELURA (ruxolitinib), a topical Janus kinase inhibitor, a potential competitor to VTAMA;
|
| • |
MK-7240 (previously PRA023), a TL1A antibody, a potential competitor to RVT 3101;
|
| • |
VYVGART (efgartigimod alfa-fcab) and VYVGART Hytrulo (efgartigimod alfa and hyaluronidase-qvfc), neonatal Fc receptor blockers, potential competitors to batoclimab and IMVT-1402;
|
| • |
Nipocalimab and RYSTIGGO (rozanolixizumab-noli), anti-FcRn antibodies, potential competitors to batoclimab and IMVT-1402;
|
| • |
TEPEZZA (teprotumumab-trbw), an insulin-like growth factor-1 receptor inhibitor, a potential competitor to batoclimab; and
|
| • |
SOTYKTU (deucravacitinib), a TYK2 inhibitor, a potential competitor to brepocitinib.
|
| • |
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.
|
| • |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
| • |
our financial or other obligations under the license agreement;
|
| • |
the extent to which our technology, products or product candidates infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
| • |
the sublicensing of patent and other rights;
|
| • |
our diligence obligations under the license agreements and what activities satisfy those diligence obligations;
|
| • |
the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and
|
| • |
the priority of invention of patented technology.
|
| • |
others may be able to make formulations or compositions that are the same as or similar to our products or product candidates, but that are not covered by the claims of the patents that we own;
|
| • |
others may be able to make product candidates that are similar to our products or product candidates that we intend to commercialize that are not covered by the patents that we exclusively licensed and have
the right to enforce;
|
| • |
we, our licensor or any collaborators might not have been the first to make or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively
licensed;
|
| • |
we or our licensor or any collaborators might not have been the first to file patent applications covering certain of our inventions;
|
| • |
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
|
| • |
it is possible that our pending patent applications will not lead to issued patents;
|
| • |
issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;
|
| • |
our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development
activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive product candidates for sale in our major commercial markets; and we may not develop
additional proprietary technologies that are patentable;
|
| • |
third parties performing manufacturing or testing for us using our products, product candidates or technologies could use the intellectual property of others without obtaining a proper license;
|
| • |
parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property;
|
| • |
we may not develop or in-license additional proprietary technologies that are patentable;
|
| • |
we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all;
|
| • |
the patents of others may harm our business; and
|
| • |
we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent application covering such intellectual property.
|
| • |
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.
|
| • |
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.
|
| Item 2. |
Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities.
|
| Item 3. |
Defaults Upon Senior Securities.
|
| Item 4. |
Mine Safety Disclosures.
|
| Item 5. |
Other Information.
|
| Item 6. |
Exhibits.
|
|
Incorporated by Reference
|
|||||||
|
Exhibit
Number
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
||
|
Stock Purchase Agreement, by and among Roche Holdings, Inc., Roivant Sciences Ltd., Pfizer Inc. and Telavant Holdings, Inc., dated as of October 22, 2023
|
Filed herewith
|
||||||
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Filed herewith
|
|||
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
—
|
—
|
—
|
Filed herewith
|
|||
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Filed herewith
|
|||
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
—
|
—
|
—
|
Filed herewith
|
|||
|
101.INS
|
Inline XBRL Instance Document
|
—
|
—
|
—
|
Filed herewith
|
||
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
—
|
—
|
—
|
Filed herewith
|
||
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
—
|
—
|
—
|
Filed herewith
|
||
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
—
|
—
|
—
|
Filed herewith
|
||
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
—
|
—
|
—
|
Filed herewith
|
||
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
—
|
—
|
—
|
Filed herewith
|
||
|
104
|
Cover Page Interactive Data (formatted as Inline XBRL and contained in Exhibit 101)
|
—
|
—
|
—
|
Filed herewith
|
||
| * |
Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted exhibits and schedules upon
request by the SEC; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits or schedules so furnished.
|
| # |
Portions of this exhibit have been omitted because they are both (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.
|
|
ROIVANT SCIENCES LTD.
|
||
|
By:
|
/s/ Matthew Gline
|
|
|
Name: Matthew Gline
|
||
|
Title: Principal Executive Officer
|
||
|
By:
|
/s/ Richard Pulik
|
|
|
Name: Richard Pulik
|
||
|
Title: Principal Financial Officer
|
||
|
By:
|
/s/ Matt Maisak
|
|
|
Name: Matt Maisak
|
||
|
Title: Authorized Signatory
|
||
|
Date: November 13, 2023
|
||
|
Page
|
|||
|
ARTICLE I.
|
DEFINITIONS
|
5
|
|
|
1.1
|
Definitions
|
5
|
|
|
1.2
|
Terms Defined Elsewhere in This Agreement
|
25
|
|
|
ARTICLE II.
|
SALE AND PURCHASE OF COMPANY SHARES
|
26
|
|
|
2.1
|
Sale and Purchase
|
26
|
|
|
2.2
|
Payment of Purchase Price; Treatment of Company RSUs
|
26
|
|
|
2.3
|
Tax Withholding
|
28 | |
|
2.4
|
Closing
|
28
|
|
|
2.5
|
Actions in Connection with Closing
|
28
|
|
|
2.6
|
Closing Deliverables
|
32 | |
|
2.7
|
Milestone Payments
|
32
|
|
|
ARTICLE III.
|
SELLER REPRESENTATIONS AND WARRANTIES
|
33
|
|
|
3.1
|
Organization, Standing and Power
|
33
|
|
|
3.2
|
Authority; Required Filings and Consents; No Conflict
|
34 | |
|
3.3
|
Ownership of the Company Shares
|
34
|
|
|
3.4
|
Litigation
|
35 | |
|
3.5
|
No Additional Representations or Warranties
|
35
|
|
|
3.6
|
No Reliance
|
35
|
|
|
ARTICLE IV.
|
ROME REPRESENTATIONS AND WARRANTIES
|
36 | |
|
4.1
|
Organization, Standing and Power
|
36 | |
|
4.2
|
Subsidiaries
|
36
|
|
|
4.3
|
Capitalization
|
36
|
|
|
4.4
|
Title to Properties and Assets; Sufficiency of Assets
|
37
|
|
|
4.5
|
No Conflict
|
38 | |
|
4.6
|
Material Contracts
|
38
|
|
|
4.7
|
Financial Statements
|
41
|
|
|
4.8
|
Absence of Certain Changes.
|
42 | |
|
4.9
|
Liabilities
|
42
|
|
|
4.10
|
Taxes
|
42
|
|
|
4.11
|
Environmental Matters
|
44
|
|
|
4.12
|
Employee Matters
|
45 | |
|
4.13
|
Compliance With Laws
|
46 | |
|
4.14
|
Legal Proceedings
|
46
|
|
|
4.15
|
Labor Matters
|
46
|
|
|
4.16
|
Intellectual Property
|
47
|
|
|
4.17
|
Governmental Authorizations
|
50
|
|
|
4.18
|
Insurance
|
50
|
|
|
4.19
|
Product Liability
|
50
|
|
|
4.20
|
Regulatory Matters
|
51 | |
|
4.21
|
Healthcare Data Privacy and Data Protection
|
53
|
|
|
4.22
|
Unlawful Payments; International Trade Compliance
|
55 | |
|
4.23
|
Affiliate Transactions
|
56 | |
|
4.24
|
IT, Cybersecurity, Data Privacy
|
56
|
|
|
4.25
|
Paris License Agreement
|
56
|
|
|
4.26
|
Brokers
|
56
|
|
|
4.27
|
No Additional Representations and Warranties
|
57 | |
|
4.28
|
No Reliance
|
57
|
|
|
ARTICLE V.
|
REPRESENTATIONS AND WARRANTIES OF THE BUYER
|
57
|
|
|
5.1
|
Organization, Standing and Power
|
57
|
|
|
5.2
|
Authority; Required Filings and Consents; No Conflict
|
58
|
|
|
5.3
|
Legal Proceedings
|
59 | |
|
5.4
|
Financial Capability
|
59
|
|
|
5.5
|
Brokers
|
59
|
|
|
5.6
|
Acquisition of Transferred Interests for Investment
|
59
|
|
|
5.7
|
No Additional Representations or Warranties
|
59
|
|
|
5.8
|
No Reliance
|
60
|
|
|
ARTICLE VI.
|
CONDUCT OF BUSINESS
|
60
|
|
|
6.1
|
Conduct of the Business of the Company
|
60
|
|
|
6.2
|
Certain Restrictions During the Pre-Closing Period
|
60
|
|
|
6.3
|
Confidentiality
|
64
|
|
|
6.4
|
Key License Agreements
|
65
|
|
|
ARTICLE VII.
|
ADDITIONAL AGREEMENTS
|
65
|
|
|
7.1
|
Access to Information; Development Plan
|
65
|
|
|
7.2
|
Consents and Antitrust Approvals
|
67
|
|
|
7.3
|
Notice of Certain Events
|
70
|
|
|
7.4
|
Public Disclosure
|
71 | |
|
7.5
|
Non-Solicit
|
71
|
|
|
7.6
|
Retention of Records
|
71
|
|
|
7.7
|
Tax Matters
|
72
|
|
|
7.8
|
Affiliate Matters
|
75
|
|
|
7.9
|
Release
|
75
|
|
|
7.10
|
Employee Matters
|
76
|
|
|
7.11
|
Directors & Officers Indemnification
|
78 | |
|
7.12
|
Paris Transaction Agreements
|
79
|
|
|
7.13
|
Post-Closing Arrangements
|
79
|
|
|
7.14
|
Drag-Along
|
79
|
|
|
7.15
|
Trademark Phase-Out
|
79
|
|
|
ARTICLE VIII.
|
CONDITIONS TO ACQUISITION
|
79
|
|
|
8.1
|
Conditions to Each Party’s Obligation to Effect the Acquisition
|
79
|
|
|
8.2
|
Additional Conditions to Obligations of the Buyer
|
80
|
|
|
8.3
|
Additional Conditions to Obligations of the Company and the Sellers
|
81 | |
|
ARTICLE IX.
|
TERMINATION AND AMENDMENT
|
82
|
|
|
9.1
|
Termination
|
82
|
|
|
9.2
|
Effect of Termination
|
83
|
|
|
9.3
|
Termination Fees.
|
83
|
|
|
9.4
|
Fees and Expenses
|
84 | |
|
9.5
|
Amendment
|
84 | |
|
9.6
|
Extension; Waiver
|
84 | |
|
ARTICLE X.
|
MISCELLANEOUS
|
85
|
|
|
10.1
|
Notices
|
85
|
|
|
10.2
|
Entire Agreement
|
86
|
|
|
10.3
|
No Third-Party Beneficiaries
|
86 | |
|
10.4
|
Assignment
|
86 | |
|
10.5
|
Severability
|
86 | |
|
10.6
|
Counterparts and Signature
|
87
|
|
|
10.7
|
Interpretation
|
87
|
|
|
10.8
|
Governing Law
|
88
|
|
|
10.9
|
Remedies
|
88
|
|
|
10.10
|
Submission to Jurisdiction
|
89
|
|
|
10.11
|
WAIVER OF JURY TRIAL
|
89
|
|
|
10.12
|
Company Disclosure Schedule
|
89 | |
|
10.13
|
Non-Survival of Representations, Warranties and Covenants
|
90
|
|
|
10.14
|
Joint Negotiation
|
90
|
|
|
10.15
|
Waiver of Conflicts; Privilege.
|
91
|
|
Exhibit A
|
Current Assets and Current Liabilities
|
|
Exhibit B
|
Development Plan
|
|
Exhibit C
|
Form of Joinder Agreement
|
|
Exhibit D
|
Form of Closing Date Statement
|
|
Exhibit E
|
Form of FIRPTA Certificate
|
|
Exhibit F
|
Form of Trademark Assignment Agreement
|
|
Exhibit G
|
Milestone Payment
|
|
Company Disclosure Schedule
|
|
| Schedule A |
Accounting Principles
|
|
Term
|
Section
|
|
280G Gross-up Payments
|
Section 1.1 |
|
Accounting Firm
|
Section 2.5(d) |
|
Accrued Bonus Amounts
|
Section 1.1 |
|
Acquisition
|
Recitals |
|
Adjusted Closing Date Statement
|
Section 2.5(b) |
|
Agreement
|
Preamble |
|
Anti-Bribery Laws
|
Section 4.22(a) |
|
Approved 280G Gross-up Payments
|
Section 1.1 |
|
Bankruptcy and Equity Exception
|
Section 3.2(a) |
|
Benefit Plan
|
Section 4.12(a) |
|
Burdensome Condition
|
Section 7.2(b) |
|
Buyer
|
Preamble |
|
Closing
|
Section 2.4 |
|
Closing Company RSU Consideration
|
Section 2.2(b) |
|
Closing Date
|
Section 2.4 |
|
Closing Payments
|
Section 2.2(a)(i) |
|
Closing Shares
|
Section 2.2(a)(i) |
|
Combined Company/Rome Group Taxes
|
Section 7.7(b) |
|
Commerce
|
Section 4.22(b) |
|
Company
|
Preamble |
|
Company Benefit Plan
|
Section 4.12(a) |
|
Company Partner
|
Section 4.20(b) |
|
Company Permits
|
Section 4.17 |
|
Company RSU Consideration
|
Section 2.2(b) |
|
Company Shares
|
Recitals |
|
Company Systems
|
Section 4.24(a) |
|
Company/Rome Group
|
Section 7.7(b) |
|
Confidentiality Agreement
|
Section 6.3(a) |
|
Continuing Employees
|
Section 7.1(f) |
|
Current Employee
|
Section 7.10(a) |
|
D&O Insurance
|
Section 7.11(b) |
|
Deal Communications
|
Section 10.15(d) |
|
Dispute Notice
|
Section 2.5(c) |
|
Disputed Amount
|
Section 2.5(c) |
|
Effective Date
|
Preamble |
|
Encumber
|
Section 1.1 |
|
End Date
|
Section 9.1(b) |
|
Equity Commitment Letter
|
Section 1.1 |
|
Estimated Closing Cash
|
Section 2.5(a) |
|
Estimated Closing Date Statement
|
Section 2.5(a) |
|
Estimated Closing Indebtedness
|
Section 2.5(a) |
|
Estimated Net Working Capital Adjustment Amount
|
Section 2.5(a) |
|
Estimated Transaction Expenses
|
Section 2.5(a) |
|
Financial Statements
|
Section 4.7 |
|
Freshfields
|
Section 10.15(a) |
|
GAAP
|
Section 4.7 |
|
Healthcare Data Requirements
|
Section 4.21(a) |
|
Term
|
Section
|
|
Indemnified Party
|
Section 7.11(a) |
|
Insurance Cap
|
Section 7.11(b) |
|
Insurance Policies
|
Section 4.18 |
|
Investor Rights Agreement
|
Section 1.1 |
|
Labor Agreement
|
Section 4.6(a)(xiii) |
|
Legal Restraints
|
Section 8.1(b) |
|
Manufacture
|
Section 1.1 |
|
Material Contracts
|
Section 4.6(a) |
|
Milestone Company RSU Consideration
|
Section 2.2(b)
|
|
New Hire
|
Section 7.10(a) |
|
OFAC
|
Section 4.22(b)
|
|
Paris
|
Preamble
|
|
Paris Company Shares
|
Recitals
|
|
Pre-Closing Period
|
Section 6.1
|
|
Preparation Period
|
Section 2.5(b)
|
|
Price Decrease
|
Section 2.5(e)
|
|
Price Increase
|
Section 2.5(e)
|
|
Privileged Deal Communications
|
Section 10.15(d)
|
|
Release
|
Section 7.10(a)
|
|
Representatives
|
Section 7.2(d)
|
|
Resolution Agreement
|
Section 2.5(d)
|
|
Resolution Period
|
Section 2.5(d)
|
|
Review Period
|
Section 2.5(c)
|
|
ROFR and Co-Sale Agreement
|
Section 1.1
|
|
Rome
|
Preamble
|
|
Rome Company Shares
|
Recitals
|
|
Rome Covered Person
|
Section 7.5
|
|
Rome FDA Meeting
|
Section 7.1(f)
|
|
Rome Parties
|
Section 10.15(b)
|
|
Safety Notices
|
Section 4.20(g)
|
|
Sanctioned Country
|
Section 4.22(b)
|
|
Sanctioned Person
|
Section 4.22(b)
|
|
Sanctions Authorities
|
Section 4.22(b)
|
|
Sellers
|
Preamble
|
|
Selling Releasees
|
Section 7.9(b)
|
|
Sensitive Business Information
|
Section 6.3(b)
|
|
Severance Obligations
|
Section 7.10(a)
|
|
Specified Transaction Expenses
|
Section 1.1
|
|
State Department
|
Section 4.22(b)
|
|
Tax Contests
|
Section 7.7(a)
|
|
Terminated Employee
|
Section 7.10(a)
|
|
Termination Fee
|
Section 9.3(a)
|
|
Termination Fee Forfeiture
|
Section 9.3(a)
|
|
Termination Fee Request
|
Section 9.3(a)
|
|
Trade Controls
|
Section 4.22(b)
|
|
Transfer Taxes
|
Section 7.7(g)
|
|
Transferred Releasees
|
Section 7.9(a)
|
| (a) |
Rome shall sell, assign, transfer, convey and deliver to the Buyer (or, subject to Section
10.4(d), an Affiliate of the Buyer designated by the Buyer), free and clear of any and all Encumbrances (other than transfer restrictions under applicable securities Laws), and the Buyer shall purchase and acquire from Rome, the
Rome Company Shares; and
|
| (b) |
Paris shall sell, assign, transfer, convey and deliver to the Buyer (or, subject to Section
10.4(d), an Affiliate of the Buyer designated by the Buyer), free and clear of any and all Encumbrances (other than transfer restrictions under applicable securities Laws), and the Buyer shall purchase and acquire from Paris, the
Paris Company Shares.
|
|
(a)
|
In consideration for the transfer of the Company Shares as set forth in Section 2.1, at
the Closing the Buyer shall:
|
| (i) |
pay or cause to be paid to each Seller an amount in cash (without interest) equal to the
product of (A) the Per Share Value and (B) the sum of (without duplication) (1) the aggregate number of shares of Common Stock held by such Seller as of immediately prior to the Closing plus (2) the aggregate number of shares of Common
Stock issuable to such Seller upon conversion of any shares of Preferred Stock held by such Seller, in each case as of immediately prior to the Closing (the result of such sum, a Seller’s “Closing Shares”), which payment shall be
made by wire transfer of immediately available funds to the accounts designated by the applicable Seller in writing for such payment (the “Closing Payments”); and
|
| (ii) |
pay, on behalf of the Company Group, by wire transfer of immediately available funds to accounts set forth on the Estimated Closing Date Statement, the aggregate amount of
the Specified Transaction Expenses (if any) that is due and payable from the Company Group at the Closing and for which invoices have been received from the payees thereof (it being understood that Rome shall request the payees of
Specified Transaction Expenses to deliver invoices therefor at least two Business Days prior to the Closing).
|
| (b) |
Immediately prior to, and contingent on, the Closing but no later than the termination of
employment of the Company Group Employees pursuant to Section 7.10(a), each unvested Company RSU that is outstanding and held by a Company Group Employee shall become fully vested. At the Closing, without any further action on
the part of the Buyer, the Company, the Sellers or any Company RSU Holder, each Company RSU that is outstanding (whether vested or unvested) as of immediately prior to the Closing (taking into account the vesting pursuant to the
immediately preceding sentence) shall be canceled and converted into the right to receive an amount in cash (without interest) equal to (i) the product of (A) the Per Share Value and (B) the aggregate number of shares of Common Stock
issuable pursuant to such Company RSU (the aggregate amounts payable to the Company RSU Holders pursuant to this Section 2.2(b)(i), the “Closing Company RSU Consideration”) and (ii) when, as and if the Milestone
Payment described in Exhibit G becomes payable pursuant to the terms of this Agreement, an amount in cash (without interest) equal to the product of (1) the Per Share Milestone Payment and (2) the aggregate number of shares of Common
Stock issuable pursuant to such Company RSU (the “Milestone Company RSU Consideration” and the aggregate amounts payable to the Company RSU Holders pursuant to this Section 2.2(b), the “Company RSU Consideration”), less
any applicable withholding taxes. Prior to the Closing, the Company’s board of directors (or, if appropriate, any committee thereof) will take all action reasonably necessary to effectuate the treatment of the Company RSUs set forth in
this Section 2.2(b) and the Company shall have taken all actions necessary such that the Company Stock Plan shall be terminated effective as of the Closing in accordance with its terms. No less than ten days prior to the Closing
Date, the Company shall deliver to the Buyer a revised version of Section 4.3(c)(i) of the Company Disclosure Schedule.
|
| (c) |
At the Closing, the Buyer shall pay or cause to be paid to the Company an amount in cash
(without interest) equal to the sum of the aggregate Closing Company RSU Consideration payable to the Company RSU Holders and the employer portion of any employment or payroll Taxes related thereto. Subject to the receipt of such
amounts from the Buyer, the Company shall pay the applicable Closing Company RSU Consideration, subject to Section 2.3, to the applicable Company RSU Holders no later than the next first applicable regularly scheduled payroll
date following the Closing Date.
|
|
(a)
|
No less than five Business Days prior to the Closing Date, the Company shall deliver to the Buyer a statement (the “Estimated Closing Date Statement”), substantially in the form attached hereto as Exhibit D, setting forth in reasonable detail the Company’s good
faith estimation of (a) the Closing Indebtedness (the “Estimated Closing Indebtedness”) and the components thereof, (b) the Closing Net Working Capital, the Net Working Capital
Adjustment Amount (the “Estimated Net Working Capital Adjustment Amount”) and the components thereof, (c) Closing Cash (the “Estimated
Closing Cash”) and the components thereof and (d) the Transaction Expenses (the “Estimated Transaction Expenses”), in each case of the foregoing clauses (a)
through (d), calculated in accordance with the definitions hereof and, if applicable, the Accounting Principles, together with reasonably detailed supporting documentation used to calculate the foregoing amounts. At least seven Business
Days prior to the Closing, the Company shall deliver to the Buyer a preliminary Estimated Closing Date Statement for information purposes only (which shall not be considered the Estimated Closing Date Statement for any purpose
hereunder). The Buyer shall be entitled, no later than six Business Days prior to the Closing Date, to comment on and request reasonable changes to the preliminary Estimated Closing Date Statement, and the Company shall consider in good
faith any changes the Buyer proposes to the preliminary Estimated Closing Date Statement within such time period; provided that (i) the Buyer shall not have any right to delay
or prevent the Closing or the payment of the Estimated Purchase Price as a result of any disagreement with the Company’s estimates set forth in the preliminary or actual Estimated Closing Date Statement and (ii) the Company shall not be
required to accept any comment made by the Buyer and shall be entitled to determine the contents of the Estimated Closing Date Statement in its sole discretion. The Company shall, no later than five Business Days prior to the Closing
Date, provide the Buyer in writing with the calculation of the Per Share Value based on the Estimated Closing Date Statement, the Pro Rata Portion of each Seller, the aggregate Closing Payment payable to each Seller at the Closing.
|
|
(b)
|
Within 90 days after the Closing Date, the Buyer shall prepare and deliver to Rome, on behalf of the Sellers, a statement (the “Adjusted Closing Date Statement”), substantially in the form of Exhibit D hereto, setting forth the Buyer’s
determination of (1) the Closing Indebtedness and the components thereof, (2) the Closing Net Working Capital, the Net Working Capital Adjustment Amount and the components thereof, (3) Closing Cash and the components thereof, (4) the
Transaction Expenses and (5) the Purchase Price calculated based on the foregoing, in each case, calculated in accordance with the definitions hereof and, if applicable, the Accounting Principles, together with reasonably detailed
supporting documentation used to calculate the foregoing amounts. During such 90-day period, Rome shall afford to the Buyer’s Representatives reasonable access, upon reasonable notice, during normal business hours and in a manner that
does not disrupt or interfere with Rome’s business operations, to all of the properties, books, Contracts, personnel and records of Rome as the Buyer shall reasonably request in connection with the preparation of the Adjusted Closing
Date Statement, in each case solely to the extent relating to the Company Group or Program Business and in Rome’s possession and subject to the execution by the Buyer of customary access letters in respect of external accountants and
auditors. If the Buyer fails to deliver the Adjusted Closing Date Statement within such 90 day period following the Closing Date, then Rome, on behalf of the Sellers, shall have the right to either (i) determine that the calculations of
the amounts in the Estimated Closing Date Statement will be deemed to be the amounts set forth in the Adjusted Closing Date Statement, the Purchase Price will be deemed to be the Estimated Purchase Price, and the Price Increase and the
Price Decrease will be deemed to be zero, and such amounts shall be final and binding upon the Parties for all purposes of this Agreement and not subject to appeal, or (ii) Rome, on behalf of the Sellers, will have the right, within 30
days thereafter (the “Preparation Period”), to prepare and deliver to the Buyer the Adjusted Closing Date Statement (it being understood that, if Rome exercises such right to
prepare and deliver the Adjusted Closing Date Statement, the provisions in paragraph (c) below shall be construed in a manner such that the Buyer has the right to review such statement and submit a Dispute Notice thereto). During the
Preparation Period (if applicable), the Review Period and the Resolution Period, the Buyer shall afford to Rome’s Representatives reasonable access, upon reasonable notice, during normal business hours and in a manner that does not
disrupt or interfere with the Buyer’s business operations, to all of the properties, books, Contracts, personnel and records of the Company Group as Rome shall reasonably request, and, during such period, the Buyer shall furnish
promptly to Rome the information concerning the business, properties, assets and personnel of the Company Group as Rome may reasonably request as reasonable to make such review and examination in connection with the delivery of the
Adjusted Closing Date Statement, subject in each case to the execution by Rome of customary access letters in respect of external accountants and auditors.
|
| (c) |
Rome, on behalf of the Sellers, shall have 30 days following receipt of the Adjusted Closing
Date Statement to review such statement (the “Review Period”). If Rome disagrees with the Adjusted Closing Date Statement, Rome, on behalf of the Sellers, shall notify the Buyer in writing of such disagreement during the Review
Period, which notice (a “Dispute Notice”) shall describe in reasonable detail the nature of such disagreement, including the specific items involved and the dollar amounts thereof (each, a “Disputed Amount”), together with
reasonably detailed documentation supporting Rome’s position with respect to the Disputed Amounts. If Rome does not deliver a Dispute Notice within the Review Period, the Adjusted Closing Date Statement, as delivered pursuant to Section
2.5(b) above, shall be considered final, binding and non-appealable upon the Parties. If Rome delivers a Dispute Notice within the Review Period, then (i) the Disputed Amounts shall be resolved pursuant to Section 2.5(d)
and (ii) such portions of the Adjusted Closing Date Statement that are not Disputed Amounts shall be considered final, binding and non-appealable upon the Parties.
|
| (d) |
During the 30 days immediately following the delivery of a Dispute Notice (the “Resolution
Period”), Rome, on behalf of the Sellers, and the Buyer shall seek in good faith to resolve any differences that they may have with respect to the matters identified in the Dispute Notice (and all discussions related thereto
shall, unless otherwise agreed to by the Buyer and Rome, be governed by Rule 408 of the Federal Rules of Evidence (and any applicable similar state rules)). If the Buyer and Rome are unable to resolve all Disputed Amounts within the
Resolution Period, then the Disputed Amounts shall be referred for final determination to Deloitte & Touche LLP, or if Deloitte & Touche LLP is unwilling or unable to serve, then an independent nationally recognized accounting
firm of independent certified public accountants, jointly determined by the Buyer and Rome (such firm, or another firm determined pursuant to this Section 2.5(d), the “Accounting Firm”), within 15 days after the end of
such 30-day period. The Accounting Firm shall act as expert, and not as arbitrator, and shall consider only those Disputed Amounts which the Buyer and Rome have been unable to resolve during the Resolution Period. Neither Rome nor the
Buyer (and none of their respective Representatives) shall have any ex parte communications (whether written or oral) or meetings with the Accounting Firm without the prior written consent of the other party. The Accounting Firm shall deliver to the Buyer
and Rome, as promptly as practicable, and in any event within 30 days after its appointment, a written report setting forth the resolution of such Disputed Amounts. The Accounting Firm determination shall be based solely on
presentations and supporting material provided by Rome and the Buyer and not pursuant to any independent review, and based solely on the definitions of Closing Indebtedness, Closing Net Working Capital, Closing Cash and Transaction
Expenses contained herein and the Accounting Principles. The Accounting Firm shall only be permitted to determine an amount with respect to any Disputed Amount that is either the amount of such Disputed Amount as proposed by the
applicable Party in the Adjusted Closing Date Statement or the Dispute Notice or an amount in between the two amounts. Such report shall be final, binding and non-appealable upon the Parties, absent fraud or manifest error. Upon the
decision of the Accounting Firm, the Adjusted Closing Date Statement, as adjusted to the extent necessary to reflect the Accounting Firm’s decision, shall be final, binding and non-appealable upon the Parties. At any time, the Buyer and
Rome may agree to settle any remaining Disputed Amount, including any such Disputed Amount submitted to the Accounting Firm, which agreement shall be in writing and shall be deemed final, binding and non-appealable upon the Parties with
respect to the subject matter of such Disputed Amount so resolved (the “Resolution Agreement”); provided that, if the Accounting Firm has been engaged, the Buyer and Rome shall promptly provide a copy of such Resolution
Agreement to the Accounting Firm and instruct the Accounting Firm not to resolve such Disputed Amount so resolved, it being agreed that if the Accounting Firm nonetheless resolved such Disputed Amount for any reason, the Resolution
Agreement shall control. The fees, costs and expenses of the Accounting Firm shall be allocated between the Buyer and Rome based upon the percentage that the portion of the contested amount not awarded to each such party bears to the
amount actually contested by such party. For example, if Rome claims the aggregate Purchase Price is $1,000 greater than the amount determined by the Buyer, and if the Accounting Firm ultimately resolves the dispute by awarding the
Sellers $300 of the $1,000 contested, then the costs and expenses of arbitration shall be allocated 30% (i.e., 300 ÷ 1,000) to the Buyer and 70% (i.e., $700 ÷ 1,000) to Rome. The dispute resolution provisions set forth in this Section
2.5 shall be the sole and exclusive remedy of the Parties for any disputes related to the Closing Indebtedness and the components thereof, the Closing Net Working Capital, the Net Working Capital Adjustment Amount and the
components thereof, the Closing Cash and the components thereof, and the Transaction Expenses; provided that the foregoing shall not prohibit any Party from instituting an Action to enforce any final determination of the
Purchase Price by the Accounting Firm pursuant to the terms and conditions of this Section 2.5(d).
|
| (e) |
In the event that the amount of the Purchase Price as finally determined pursuant to this Section
2.5 is greater than the Estimated Purchase Price (the “Price Increase”), the Buyer shall pay to each Seller, by wire transfer of immediately available funds, an amount in cash equal to such Seller’s Pro Rata Portion of
the Price Increase. In the event that the Purchase Price as finally determined pursuant to this Section 2.5 is less than the Estimated Purchase Price (the “Price Decrease”), each Seller shall pay to the Buyer, by wire
transfer of immediately available funds, an amount in cash equal to its Pro Rata Portion of the Price Decrease.
|
| (f) |
Any amounts payable pursuant to Section 2.5(e) shall be paid within five Business
Days after final determination of the Purchase Price by wire transfer of immediately available funds to an account designated by the Party receiving such payment within two Business Days after such final determination.
|
| (g) |
Any payment made pursuant to this Section 2.5 or Section 2.7 shall be treated as an
adjustment to the Purchase Price for federal, state, local and non-U.S. income Tax purposes, except as and to the extent required to be treated as interest under applicable Law, including Sections 483 and/or 1274 of the Code.
|
| (a) |
At the Closing, (i) each of Rome and Paris shall deliver to the Buyer an instrument of assignment transferring all of their right, title and interest to the Rome Company
Shares and the Paris Company Shares, respectively, to the Buyer and (ii) the Company shall record the transfer of the Company Shares in its books and records and the Buyer as the record holder of the Company Shares.
|
| (b) |
At or prior to the Closing, Rome shall deliver or cause to be delivered to the Buyer an executed counterpart of the Joinder Agreement, duly executed by or on behalf of
Paris.
|
| (c) |
At or prior to the Closing, (i) the Company shall deliver to the Buyer a certificate and
notice to the Internal Revenue Service from the Company, dated as of the Closing, in a form and substance prescribed by the Treasury Regulations promulgated under Sections 897 and 1445(b)(2) of the Code stating that the Company is
not, and has not been during the relevant period specified in Section 897(c)(1)(ii) of the Code, a “United States real property holding corporation” within the meaning of Section 897(c) of the Code, in substantially the form attached
hereto as Exhibit E, and (ii) each of Rome and Paris shall deliver to the Buyer an IRS Form W-9 or Form W-8BEN-E, as applicable.
|
| (d) |
At or prior to the Closing, (i). Rome shall deliver or cause to be delivered to the Buyer an executed counterpart of the Trademark Assignment Agreement and (ii). the
Company shall deliver to the Buyer an executed counterpart of the Trademark Assignment Agreement.
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| (a) |
After the Closing, if applicable, the Buyer shall pay or cause to be paid the Milestone
Payment owing pursuant to Exhibit G, such payment obligation (if any) to be governed by the terms and conditions of Exhibit G and this Article II. Any such right is solely a contractual right and is not a security for
purposes of any federal or state securities Laws. In the event that the Buyer becomes obligated pursuant to the terms of Exhibit G to make the Milestone Payment, when, as and if such Milestone Payment becomes payable pursuant
to the terms of this Agreement, the Buyer shall pay or cause to be paid no later than the time provided for in Exhibit G:
|
| (i) |
to each Seller an amount in cash (without interest) equal to the product of (A) the Per Share Milestone Payment Amount and (B) such Seller’s Closing Shares, which payment
shall be made by wire transfer of immediately available funds to the account designated by the applicable Seller in writing for such payment; and
|
| (ii) |
to the Company an amount in cash (without interest) equal to the sum of the aggregate
Milestone Company RSU Consideration payable to the Company RSU Holders and the employer portion of any employment or payroll Taxes related thereto. Subject to the receipt of such amounts from the Buyer, the Company shall pay the
applicable Milestone Company RSU Consideration, subject to Section 2.3, to the applicable Company RSU Holders, not later than five (5) days following the date of receipt of the Milestone Company RSU Consideration.
|
| (b) |
The right of any Seller or Company RSU Holder to receive the portion of the Milestone
Payment payable thereto shall not be evidenced by any form of certificate or instrument, and does not represent any ownership or equity interest in any member of the Company Group, Buyer or any of their respective Affiliates and does
not entitle any such entitled Person to any voting rights or any rights to dividend payments. The right of the Sellers and the Company RSU Holders to receive the portion of the Milestone Payment payable thereto shall not be assignable
or transferable except, (i) in the case of any Company RSU Holder, (A) by will or the laws of intestacy, (B) by operation of law, (C) by gift without consideration of any kind to a spouse, lineal descendant, sibling, parent, heir,
executor, administrator, testamentary, trustee, legatee or beneficiary of such Company RSU Holder or (D) to a trust that is for the exclusive benefit of such Company RSU Holder or its permitted transferees under clause (C) above and
(ii) in the case of a Seller, to an Affiliate of such Seller; provided, that in each case, written notice of such assignment and transfer shall be promptly delivered to the Buyer by the transferor or assignor, which notice
shall expressly set forth the transferor or assignor and the transferee or assignment, the rights to which such transfer or assignment related and the effective date of such transfer; provided further, that as a condition to
such transfer or assignment, the parties to such transfer or assignment shall agree to provide to the Buyer any additional evidence of the transfer or assignment that the Buyer may reasonably request. None of the Buyer or any member
of the Company Group or any of their respective Affiliates shall give effect to any purported assignment or transfer made in contravention of this Section 2.7.
|
| (a) |
Such Seller has all requisite legal capacity, right, corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby in accordance with the terms of this Agreement. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all necessary company action on the part of such Seller, and no other action on the part of such Seller is necessary to authorize the execution, delivery and
performance of this Agreement or the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by such Seller and, assuming due authorization, execution and delivery by the
Buyer, constitutes a valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditors’ rights and to general equity principles (the “Bankruptcy and Equity Exception”). No vote or other approval of the equityholders of such Seller is required in connection
with the execution, delivery or performance of this Agreement or to consummate the transactions contemplated by this Agreement in accordance with the terms hereof, whether by reason of applicable Law, the Constitutive Documents of
such Seller, the rules or requirements of any securities exchange, or otherwise.
|
| (b) |
No notices to, consents or approvals of, waivers, permits or authorizations from or filings or registrations with, any Governmental Authority are required at or prior to
the Closing by such Seller in connection with the execution, delivery or performance by such Seller of this Agreement or to consummate the transactions contemplated hereby, except for (i) as required under the HSR Act, the Securities
Act or the Exchange Act and (ii) any such notice, consent, approval, waiver, permit, authorization, filing or registration, the failure to make or obtain would not reasonably be expected to have, individually or in the aggregate, a
Seller Material Adverse Effect.
|
| (c) |
Subject to the making of the notices, filings and registrations and receipt of the consents,
approvals, waivers, permits and authorizations referred to in Section 3.2(b), and the expiration of related waiting periods, the execution, delivery and performance of this Agreement by such Seller and the consummation of the
transactions contemplated hereby do not and shall not (i) conflict with, result in a breach or violation of, or a default under, any (A) applicable Law, (B) applicable Order, (C) applicable Governmental Authorization or (D) Contract
to which such Seller is a party, or give rise to any right of termination, cancellation or acceleration under such Contract, except, in each case of the foregoing clauses (A) through (D), as would not reasonably be expected to have,
individually or in the aggregate, a Seller Material Adverse Effect or a Business Material Adverse Effect, or (ii) conflict with, or result in a breach or violation of, or a default under, the Constitutive Documents of such Seller.
|
|
(a)
|
Section 4.3(a) of the Company
Disclosure Schedule sets forth a true and complete list, as of the Effective Date, of the authorized Capital Stock of the Company and the number of shares of Capital Stock issued and outstanding and the holders of record of such
shares. The Company Shares constitute all of the issued and outstanding shares of Capital Stock of the Company.
|
| (b) |
All Company Shares are duly authorized and validly issued, are fully paid and non-assessable
and are free and clear of all Encumbrances (other than transfer restrictions under applicable securities Laws, restrictions under the Company’s Constitutive Documents and the Paris Transaction Agreements and any Encumbrances that will
be released at the Closing). There are no declared or accrued but unpaid dividends with respect to any shares of Capital Stock of the Company. The Company Shares have not been issued in violation of any applicable Laws or the
Company’s Constitutive Documents. The Company does not have any bonds, notes, debentures or other debt securities outstanding that have voting rights or are exercisable or convertible into, or exchangeable or redeemable for, or that
give any Person a right to subscribe for or acquire, Capital Stock or any other Equity Securities of the Company. Other than pursuant to the Paris Transaction Agreements, there are no obligations, contingent or otherwise, to acquire, repurchase, redeem (or establish a sinking fund with respect to redemption) or otherwise acquire any shares of Capital Stock in
the Company or for a member of the Company Group to make any investment (in the form of a loan, capital contribution or similar transaction) in any
other Person. Except for the Company RSUs and the Company Shares, the Company does not have any other Equity Securities that are issued and outstanding.
|
| (c) |
Section 4.3(c)(i) of the Company Disclosure Schedule sets forth a true and complete
list, as of the Effective Date, of each outstanding Company RSU, including (i) the award holder, (ii) the number of shares of Common Stock issuable under such Company RSU, (iii) the grant date, (iv) vesting commencement date and (v)
the vesting schedule (including any acceleration provisions). Section 4.3(c)(ii) of the Company Disclosure Schedule sets forth a true and complete list, as of the Effective Date, of each Person with an offer letter or other
Contract that contemplates a grant of Company RSUs or other Equity Securities, which have not been granted or issued as of the date hereof.
|
| (a) |
The Company Group does not lease, sublease or own, and has never leased, subleased or owned, any real property.
|
| (b) |
All of the tangible assets of the Company Group are in all material respects in reasonably serviceable operating condition and repair (giving due account to the age and
length of use of same, ordinary wear and tear excepted), and are adequate in all material respects for the uses to which they are being put. The Company Group holds good, valid and enforceable title to each material asset which it
purports to own or, in the case of leased assets or assets held under license, a good and valid leasehold or license interest in, each material asset used by the Company Group in connection with the Program Business, in each case, free
and clear of any Encumbrances of any kind, other than Permitted Encumbrances, including Permitted Licenses.
|
| (c) |
At the Closing, the Company Group will own or have the right to use (including by means of
ownership or rights pursuant to licenses or other Contracts) all of the assets, properties and rights necessary to conduct the Program Business in substantially the same manner in all material respects as conducted as of the date of
this Agreement and as of immediately prior to the Closing (other than any assets, properties or services provided pursuant to the Services Agreement); provided that the foregoing shall not constitute a representation or
warranty regarding the infringement, misappropriation or other violation of any Intellectual Property of any Person, which is addressed exclusively in the first two sentences of Section 4.16(b). No member of the Company Group
has any Liabilities other than Liabilities incurred in connection with the Company Group’s efforts to Develop, Manufacture and Commercialize the Program Compounds and Program Products or otherwise in the conduct by the Company Group
of the Program Business.
|
| (a) |
Section 4.6(a) of the Company Disclosure Schedule sets forth a true, correct and
complete list of the following Contracts in effect, as of the Effective Date, to which the Company Group is party or by which it is bound (including, in each case, all amendments, extensions and supplements thereto as of the Effective
Date) (the “Material Contracts”) (it being understood, for the avoidance of doubt, that (i) this Section 4.6 shall not require the disclosure of, and Material Contracts shall not be deemed to include, any Contract which
contains any of the provisions or obligations set forth below, but which provisions or obligations have terminated or expired in accordance with their terms and for which there is no continuing liability and (ii) the Material
Contracts shall not be deemed to include [***], which are addressed exclusively by Section 4.6(c)):
|
| (i) |
any Contract containing covenants requiring a member of the Company Group to indemnify or hold harmless any Person, other than indemnification provisions in contract
manufacturing agreements, contract research agreements, clinical trial agreements, institutional review board/independent ethics committee agreements and other services agreements, material transfer agreements or Permitted Licenses, in
each case, entered into in the Ordinary Course;
|
| (ii) |
any Contract containing covenants requiring the Company Group not to (or that otherwise
restrict or limit the Company Group’s ability to) (A) compete or otherwise conduct activities in any line of business or geographical area (including any covenant not to compete with respect to, or that otherwise restricts, the
Manufacture, marketing, distribution or sale of any product or product line) or (B) solicit any customer of any Person or solicit or hire any employee, consultant or independent contractor of any Person; provided that this
clause (B) shall not apply to non-solicitation and no-hire provisions contained in non-disclosure agreements or Contracts with employees, consultants and other individual service providers entered into in the Ordinary Course;
|
| (iii) |
any Contract that contains (A) exclusivity obligations (including providing for the grant of exclusive sales, distribution, marketing or other exclusive rights), (B) most
favored nation obligations, (C) minimum purchase requirements or (D) other similar provisions, in each case that would apply to the activities of Buyer after the Closing with respect to the Program Business;
|
| (iv) |
any Contract relating to (A) a joint venture, strategic alliance or partnership or (B) material research and development, pre-clinical or clinical trial or manufacturing
services;
|
| (v) |
any Contract (A) relating to any incurrence, assumption or guarantee of indebtedness for borrowed money in excess of $2,000,000, (B) relating to any interest rate,
derivatives, currency exchange, commodities or hedging transactions or (C) granting any Person and Encumbrance on, mortgaging or pledging any material assets of any member of the Company Group, other than Permitted Encumbrances
(including Permitted Licenses) or Encumbrances that will be released at or prior to Closing;
|
| (vi) |
any Contract involving aggregate outstanding payment obligations by or to a Person with a value in excess of $2,000,000 in any consecutive 12-month period;
|
| (vii) |
any Contract requiring the Development by a member of the Company Group of any compound or product;
|
| (viii) |
any Contract relating to any acquisition or disposition of any business, (whether by merger, sale of equity, sale of assets or otherwise), assets (other than sales of
inventory), properties or rights with a value in excess of $2,000,000;
|
| (ix) |
any Contract relating to the settlement, conciliation or similar agreement with (A) any Governmental Authority that provides for payments of money by a member of the
Company Group or (B) other Person that provides for payments in excess of $500,000, or that provides for any continuing material non-monetary obligations on the part of the Company Group or the Company Group Employees (or after the
Closing, the Buyer and its Affiliates);
|
| (x) |
any Contract containing any capital commitment on behalf of a member of the Company Group or otherwise requiring any member of the Company Group to make any capital
expenditure in an amount in excess of $10,000,000;
|
| (xi) |
any Contract involving the payment of royalties or other amounts calculated upon the revenues, profits or income of any member of the Company Group or the Program Business
or income, profits or revenues related to any product of any member of the Company Group, Intellectual Property owned by or licensed to any member of the Company Group or the Program Business;
|
| (xii) |
any Contract granting any Person any right of first refusal, right of first negotiation, option to purchase, option to license or any other similar preferential rights with
respect to the equity, assets, products of any member of the Company Group, Intellectual Property owned by or licensed to any member of the Company Group or the Program Business;
|
| (xiii) |
any collective bargaining agreement or other labor-related Contract with a union, works
council, labor organization or other employee representative of the members of the Company Group (each, a “Labor Agreement”);
|
| (xiv) |
any Contract which imposes an obligation on any member of the Company Group with respect to an “earn out,” royalty, milestone, contingent purchase price or similar
contingent payment obligation;
|
| (xv) |
any Contract directly with any Governmental Authority;
|
| (xvi) |
any Contract (A) by which any member of the Company Group licenses or sublicenses to or
otherwise authorizes any Third Party to use, or covenants not to sue or grants an immunity from suit with respect to, any Intellectual Property or (B) by which any member of the Company Group is granted a license or sublicense to, is
authorized to use, or is granted a covenant not to sue or immunity from suit with respect to, any Intellectual Property, in each case other than (1) Contracts for any commercially available, off-the-shelf software products, (2) non-exclusive licenses or other rights granted to or by the Company Group pursuant to any fee-for-service agreements in connection with the provision of services to the Company Group entered into the Ordinary Course, or (3) agreements between the Company Group and its employees, independent contractors or consultants on the Company Group’s standard forms thereof,
which have been made available to the Buyer;
|
| (xvii) |
any Contract that constitutes a Contract or agreement with any manager, officer, employee, director, stockholder or other Affiliate of any member of the Company Group (other than (A) Affiliate
contracts that have been or will be terminated prior to the Closing without any continuing liability or obligation to any party and (B) Benefit Plans);
|
| (xviii) |
any stockholders agreement, investors rights agreement, registration rights agreement or similar Contract not otherwise disclosed as a Paris Transaction Document or a Company’s Constitutive
Document; or
|
| (xix) |
any Contract where a member of the Company Group is a lessee of leased real property.
|
| (b) |
The Company has made available to the Buyer correct and complete copies of each Material
Contract (or form thereof), subject to redactions for competitively sensitive information (which has been made available on an outside counsel basis). (i) Each Material Contract is in full force and effect, subject to the Bankruptcy
and Equity Exceptions, (ii) all of the Material Contracts are valid, binding and enforceable against the relevant member of the Company Group and, to Rome’s Knowledge, the other party(ies) thereto, in accordance with their terms
except as enforcement may be limited by the Bankruptcy and Equity Exceptions, (iii) no member of the Company Group is in breach or default under any Material Contract to which it is party, (iv) to Rome’s Knowledge, no other party is
in breach or default under such Material Contracts and, to Rome’s Knowledge, no event has occurred, and no condition or state of facts exists which, with the passage of time or the giving of notice or both, would constitute a material
breach, default or termination under any Material Contract, (v) as of the Effective Date, no written notice of any claim of breach, violation, default or termination under a Material Contract has been received by any member of the
Company Group, (vi) no member of the Company Group has waived any of its rights under any Material Contract to which it is party and (vii) no member of the Company Group has provided or received any written notice of any intention to
terminate or cancel any Material Contract, in the case of each of clauses (i) through (vii), except as would not reasonably be expected to be, individually or in the aggregate, material to the Program Business, taken as a whole. For
clarity, the foregoing representations and warranties in this Section 4.6(b) shall not apply with respect to [***].
|
| (c) |
To Rome’s Knowledge, the Company has made available to the Buyer a correct and complete copy of each of [***] as in effect on the Effective Date, subject to redactions for
competitively sensitive information (which has been made available on an outside counsel basis). To Rome’s Knowledge: (i) [***] is in full force and effect, subject to the Bankruptcy and Equity Exceptions, and is valid, binding and
enforceable against the parties thereto, in accordance with its terms except as enforcement may be limited by the Bankruptcy and Equity Exceptions, (ii) as of the Effective Date, no party is in material breach or default under any [***]
and no event has occurred, and no condition or state of facts exists which, with the passage of time or the giving of notice or both, would constitute a material breach, default or termination under any [***], (iii) as of the Effective
Date, Paris has not received written notice of any claim of material breach, default or termination under a [***] and has not waived any of its material rights under any [***] and (iv) as of the Effective Date, Paris has not provided or
received any written notice of any intention to terminate or cancel any [***].
|
| (a) |
Each member of the Company Group has timely filed all material Tax Returns that it was required to file, and all such Tax Returns were true, correct and complete in all
material respects. Each member of the Company Group has paid on a timely basis all material Taxes due or payable by or with respect to it, whether or not shown on any Tax Return.
|
| (b) |
No member of the Company Group is subject to nor has submitted an application for any letter rulings, technical advice memoranda, closing agreements or similar documents
issued by a Tax Authority relating to Taxes.
|
| (c) |
No examination or audit of any member of the Company Group by any Tax Authority in respect of material Taxes is currently in progress or, to Rome’s Knowledge, threatened in
writing, and no deficiencies for Taxes or other assessments relating to Taxes have been claimed, proposed or assessed in each case in writing against any member of the Company Group.
|
| (d) |
No member of the Company Group has been informed in writing by any jurisdiction that the jurisdiction believes that any member of the Company Group was required to file any
material Tax Return that was not filed or that any member of the Company Group is or may be subject to taxation in that jurisdiction in each case which has not been subsequently resolved.
|
| (e) |
No member of the Company Group is the beneficiary of any extension of time within which to file any material Tax Return which extension is still in effect other than any
such extension obtained in the Ordinary Course. No member of the Company Group has been granted any extension or waiver of the limitation period applicable to the collection or assessment of a material amount of Taxes which extension or
waiver is still in effect.
|
| (f) |
No member of the Company Group (i) has ever been a member of a group of corporations filing (or required to file) consolidated, combined or unitary Tax Returns, (ii) has
any liability for Taxes of any Person other than a member of the Company Group under Treasury Regulations Section 1.1502-6 or any similar provision of state, local or non-U.S. Law or (iii) is a party to or bound by any Tax Sharing
Agreement.
|
| (g) |
There are no material Encumbrances with respect to Taxes upon any of the assets or properties of any member of the Company Group, other than Permitted Encumbrances.
|
| (h) |
No member of the Company Group has distributed to its shareholders or security holders stock or securities of a controlled corporation, nor have stock or securities of any
member of the Company Group been distributed, in a transaction to which Section 355 of the Code applies in the two years prior to the Effective Date.
|
| (i) |
No member of the Company Group has engaged in a “listed transaction” as set forth in Treasury Regulations Section 1.6011-4(b)(2).
|
| (j) |
All material Taxes required by Law to be withheld or collected by each member of the Company Group has been duly withheld or collected and, to the extent required, have
been timely paid to the proper Governmental Authority.
|
| (k) |
No member of the Company Group (i) has agreed, nor is it required, to make any adjustment
under Section 481(a) of the Code by reason of a change in accounting method or otherwise that occurred prior to Closing, or (ii) has executed or entered into a closing agreement pursuant to Section 7121 of the Code or similar
provision of Law.
|
| (l) |
No member of the Company Group will be required to include a material amount of income in, or exclude a material item of deduction from, taxable income for any period (or
portion thereof) ending after the Closing Date as a result of (i) a change in method of accounting made prior to the Closing, (ii) closing agreement, advance pricing agreement or other agreement with any Tax Authority relating to Taxes
entered into prior to the Closing, (iii) an installment sale or open transaction disposition entered into on or prior to the Closing or (iv) a prepaid amount received prior to the Closing. No member of the Company Group has any
liability for Taxes pursuant to Section 965 of the Code.
|
| (m) |
No member of the Company Group has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
|
| (n) |
Each member of the Company Group has, to the extent applicable, (i) properly complied with all legal requirements to defer the amount of the employer’s share of any
“applicable employment taxes” under Section 2302 of the CARES Act (or any similar provision of state, local or non-U.S. Law), and (ii), properly complied with all legal requirements and duly accounted for any available Tax credits under
Sections 7001 through 7005 of the Families First Act and Section 2301 of the CARES Act.
|
| (o) |
No member of the Company Group (i) is or has been resident for Tax purposes in a country outside of its country of organization or incorporation; (ii) has, or has ever had,
a permanent establishment or other taxable presence in any country other than its country of organization or incorporation; and (iii) is, or has ever been, subject to income Tax in a country outside its country of organization or
incorporation.
|
| (a) |
Except as would not reasonably be expected to have a material impact on the Company Group, taken as a whole, (i) the Company Group and, with respect to the Program
Business, the Rome Group are, and have been, in compliance with all Environmental Laws and (ii) the Rome Group has not received any communication (written or oral) from a Governmental Authority that alleges that the Company Group or,
with respect to the Program Business, the Rome Group, is not in compliance with, or has liability under, any Environmental Laws.
|
| (b) |
Except as would not reasonably be expected to have, individually or in the aggregate, a Business Material Adverse Effect, there is no Environmental Claim pending or, to
Rome’s Knowledge, threatened against the Company Group, the Program Business or against any Person whose liability for any Environmental Claim the Company or the Program Business has retained, assumed, undertaken or otherwise become
subject to, either contractually or by operation of Law.
|
| (c) |
Except as would not reasonably be expected to have, individually or in the aggregate, a Business Material Adverse Effect, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the release, emission, discharge, presence, generation, manufacture, treatment, storage, transport, distribution, marketing, sale, disposal or arrangement for disposal of,
exposure of any Person to, or ownership or operation of any property or facility contaminated by, any Materials of Environmental Concern, in each case that would reasonably be expected to (i) form the basis of any Environmental Claim
against the Company Group, the Program Business or against any Person whose liability for any Environmental Claim the Company Group has retained, assumed, undertaken or otherwise become subject to, either contractually or by operation
of Law, or (ii) otherwise result in any costs or liabilities under Environmental Law.
|
| (a) |
Section 4.12(a) of the Company Disclosure Schedule sets forth a correct and complete
list, as of the Effective Date, of each material Benefit Plan, and separately designates (i) each Benefit Plan that is sponsored by a professional employer organization and (ii) each Benefit Plan that is sponsored, maintained or
contributed to (or required to be contributed to) by any member of the Company Group or with respect to which any member of the Company Group has any current, future or contingent liability (a “Company Benefit Plan”), none of
which is an International Plan. A “Benefit Plan” is each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA), whether or not subject to ERISA, and any employment, individual consulting, bonus, retention,
change in control, deferred compensation, incentive compensation, commission, equity purchase, option, warrant, restricted equity, equity appreciation, phantom equity or other equity or equity-related, severance or termination pay,
hospitalization, medical, life, disability, supplemental unemployment benefits, paid time off, leave, profit-sharing, pension, retirement plan, program, policy, agreement or arrangement, or other benefit or compensation plan, program,
policy, agreement (including but not limited to employment agreements) or arrangement, whether written or unwritten in each case that is (i) maintained, sponsored, entered into, contributed to or required to be contributed to by the
Rome Group for the benefit of any current or former Company Group Service Provider with respect to or in consideration for such Company Group Service Provider’s services provided to the Company Group or (ii) with respect to which the
Company Group has or may have any direct or indirect liability or obligation.
|
| (b) |
With respect to each material Benefit Plan, the Company has made available to the Buyer complete and correct copies of the plan documents, including any amendments thereto,
all related trust, or other funding documents, insurance contract and any other material related agreement, and in the case of unwritten material Benefit Plans, written descriptions thereof, in each case, if applicable.
|
| (c) |
No Benefit Plan is and no member of the Rome Group or any ERISA Affiliate maintains, sponsors or contributes to (or is required to contribute to) or has ever maintained,
sponsored, contributed to or been required to contribute to, and does not otherwise have any current or contingent liability or obligation under or with respect to, (i) a “defined benefit plan” as defined in Section 3(35) of ERISA or
any other plan that is or was subject to Section 302 or Title IV of ERISA or Section 412 of the Code, (ii) a “multiemployer plan” within the meaning of Section 3(37) of ERISA, (iii) a “multiple employer plan” within the meaning of
Section 210 of ERISA or Section 413(c) of the Code, (iv) a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA or (v) post-retirement or post-termination health or life insurance or other similar
benefits (other than health continuation coverage required by Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code for which the covered Person pays the full cost of coverage). No member of the Company Group has any
material current or contingent liability or obligation as a consequence of at any time being considered a single employer under Section 414 of the Code with any other Person.
|
| (d) |
Except for the Severance Obligations, the Company RSU Consideration and the Approved 280G Gross-up Payments, neither the execution and delivery of this Agreement nor the
Acquisition (either alone or in combination with any other event), directly or indirectly, could (i) result in any payment becoming due to any current or former Company Group Service Provider, (ii) increase any payments or benefits
under any Benefit Plan or otherwise payable to any current or former Company Group Service Provider or (iii) result in the acceleration of the time of payment, vesting or funding of any such benefit, or the forgiveness of any loan,
under any Benefit Plan or otherwise with respect to any current or former Company Group Service Provider.
|
| (e) |
Neither the execution and delivery of this Agreement nor the transactions contemplated herein (either alone or in combination with any other event) could give rise to any
payment or benefit that could be an “excess parachute payment” as defined in Section 280G of the Code to any current or former Company Group Service Provider.
|
| (a) |
Section 4.15(a) of the Company Disclosure Schedule sets forth a correct and complete
list, as of the Effective Date, of each Company Group Service Provider, specifying which Company Group Service Providers are employed or engaged by a member of the Company Group and which Company Group Service Providers are employed
or engaged by Rome or one of its Affiliates other than the Company Group and for each specifying the (i) name or employee ID, (ii) job title, (iii) primary work location, (iv) date of hire and (v) hourly wage or base salary (as
applicable) payable by the Company Group.
|
| (b) |
No member of the Company Group is a party to or bound by any Labor Agreement, and no Company Group Employee is represented by any labor union, labor organization, works
council, employee representative or group of employees with respect to their employment.
|
| (c) |
No member of the Company Group is currently negotiating in connection with entering into, a collective bargaining agreement and, to Rome’s Knowledge, there has not been any
organizational campaign, petition or other unionization activity seeking recognition of a collective bargaining unit relating to any Company Group Service Provider. The consent or consultation of, or the rendering of formal advice by,
any labor or trade union, works council or other employee representative body is not required for the Sellers to enter into this Agreement or to consummate any of the transactions contemplated hereby.
|
| (a) |
Section 4.16(a) of the Company Disclosure Schedule sets forth a true, complete and
accurate list, as of the Effective Date, of all (i) (A) Patents issued by or filed with any Governmental Authority, (B) applied for or registered Trademarks, (C) applications for registration or registered Copyrights, and (D) internet
domain name registrations, websites and social media handles, in each case, owned or licensed by any member of the Company Group, and (ii) Telavant Trademarks, in each case of clauses (i) and (ii), specifying as to each such item, as
applicable, (w) the owner(s) of the item, (x) the jurisdictions in which the item is issued or registered or in which any application for issuance or registration has been filed, (y) the respective issuance, registration and
application number of the item and (z) the date of application and issuance or registration of the item.
|
| (b) |
To Rome’s Knowledge, the Development, Manufacturing and Commercialization of any Program Compound and Program Product, and the operation of the Program Business, each as
currently conducted or contemplated by any member of the Company Group to be conducted, does not infringe, misappropriate or otherwise violate, and has not infringed, misappropriated or otherwise violated, any valid Intellectual
Property of any Person. No member of the Rome Group has filed, or threatened in writing to file, any Actions alleging that any Third Party has infringed, misappropriated or otherwise violated any Company Intellectual Property, and, to
Rome’s Knowledge, no Third Party infringes, misappropriates or otherwise violates, or has infringed, misappropriated, or otherwise violated, any Company Intellectual Property. No Third Party has filed, or threatened in writing to file,
any Actions alleging that any member of the Rome Group has infringed, misappropriated or otherwise violated any Person’s Intellectual Property rights (to the extent relating to the Program Business), and no such Actions are currently
pending.
|
| (c) |
All right, title and interest in and to all of the Company Intellectual Property is owned solely by a member of the Company Group (or, to Rome’s Knowledge, solely or
jointly by the Company Group’s licensor or such licensor’s licensor), free and clear of all Encumbrances (except for Permitted Encumbrances, including Permitted Licenses) and, with respect to each item of Company Owned Intellectual
Property and, to Rome’s Knowledge, Company Licensed Intellectual Property, (i) such Intellectual Property is not the subject of any reexamination proceeding or any other proceeding or dispute challenging its scope, enforceability or
validity, (ii) no such item of Intellectual Property has been adjudged invalid or unenforceable, in whole or in part, (iii) no written notice from any Third Party challenging such Intellectual Property’s validity, enforceability or
ownership has been received by any member of the Rome Group, (iv) no opposition, extension of time to oppose, interference, rejection or refusal to register has been filed in connection with any application to register any such item of
Intellectual Property, (v) except with respect to Patents, such Intellectual Property is subsisting, valid and enforceable and, with respect to Patents, is subsisting and, to Rome’s Knowledge, valid and enforceable and (vi) the
ownership of the entire right, title and interest in and to such Intellectual Property is recorded with the applicable Governmental Authority solely in the name of a member of the Company Group (or, to Rome’s Knowledge, solely or
jointly in the name of the Company Group’s licensor or such licensor’s licensor) or a member of the Company Group (or, to Rome’s Knowledge, the Company Group’s licensor or such licensor’s licensor) is the applicant of record with
respect thereto. To Rome’s Knowledge, all fees, Taxes, annuities and other payments associated with filing, prosecuting, issuing, recording, registering or maintaining any Registered Company Intellectual Property have been paid in full
in a timely manner to, and all documents and certificates related to such items have been filed with, the proper Governmental Authority. All current and former officers (or equivalents) and employees of the Rome Group who have conceived
of or reduced to practice any Intellectual Property for or on behalf of any member of the Company Group (or otherwise relating to the Program Business) have executed and delivered to the Rome Group an agreement (containing no exceptions
or exclusions from the scope of its coverage) regarding the protection of proprietary information and providing for the assignment to a member of the Company Group of any Intellectual Property made in the course of services performed by
such officer (or equivalent) or employee for the Rome Group by such individuals, the current form of which has been made available to the Buyer. All current and former consultants and independent contractors of the Rome Group who have
conceived of or reduced to practice any Intellectual Property relating to the Program Business for or on behalf of the Rome Group have executed and delivered to the Rome Group an agreement in substantially the form provided to the Buyer
(containing no exceptions or exclusions from the scope of its coverage) regarding the protection of proprietary information and the assignment to a member of the Company Group of any Intellectual Property made by such consultant or
independent contractor in the course of services performed for the Rome Group by such individuals relating to the Program Business. To Rome’s Knowledge, no current or former officer (or equivalent), employee, consultant or independent
contractor of the Rome Group is in violation of any term of any such proprietary information protection agreement or assignment agreement. The Company Group has complied in all material respects with all applicable procedures (y)
mandated by applicable Law relating to assignments by employees or equivalents thereof with respect to Intellectual Property owned or purported to be owned by the Company Group or (z) that are reasonably necessary to effectuate the
transfer of all right, title and interest in and to Intellectual Property owned or purported to be owned by any member of the Company Group to such member of the Company Group.
|
| (d) |
With respect to each Patent included in the Registered Company Intellectual Property, (i) each member of the Company Group and, to Rome’s Knowledge, any licensor to any
member of the Company Group with respect to any such Patent, has complied in all material respects with all applicable Laws in connection with the filing and prosecution of such Patent, including the duty of candor to the U.S. Patent
and Trademark Office and (ii) all listed inventors of such Patent (A) to Rome’s Knowledge, are the sole inventors of such Patent and (B) have irrevocably assigned all right, title and interest in and to such inventions and Patent to a
member of the Company Group (including through Third Parties, if applicable) (or, if such Patent is licensed to any member of the Company Group, to the licensor) pursuant to a valid and enforceable assignment agreement recorded with the
applicable Governmental Authority.
|
| (e) |
To Rome’s Knowledge, none of the trade secrets or other material confidential or proprietary information of any member of the Company Group have been disclosed to any
Person unless such disclosure was made pursuant to a commercially reasonable written agreement requiring such Person to maintain the confidentiality of such information. To Rome’s Knowledge, there has not been any breach by any such
Person of any such agreement. The Company Group has taken commercially reasonable measures at least commensurate with industry standards to maintain the confidentiality of all Company Intellectual Property, the value of which to the
Company Group is contingent upon maintaining the confidentiality thereof, including any such trade secrets and other material confidential or other proprietary information.
|
| (f) |
Except for any fees payable to a Governmental Authority to issue, register or maintain any
of the Registered Company Intellectual Property and any payments required pursuant to a Contract listed in Section 4.6(a)(xvi) of the Company Disclosure Schedule, no payment of any kind is required to be made to any Person
(including directors, officers, employees, consultants, contractors and agents of any member of the Rome Group) for the ownership or use of, or a covenant not to sue or immunity from suit under, any Company Intellectual Property. To
Rome’s Knowledge, no funding, facilities or personnel of any educational institution or Governmental Authority were used, directly or indirectly, to develop or create, in whole or in part, any Company Intellectual Property, any
Program Compound or any Program Product.
|
| (g) |
All Intellectual Property that is used or held for use by any member of the Company Group in
connection with any Program Compound or Program Product or any Development, Manufacture or Commercialization thereof (including, for the avoidance of doubt, all such Intellectual Property licensed to Telavant under the Paris License
Agreement) is included in the Company Intellectual Property; provided that the foregoing shall not constitute a representation or warranty regarding the infringement, misappropriation or other violation of any Intellectual
Property of any Person, which is addressed exclusively in the first two sentences of Section 4.16(b).
|
| (h) |
The Company Group’s right, title or interest in, to or under any Company Intellectual Property as of immediately prior to the Closing will not be altered, encumbered,
impaired or extinguished as a result of the consummation of the transactions contemplated by this Agreement at the Closing.
|
| (i) |
No member of the Rome Group (other than the Company Group) or any of their respective Affiliates owns, licenses or otherwise has any right, title or interest (including any
option or right to license) in, to or under any Company Intellectual Property, including any Intellectual Property, that is: (i) related to any Program Compound or Program Product or any Development, Manufacturing or Commercialization
thereof, or (ii) otherwise necessary for any Development, Manufacture or Commercialization thereof. No member of the Rome Group or any of their respective Affiliates has transferred to any Third Party or other member of the Rome Group
(other than the Company Group) ownership of any Intellectual Property that is: (x) related to any Program Compound or Program Product or any Development, Manufacturing or Commercialization thereof or (y) otherwise necessary for any
Development, Manufacture or Commercialization thereof. No member of the Rome Group or any of their respective Affiliates has, and, to Rome’s Knowledge, Paris has not, granted to any Person any license or other right with respect to any
Company Intellectual Property related to a Program Compound or Program Product except under any Permitted License with respect thereto, the Paris License Agreement or the Trademark Assignment Agreement.
|
| (a) |
No member of the Rome Group has received any written communications from any Regulatory Authority, including regulatory or warning letters, FDA Form 483 observations, notices of adverse findings, Section
305 notices and similar letters or notices, alleging violations of applicable Laws (including applicable Healthcare Laws), in each case relating to any Program Product or Program Compound. The Rome Group is neither subject to, nor
has received written notice of, any criminal, injunctive, seizure or civil penalty actions begun or, to Rome’s Knowledge, threatened by any Regulatory Authority against the Rome Group, in each case relating to any Program Product or
Program Compound.
|
| (b) |
There are no (and the Rome Group with respect to the Program Business has not been notified by a Company Partner of any) pending, or to Rome’s Knowledge, threatened regulatory actions against any
member of the Rome Group with respect to the Program Business or, to Rome’s Knowledge, any Person that Manufactures or Develops any Program Compound or Program Product pursuant to a Development, contract research, Manufacturing,
supply or other collaboration arrangement with any member of the Rome Group with respect to the Program Business (each, a “Company Partner”) by any Regulatory Authority (i) indicating that any of the Regulatory Filings are
not in good standing with the relevant Regulatory Authority or (ii) alleging material non-compliance with any applicable Laws. The Rome Group has not, and, to Rome’s Knowledge, no Company Partner has, committed any material
violation of the rules and regulations of any Regulatory Authority which has not been cured by the applicable member of the Rome Group or, to Rome’s Knowledge, any such Company Partner, or waived by the relevant Regulatory
Authority, in each case relating to a Program Compound, Program Product or the Program Business.
|
| (c) |
All Program Compounds and Program Products are being and have been Developed, Manufactured, distributed, used, processed, packaged, labeled, stored and tested by, or, to Rome’s Knowledge, on behalf of, the
Rome Group or the Company Group, in compliance in all material respects with all applicable requirements under all applicable Laws, including applicable Healthcare Laws. All preclinical studies and Clinical Trials conducted by, or,
to Rome’s Knowledge, on behalf of, the Rome Group with respect to the Program Products and Program Compounds are being and have been conducted in compliance in all material respects with the required experimental protocols,
procedures and controls, GLP, GCP and GMP, as and to the extent applicable, and all applicable Laws (including applicable Healthcare Laws), and all applicable written instructions from institutional review boards and ethics
committees. There exist no facts or circumstances that, to Rome’s Knowledge, would warrant the issuance by the FDA or any other Regulatory Authority of a clinical hold on the investigation of any Program Compound or Program Product.
None of the FDA, EMA or any other Regulatory Authority has, with respect to any Program Compound, Program Product or the Program Business, sent any written notices or other correspondence to the Rome Group with respect to any
ongoing preclinical studies and Clinical Trials requiring the termination, suspension or material modification of such preclinical studies and Clinical Trials.
|
| (d) |
Neither the Company Group nor, to Rome’s Knowledge, any of their personnel, agents or subcontractors with respect to the Program Business has been convicted of any crime or engaged in any conduct which
would reasonably be expected to result in debarment or disqualification by any Regulatory Authority, and there are no Actions pending or, to Rome’s Knowledge, threatened in writing that would reasonably be expected to result in any
such criminal liability or debarment or disqualification by any Regulatory Authority.
|
| (e) |
The Rome Group has not imported, exported, marketed, sold, offered for sale or distributed for sale any Program Compounds or Program Products. Rome has made available to the Buyer complete and accurate
copies of all documents provided to Rome by Paris in connection with the execution of the Paris Transaction Agreements as set forth in Section 4.4 of Schedule 4 of the Paris License Agreement and all material data and information
with respect to the Program Compounds, Program Products and Program Business, including any material correspondence and minutes of meetings with Regulatory Authorities with respect thereto, received or generated following the
execution of the Paris Transaction Agreements and prior to the execution of this Agreement (and will furnish to Buyer any such documents, data or information received or generated following the execution of this Agreement). To
Rome’s Knowledge, Paris has complied in all material respects with all of its obligations under Schedule 4 of the Paris License Agreement. All reports, applications, notifications, submissions, registrations, information, claims,
filings, reports and statistics and other data (i) required by the FDA, EMA or any other Regulatory Authority to be maintained by or on behalf of the Rome Group in connection with, or (ii) that have otherwise been utilized by the
Rome Group as the basis for, or submitted in connection with, any regulatory or marketing approvals or permits from the FDA, EMA or any other Regulatory Authority, in each case relating to the Program Products and Program Compounds,
have been so maintained and were true, complete and correct in all material respects as of the date of submission (or were corrected in or supplemented by a subsequent filing or submission so as to be true, complete and correct in
all material respects as of the date of such correction or supplementation), as applicable, and any necessary or required updates, changes, corrections or modification to such applications, submissions, information and data have
been submitted to the FDA, EMA or other Regulatory Authority.
|
| (f) |
The Rome Group has not received notice from any Company Partner of any material interruption of supply or Manufacturing capacity, shortage of raw materials, components or other Manufacturing problems that
would have a material effect on the subsequent Development (as such Development is contemplated as of the Effective Date) of the Program Products or Program Compounds.
|
| (g) |
Section 4.20(g) of the Company Disclosure Schedule sets forth a list, as of the Effective Date, of (i) all recalls, field notifications, investigator notices, safety alerts, IND safety reports
or other notices of action relating to an alleged lack of safety of any Program Compound or Program Product issued by any member of the Rome Group (“Safety Notices”), (ii) the dates such Safety Notices, if any, were
resolved or closed and (iii) any material complaints with respect to any Program Compound or Program Product that, to Rome’s Knowledge, are currently unresolved.
|
| (h) |
No member of the Company Group is a party to any corporate integrity agreement, monitoring agreement, consent decree, settlement order, deferred prosecution agreement or similar agreement with or imposed
by any Governmental Authority arising from violations or alleged violations of Healthcare Laws and concerning any Program Products or Program Compounds, and no such agreement is currently pending, or, to Rome’s Knowledge,
threatened.
|
| (i) |
No member of the Company Group intentionally (i) has made any materially untrue or fraudulent statement to any Regulatory Authority, (ii) has failed to disclose a material fact required to be disclosed to
a Regulatory Authority or (iii) has committed any act or failed to commit any act that establishes the basis for any Regulatory Authority to invoke a material violation of applicable Law, in each case with respect to a Program
Product, Program Compound or the Program Business.
|
| (a) |
The Rome Group has operated the Program Business in compliance in all material respects with all applicable Laws (including Healthcare Laws) and Contracts relating to Protected Health Information,
medical records and medical information privacy that regulate or limit the maintenance, use, disclosure or transmission of medical records, identifiable patient information or other Personal Data made available to or collected by
the Rome Group in connection with the operation of the Program Business as currently conducted (the “Healthcare Data Requirements”). The Rome Group has in all material respects implemented all confidentiality, security and
other protective measures required by the Healthcare Data Requirements and applicable to the Program Business or the Company Group.
|
| (b) |
The Rome Group is currently in compliance in all material respects and has at all times complied in all material respects with all Healthcare Data Requirements and Data Requirements with respect to the
operation of the Program Business, including:
|
| (i) |
requirements relating to the registration or notification of the access, collection, use, processing, storage, sharing, distribution, transfer, disclosure, security, destruction or disposal of Personal
Data under Healthcare Data Requirements or Data Requirements;
|
| (ii) |
requirements relating to requests from data subjects with respect to Personal Data held or controlled by the Rome Group under Healthcare Data Requirements or Data Requirements;
|
| (iii) |
obligations set out in the Healthcare Data Requirements or Data Requirements;
|
| (iv) |
requirements relating to the access, collection, use, processing, storage, sharing, distribution, transfer, disclosure, security, destruction or disposal of Personal Data by a data processor on the Rome
Group’s behalf under Healthcare Data Requirements or Data Requirements; and
|
| (v) |
obtaining necessary consents from, and providing adequate privacy notice to, data subjects with respect to its processing of Personal Data relating to the Program Business.
|
| (c) |
To Rome’s Knowledge, no material breach has occurred with respect to any unsecured Protected Health Information, as that term is defined in 45 C.F.R. §160.103, maintained by or for the Rome Group with
respect to the Program Business that is subject to the notification requirements of 45 C.F.R. Part 164, Subpart D or would require notification under any comparable Laws.
|
| (d) |
To the extent required by the Healthcare Data Requirements or Data Requirements, the Rome Group has in place agreements with Third Parties processing Personal Data on its behalf in respect of the
processing of data (if applicable) in connection with the Program Business which comply in all material respects with the Healthcare Data Requirements and Data Requirements.
|
| (e) |
All Protected Health Information (including any sensitive Personal Data) accessed, collected, used, processed or stored by the Rome Group (or a Third Party engaged thereby) in connection with the Program
Business or transferred to any Third Parties by the Rome Group in the operation of the Program Business has in all material respects been lawfully obtained, used, processed or transferred in accordance with (i) applicable Laws
(including Healthcare Data Requirements), (ii) the requirements of Contracts to which the Rome Group is a party and (iii) published privacy policies of the Rome Group relating to its processing of Protected Health Information in
connection with the Program Business that the Rome Group has communicated to Persons about whom such Personal Data relates.
|
| (f) |
No member of the Rome Group is party to any pending, and no member of the Rome Group has received any written notices of any threatened, Action by any Third Party, or any inquiries or investigations by any
Governmental Authority, or been the subject of any material claims or complaints to any regulatory or Governmental Authority, in each case in relation to its compliance with Healthcare Data Requirements or Data Requirements with
respect to its operation of the Program Business. Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company Group or the Program Business, taken as a whole, the completion of the
Acquisition shall not violate any Healthcare Data Requirements or Data Requirements.
|
| (g) |
Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company Group or the Program Business, taken as a whole, no Person has (with respect to the Program
Business):
|
| (i) |
alleged in writing to the Rome Group that the Rome Group has failed to comply with the provisions of any Healthcare Data Requirements or Data Requirements; or
|
| (ii) |
been awarded compensation by, or taken action against the Rome Group for breach of any Healthcare Data Requirements or Data Requirements, including with respect to the Rome Group’s use of Personal Data or
Protected Health Information.
|
| (a) |
None of the Sellers, the Company Group, nor, to Rome’s Knowledge, any of their respective directors (or equivalent), officers (or equivalent), employees or agents or other Persons acting on behalf of
or in the name of such Person with authority to do so (including its agents, distributors, sales intermediaries and/or channel partners) has, in connection with the operation of the Program Business: (i) offered or used any
corporate funds, directly or indirectly, for any unlawful contribution, gift, entertainment or other unlawful expense; (ii) offered or made a direct or indirect unlawful payment or conveyance of something of value to any U.S. or
non-U.S. government official, employee or political candidate or established or maintained any unlawful or unrecorded funds or (iii) offered, received, authorized, promised, agreed to or given any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment or gift of money or anything of value to or from any Third Party, including any U.S. or non-U.S. government official or employee of any Governmental Authority, in each case in
material violation of the U.S. Foreign Corrupt Practices Act of 1977, the UK Anti-Bribery Act of 2010 or any similar Laws relating to the prevention of bribery, corruption or money laundering, including those concerning unlawful
payments or gifts in any jurisdiction (collectively, “Anti-Bribery Laws”). The Company Group (and the Rome Group with respect to the Program Business) has instituted and maintains policies and procedures designed to
promote, and which are reasonably expected to continue to promote, compliance with Anti-Bribery Laws.
|
| (b) |
None of the Sellers, the Company Group, nor, to Rome’s Knowledge, any of their respective directors (or equivalent), officers (or equivalent) or agents or other Persons acting on behalf of or in the
name of such Person with authority to do so, has been or is currently (i) designated on any restricted party list or otherwise the subject or target of any sanctions or export-related restrictions administered by any Governmental
Authority of the (A) United States, including, but not limited to, the U.S. Office of Foreign Assets Control’s (“OFAC”) Specially Designated Nationals and Blocked Persons List, the U.S. Department of Commerce (“Commerce”)
Denied Persons List, the Commerce Entity List and the U.S. Department of State (“State Department”) Debarred List; (B) the United Nations; (C) the European Union; or (D) the United Kingdom (collectively, “Sanctions
Authorities”), (ii) in the aggregate, 50 percent or greater, directly or indirectly, owned or controlled, or otherwise acting on behalf of, any Person or Persons described in clause (i) (each, a “Sanctioned Person”),
(iii) organized or resident in a country or territory targeted by a comprehensive embargo administered by one or more Sanctions Authorities (which countries and territories, as of the date hereof, include Cuba, Iran, North Korea,
Syria, the Crimea region of Ukraine, the so-called Donetsk People’s Republic of Ukraine, and the so-called Luhansk People’s Republic of Ukraine) (“Sanctioned Country”), (iv) participating in any transaction, whether
directly or indirectly, for or on behalf of a Sanctioned Person, or any Sanctioned Country in material violation of economic sanctions Laws, (v) exporting (including deemed exportation), re-exporting (including deemed
re-exportation), or transferring, directly or indirectly, any good, software, technology or services in material violation of any applicable export, re-export, transfer or import control or economic or trade sanctions Laws,
including those administered by OFAC, Commerce or the State Department, (vi) participating in any export, re-export or transaction in material violation of applicable export, re-export, transfer or import control, anti-boycott, or
economic or trade sanctions Laws, including, without limitation, support for international terrorism and nuclear, chemical or biological weapons proliferation (collectively, “Trade Controls”) or (vii) otherwise in material
violation of any Trade Controls.
|
| (a) |
The Rome Group has (i) purchased a sufficient number of license seats, and scope of rights, with respect to all material third-party software used by the Company Group in connection with the Program
Business as currently conducted, and (ii) has complied in all material respects with the terms of the corresponding agreement. The Rome Group has taken commercially reasonable efforts (including maintaining business continuity and
disaster recovery policies) in accordance with normal industry practice to maintain and protect the integrity, security and operation of the material computer software and algorithms (including source code), programs, hardware,
networks, databases, systems, telecommunications equipment and websites used in connection with or relied upon by the Program Business (and all information transmitted thereby or stored therein) (the “Company Systems”).
There have been no material unauthorized intrusions, security breaches, ransomware attacks, successful phishing attempts or other attacks or material disruptions of the Company Systems that required or resulted in notification to
any Governmental Authority or other Third Parties under Data Protection Laws; and to Rome’s Knowledge, the Company Systems do not contain any malware, “Trojan horses,” viruses or other malicious code. The Company Group maintains
commercially reasonable security, disaster recovery and business continuity plans, procedures and/or facilities.
|
| (b) |
All Personal Data collected, used or maintained by the Rome Group in connection with the Program Business has been collected, maintained, used and transferred in compliance in all material respects with
applicable Data Requirements. All written, publicly-posted privacy policies of the Rome Group have been and are designed and administered materially in accordance with applicable Data Protection Laws. Except as would not reasonably
be expected to be, individually or in the aggregate, material to the Program Business, taken as a whole, no Person has claimed any compensation from, and no Governmental Authority has made any allegation against, the Rome Group, and
the Rome Group has not received any written notice from a Governmental Authority, related to the loss of or unauthorized disclosure or transfer of Personal Data or violation of any Data Requirement (in each case relating to the
Program Business).
|
| (a) |
The Buyer has all requisite corporate power and authority necessary, to authorize, execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby
in accordance with the terms of this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the
Buyer, and no other action on the part of the Buyer is necessary to authorize the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated by this Agreement. This Agreement has been
duly executed and delivered by the Buyer and, assuming due authorization, execution and delivery by the Sellers and the Company, constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms, subject to the Bankruptcy and Equity Exception. No vote or other approval of the equityholders of the Buyer is required in connection with the execution, delivery or performance of this Agreement or to consummate the
transactions contemplated by this Agreement in accordance with the terms hereof, whether by reason of applicable Law, the Constitutive Documents of the Buyer, the rules or requirements of any securities exchange, or otherwise.
|
| (b) |
No notices to, consents or approvals of, waivers, permits or authorizations from or filings or registrations with any Governmental Authority are required at or prior to the Closing by the Buyer in
connection with the execution, delivery or performance by the Buyer of this Agreement or to consummate the transactions contemplated hereby, except for (i) as required under the HSR Act and (ii) any such notice, consent, approval,
waiver, permit, authorization, filing or registration, the failure to make or obtain would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect. Neither the Buyer nor any of its
Affiliates is subject to any “prior approval” requirement or agreement with the FTC or DOJ that would be applicable to the transactions contemplated by this Agreement.
|
| (c) |
Subject to the making of the notices, filings and registrations and receipt of the consents, approvals, waivers, permits and authorizations referred to in Section 5.2(b) and the expiration of
related waiting periods, the execution, delivery and performance of this Agreement by the Buyer and the consummation of the transactions contemplated hereby does not and shall not (i) conflict with, result in a breach or violation
of, or a default under, any (A) applicable Law, (B) applicable Order, (C) applicable Governmental Authorization or (D) Contract to which the Buyer is a party or subject to or by which it or any of its assets or properties is
otherwise bound, except in each of the foregoing clauses (A) through (D), as would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect, or (ii) conflict with, or result in a breach
or violation of, or a default under, the Constitutive Documents of the Buyer.
|
| (a) |
conduct the Program Business in the Ordinary Course;
|
| (b) |
perform the Development activities set forth in the Development Plan in all material respects in accordance with such Development Plan;
|
| (c) |
preserve and maintain good working relationships with suppliers, vendors, partners, licensors, licensees, distributors, regulatory authorities and other Persons having a material business relationship with
the Company Group or the Program Business; and
|
| (d) |
keep available the services of its directors, officers and employees who are important to the operation of the Program Business as presently conducted.
|
| (a) |
modify, amend or change the Constitutive Documents of any member of the Company Group;
|
| (b) |
issue, grant, sell, Encumber, dispose of or transfer any Capital Stock or other Equity Securities in any member of the Company Group, other than grants of Company RSUs to Company Group Service
Providers not to exceed an aggregate number of shares of Common Stock underlying such Company RSUs of [***] of the Fully Diluted Share Number; provided that no grants shall be made on or after the date that is 10 days
prior to the Closing Date;
|
| (c) |
form a Subsidiary of any member of the Company Group;
|
| (d) |
split, combine, redeem, repurchase, reclassify or otherwise acquire any Equity Securities of any member of the Company Group, except for acquisitions, or deemed acquisitions, of Capital Stock or Company
RSUs effected in connection with (1) required tax withholding in connection with the vesting or settlement of Company RSUs pursuant to the terms of the Company RSUs in effect as of the date of this Agreement, (2) forfeitures of
Company RSUs or (3) repurchases of Capital Stock held by employees that are subject to a repurchase right in favor of the Rome Group or the Company Group upon termination of employment;
|
| (e) |
declare, set aside or pay any non-cash dividend (or cash dividend if the record date therefor is prior to and the payment date therefor is following the Closing) on, or make any other distribution in kind
in respect of, any Capital Stock of the Company;
|
| (f) |
in the case of the Company Group, create, incur, guarantee or assume any indebtedness for borrowed money, or issue or sell, or amend, modify or change any term of, any debt securities or options, warrants,
calls or other rights to acquire any debt securities of any member of the Company Group or make or guarantee any loans, advances or capital contributions to, or investments in, any Person other than the Company Group;
|
| (g) |
sell, lease, sublease, license, abandon, mortgage, pledge or otherwise encumber or subject to any Encumbrance (other than a Permitted Encumbrance, including a Permitted License), or otherwise dispose of
any material tangible property or material tangible assets other than the sale of inventory or obsolete equipment in the Ordinary Course;
|
| (h) |
(i) sell, assign, license, grant any immunity under, transfer, abandon, waive rights with respect to, permit to expire or lapse, convey, lease or otherwise dispose of or subject to any Encumbrance (other
than a Permitted Encumbrance, including a Permitted License), any Company Intellectual Property, except for the expiration of such Intellectual Property at the end of the applicable maximum statutory term or (ii) disclose any trade
secrets or other confidential information of any member of the Company Group to any Person other than pursuant to a written confidentiality and non-disclosure agreement entered into in the Ordinary Course;
|
| (i) |
[reserved]
|
| (j) |
with respect to any member of the Company Group, acquire or agree to acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of, or by purchasing all
or a substantial portion of the Equity Securities of, or by any other manner, any business or any other Person or any division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company Group
or the Program Business, other than in the Ordinary Course or to the extent consistent with the Development Plan; provided that this clause (j) shall not apply to capital expenditures, which are governed by Section
6.2(t);
|
| (k) |
adopt a plan of merger, consolidation, restructuring, recapitalization or other reorganization with respect to any member of the Company Group;
|
| (l) |
commence, participate or agree to commence or participate in any bankruptcy, voluntary liquidation, dissolution, winding up, examinership, insolvency or similar proceeding with respect to any member of the
Company Group;
|
| (m) |
enter into any Contract to which a member of the Company Group is a party (or any substantially related Contracts, taken together) that, if entered into prior to the date hereof, would be a Material
Contract, or amend in a material respect, renew, voluntarily terminate or waive any material rights under any Material Contract, in each case, other than (x) in the Ordinary Course (provided that in no event shall the
Company be permitted to enter into any Contract that would be a Material Contract under Sections 4.6(a)(ii), 4.6(a)(iii)(A), 4.6(a)(iii)(B), 4.6(a)(iv), 4.6(a)(vii), 4.6(a)(xii), 4.6(a)(xiii), 4.6(a)(xv)
or 4.6(a)(xvii) or amend in a material respect the provisions of any such Material Contract referenced in such sections) or (y) to the extent expressly contemplated by the Development Plan (excluding, for the avoidance of
doubt, any Contract of the type referred to in the proviso to the immediately preceding clause (x)); provided that this clause (m) (other than the first proviso hereof) shall not restrict any action that is specifically
addressed by and permitted by any other clause of this Section 6.2;
|
| (n) |
[reserved]
|
| (o) |
except (i) as required pursuant to the terms of any Benefit Plan in effect as of the date of this Agreement or as permitted to be established or amended by the terms of this Agreement, (ii) for any action
(x) for which the Rome Group (other than the Company Group) shall be solely liable and (y) which will not result in any additional Liability of Buyer or the Company Group with respect to Section 280G or Section 4999 of the Code
(including in connection with any obligation to provide any gross-up or reimbursement of any Tax or related interest or penalties or the disallowance of a federal income tax deduction) or (iii) entering into any agreement with
respect to granting of rights to the Approved 280G Gross-up Payments subject to Buyer’s prior review and comment (which shall not be unreasonably withheld, conditioned or delayed), (A) terminate, materially modify, establish or
enter into any Benefit Plan or any arrangement that would be a Benefit Plan if in effect on the date hereof (except as required by applicable Law), (B) increase the compensation or benefits provided to any current or former Company
Group Service Provider or (C) take any action to accelerate the time of payment, funding or vesting of any compensation or benefits under any Benefit Plan or otherwise, in each case with respect to Company Group Service Providers;
|
| (p) |
with respect to any member of the Company Group, (i) make any material changes in Tax accounting methods, principles, practices or policies, except for any changes required by applicable Law, (ii) make,
change or revoke any material Tax election or change any Tax accounting period, (iii) enter into any closing agreement relating to any material Tax, (iv) surrender, settle, compromise or otherwise abandon any right to claim a
material Tax refund, (v) consent to any waiver or extension of the statute of limitations applicable to any material Tax claim or assessment (other than waivers or extensions requested in the Ordinary Course by a Tax Authority) or
(vi) apply for or request any Tax ruling;
|
| (q) |
with respect to any member of the Company Group, adopt or change any of the accounting methods or practices (including any change in depreciation or amortization policies or rates or any change to
practices that would impact the methodology for recognizing revenue) used by the Company Group or the Program Business, in each case, unless required by GAAP or applicable Law or otherwise applicable to all of the members of the
Rome Group;
|
| (r) |
offer, propose to settle, settle or compromise any Action, or enter into any consent decree or settlement agreement with any Governmental Authority, in each case, other than (A) a settlement or release
that contemplates only the payment prior to the Closing Date of money without ongoing limits on the conduct or operations of any member of the Company Group (other than obligations of confidentiality and non-disparagement and other
obligations that are merely incidental to a settlement or compromise for the payment of money) or (B) settlements or compromises of any Action in the Ordinary Course or where the amount paid in settlement or compromise (in excess of
amounts covered by a third-party indemnity or insurance) does not exceed $1,000,000 individually or $2,000,000 in the aggregate (but not including any such settlement or compromise that would impose any ongoing limits on the conduct
or operations of any member of the Company Group (other than obligations of confidentiality and non-disparagement and other obligations that are merely incidental to a settlement or compromise for the payment of money));
|
| (s) |
with respect to any member of the Company Group, enter into a lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) (other than any such lease or sublease that is one
year or less in duration or includes payment obligations not in excess of $100,000 on an annual basis);
|
| (t) |
with respect to any member of the Company Group, make or agree to make any capital expenditures in excess of $5,000,000, in the aggregate, other than to the extent consistent with the Development
Plan or the Company’s budget for capital expenditures set forth in Section 6.2(t) of the Company Disclosure Schedule; provided that this clause (t) shall not apply to any acquisitions governed by Section
6.2(j);
|
| (u) |
with respect to any member of the Company Group, (i) modify, extend, terminate or enter into any Labor Agreement or (ii) recognize or certify any labor union, labor organization, works council or
group of employees as the bargaining representative for any Company Group Employees;
|
| (v) |
implement or announce any layoffs, furloughs, reductions in force, plant closings, reductions in compensation or other similar actions with respect to Company Group Employees that would trigger notice
obligations under the WARN Act;
|
| (w) |
with respect to any member of the Company Group, waive or release any noncompetition, nonsolicitation, nondisclosure or other restrictive covenant obligation of any current or former Company Group Service
Provider other than in the Ordinary Course;
|
| (x) |
transfer the employment of (i) a Company Group Employee from the Company Group to the Rome Group (other than the Company Group), or (ii) any employee of the Rome Group from the Rome Group to the Company
Group; or
|
| (y) |
authorize any of, or commit, resolve or agree, whether in writing or otherwise, to take any of, the actions prohibited in Sections 6.2(a) through 6.2(x).
|
| (a) |
The Parties acknowledge that the Buyer and Roivant Sciences, Inc. have previously executed a confidentiality agreement, dated as of January 18, 2023 (the “Confidentiality Agreement”), which
Confidentiality Agreement shall continue in full force and effect in accordance with its terms, except as expressly modified herein or as the Buyer and Rome may mutually amend, supplement or otherwise modify from time to time.
Effective upon the Closing, the Confidentiality Agreement shall terminate solely with respect to information relating to the Company Group or the Program Business (it being understood that any other information will continue to be
subject to the provisions of the Confidentiality Agreement in accordance with its terms).
|
| (b) |
For a period of five years from the Closing Date (except with respect to trade secrets, in which case the obligation shall survive for so long the trade secret is maintained as a trade secret under
applicable Law), Rome shall, and shall cause its Affiliates to, hold in confidence nonpublic information that is proprietary or competitively sensitive (“Sensitive Business Information”) to the extent relating to the
Program Business; provided that the foregoing restriction shall not apply to information (i) that becomes available on a non-confidential basis to Rome or any of its Affiliates from and after the Closing from a third-party
source that is not known by Rome or its applicable Affiliates after reasonable inquiry to be under any obligations of confidentiality to the Buyer or the Company Group with respect to such information, (ii) that is in the public
domain or enters into the public domain other than as a result of breach by Rome or any of its Affiliates of the terms of this Agreement, (iii) to the extent used by Rome or any of its Affiliates to comply with the terms of this
Agreement or any other Contract between Rome or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand, but for such purpose only, (iv) that is, following the Closing, independently
developed or derived by Rome or any of its Affiliates without use of such Sensitive Business Information or (v) that Rome or any of its Affiliates is required by Law or required or requested pursuant to legal or regulatory process
to disclose. In the event that Rome or any of its Affiliates is required by Law or required or requested pursuant to legal or regulatory process to disclose such Sensitive Business Information, Rome shall reasonably promptly
notify the Buyer in writing (unless not permitted by Law or such legal or regulatory process to so notify), and the extent of the required or requested disclosure, and will use commercially reasonable efforts to cooperate with the
Buyer, at the Buyer’s sole cost and expense, to preserve to the extent reasonably practicable the confidentiality of such information; provided that Rome and its Affiliates may only disclose such Sensitive Business
Information which, based on the advice of their respective legal counsel, is required by Law or such legal or regulatory process to be disclosed.
|
| (a) |
During the Pre-Closing Period, the Company and Rome shall afford to the Buyer’s Representatives reasonable access, upon reasonable advance notice, during normal business hours and in a manner that
does not materially disrupt or interfere with business operations, to all of the properties, books, Contracts, personnel and records of the Rome Group solely to the extent relating to the Company Group or the Program Business as
the Buyer shall reasonably request in connection with the Acquisition, and, during such period, Rome and the Company shall furnish promptly to the Buyer such information concerning the business, properties, assets and personnel of
the Company Group and the Program Business as the Buyer may reasonably request, solely for purposes of furthering the Acquisition, including for purposes of integration planning relating to the Acquisition.
|
| (b) |
Without limiting the generality of the foregoing, Rome covenants and agrees that, during the Pre-Closing Period, it shall keep the Buyer reasonably informed, with respect to the Program Business and
Program Products, as to the Rome Group’s regulatory strategy, material communications with Regulatory Authorities and submissions to Regulatory Authorities, including by providing copies of material information to the Buyer. In
order to keep the Buyer reasonably informed regarding its regulatory relationship with Regulatory Authorities for the Program Business and Program Products, Rome also agrees to cause the Rome Group to promptly provide the Buyer
with any and all material communications with Regulatory Authorities for the Program Business and Program Products with respect to its submissions and other non-immaterial regulatory issues such as INDs and Clinical Trials
(whether new or ongoing). Without limiting the generality of the foregoing, the Buyer shall have the right to, at its sole election, participate in all meetings of the Rome Group with the FDA or any other Regulatory Authority with
respect to the Program Business or Program Products (whether in-person or via video or teleconference) and all material preparatory, follow-up and debrief meetings or conferences (including by telephone with respect thereto).
Nothing contained in this Section 7.1(b) is intended to give the Buyer, directly or indirectly, the right to control or direct the regulatory strategy of the Program Business prior to the Closing Date.
|
| (c) |
Rome and the Company covenant and agree that, during the Pre-Closing Period, the Company shall (i) not amend, in any material respect, the Development Plan without the Buyer’s prior written consent
(not to be unreasonably withheld, conditioned or delayed), except that such consent shall not be required (but Buyer shall be offered a reasonable time, not to exceed five Business Days, to comment thereupon, and the Company shall
consider in good faith incorporating such comments) with respect to any such amendment that is mandated or recommended by a Regulatory Authority and (ii) keep the Buyer reasonably informed as to the Rome Group’s progress of the
material activities under the Development Plan, including material Regulatory Authority interactions and material correspondences and providing copies of final clinical data with respect to any Program Compound or Program Product
that first becomes available to the Rome Group during the Pre-Closing Period. Nothing contained in this Section 7.1(c) is intended to give the Buyer, directly or indirectly, the right to control or direct the Development
of the Program Compounds or Program Products prior to the Closing.
|
| (d) |
Notwithstanding anything in the foregoing, no member of the Rome Group shall be required to provide access to or disclose any such information under this Section 7.1 (i) to the extent such
access or disclosure would jeopardize or reasonably be expected to result in the loss of attorney-client privilege, attorney-work product protection or other legal privilege of the Rome Group or (ii) which is prohibited under
applicable Law or Order or the terms of any agreement to which the Rome Group is a party as of the Effective Date; provided that
Rome shall cause the Rome Group to cooperate in good faith to provide, to the extent feasible, substantially the information the Buyer requests in such a manner as not to waive any attorney-client or other legal privilege or
contravene any applicable Law.
|
| (e) |
Until the Closing, all information provided to the Buyer and its officers, employees, accountants, counsel and other Representatives shall be subject to the Confidentiality Agreement.
|
| (f) |
If Closing occurs prior to the occurrence of the meeting described on Section 7.1(f)(1) of the Company Disclosure Schedule (the “Rome FDA Meeting”), then Rome shall provide Buyer and the
Company with reasonable assistance with respect to the Rome FDA Meeting, including by making available to the Buyer the individuals listed on Section 7.1(f)(2) of the Company Disclosure Schedule (the “Continuing Employees”)
for the purpose of preparing for and attending the Rome FDA Meeting and handling any post-meeting follow-up. In furtherance thereof, and without limitation to Section 7.10(a), the Rome Group shall (i) from the date
of this Agreement through immediately prior to the Closing, use its commercially reasonable efforts to continue the employment of the Continuing Employees, and (ii) from immediately prior to the Closing through the date that is
five days following the Rome FDA Meeting and, at Buyer’s sole election provided by notice in writing to Rome during such five day period immediately following the Rome FDA Meeting, for a period of up to five weeks after the date
of the Rome FDA Meeting (such period, as applicable, the “Continuing Assistance Period”), use its commercially reasonable efforts to (A) continue the employment of the Continuing Employees who are employees of the Rome
Group (other than the Company Group) and (B) engage as consultants the Continuing Employees who are Company Group Employees.
|
| (a) |
Subject to the terms and conditions of this Agreement, including Section 7.2(b), each Party shall, and each shall cause its Affiliates to and Rome shall cause the Company Group to, use their
respective reasonable best efforts (unless, with respect to any action, another standard of performance is expressly provided for herein) to take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable, to the extent permitted by applicable Law, to achieve satisfaction of the conditions to the Acquisition set forth in Article VIII and to consummate the Acquisition (in each case, no later
than the End Date), including (x) preparing and filing as promptly as reasonably practicable with any Governmental Authority or other Third Party all documentation to effect all Filings (and thereafter make any other required or
appropriate submissions) as are necessary to consummate the Acquisition, including (in each case as promptly as reasonably practicable) (A) Rome and the Buyer each making an appropriate Filing of a notification and report form
pursuant to the HSR Act with the FTC and the Antitrust Division of the DOJ with respect to the Acquisition no later than ten (10) days after the date of this Agreement, (B) in relation to the Clearances set forth in Section
8.1(a) of the Company Disclosure Schedule, the Buyer preparing and filing a briefing paper with any Governmental Authority set forth in Section 8.1(a) of the Company Disclosure Schedule no later than ten (10)
Business Days after the date of this Agreement and (C) Rome and the Buyer each making any other Filing that is required under any Antitrust Law (other than the HSR Act) or foreign investment Law, (y) using reasonable best efforts
to obtain, and thereafter maintain, all Clearances required to be obtained from any Governmental Authority or other Third Party that are necessary to consummate the Acquisition, and complying with the terms and conditions of each
Clearance (including by using reasonable best efforts to supply any additional information that may be required or reasonably requested pursuant to the HSR Act or other applicable Antitrust Laws or foreign investment Laws), and
(z) using reasonable best efforts to cooperate, to the extent reasonable, with the other Parties in their efforts to comply with their obligations under this Agreement, including in seeking to obtain any required Clearances. Each
of the Buyer and Rome (but not, for clarity, Paris) shall contest, defend and appeal any Action, whether judicial or administrative, challenging this Agreement or the consummation of the Acquisition. For the avoidance of doubt,
except as expressly permitted in Section 7.2(a)(x)(B) above, no Party or its Affiliates shall be permitted, unless otherwise mutually agreed between Buyer and Rome, to submit a briefing paper to a Governmental Authority
(including any Governmental Authority set forth in Section 8.1(a) of the Company Disclosure Schedule); provided that nothing in this Section 7.2(a) shall restrict the right of the Buyer to communicate
(orally or in writing) with any Governmental Authority in response to prior communications or engagement from such Governmental Authority with Buyer, Rome or their respective Affiliates.
|
| (b) |
Notwithstanding the foregoing, or anything else in this Agreement, Buyer shall not be required to (A) divest, sell, license or otherwise dispose of, subject to a hold-separate order or other
restriction with respect to any asset, operation, division, business, product line or business relationship of the Buyer or its Affiliates or the Company Group, (B) terminate, amend or assign existing relationships or contractual
rights or obligations or (C) amend, assign or terminate existing licenses or other agreements or enter into new licenses or other agreements, in any such case to obtain the expiration of any applicable waiting period or clearance
with respect to the Clearances (each, a “Burdensome Condition”).
|
| (c) |
Subject to the Buyer’s overall control of strategy (including with respect to communications and timing matters related to interactions with the applicable Governmental Authority, but subject to the
express rights of Rome and the Company set forth in this Section 7.2 and the express timing limitations set forth in Section 7.2(a)(x)) with respect to the Parties’ efforts to obtain the Clearances, the Buyer and
the Company shall cooperate in good faith (including the Buyer reasonably consulting with and considering in good faith all comments and advice of Rome and its counsel), to jointly develop, devise and implement the strategy for
obtaining any necessary approval of, for responding to any request from, inquiry or investigation by (including with respect to the timing, nature and substance of all such responses), and shall jointly participate in all meetings
and communications (including any negotiations) with, any Governmental Authority that has authority to enforce any Antitrust Law or foreign investment Law. The Buyer shall control the defense and settlement of any Action brought
by or before any Governmental Authority that has authority to enforce any Antitrust Law or foreign investment Law; provided that the Buyer shall reasonably consult with and consider in good faith all comments and advice of
Rome and its counsel in respect of such Action. None of the Buyer, Rome, the Company or any of their respective Affiliates shall (x) commit to or agree with any Governmental Authority to stay, toll or extend any applicable waiting
period under the HSR Act or any other Antitrust Laws or enter into a timing agreement with a Governmental Authority, or (y) withdraw and refile its initial filing pursuant to the HSR Act or any other Antitrust Law, as the case may
be, without the prior written consent of Rome and Buyer, not to be unreasonably withheld, conditioned or delayed.
|
| (d) |
To the extent permitted by applicable Law, each of the Parties shall, and shall cause its Affiliates to, as promptly as practicable, (i) upon request from a Governmental Authority, furnish to such
Governmental Authority any information or documentation concerning themselves, their Affiliates, directors, officers and stockholders, information or documentation concerning the Acquisition and information or documentation on
such other matters as may be requested and (ii) make available their respective directors, officers, employees, agents, investment bankers, financial advisors, legal advisors, accountants, brokers, finders, consultants or other
representatives (“Representatives”) to, upon reasonable request, any Governmental Authority, in the case of each of clause (i) and (ii), in connection with (A) the preparation of any Filing made by or on their behalf to any
Governmental Authority in connection with the Acquisition or (B) any Governmental Authority investigation, review or approval process.
|
| (e) |
Subject to Section 7.2(b), applicable Laws relating to the sharing of information and the terms and conditions of the Confidentiality Agreement, and subject to the proviso at the end of this
Section 7.2(e), each of Parties shall, and each shall cause its Affiliates to, and Rome shall cause the Company Group to (i) (A) as far in advance as practicable, notify the other Party of, and provide the other Party with
an opportunity to consult with respect to, any Filing or material or substantive communication or inquiry it or any of its Affiliates or the Company Group intends to make with any Governmental Authority relating to the matters
that are the subject of this Agreement, (B) prior to submitting any such Filing or making any such communication or inquiry, the submitting or making Party shall provide the other Party and its respective counsel a reasonable
opportunity to review, and shall consider in good faith the comments of the other Party and such Party’s Representatives in connection with any such Filing, communication or inquiry, and (C) promptly following the submission of
such Filing or making of such communication or inquiry, provide the other Party with a copy of any such Filing or, if in written form, a summary of any communication or inquiry, (ii) as promptly as practicable following receipt,
furnish the other Party with a copy of any Filing or, if in written form, material or substantive communication or inquiry, it or any of its Affiliates or the Company Group receives from any Governmental Authority relating to
matters that are the subject of this Agreement and (iii) coordinate and reasonably cooperate with the other two Parties in exchanging such information and provide such other assistance as the other two Parties may reasonably
request in connection with this Section 7.2; provided that the Buyer, Paris and Rome may limit provision of such information to outside counsel to each of the other two Parties and may redact information that is
covered by the attorney-client privilege or relates to the valuation of the Acquisition. Subject to Section 7.2(b), none of the Parties or their respective Affiliates or Representatives shall agree to participate in any
material or substantive meeting or conference (including by telephone) with any Governmental Authority, or any member of the staff of any Governmental Authority, in respect of any Filing, Action (including the settlement of any
investigation) or other inquiry regarding the Acquisition unless it consults with Rome and the Buyer in advance and, to the extent permitted by such Governmental Authority, allows (i) in the case of a meeting or conference
involving Rome or the Company or their respective Representatives, the Buyer to participate and (ii) in the case of a meeting or conference involving the Buyer or its Representatives, Rome to participate.
|
| (f) |
Except as set forth in Section 7.2(f) of the Company Disclosure Schedule, the Buyer shall not (and shall cause its Affiliates not to) acquire or agree to acquire (by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner), any Person or portion thereof, if the entering into an agreement relating to, or the consummation of, such acquisition, merger or
consolidation would reasonably be expected to prevent or materially delay the consummation of the Acquisition on or prior to the End Date.
|
| (g) |
Each Party agrees to cooperate and Rome shall use commercially reasonable efforts in obtaining any consents and approvals of Third Parties that may be required in connection with the transactions
contemplated by this Agreement pursuant to the Material Contracts set forth on Section 4.6(a) of the Company Disclosure Schedule. Notwithstanding anything to the contrary in this Agreement, nothing herein shall obligate or
be construed to obligate any member of the Company Group to make, or to cause to be made, any payment to any Third Party in order to obtain the consent or approval of such Third Party under any contract or otherwise.
Notwithstanding anything to the contrary in this Agreement, Buyer agrees that none of the Sellers or any of their respective Affiliates shall have any liability whatsoever to Buyer arising out of or relating to the failure to
obtain any such consent and no representation, warranty or covenant herein shall be breached or deemed breached, no condition shall be deemed not satisfied and no termination right shall be deemed triggered as a result of such
failure.
|
| (h) |
In the event of any Willful Breach by a controlling Affiliate of the Buyer (solely for these purposes, as though such Affiliate were a party to this Agreement) of any provision of this Section
7.2 applicable to the Buyer’s Affiliates, such Willful Breach shall be deemed to be a Willful Breach of the Buyer for all purposes of this Agreement.
|
| (a) |
Subject to Section 6.3, (i) Rome and the Company shall reasonably consult with the Buyer, and the Buyer shall reasonably consult with Rome, before issuing any press release or otherwise
making any public statement or making any other public disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the transactions contemplated hereby, and (ii) no Party or its Affiliates shall
issue any such press release or make any such public statement or disclosure without the prior written approval of the Buyer (in the case of any other Party) or Rome (in the case of any other Party), except as permitted by Sections
7.4(b); provided, however, that the Parties may make public statements or disclosures that are not inconsistent with (or more expansive than) previous press releases, public disclosures or public statements
made by the Parties in compliance with this Section 7.4.
|
| (b) |
Each Party may disclose such information as may be required by applicable Law or Order, including those incident to the listing of securities on a stock exchange or governing disclosure of publicly
traded companies in the United States, without the consent of the other Parties; provided, further, that the Party disclosing such information shall (i) only disclose such information as is required by such
applicable Law or Order; and (ii) provide reasonable advance notice to the extent practicable to the Buyer (in the case of Rome, Paris and the Company) or Rome (in the case of the Buyer) of the intended disclosure and the content
of that disclosure and shall permit the Buyer (in the case of Rome, Paris and the Company) or Rome (in the case of the Buyer) the opportunity to comment on any such disclosure.
|
| (a) |
The Buyer and Rome shall provide each other with such reasonable cooperation and assistance as may be reasonably requested in writing by either of them in connection with the preparation of any Tax
Return, any audit or other examination by any Tax Authority, or any judicial or administrative proceedings relating to liability for Taxes (“Tax Contests”) of or relating to any member of the Company Group, provided
that the Buyer and the Company shall in no event be required under this Section 7.7(a) to provide any information with respect to the Company Group or to cooperate hereunder with respect to Taxes, for any Tax Period, or
portion of a Tax Period, beginning after the Closing Date except to the extent includable in the Tax Package; and provided that, the Buyer shall not be required under this Section 7.7(a) to provide any information
of its operations or those of its Affiliates (other than for the Company Group as provided in this Section 7.7(a)). The Buyer shall cause the members of the Company Group to execute such Tax Returns, powers of attorney or
both as Rome may reasonably request in connection with filing any Tax Return for a Pre-Closing Tax Period or Straddle Period that includes Rome or any of its Affiliates or Tax Contest with respect to Rome or any of its Affiliates,
in each case other than Tax Returns or Tax Contests that relate solely to the Company Group. Within a reasonable period of time following the Closing Date, the Buyer shall prepare and provide, or cause to be prepared and provided,
to Rome a Tax Package that includes all members of the Company Group whose Tax Period ended on the Closing Date (or otherwise as a result of the Closing) for any combined, consolidated, affiliated, unitary or similar Tax Returns.
Rome will provide the Buyer with information reasonably requested by Buyer (i) in connection with the preparation or provision of the Tax Package and (ii) pertaining to the utilization of any Tax assets of the Company Group by any
member of a Company/Rome Tax Group during the Pre-Closing Tax Period or Straddle Period. Notwithstanding anything in this Agreement to the contrary, neither the Buyer nor any of its Affiliates on the one hand or Rome or any of
its Affiliates on the other hand, shall be required to provide to any Person any right to access or to review any Tax Return or Tax work papers of the Buyer or any of its Affiliates or Rome or any of its Affiliates, as applicable
(including any consolidated, combined, affiliated or unitary Tax Return that includes the Buyer or any of its Affiliates or Rome or any of its Affiliates, as applicable, and any pro forma Tax Return used to create any such
consolidated, combined, affiliated or unitary Tax Return), in each case other than information (i) necessary to comply with the preceding sentence (which may be provided on a pro forma basis) and (ii) solely related to the Company
Group.
|
| (b) |
For purposes of this Agreement, any Taxes of the Company Group with respect to any Straddle Period will be apportioned between the portion of such period up to and including the Closing Date (such
portion, the Pre-Closing Tax Period of a Straddle Period) and the portion of such Straddle Period that begins after the Closing Date where the Pre-Closing Tax Period amount of a Straddle Period will be (i) in the case of any real
or personal property or similar periodic Taxes, the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the Pre-Closing Tax Period of a Straddle Period and the
denominator of which is the number of days in such Straddle Period and (ii) in the case of any other Tax, the amount which would be payable if the relevant taxable period ended as of the close of business on the Closing Date. For
purposes of this allocation, any exemption, deduction, credit or other item for a Straddle Period will be allocated in the same manner as described in the previous sentence. For the avoidance of doubt, nothing in this Section
7.7(b) shall affect the provisions of Section 7.10.
|
| (c) |
Notwithstanding anything to the contrary in this Agreement, for any state or local consolidated, combined, unitary or similar group that includes or has included any member of the Company Group with
any member of the Rome Group (a “Company/Rome Group,” and such taxes of a Combined Company/Rome Group, “Combined Company/Rome Group Taxes”), (i) such member(s) of the Company Group shall be allocated, and shall be
responsible for, the portion of such Combined Company/Rome Group Taxes that are properly attributable to such Company Group member(s), and (ii) such member(s) of the Rome Group shall be allocated, and shall be responsible for, the
portion of such Combined Company/Rome Group Taxes such that are properly attributable to such Rome Group member(s). The Parties agree that to the extent Buyer or its Affiliates (including after the Closing, the Company Group) on
the one hand, or Rome or its Affiliates, on the other hand, has an actual cash Tax liability for any Combined Company/Rome Group Taxes that are attributable to Rome or its Affiliates (other than the Company Group) or Buyer or its
Affiliates (including, after the Closing, the Company Group), as applicable, Rome or Buyer, as applicable, shall reimburse the paying Party (or cause such paying Party to be reimbursed) for such Combined Company/Rome Group Taxes
upon reasonable written request therefor; provided, that if such request is made within ten (10) Business Days prior to the due date (including extensions) for such Taxes, such payment shall be made in all cases at least
three (3) Business Days prior to such due date.
|
| (d) |
Buyer shall prepare all Pre-Closing Tax Period and Straddle Period Tax Returns with respect to a Company/Rome Group that are due after the Closing where the entity legally obligated to file such Tax
Return is Buyer or any of its Affiliates (including the Company Group) (each a “Buyer Tax Return”); provided, that (A) such Buyer Tax Returns shall be prepared on a basis consistent with those prepared for prior
taxable periods, if any, unless a different treatment of any item is required by applicable Law, (B) Buyer (1) shall provide a complete copy of such Buyer Tax Returns to Rome for its review and comment at least fifteen days prior
to the due date for filing of such Buyer Tax Returns (including extensions) and (2) shall not file any such Buyer Tax Returns without first obtaining the prior written consent of Rome (not to be unreasonably withheld, conditioned
or delayed); provided, that if Rome and Buyer have not agreed on a Buyer Tax Return by the due date of such Tax Return, then Buyer may file such Tax Return (as prepared by Buyer) when due and the Parties shall submit any
disputes for resolution in accordance with the principles of Section 2.5(d) (mutatis mutandis) and Buyer shall amend such Tax
Return as necessary to give effect to the final resolution of such dispute, and (C) Buyer shall timely file (or cause the Company Group to timely file) any such Buyer Tax Returns.
|
| (e) |
Rome shall prepare and file any Tax Returns with respect to a Company/Rome Group that are due after the Closing where the entity legally obligated to file such Tax Return is Rome or any of its
Affiliates (other than a member of the Company Group), including any state income Tax Return that is filed on a combined basis for or with respect to any Pre-Closing Tax Period, including any Straddle Period (each a “Rome Tax
Return”); provided, that (A) such Rome Tax Returns shall be prepared on a basis consistent with those prepared for prior taxable periods, if any, unless a different treatment of any item is required by applicable
Law, (B) Rome (1) shall provide a pro forma copy of such Rome Tax Returns reflecting only the items relating to the Company Group to Buyer for its review and comment at least fifteen days prior to the due date for filing of such
Rome Tax Returns (including extensions) and (2) shall not file such Rome Tax Return without first obtaining the prior written consent of Buyer (not to be unreasonably withheld, conditioned or delayed); provided, that if
Rome and Buyer have not agreed on a Rome Tax Return by the due date of such Tax Return, then Rome may file such Tax Return (as prepared by Rome) when due and the Parties shall submit any disputes for resolution in accordance with
the principles of Section 2.5(d) (mutatis mutandis) and Rome shall amend such Tax Return as necessary to give effect to the
final resolution of such dispute, and (C) Rome shall timely file (or cause to be timely filed) any such Rome Tax Returns. With respect to any Rome Tax Return, the Parties agree that Rome shall be entitled to claim on its combined
Tax Return any exemption, deduction, credit or other item that would be allocated to the Pre-Closing portion of a Straddle Period under Section 7.7(b), and Buyer shall be entitled to claim any losses, credits, or other
deductions that are attributable to the Company Group and are allocated to the portion of the Straddle Period that begins after the Closing Date.
|
| (f) |
In the case of any Tax Contest that relates to a Company/Rome Group or Combined Company/Rome Group Taxes, Rome shall, at its cost and expense, have exclusive right to control such Tax Contest; provided that, if the settlement or other resolution of such Tax Contest would reasonably be expected to increase the amount of Taxes payable or
borne by, or otherwise negatively affect the tax position of, the Buyer or its Affiliates, including the Company Group, then, to the extent related thereto, (i) the Buyer, at its sole cost and expense, shall have the right to
participate in such audit or Tax proceeding and receive copies of all material correspondence with respect thereto and (ii) Rome shall not settle, compromise or otherwise resolve such Tax Contest without the Buyer’s prior written
consent, not to be unreasonably withheld, conditioned or delayed.
|
| (g) |
Notwithstanding anything to the contrary herein, all transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges
(including any penalties and interest) incurred in connection with consummation of the transactions contemplated by this Agreement (“Transfer Taxes”) shall be borne equally by the Sellers, on the one hand, and the Buyer, on
the other hand. The Buyer and the Sellers shall cooperate in timely making all filings, returns, reports and forms as necessary or appropriate to comply with the provisions of all applicable Laws in connection with the payment of
such Transfer Taxes and shall cooperate in good faith to minimize the amount of any such Transfer Taxes payable in connection herewith.
|
| (h) |
Notwithstanding anything to the contrary herein, all Tax Sharing Agreements between any member of the Company Group, on the one hand, and any Person (other than any member of the Company Group), on the
other hand, shall be terminated prior to the Closing Date and, after the Closing, no member of the Company Group will be bound thereby or have any liability thereunder.
|
| (i) |
Survival. Notwithstanding anything to the contrary in this Agreement, the provisions of this Section 7.7 shall survive until sixty days after the
expiration of the statute of limitations with respect to the relevant Tax (taking into account any extension, mitigation or waiver thereof).
|
| (a) |
Effective as of the Closing, each Seller, on behalf of itself and each of its Affiliates, or any Person claiming by, through or for the benefit of any of them, and each of their respective successors
and assigns, hereby irrevocably, unconditionally and completely waives and releases and forever discharges Buyer and its Affiliates and each member of the Company Group and each of their respective heirs, executors,
administrators, successors and assigns (such released Persons, the “Transferred Releasees”), in each case from all claims arising solely in such Seller’s capacity as a stockholder of the Company whatsoever of every name and
nature, both in law and in equity, arising out of or related to events, circumstances or actions taken by the Transferred Releasees occurring or failing to occur, in each case, at or prior to the Closing, other than in each case,
(i) any rights of either Seller, its Affiliates and their respective Representatives under this Agreement or any other written agreement to be in effect between such Seller and the Company (or their respective Affiliates) after
the Closing, or any enforcement thereof, (ii) accounts payable set forth in Section 7.8 of the Company Disclosure Schedule, (iii) the rights of Sellers and their Affiliates under the terms of the Paris Transaction
Agreements that by their terms survive the Closing, (iv) the other arrangements, understandings or Contracts listed in Section 7.8 of the Company Disclosure Schedule or (v) Fraud. Each Seller shall not make, and each
Seller shall not permit any of its Affiliates to make, and each Seller covenants never to, and to cause its Affiliates not to, assert or voluntarily assist any Person in asserting any claim, or commence any Action asserting any
claim, including any claim for contribution or indemnification, against any of the Transferred Releasees with respect to any claims released pursuant to this Section 7.9(a).
|
| (b) |
Effective as of the Closing, the Buyer, on behalf of itself and each of its Affiliates (including the Company Group), or any Person claiming by, through or for the benefit of any of them, and each of
their respective successors and assigns, hereby irrevocably, unconditionally and completely waives and releases and forever discharges each Seller and its Affiliates and each of their respective heirs, executors, administrators,
successors and assigns (such released Persons, the “Selling Releasees”), in each case from all claims arising whatsoever of every name and nature, both in Law and in equity, arising out of or related to the Sellers’
ownership or operation of the Company Group or the Program Business at or prior to the Closing, other than in each case, (i) any rights of the Buyer, its Affiliates and their respective Representatives under this Agreement, the
Paris License Agreement or any other written agreement to be in effect between the Buyer and the Company (or their respective Affiliates) after the Closing, or any enforcement thereof, (ii) accounts payable set forth in Section
7.8 of the Company Disclosure Schedule, (iii) the other arrangements, understandings or Contracts listed in Section 7.8 of the Company Disclosure Schedule or (iv) Fraud. The Buyer shall not make, and the Buyer shall
not permit any of its Affiliates to make, and the Buyer covenants never to, and to cause its Affiliates not to, assert or voluntarily assist any Person in asserting any claim, or commence any Action asserting any claim, including
any claim for contribution or indemnification, against any of the Selling Releasees with respect to any claims released pursuant to this Section 7.9(b).
|
| (a) |
Immediately prior to, and contingent upon the Closing, the Company Group shall terminate (x) the employment of each Company Group Employee and (y) unless otherwise requested in writing by Buyer prior
to the Closing, each consulting agreement between a member of the Company Group and each Company Group Service Provider. The Company Group shall provide each Company Group Employee whose employment is terminated pursuant to this Section
7.10(a) (a “Terminated Employee”) and who executes and does not revoke a release of claims prepared by Rome, which release shall cover all claims against the Sellers, the Company Group and the Buyer and their
respective Affiliates (each, a “Release”), in a form agreed to by each of the foregoing, with severance benefits equal to a cash amount equal to the sum of (i) the greater of (A) the amount of cash severance payments such
Terminated Employee is entitled to under any Company Benefit Plan (the amount of cash severance described in this clause (A), the “Contractual Cash Severance”) and (B) three months of such Terminated Employee’s base salary
payable by the Company Group (which cash amount shall be determined (x) with respect to each Terminated Employee who was a Company Group Employee as of the Effective Date (each such Terminated Employee, a “Current Employee”)
based on such Current Employee’s hourly wage or base salary (as applicable) payable by the Company Group in effect as of the Effective Date and (y) with respect to each Terminated Employee who is not a Current Employee (each such
Terminated Employee, a “New Hire”) based on such New Hire’s initial base salary payable by the Company Group) (the amount of cash severance described in this clause (B), the “Section 7.10(a) Cash Severance”) and (ii)
an amount, determined on a post-tax basis, equal to the cost to such Terminated Employee for continued coverage for such Terminated Employee (and such Terminated Employee’s covered dependents, if applicable) under the Company’s
group health plans under Section 4980B of the Code (including the portion of the premium that the Company subsidized for active employees and a 2% administrative fee) for three months at the same levels and costs as in effect on
the date of termination of employment (the sum of the amounts in (i) and (ii), the “Severance Obligations”), payable in accordance with Section 7.10(b).
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| (b) |
The Buyer shall cause the Company Group to pay the Severance Obligations, the Accrued Bonus Amounts and the Approved 280G Gross-up Payments to the respective Terminated Employees and other Company Group
Service Providers, in each case subject to the applicable Terminated Employee’s or Company Group Service Provider’s execution and non-revocation of a Release, with each such payment to be made in a lump sum to the Terminated
Employee or Company Group Service Provider entitled to such payment on the first payroll date immediately following the date that such Terminated Employee or Company Group Service Provider’s Release becomes effective and
irrevocable. No later than ten days prior to the Closing, Rome shall provide to Buyer (or its counsel) (i) a true and complete schedule that sets forth each of the Approved 280G Gross-up Payments for each applicable Company Group
Service Provider and the related 280G calculations prepared by KPMG LLP and (ii) a true and complete schedule of the Accrued Bonus Amount for each Company Group Employee.
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| (c) |
Rome shall assume or retain sponsorship of and be solely responsible for, and shall indemnify and hold the Buyer and its Affiliates harmless for, (i) all Liabilities and obligations relating to or at any
time arising under or in connection with any Benefit Plan, and (ii) all Liabilities based upon, relating to or arising from the employment or services, or the termination of employment or service (actual or constructive), of any
Company Group Service Provider or any other current or former employee or service provider of Rome and its Affiliates, in each case whether arising prior to, on, or after the Closing Date (including, without limitation, any
severance or termination-related payments or benefits and including any such Liabilities arising under applicable Law) but other than any Liabilities that relate to any services performed for the Buyer and its Affiliates following
the Closing (other than any Liabilities for the services contemplated in Section 7.1(f) during the Continuing Assistance Period), in each case other than (x) any Liabilities included in Transaction Expenses, Indebtedness or in
Closing Net Working Capital, (y) any Approved 280G Gross-up Liabilities, Severance Obligations or Accrued Bonus Amounts (the bearing of Liability for each of which is otherwise addressed in this Agreement) and (z) the loss of any
deduction or other tax benefit as a result of the application of Section 280G of the Code.
|
| (d) |
Prior to the Closing, the Company Group shall take (or cause to be taken) all actions necessary to terminate or transfer to the Rome Group (other than the Company Group), effective as of immediately prior
to the Closing, (i) all Company Benefit Plans, (ii) any relationship of the Company Group with any professional employer organization and (iii) the participation in any Benefit Plan by any member of the Company Group.
|
| (e) |
Nothing in this Section 7.10 shall (i) be construed as an amendment or other modification of, or the establishment or termination of, any Company Benefit Plan, Benefit Plan or other benefit
or compensation plan, agreement or arrangement, (ii) obligate Buyer or any of its Affiliates to retain the employment of any particular employee of the Company or any of its Subsidiaries following the Closing, (iii) give any Third
Party any right to enforce the provisions of this Agreement or any remedies under this Agreement or (iv) limit the right of any member of the Rome Group or the Buyer and its Affiliates to amend, terminate or otherwise modify any
Company Benefit Plan, Benefit Plan or other benefit or compensation plan, agreement or arrangement.
|
| (a) |
The Buyer shall cause each member of the Company Group to honor and fulfill, in all respects, the obligations of the Company Group pursuant the Constitutive Documents of each member of the Company
Group, the Investor Rights Agreement and to any indemnification agreement between the Company Group, on the one hand, and any of its current or former directors, managers, officers or employees (each, an “Indemnified Party”
and collectively, the “Indemnified Parties”), on the one hand, for any act or omission by any such Indemnified Party occurring prior to the Closing. In addition, during the period commencing at the Closing and ending on the
sixth anniversary of the Closing, the Buyer shall cause each member of the Company Group to cause the Constitutive Documents of such member of the Company Group to contain provisions with respect to indemnification, exculpation
and the advancement of expenses that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions set forth in the Constitutive Documents of each such member of the Company Group as of the
Effective Date. During such six-year period, such provisions may not be repealed, amended or otherwise modified in any manner except as required by applicable Law. Without limiting the generality of the foregoing provisions of
this Section 7.11(a), following the Closing, the Buyer shall, and shall cause each member of the Company Group to, defend, indemnify and hold harmless, to the fullest extent permitted by applicable Law, each Indemnified
Party with respect to such member from and against any cost, fee and expense (including attorneys’ fees and investigation expenses), judgment, fine, loss, claim, damages, liability and amount paid in settlement or
compromise in connection with any Action to the extent that such Action arises, directly or indirectly, out of or pertains, directly or indirectly, to (i) any action or omission, or alleged action or
omission, in such Indemnified Party’s capacity as a director, manager, officer, employee or agent of such member of the Company Group to the extent that such action or omission, or alleged action or omission, occurred prior to or
at the Closing or (ii) any of the transactions contemplated by this Agreement.
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| (b) |
On the Closing Date, the Buyer shall pay for a non-cancelable run-off insurance policy of not less than the existing coverage amount, for a period of six years from and after the Closing Date to
provide insurance coverage for events, acts or omissions occurring on or prior to the Closing Date for all of the Indemnified Parties on or prior to the Closing Date (the “D&O Insurance”), which policy shall contain
terms and conditions no less favorable to the insured persons than the directors’, managers’ or officers’ liability coverage presently maintained by each member of the Company Group; provided however that if such insurance
policy is not available at an annual cost not greater than the amount set forth on Section 7.11(b) of the Company Disclosure Schedule, (the “Insurance Cap”), then Buyer shall maintain, or shall cause the Company
Group to maintain, as much comparable insurance as can reasonably be obtained in Buyer’s good faith judgment at a cost up to but not exceeding the Insurance Cap.
|
| (c) |
The covenants contained in Section 7.11(a) are intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Parties and their respective heirs and legal
representatives and shall not be deemed exclusive of any other right to which an Indemnified Party is entitled, whether pursuant to Law, Contract or otherwise. In the event that the Buyer, any member of the Company Group or any of
their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation, company or entity of such consolidation or merger or (ii) transfers or conveys
all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors, assigns or transferees of the Buyer or any member of the Company Group, as
the case may be, shall succeed to the obligations set forth in Section 7.11(a).
|
| (a) |
Antitrust Approvals. (i) The waiting period (and any extension thereof) applicable to the consummation of the Acquisition under the HSR Act shall have expired or been terminated, (ii) any
agreement with a Governmental Authority entered into in accordance with Section 7.2 not to consummate, or to delay consummation, of the Acquisition shall have expired or been terminated and (iii) the Clearances set forth
in Section 8.1(a) of the Company Disclosure Schedule shall have been obtained, as applicable, in the case of each of clauses (i), (ii) and (iii) without the imposition by the applicable Governmental Authority of a
Burdensome Condition (other than a Burdensome Condition that Buyer (in its sole discretion) has determined to accept).
|
| (b) |
Legal Restraints. No Governmental Authority of competent jurisdiction shall have (i) issued any Order (whether preliminary or permanent) or (ii) enacted any Law after the Effective Date, in
each case that (x) remains in effect (or would become effective upon the Closing) and makes illegal or otherwise prohibits consummation of the Acquisition or (y) imposes a Burdensome Condition that Buyer has not (in its sole
discretion) determined to accept (collectively, “Legal Restraints”).
|
| (a) |
Representations and Warranties.
|
| (i) |
The representations and warranties of the Sellers and the Company set forth in this Agreement, as applicable (other than any Fundamental Representations and the representations and warranties set
forth in Section 3.3 and 4.8(b)), shall be true and correct in all respects as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are specifically made as of
a particular date, in which case the accuracy of such representations and warranties shall be determined as of such date), and without regard to any materiality, Business Material Adverse Effect or Seller Material Adverse Effect
qualifications contained therein, except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse
Effect, in the case of the representations and warranties set forth in Article III, or a Business Material Adverse Effect, in the case of the representations and warranties set forth in Article IV;
|
| (ii) |
the representations and warranties set forth in Section 3.3 shall be true and correct in all respects (other than de minimis respects) as of the Closing Date as though made on and as of each such date;
|
| (iii) |
the representation and warranty set forth in Section 4.8(b) shall be true and correct in all respects as of the Closing Date as though made on and as of each such date; and
|
| (iv) |
the Fundamental Representations shall be true and correct (A) in all respects, in the case of any such Fundamental Representations that are qualified within the text thereof by any materiality, Business
Material Adverse Effect or Seller Material Adverse Effect qualifications or (B) in all material respects, in the case of any such Fundamental Representations that are not so qualified within the text thereof by any such materiality,
Business Material Adverse Effect or Seller Material Adverse Effect qualifications, in each case as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are specifically
made as of a particular date, in which case the accuracy of such representations and warranties shall be determined as of such date).
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| (b) |
Performance of Obligations of the Sellers and the Company. Each of the Sellers and the Company shall have performed or complied in all material respects with all agreements and covenants
required to be performed by or complied with by it under this Agreement on or prior to the Closing Date.
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| (c) |
Officer’s Certificate. The Buyer shall have received a certificate, dated as of the Closing Date and (i) signed on behalf of Rome by an officer of Rome, stating that the conditions specified
in Section 8.2(a) and Section 8.2(b) (insofar as such representations and warranties are made by, or the relevant covenants apply to, Rome) have been satisfied and (ii) signed on behalf of Paris by an officer of
Paris (or an agent of Paris), stating that the conditions specified in Section 8.2(a) and Section 8.2(b) (insofar as such representations and warranties are made with respect to, or the relevant covenants apply to,
Paris) have been satisfied.
|
| (d) |
Seller and Company Deliveries. The Buyer shall have received all of the instruments, documents and considerations described in Section 2.6.
|
| (a) |
Representations and Warranties. (i) The representations and warranties of the Buyer (other than the representations and warranties of the Buyer set forth in Sections 5.1, 5.2(a)
and 5.5) set forth in this Agreement shall be true and correct in all respects as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are specifically made as
of a particular date, in which case the accuracy of such representations and warranties shall be determined as of such date, and without regard to any materiality or Buyer Material Adverse Effect qualifications contained therein),
except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect, and (ii) the representations
and warranties of the Buyer set forth in Sections 5.1, 5.2(a) and 5.5 shall be true and correct (A) in all respects, in the case of any such representations and warranties that are qualified within the text
thereof by any materiality or Buyer Material Adverse Effect qualifications, or (B) in all material respects, in the case of any such representations and warranties that are not so qualified within the text thereof by any such
materiality or Buyer Material Adverse Effect qualifications, in each case as of the Closing Date as though made on and as of each such date (except to the extent such representations and warranties are specifically made as of a
particular date, in which case the accuracy of such representations and warranties shall be determined as of such date).
|
| (b) |
Performance of Obligations of the Buyer. The Buyer shall have performed or complied in all material respects with all agreements and covenants required to be performed by or complied with by
it under this Agreement on or prior to the Closing Date.
|
| (c) |
Officer’s Certificate. The Sellers shall have received a certificate, dated as of the Closing Date and signed on behalf of the Buyer by an executive officer of the Buyer, stating that the
conditions specified in Section 8.3(a) and Section 8.3(b) have been satisfied.
|
| (a) |
by mutual written consent of the Buyer and Rome;
|
| (b) |
by either the Buyer or Rome if the Acquisition shall not have been consummated by the date that is nine (9) months from the Effective Date (the “End Date”); provided, however,
that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any Party whose breach or failure to perform in any material respect any of its representations, warranties, covenants or
agreements under this Agreement has been the primary cause of, or resulted in, the failure of the Acquisition to have been consummated on or before such date;
|
| (c) |
by either the Buyer or Rome if any Legal Restraint permanently preventing or prohibiting consummation of the Acquisition shall be in effect and shall have become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(c) shall not be available to any Party whose breach or failure to perform in any material
respect any of its representations, warranties, covenants or agreements contained in this Agreement has been the primary cause of, or resulted in, such Legal Restraint;
|
| (d) |
by the Buyer, if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of any Seller or the Company set forth in this Agreement, which
breach or failure to perform (i) would cause the conditions set forth in Section 8.2(a) or 8.2(b) not to be satisfied and (ii) if curable, shall not have been cured upon the earlier of (A) 30 days following receipt
by Rome of written notice from the Buyer of such breach or failure to perform and (B) the End Date; provided that the Buyer shall not have the right to terminate this Agreement pursuant to this Section 9.1(d) if
the Buyer is then in breach in any material respect of any of its respective representations, warranties, covenants or agreements contained in this Agreement, and such breach would give rise to the failure of a condition set forth
in Section 8.3(a) or 8.3(b) measured as of such time; or
|
| (e) |
by Rome, if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Buyer set forth in this Agreement, which breach or failure to
perform (i) would cause the conditions set forth in Section 8.3(a) or 8.3(b) not to be satisfied and (ii) if curable, shall not have been cured upon the earlier of (A) 30 days following receipt by the Buyer of
written notice from Rome of such breach or failure to perform and (B) the End Date; provided that Rome shall not have the right to terminate this Agreement pursuant to this Section 9.1(e) if Rome, Paris or the
Company is then in breach in any material respect of any of its respective representations, warranties, covenants or agreements contained in this Agreement, and such breach would give rise to the failure of a condition set forth
in Section 8.2(a) or 8.2(b) measured as of such time.
|
| (a) |
In the event that the Buyer or Rome terminates this Agreement pursuant to Sections 9.1(b) (End Date) or Section 9.1(c) (Legal Restraints)
(with respect to Section 9.1(c) (Legal Restraints), solely to the extent the applicable Legal Restraint arises under any Antitrust Law) and, at the time of such termination, (i) the conditions set forth in at least one of Section
8.1(a) (Antitrust Approvals) or Section 8.1(b) (Legal Restraints) (with respect to Section 8.1(b) (Legal Restraints), solely to the extent the failure of such condition to
be satisfied arises as a result of a Legal Restraint under any Antitrust Law) shall not have been satisfied or validly waived and the failure of any such condition to be satisfied shall not have been the result of any breach of, or
failure to performs its obligations under, this Agreement by any Seller or the Company and (ii) all of the other conditions set forth in Article VIII have been satisfied or validly waived (except for those conditions that by
their terms must be satisfied at the Closing, provided that such conditions would have been so satisfied if the Closing would have occurred on the date of termination), then the Buyer shall, upon the written request of the Company (such request to be delivered to the Buyer no later than thirty (30) days following the date of termination of this Agreement) (a “Termination
Fee Request”), pay to the Sellers (in accordance with their respective Pro Rata Portions) an aggregate fee equal to $[ * * * ] (the “Termination Fee”), by wire transfer on the second
Business Day following delivery of such request. In the event the Company does not deliver a Termination Fee Request in accordance with the preceding sentence (a “Termination Fee Forfeiture”),
(A) each Seller shall be deemed to have irrevocably waived its right to receive its Pro Rata Portion of the Termination Fee and (B) the Company and the Sellers shall be entitled to pursue all other available remedies (subject to Section
9.2). In no event shall the Buyer be required to pay the Termination Fee on more than one occasion.
|
| (b) |
The Parties acknowledge and agree that the agreements contained in this Section 9.3 are an integral part of the Acquisition, and that, without these agreements, the Parties would not enter into this Agreement;
accordingly, if the Buyer fails promptly to pay the Termination Fee when required by Section 9.3(a), and, in order to obtain such payment, any Seller commences a suit that results in a
final, non-appealable judgment against the Buyer for such Seller’s Pro Rata Portion of the Termination Fee, the Buyer shall pay to the applicable Seller its costs and expenses (including attorneys’ fees and expenses) in connection
with such suit, in each case, together with interest on such Seller’s Pro Rata Portion of the Termination Fee, as applicable, from the date such payment was required to be made until the date of payment at the prime rate set forth
in The Wall Street Journal, in effect on the date such payment was required to be made.
|
| (c) |
In the event the Company delivers a Termination Fee Request and the Termination Fee is paid to the Sellers pursuant to Section 9.3(a), such payment of the Termination Fee shall
constitute liquidated damages and be the sole and exclusive monetary remedy of the Sellers and the Company against the Buyer for all losses, damages, costs or
expenses in respect of this Agreement (or the termination thereof) or the Acquisition (or the failure of the Acquisition to occur for any reason or for no reason) or any breach of any covenant or agreement or otherwise in
respect of this Agreement, and upon payment of the Termination Fee, the Buyer shall not have any further monetary liability or obligation relating to or arising out of this Agreement or the
Acquisition, and none of the Sellers or the Company shall seek to recover any other monetary damages; provided, that nothing in this Section 9.3(c) shall be deemed to limit the remedies
or damages of the Company or any Seller in the event of a Termination Fee Forfeiture. Each Party further acknowledges that, other than in the case of a Termination Fee Forfeiture, the
Termination Fee is not a penalty, but rather is liquidated damages in a reasonable amount that shall compensate the Sellers in the circumstances in which such payment is payable for the efforts
and resources expended and opportunities forgone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Acquisition contemplated hereby, which amounts would otherwise be
impossible to calculate with precision.
|
| (a) |
if to the Buyer and, after the Closing, the Company, to:
|
|
Roche Holdings, Inc.
|
||
|
1 DNA Way
|
||
|
South San Francisco
|
||
|
California 94080
|
||
|
Attention:
|
General Counsel
|
|
|
Facsimile:
|
[***]
|
|
|
with a copy to (which shall not constitute notice):
|
||
|
F. Hoffman-La Roche Ltd
|
||
|
Grenzacherstrasse 124
|
||
|
CH-4070 Basel
|
||
|
Switzerland
|
||
|
Attention:
|
Group Legal Department
|
|
|
Email:
|
[***]
|
|
|
with a copy to (which shall not constitute notice):
|
||
|
Davis Polk & Wardwell LLP
|
||
|
450 Lexington Avenue
|
||
|
New York, NY 10017
|
||
|
Attention:
|
Marc O. Williams;
|
|
|
Brian Wolfe
|
||
|
Email:
|
marc.williams@davispolk.com;
|
|
|
brian.wolfe@davispolk.com
|
||
| (b) |
if to Rome and, prior to the Closing, the Company, to
|
|
Roivant Sciences Ltd.
|
|
|
7th Floor
|
|
|
50 Broadway
|
|
|
London SW1H 0BD
|
|
|
United Kingdom
|
|
|
Attention: Roivant Legal
|
|
|
Email: [***]
|
|
with a copy to (which shall not constitute notice):
|
||
|
Freshfields Bruckhaus Deringer US LLP
|
||
|
601 Lexington Avenue, 31st Floor
|
||
|
New York, NY 10022
|
||
|
Attention:
|
Damien R. Zoubek;
|
|
|
Jenny Hochenberg;
|
||
|
Adam H. Golden
|
||
|
Email:
|
damien.zoubek@freshfields.com;
|
|
|
jenny.hochenberg@freshfields.com;
|
||
|
adam.golden@freshfields.com
|
||
| (a) |
The Buyer acknowledges and agrees that Freshfields Bruckhaus Deringer US LLP (“Freshfields”) has acted as counsel to the Company and Rome in connection with this Agreement and the transactions contemplated hereby.
|
| (b) |
The Buyer hereby consents and agrees to, and agrees to cause the Company Group to consent and agree to, Freshfields representing Rome and its Affiliates
(collectively, the “Rome Parties”) after the Closing with respect to disputes in which the interests of the Rome Parties may be directly adverse to the Buyer and its Subsidiaries (including, after the Closing, the
Company Group). The Buyer further consents and agrees to, and agrees to cause the Company Group to consent and agree to, the communication by Freshfields to the Rome Parties in connection with any such
representation of any fact known to Freshfields arising by reason of Freshfields’s prior representation of the Company in connection with this Agreement and consummation of the transactions
contemplated hereby.
|
| (c) |
In connection with the foregoing, the Buyer hereby irrevocably waives and agrees not to assert, and agrees to cause the Company Group to irrevocably waive and not to assert, any conflict of
interest arising from or in connection with (i) Freshfields’s prior representation of the Company in connection with this Agreement and consummation of the
transactions contemplated hereby and (ii) Freshfields’s representation of the Rome Parties prior to and after the Closing.
|
| (d) |
The Buyer further agrees, on behalf of itself and, after the Closing, on behalf of the Company Group, that all communications in any form or format whatsoever between or among any of Freshfields, the Company Group and/or any Rome Party, or any of their respective Representatives that relate in any
way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement or any dispute arising under this Agreement (collectively, the “Deal
Communications”) shall be deemed to be retained and owned collectively by the Rome Parties, shall be controlled by Rome on behalf of the Rome Parties and shall not pass to or be claimed by the Buyer or the Company Group. All Deal Communications that are attorney-client privileged (the “Privileged Deal
Communications”) shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to the Rome Parties, shall be controlled by Rome on behalf of the
Rome Parties and shall not pass to or be claimed by the Buyer or the Company Group.
|
| (e) |
Notwithstanding the foregoing, in the event that a dispute arises between the Buyer or any member of the Company Group, on the one hand, and a Third Party other than a Rome Party, on the other hand, the Buyer or such member of the Company Group may assert the attorney-client privilege to prevent the
disclosure of the Privileged Deal Communications to such Third Party; provided, however, that none of the Buyer or any member of the Company Group may waive such privilege without the prior written consent of Rome.
|
| (f) |
To the extent that files or other materials maintained by Freshfields constitute property of its clients, only the Rome Parties shall hold such property rights and Freshfields shall have no duty to reveal
or disclose any such files or other materials or any Deal Communications by reason of any attorney-client relationship between Freshfields, on the one hand, and the Company, on the other hand.
|
| (g) |
The Buyer agrees that it shall not, and that following the Closing it shall cause the Company Group not to, access or use the Deal Communications, including by way of review of any electronic data,
communications or other information, by seeking to have any Rome Party waive the attorney-client or other privilege, or by otherwise asserting that the Buyer or the Company has the right to waive the attorney-client or other
privilege.
|
|
ROCHE HOLDINGS, INC.
|
|
By:
|
/s/ Bruce Resnick |
|
|
Name: Bruce Resnick
|
||
|
Title: Vice President
|
|
ROIVANT SCIENCES LTD.
|
|
By:
|
/s/ Matt Maisak |
|
|
Name: Matt Maisak
|
||
|
Title: Authorized Signatory
|
|
TELAVANT HOLDINGS, INC.
|
|
By:
|
/s/ Frank Torti |
|
|
Name: Frank Torti
|
||
|
Title: Director
|
| 1. |
Paris hereby accedes to the Agreement as “Paris” and a “Seller” thereunder and agrees to be subject to, and bound by, all terms and provisions of the Agreement specifically applicable to “Paris” or a “Seller” thereunder and to
have all the rights and obligations of “Paris” and the “Sellers” (or any and each “Seller”) thereunder and as provided therein, in each case with the same force and effect as if it had executed and delivered the Agreement as of the
Effective Date;
|
| 2. |
In addition to the foregoing, Paris hereby acknowledges and accepts the provisions of Section 2.5 (Actions in Connection with the Closing), Article III (Seller Representations and Warranties) (other than Section
3.4), Section 7.2(a), Section 7.2(d) and Section 7.2(e) (Consents and Regulatory Approvals), Section 7.4 (Public Disclosure), Section 9.2 (Effect of Termination), Section 9.3
(Termination Fees), Section 9.4 (Fees and Expenses), Section 10.2 (Entire Agreement), Section 10.5 (Severability), Section 10.7 (Interpretation), Section 10.8 (Governing Law), Section 10.9
(Remedies), Section 10.10 (Submission to Jurisdiction), Section 10.11 (Waiver of Jury Trial), Section 10.13 (Non-Survival or Representations, Warranties and Covenants) and Section 10.14 (Joint
Negotiation) (other than the first sentence thereof) and any references therein to the “Parties” or a “Party” shall be deemed to include Paris. For the avoidance of doubt, Paris shall not be deemed to be a “Party” to the Agreement
for purposes of any other provisions, except (a) those Sections set forth above in this paragraph 2 and (b) those provisions specifically applicable to “Paris” or the “Sellers” (or any or each “Seller”) as set forth in
paragraph 1 above.
|
| 3. |
Paris hereby (a) makes all of the representations and warranties set forth in Article III of the Agreement (other than the representations and warranties set forth in Section 3.4 of the Agreement) and (b) agrees
to deliver the certificate required to be delivered pursuant to Section 8.2(c)(ii) of the Agreement on, or prior to, the Closing Date.
|
| 4. |
Rome and Paris hereby agree that effective as of immediately following the Closing, each of the Paris Transaction Agreements and the Stock Purchase Agreement, dated November 21, 2022, by and among Rome, Paris and the Company
(collectively, the “Terminated Paris Agreements”) shall automatically terminate and Rome shall have no further (and shall be irrevocably and unconditionally released and discharged from any and all) obligations or liabilities
thereunder, and the Terminated Paris Agreements shall be of no further force and effect.
|
| 5. |
Paris hereby agrees that it shall execute and deliver such instruments of conveyance and transfer and take such other action, including executing any agreement with respect to the Acquisition, as may be reasonably required at the
request of Rome in order to carry out the terms and provisions of Section 2.3 of the ROFR & Co-Sale Agreement and consummate the Acquisition.
|
| 6. |
Rome hereby agrees that this Joinder shall automatically terminate and become void in the event that the Agreement is (x) amended or otherwise modified, without the prior written consent of Paris, in a manner such that the
Acquisition would no longer constitute a “Solitary Drag Along Sale” under the ROFR & Co-Sale Agreement or otherwise in a manner such that the requirements of Section 2.3(b) or Section 2.3(f) of ROFR & Co-Sale Agreement would
cease to be satisfied with respect to the Acquisition (it being acknowledged by Paris that the Agreement and the terms and conditions of the Acquisition, as in effect on the date hereof, comply with all requirements of Section 2.3
of the ROFR & Co-Sale Agreement and Rome is entitled to its drag-along rights specified therein with respect thereto); provided, however, that, for the avoidance of doubt, except as expressly set forth in this
paragraph 6, nothing in this Joinder shall be deemed to prevent or otherwise restrict (or grant Paris a consent right with respect to) any amendments, waivers or other modifications to the Agreement as may be agreed between Rome,
the Company and the Buyer or (y) terminated in accordance with its terms.
|
| 7. |
All notices and other communications to be given to Paris in connection with the Agreement shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service, or by
electronic mail (“e-mail”) transmission (provided that a “bounceback” or notice of non-receipt by return electronic mail from the recipient is not received), and shall be directed to the address set forth below (or at such other
address as Paris shall designate by like notice):
|
| 8. |
This Joinder and the Agreement (including the Company Disclosure Schedule and the Exhibits thereto and other documents and instruments referred to therein that are to be delivered at the Closing) constitutes the entire agreement
among between Rome, Paris and the Buyer and supersedes any prior understandings, agreements or representations by or among Rome, Paris and the Buyer, or any of them, written or oral, with respect to the subject matter hereof.
|
| 9. |
The Buyer shall be an express third-party beneficiary of this Joinder, with the right to enforce the terms and conditions of this Joinder.
|
| 10. |
Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party hereto shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such party,
and the exercise by a party hereto of any one remedy shall not preclude the exercise of any other remedy. The parties hereto agree that irreparable harm would occur if any of the provisions of this Joinder were not performed in
accordance with their specific terms on a timely basis or were otherwise breached. It is accordingly agreed that without posting bond or other undertaking, the parties hereto shall be entitled to injunctive or other equitable relief
to prevent breaches or threatened breaches of this Joinder and to enforce specifically the terms and provisions of this Joinder in any court of competent jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity. The parties hereto further agree that (a) by seeking any remedy provided for in this paragraph 10, a party shall not in any respect waive its right to seek any other form of relief that may be available
to such party under this Joinder and (b) nothing contained in this paragraph 10 shall require any party hereto to institute any Action for (or limit such party’s right to institute any Action for) specific performance under this
paragraph 10 before exercising any other right under this Joinder. Each of the parties hereto agrees that it will not oppose, and irrevocably waives its right to object to, the granting of an injunction, specific performance or
other equitable relief on the basis that another party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
|
| 11. |
The following provisions from the Agreement shall be deemed incorporated into this Joinder as if set forth herein, mutatis mutandis: Section 10.4 (Assignment), Section 10.5
(Severability), Section 10.6 (Counterparts and Signature), Section 10.7 (Interpretation), Section 10.8 (Governing Law), Section 10.10 (Submission to Jurisdiction) and Section 10.11 (WAIVER OF
JURY TRIAL).
|
| 12. |
This Joinder may not be amended or modified without the prior written consent of the Buyer. Additionally, neither this Joinder nor any of the rights, interests or obligations under this Joinder may be assigned or delegated, in
whole or in part, by operation of Law or otherwise, by either Rome or Paris without the prior written consent of the Buyer, and any such assignment without such prior written consent shall be null and void.
|
|
PFIZER INC.
|
|
By:
|
||
|
Name:
|
||
|
Title:
|
|
ROIVANT SCIENCES LTD.
|
|
By:
|
||
|
Name:
|
||
|
Title:
|
|
Milestone Event
|
Milestone
Payment
|
|
|
Initiation of a Phase 3 Clinical Trial of a Milestone Product in the UC Indication [***].
|
$150,000,000
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Roivant Sciences Ltd.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
|
|
/s/ Matthew Gline
|
|
|
Matthew Gline
|
|
|
Principal Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Roivant Sciences Ltd.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
|
|
/s/ Richard Pulik
|
|
|
Richard Pulik
|
|
|
Principal Financial Officer
|
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023, to which this Certification is attached as Exhibit 32.1 (the
“Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
|
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
|
|
/s/ Matthew Gline
|
|
|
Matthew Gline
|
|
|
Principal Executive Officer
|
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023, to which this Certification is attached as Exhibit 32.2 (the
“Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
|
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
|
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/s/ Richard Pulik
|
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Richard Pulik
|
|
|
Principal Financial Officer
|
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Mar. 31, 2023 |
|---|---|---|
| Current liabilities: | ||
| Current portion of long-term debt accounted for under fair value option | $ 28,120 | $ 26,940 |
| Long term debt accounted under fair value option | $ 188,911 | $ 180,700 |
| Shareholders' equity: | ||
| Common stock, par value (in dollars per share) | $ 0.0000000341740141 | $ 0.0000000341740141 |
| Common stock, shares authorized (in shares) | 7,000,000,000 | 7,000,000,000 |
| Common stock, shares issued (in shares) | 800,792,365 | 760,143,393 |
| Common stock, shares outstanding (in shares) | 800,792,365 | 760,143,393 |
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Share-based compensation | $ 98,578 | $ 134,773 | ||
| Research and Development Expense [Member] | ||||
| Share-based compensation | $ 8,877 | $ 7,417 | 16,830 | 19,660 |
| Selling, General and Administrative Expense [Member] | ||||
| Share-based compensation | $ 40,309 | $ 54,479 | $ 81,501 | $ 115,030 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Condensed Consolidated Statements of Comprehensive Loss [Abstract] | ||||
| Net loss | $ (331,118) | $ (315,921) | $ (658,963) | $ (669,705) |
| Other comprehensive income (loss): | ||||
| Foreign currency translation adjustment | 3,602 | 3,752 | (546) | 9,519 |
| Total other comprehensive income (loss) | 3,602 | 3,752 | (546) | 9,519 |
| Comprehensive loss | (327,516) | (312,169) | (659,509) | (660,186) |
| Comprehensive loss attributable to noncontrolling interests | (26,727) | (24,648) | (62,911) | (46,822) |
| Comprehensive loss attributable to Roivant Sciences Ltd. | $ (300,789) | $ (287,521) | $ (596,598) | $ (613,364) |
Description of Business and Liquidity |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Description of Business and Liquidity [Abstract] | |
| Description of Business and Liquidity |
Note 1—Description of Business and Liquidity
(A) Description of Business
Roivant Sciences Ltd. (inclusive of its consolidated subsidiaries, the “Company” or “RSL”) aims to improve health by rapidly delivering
innovative medicines and technologies to patients. The Company does this by building biotech and healthcare technology companies (“Vants”) and deploying technology to drive greater efficiency in research and development and commercialization. In
addition to biopharmaceutical subsidiaries, the Company also builds technology Vants focused on improving the process of developing and commercializing medicines. The Company was founded on April 7, 2014 as a Bermuda exempted limited company.
VTAMA® (tapinarof) was approved by the United States Food and Drug Administration (“FDA”) in May 2022 for the treatment of plaque psoriasis in
adult patients.
The Company has determined that it has one
operating and reporting segment as it allocates resources and assesses financial performance on a consolidated basis. The Company’s subsidiaries are wholly owned subsidiaries and majority-owned or controlled subsidiaries. Refer to Note 3, “Equity
Method Investments” for further discussion of the Company’s investments in unconsolidated entities.
On September 30, 2021, RSL completed its business combination (the “Business Combination”) with Montes Archimedes Acquisition Corp. (“MAAC”), a
special purpose acquisition company, and began trading on Nasdaq under the ticker symbol “ROIV.”
(B) Liquidity
The Company has incurred significant losses and negative cash flows from operations since its inception. As of September 30, 2023, the Company
had cash and cash equivalents of approximately $1.4 billion and its accumulated deficit was approximately $4.4 billion. For the six months ended September 30, 2023 and 2022, the Company incurred net losses of approximately $659.0 million and $669.7 million,
respectively. The Company has historically financed its operations primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements. Through its
subsidiary, Dermavant Sciences Ltd., the Company has launched its first commercial product, VTAMA, following approval by the FDA in May 2022.
The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, uncertainties related to
commercialization of products, regulatory approvals to market its product candidates, dependence on key products, dependence on third-party service providers, such as contract research organizations, and protection of intellectual property
rights. Management expects to incur additional losses in the future to fund its operations and conduct product research and development and recognizes the need to raise additional capital to fully implement its business plan.
The Company intends to raise such additional capital through the issuance of equity securities, debt financings or other sources in order to
further implement its business plan. However, if such financing is not available at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay or discontinue the development of its product candidates or
take other steps to conserve capital. The Company expects its existing cash and cash equivalents will be sufficient to fund its committed operating expenses and capital expenditure requirements for at least the next 12 months from the date of
issuance of these condensed consolidated financial statements.
|
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies |
Note 2—Summary of Significant Accounting Policies
(A) Basis of Presentation and Principles of Consolidation
The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”) for interim financial information and follow the requirements of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, these unaudited condensed
consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be
condensed or omitted. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial
statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 filed with the SEC. The unaudited condensed consolidated balance sheet at March 31, 2023 has been derived from the audited
consolidated financial statements at that date. In the opinion of management, the unaudited condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary to present fairly the financial
position of the Company and its results of operations and cash flows for the interim periods presented. Certain prior year amounts were reclassified to conform to current year presentation. Operating results for the six months ended September 30,
2023 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2024, for any other interim period, or for any other future year.
Any references in these notes to applicable accounting guidance are meant to refer to the authoritative U.S. GAAP as found in the Accounting
Standards Codification (‘‘ASC’’) and Accounting Standards Updates (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). The unaudited condensed consolidated financial statements include the accounts of RSL and the subsidiaries in
which it has a controlling financial interest, most often through a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation.
For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to
noncontrolling interests in its unaudited condensed consolidated statements of operations equal to the percentage of common stock ownership interest retained in the respective operations by the noncontrolling parties. The Company presents
noncontrolling interests as a component of shareholders’ equity on its unaudited condensed consolidated balance sheets.
The Company accounts for changes in its ownership interest in its subsidiaries while control is retained as equity transactions. The carrying
amount of the noncontrolling interest is adjusted to reflect the change in RSL’s ownership interest in the subsidiary. Any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest
is adjusted is recognized within shareholders’ equity attributable to RSL.
(B) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs, expenses, contingent liabilities, share-based compensation and research and
development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
(C) Concentrations
Financial instruments that potentially subject the Company to concentration of credit risk include cash and cash equivalents. The Company
maintains cash deposits and cash equivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company has established guidelines relative to diversification and maturities to maintain safety and
liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe that it is exposed to any significant credit risk related to these instruments.
The Company has long-lived assets in different geographic locations. As of September 30, 2023 and March 31, 2023, a majority of the Company’s
long-lived assets were located in the United States.
(D) Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash. The Company
considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted
cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands):
(E) Contingencies
The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company continually
assesses any litigation or other claims it may confront to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. The Company accrues for all contingencies at the earliest date at
which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the
Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible.
(F) Investments
Investments in equity securities may be accounted for using (i) the fair value option, if elected, (ii) fair value through earnings if fair
value is readily determinable or (iii) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable. The election to use
the measurement alternative is made for each eligible investment.
The Company has elected the fair value option to account for certain investments over which the Company has significant influence. The Company
believes the fair value option best reflects the underlying economics of the investment. See Note 3, “Equity Method Investments.”
(G) Fair Value Measurements
The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance
establishes a fair value hierarchy for financial instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are
inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market
participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. Fair value is defined as the exchange price, or exit price, representing the amount that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a
three-tier fair value hierarchy that distinguishes among the following:
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value
requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement.
The Company’s financial instruments include shares of common stock of Arbutus Biopharma Corporation (“Arbutus”); shares of common stock of
Heracles Parent, L.L.C., the parent entity of Datavant, (as defined and discussed in Note 3, “Equity Method Investments”); liability instruments issued, including warrant and earn-out shares liabilities issued in connection with the Company’s
business combination with MAAC (as discussed in Note 12, “Earn-Out Shares, Public Warrants and Private Placement Warrants”); its investments in other entities; cash and cash equivalents consisting of money market funds; accounts payable; and
long-term debt.
The shares of Arbutus common stock and
investments in common stock with a readily determinable fair value are classified as Level 1, and their fair value is determined based upon quoted market prices in an active market. The shares of common stock of Heracles Parent, L.L.C., the
parent entity of Datavant (as defined and discussed in Note 3, “Equity Method Investments”) and liability instruments issued, excluding the Public Warrants (as defined and discussed in Note 12, “Earn-Out Shares, Public Warrants and Private
Placement Warrants”), are classified as Level 3 within the fair value hierarchy as the assumptions and estimates used in the valuations are unobservable in the market. Prior to their settlement, the Public Warrants were publicly traded and
therefore were classified as Level 1 as the Public Warrants had a readily determinable fair value. Cash and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature.
Money market funds are included in Level 1 of the fair value hierarchy and are valued at the closing price reported by an actively traded exchange. The carrying value of long-term debt issued by Dermavant Sciences Ltd. (together with its wholly
owned subsidiaries, “Dermavant”), which is stated at amortized cost, approximates fair value based on current interest rates for similar types of borrowings and therefore is included in Level 2 of the fair value hierarchy. Long-term debt issued
by Dermavant for which the fair value option has been elected is included in Level 3 of the fair value hierarchy as the assumptions and estimates used in the valuation are unobservable in the market.
(H) Significant Accounting Policies
There were no significant changes to the Company’s significant accounting policies from those disclosed in the Company’s Form 10-K for the year
ended March 31, 2023.
(I) Recently Adopted Accounting Pronouncements
The Company did not adopt any material accounting pronouncements during the six months ended September 30, 2023.
(J) Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the
specified effective date. Unless otherwise disclosed above, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its condensed consolidated financial statements and disclosures.
|
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Equity Method Investments |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Equity Method Investments [Abstract] | |
| Equity Method Investments |
Note 3—Equity Method Investments
The Company maintains equity method investments in certain entities. As of September 30, 2023 and March 31, 2023, the most significant of these were our
investments in Arbutus and Datavant, which are accounted for using the fair value option.
The Company determined that it does not control these entities and as a result does not consolidate these entities. Due to the Company’s significant influence over operating and financial policies of
these entities, the entities are considered related parties of the Company.
Investment in Arbutus
The Company holds an investment in Arbutus in the form of 38,847,462 common shares of Arbutus. As of September 30, 2023, RSL held approximately 23%
of issued and outstanding shares of Arbutus.
At September 30, 2023 and March 31, 2023, the aggregate fair value of the Company’s investment in Arbutus was $78.9 million and $117.7 million,
respectively. During the three and six months ended September 30, 2023, the Company
recognized unrealized losses of $10.5 million and $38.8 million on its investment in Arbutus, respectively, in the accompanying condensed consolidated statements of operations. During the
three and six months ended September 30, 2022, the Company recognized unrealized losses of $31.1 million and $41.6 million on its investment in Arbutus, respectively, in the accompanying condensed consolidated statements of operations. The fair value of the
Company’s investment was determined using the closing price of Arbutus’s common stock on September 30, 2023 and March 31, 2023 of $2.03
and $3.03, respectively.
Investment in Datavant
In June 2021, Datavant and Heracles Parent, L.L.C. (referred to herein as “Ciox Parent” and, after the closing of the Datavant Merger (as defined below), “Datavant”), primarily through its wholly owned subsidiary CIOX
Health, LLC, entered into a definitive agreement to merge Datavant with and into a newly formed wholly owned subsidiary of Ciox Parent (the “Datavant Merger”). As of September 30, 2023, the Company’s minority equity interest represented
approximately 17% of the outstanding Class A units in Ciox Parent. Ciox Parent’s capital structure includes several classes of
preferred units that, among other features, have liquidation preferences and conversion rights. Upon conversion of such preferred units into Class A units, the Company’s ownership interest would be diluted.
As of September 30, 2023 and March 31, 2023, the fair value of the Company’s investment was $164.3 million and $178.6 million, respectively. During the three and six months ended September 30, 2023, the Company recognized unrealized losses on its investment in Datavant
of $35.1 million and $14.3 million, respectively, in the
accompanying condensed consolidated statements of operations. During the three and six months ended September 30, 2022, the Company recognized unrealized losses on its investment of $21.9 million and $28.9 million, respectively, in the accompanying condensed consolidated statements of operations.
The fair value of the Company’s investment was determined using valuation models that incorporate significant unobservable inputs and is
classified as a Level 3 measurement within the fair value hierarchy. Refer to Note 13, “Fair Value Measurements” for more information.
|
Intangible Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||
| Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||
| Intangible Assets |
Note 4—Intangible Assets
In July 2018, Dermavant acquired the worldwide rights (other than for China) with respect to certain intellectual property rights retained by
Welichem Biotech Inc. (“Welichem”) to VTAMA and related compounds from Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Ltd. (collectively, “GSK”) pursuant to an asset purchase agreement. GSK previously acquired rights to
a predecessor formulation from Welichem pursuant to an asset purchase agreement between GSK and Welichem entered into in May 2012. The Company evaluated the agreement and determined that the acquired assets did not meet the definition of a
business and thus the transaction was accounted for as an asset acquisition.
Following the FDA approval of VTAMA in May 2022, the Company became obligated to pay a regulatory milestone to GSK of £100.0 million (approximately $126
million on the date of achievement) following the receipt of marketing approval of VTAMA in the United States. The milestone was paid in July 2022.
Additionally, the first sale of VTAMA in May 2022 resulted in the achievement of a milestone to Welichem Biotech Inc. of CAD$25.0 million (approximately $20
million on the date of achievement). The milestone was paid in August 2022.
Both of the above milestones were capitalized as intangible assets upon achievement and are being amortized over their estimated useful lives.
The following table summarizes the Company’s recognized intangible assets:
The Company’s
intangible assets are denominated in currencies other than U.S. dollar and therefore are subject to foreign currency movements.
Amortization expense was $2.4
million and $2.2 million for the three months ended September 30, 2023 and 2022, respectively, and $4.8 million and $2.9 million for the
six months ended September 30, 2023 and 2022, respectively. Amortization expense was recorded as part of “Cost of revenues” in the accompanying condensed consolidated statement of operations. Future amortization expense is approximately $4.7 million for the remainder of the year ended March 31, 2024, $9.3 million for each of the years ended from March 31, 2025 through March 31, 2028 and $98.7
million thereafter.
|
||||||||||||||||||||||||||||||||
Recent Transactions |
6 Months Ended | ||||
|---|---|---|---|---|---|
Sep. 30, 2023 | |||||
| Recent Transactions [Abstract] | |||||
| Recent Transactions |
Note 5—Recent Transactions
In July 2023, a
newly-formed subsidiary in-licensed certain intellectual property rights in exchange for a $14.0 million upfront cash payment. The
transaction was accounted for as an asset acquisition as the acquired assets did not meet the definition of a business. The acquired rights represent in-process research and development assets, which were determined to have no alternative future
use. Accordingly, the Company recorded $14.0 million as acquired in-process research and development expense in the accompanying
condensed consolidated statements of operations for the three and six months ended September 30, 2023.
Additionally,
the newly-formed subsidiary agreed to pay up to $280 million of future development, regulatory, and commercial milestone payments and
tiered high-single digit sales-based royalties.
In July 2023, VantAI
Holdings, Inc. (“VantAI”), a wholly-owned subsidiary of the Company, completed a transaction pursuant to which SK, Inc. (“SK”) contributed $6.0
million to VantAI in exchange for preferred shares in VantAI (the “VantAI Preferred Financing”). In August 2023, the Company and SK Biopharmaceuticals Co., Ltd. (“SK Bio”), a subsidiary of SK, completed a transaction pursuant to which SK Bio
purchased all of the Company’s shares in Proteovant Sciences, Inc. (“Proteovant”) in exchange for $47.5 million (the “Proteovant Sale”).
As a result of changes in
governance and voting rights, the Company determined that it no longer held a controlling financial interest in VantAI. Accordingly, the Company deconsolidated VantAI as of July 2023. The Company recorded a $17.4 million gain on deconsolidation of Proteovant and VantAI in the accompanying condensed consolidated statements of operations for the three and six months ended
September 30, 2023.
Upon deconsolidation, the
Company recorded its $9.0 million retained investment in VantAI based upon the fair value of the preferred shares held by the Company.
Due to the Company’s significant influence over the operating and financial policies of VantAI, the Company will account for its retained interest under the equity method of accounting.
|
Certain Balance Sheet Components |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain Balance Sheet Components [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain Balance Sheet Components |
Note 6—Certain Balance Sheet Components
(A) Other Current Assets
Other current assets at September 30, 2023 and March 31, 2023 consisted of the following (in thousands):
(B) Accrued Expenses
Accrued expenses at September 30, 2023 and March 31, 2023 consisted of the following (in thousands):
(C) Other Current Liabilities
Other current liabilities at September 30, 2023 and March 31, 2023 consisted of the following (in thousands):
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Long-Term Debt |
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt |
Note 7—Long-Term Debt
Dermavant
Funding Agreement with NovaQuest
In connection with Dermavant’s acquisition of tapinarof from GSK pursuant to an asset purchase agreement (the “GSK Agreement”), Dermavant and
NovaQuest Co-Investment Fund VIII, L.P. (“NovaQuest”) entered into a funding agreement (the “NovaQuest Agreement”). Pursuant to the NovaQuest Agreement, Dermavant borrowed $100.0 million in August 2018 and $17.5 million in October 2018.
In exchange for the $117.5
million in total funding from NovaQuest, Dermavant agreed to make fixed payments to NovaQuest under the NovaQuest Agreement upon regulatory approval of tapinarof. For each of the atopic dermatitis and psoriasis indications, Dermavant is required
to make quarterly payments to NovaQuest totaling $176.3 million per indication over a six-year period following regulatory
approval of tapinarof for the applicable indication in the United States. In the event that Dermavant receives regulatory approval for one indication, and Dermavant terminates the development of the other indication for any reason other than a
Technical Failure (as defined below), then Dermavant will be required to make the above-referenced quarterly payments to NovaQuest up to $440.6
million over a 15-year period for the approved indication, which are referred to as 15-year Payments. A Technical Failure is deemed to occur for an indication if the development program for such indication is terminated due to (1) significant safety
concerns, (2) material adverse developments or (3) the receipt by Dermavant of a complete response letter or a final non-approval letter from the FDA is expected to result in significant delay in or cost to reach commercialization for the
applicable indication. In addition, Dermavant is required to make up to $141.0 million in payments to NovaQuest upon achievement of
certain commercial milestones. In the event that Dermavant is required to start making 15-year Payments, then Dermavant has the right
to offset such amounts by up to $88.1 million of the commercial milestone payments, with such offset being applied to the quarterly
payments in reverse chronological order (such that the final quarterly payments owed will be used first to offset the commercial milestone payments). The NovaQuest Agreement does not contain any royalty payment requirements on commercialization
of tapinarof. Upon receiving FDA approval for the psoriasis indication, Dermavant made its first quarterly payment of $7.3 million
under the NovaQuest Agreement in May 2022 and has made cumulative quarterly payments totaling $44.1 million as of September 30, 2023.
At issuance, the Company concluded that certain features of the long-term debt would be considered derivatives that would require bifurcation.
In lieu of bifurcating various features in the agreement, the Company has elected the fair value option for this financial instrument and records the changes in the fair value within the statements of operations at the end of each reporting
period. Direct costs and fees related to the debt issued under the NovaQuest Agreement were recognized in earnings. As of September 30, 2023 and March 31, 2023, the fair value of the debt was $217.0 million and $207.6 million, respectively. Refer to Note
13, “Fair Value Measurements” for additional details regarding the fair value measurement.
The carrying balance of the debt issued to NovaQuest was as follows (in thousands):
Credit Facility with XYQ Luxco
In May 2021, Dermavant and certain of its subsidiaries entered into a $40.0 million senior secured credit facility (the “Credit Facility”) with XYQ Luxco S.A.R.L (“XYQ Luxco”), as lender, and U.S. Bank National Association, as collateral agent.
The Credit Facility has a five-year maturity and bears an interest rate of 10.0% per annum. Interest is payable quarterly in arrears on the last day of each calendar quarter through the maturity date. A lump sum principal payment is due on the maturity date.
Dermavant is also obligated to pay an exit fee of $5.0 million. The exit fee can be reduced to $4.0 million upon achievement of certain equity milestones defined in the agreement, which are not deemed likely as of September 30, 2023. In
connection with the funding of the Credit Facility, Dermavant issued a warrant to XYQ Luxco to purchase 1,199,072 common shares of
Dermavant at an exercise price of $0.01 per common share.
Outstanding debt obligations to XYQ Luxco were as follows (in thousands):
Revenue Interest Purchase and Sale Agreement
In
May 2021, Dermavant, as seller, entered into a $160.0 million revenue interest purchase and sale agreement (the “RIPSA”) for its
investigational product tapinarof 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. Bank
National Association, as collateral agent. 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, which was paid to Dermavant in June 2022 following the approval of tapinarof by the FDA.
The
transaction is accounted for as debt. Over the term of the arrangement, the effective interest rate will be updated prospectively each reporting period based on the carrying amount of the note, payments made to date, and the estimated remaining
cash flows related to the note.
The RIPSA carrying balance was as follows (in thousands):
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Shareholders' Equity |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Shareholders' Equity [Abstract] | |
| Shareholders' Equity |
Note 8—Shareholders’ Equity
(A)
At-the-Market Equity Offering Program
On September 19, 2022, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company,
LLC (“Cowen”) to sell its common shares having an aggregate offering price of up to $400.0 million from time to time through an
“at-the-market” equity offering program under which Cowen acts as the Company’s agent (the “ATM Facility”).
As of September 30, 2023, the Company had $400.0 million of remaining capacity available under the ATM Facility.
(B) Common Share
Purchase and Share Agreements
In September 2023, the Company entered into common share purchase and sale agreements with certain institutional investors, pursuant to which the Company sold an aggregate of 19,600,685 of its common shares at a purchase price of $10.21 per share.
Net proceeds to the Company were approximately $199.8 million after deducting offering expenses.
|
Share-Based Compensation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation |
Note 9—Share-Based Compensation
(A) RSL Equity Incentive Plans
RSL has three equity incentive
plans: the Roivant Sciences Ltd. 2021 Equity Incentive Plan (the “RSL 2021 EIP”), the Roivant Sciences Ltd. Amended and Restated 2015 Equity Incentive Plan, and the Roivant Sciences Ltd. Amended and Restated 2015 Restricted Stock Unit Plan
(collectively, the “RSL Equity Plans”). The RSL 2021 EIP was approved and adopted in connection with the Business Combination and became effective immediately prior to closing. At September 30, 2023, a total of 41,722,310 common shares were available for future grants under the RSL 2021 EIP.
Stock Options and Performance Stock Options
Activity for stock options and performance stock options under the RSL Equity Plans for the six months ended September 30, 2023 was as follows:
Restricted Stock Units and Performance Stock Units
Activity for restricted stock units and performance stock units under the RSL Equity Plans for the six months ended September 30, 2023 was as
follows:
Capped Value Appreciation Rights
March 2020 CVAR Grants
As of September 30, 2023, there were 591,887
non-service-vested capped value appreciation rights (“CVARs”) and 28,161,790 service-vested CVARs relating to the March 2020 grants.
During the six months ended September 30, 2023, 3,247,903 service-vested CVARs subject to the knock-in condition satisfied both the
applicable hurdle price and the knock-in condition on the applicable measurement date, and as a result, 1,059,907 common shares were
issued upon their settlement.
November 2021 CVAR Grants
Activity for CVARs under the RSL 2021 EIP for the six months ended September 30, 2023 was as follows:
During the six months ended September 30, 2023, 628,971 common shares were issued upon their settlement.
(B)
Subsidiary Equity Incentive Plans
Certain
subsidiaries of RSL adopt their own equity incentive plan (“EIP”). Each EIP is generally structured so that the applicable subsidiary, and its affiliates’ employees, directors, officers and consultants are eligible to receive non-qualified
and incentive stock options, stock appreciation rights, restricted share awards, restricted stock unit awards, and other share awards under their respective EIP. The Company recorded share-based compensation expense of $14.9 million and $29.8 million for
the three and six months ended September 30, 2023, respectively, and $12.6 million and $24.1 million for the three and six months ended September 30, 2022, respectively, related to subsidiary EIPs.
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Income Taxes |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Income Taxes [Abstract] | |
| Income Taxes |
Note 10—Income Taxes
The Company’s effective tax rate for the three and six months
ended September 30, 2023 was (1.1)%
and (0.8)%, respectively, and the effective tax rate for the three and six months ended September 30, 2022 was (0.7)% and (0.9)%, respectively. The effective tax rate is driven by the Company’s jurisdictional earnings by location and a valuation allowance that eliminates the Company’s global net
deferred tax assets.
The Company assesses the realizability of its deferred tax assets at each balance sheet date based on available positive and negative evidence
in order to determine the amount which is more likely than not to be realized and records a valuation allowance as necessary.
|
Commitments and Contingencies |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Commitments and Contingencies [Abstract] | |
| Commitments and Contingencies |
Note 11—Commitments and Contingencies
(A) Commitments
In conjunction with Dermavant’s entry into the GSK Agreement in 2018, Dermavant entered into a clinical supply agreement pursuant to which GSK would provide a supply of tapinarof and clinical product at an agreed upon
price during the Company’s clinical trials. In April 2019, Dermavant entered into a commercial supply agreement with GSK to continue to provide certain quantities of tapinarof and commercial product at agreed upon minimum quantities and
price. The commercial supply agreement commenced in April 2022 upon completion of certain quality and regulatory conditions. In July 2022, Dermavant and GSK amended the terms of the clinical supply and commercial supply agreements which
released GSK of certain commitments to supply tapinarof and released Dermavant of certain commitments to purchase tapinarof in exchange for a supplementary fee. Other supply and purchase commitments under the agreements remain in effect. In
addition, Dermavant and Thermo Fisher Scientific (“TFS”) entered into a Commercial Manufacturing and Supply Agreement for which TFS agreed to provide a supply of tapinarof to Dermavant at an agreed upon price. The agreements discussed
above require Dermavant to purchase certain quantities of inventory over a period of five years. As of September 30, 2023, the
minimum purchase commitment related to these agreements is estimated to be approximately $42.6 million.
In November 2021, the Company’s subsidiary, Immunovant, Inc. (“Immunovant”), entered into a Product Service Agreement with Samsung Biologics Co., Ltd. (“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. As of September 30, 2023, the minimum purchase commitment related to this agreement is estimated to be approximately $18.7 million.
In May 2021, the Company entered into a master subscription agreement with Palantir Technologies Inc. (“Palantir”) for access to Palantir’s proprietary software for a five-year period. As of September 30, 2023, the remaining minimum payments for this software subscription are $19.1
million.
The Company, primarily through its subsidiaries, has entered into commitments under various asset acquisition and license agreements. Additionally, the Company through its subsidiaries enters into agreements with contract service providers to
assist in the performance of its R&D activities. Expenditures to contract research organizations and contract manufacturing organizations represent significant costs in the clinical development of its product candidates. Subject to required
notice periods and certain obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. The Company expects to enter into additional collaborative research, contract research,
manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.
The Company also has commitments relating to its long-term debt and leases. Refer to Note 7, “Long-Term Debt” for further information. There have been no material changes to the commitments relating to the Company’s leases during the six months
ended September 30, 2023 outside the ordinary course of business. For further information regarding the Company’s lease commitments, refer to Note 15, “Leases” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2023.
(B) Loss Contingencies
The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company accrues for loss contingencies when available information indicates that it is probable
that a liability has been incurred and the amount of such loss can be reasonably estimated, and if the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation or claim,
including an estimable range, if possible.
Immunovant Securities Litigation
In February 2021, a putative securities class action complaint was filed against Immunovant and certain of its current and former officers in the U.S. District Court for the Eastern District of New
York on behalf of a class consisting of those who acquired Immunovant’s securities from October 2, 2019 and February 1, 2021. The complaint alleged that Immunovant and certain of its officers violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, by making false and misleading statements regarding the safety of batoclimab and sought unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including
reasonable attorneys’ fees. In December 2021, the U.S. District Court appointed a lead plaintiff. In March 2022, the lead plaintiff filed an amended complaint adding both (i) the Company and (ii) Immunovant’s directors and underwriters as
defendants, and asserting additional claims under Section 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, on behalf of a putative class consisting of those who purchased or otherwise acquired Immunovant’s securities pursuant
and/or traceable to Immunovant’s follow-on public offering on or about September 2, 2020. In February 2023, after further briefing on the amended complaint the U.S. District Court issued an order permitting the lead plaintiff to file a second amended complaint. That second amended complaint was
filed in March 2023. The defendants’ served motions to dismiss the second amended complaint on April 28, 2023. The fully briefed motions to dismiss, including defendants’ opening briefs, lead plaintiff’s opposition and defendants’ replies,
were filed with the court on June 30, 2023. No hearing date has yet been set. The Company intends to continue to vigorously defend the case and has not recorded a liability related to this lawsuit because, at this time, the Company
is unable to reasonably estimate possible losses or determine whether an unfavorable outcome is either probable or remote.
Acuitas Declaratory Judgment Action
In March 2022, Acuitas Therapeutics Inc. (“Acuitas”) filed a lawsuit in the U.S. District Court for the Southern District of New York (“SDNY”) against two of the Company’s affiliates, Genevant and Arbutus, seeking a
declaratory judgment that certain patents held by Arbutus and licensed by Genevant 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. On September 6, 2022, Acuitas filed a First Amended Complaint. In response, on October 4, 2022, Genevant and Arbutus filed a motion to dismiss the first amended complaint for lack of a controversy and supporting
brief. Briefing on this motion was completed in mid-November. On August 4, 2023, Acuitas voluntarily dismissed the action in the SDNY and re-filed a complaint in the U.S. District Court for the District of New Jersey. On October 13, 2023, Genevant and Arbutus filed a motion to dismiss the re-filed complaint. Each of Genevant and Arbutus intends to continue to vigorously defend the case.
(C) Indemnification Agreements
The Company is a party to a number of agreements entered into in the ordinary course of business that contain typical provisions that obligate the Company to indemnify the other parties to such agreements upon the
occurrence of certain events. The aggregate maximum potential future liability of the Company under such indemnification provisions is uncertain. The Company also indemnifies each of its directors and officers for certain events or occurrences,
subject to certain limits. The maximum amount of potential future indemnification is unlimited; however, the Company currently maintains director and officer liability insurance, which may cover certain liabilities arising from the Company’s
obligation to indemnify its directors and officers. To date, the Company has not incurred any material costs related to these indemnification obligations and has not accrued any liabilities related to such obligations in the condensed
consolidated financial statements as of September 30, 2023 and March 31, 2023.
|
Earn-Out Shares, Public Warrants and Private Placement Warrants |
6 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||
| Earn-Out Shares, Public Warrants and Private Placement Warrants [Abstract] | ||||||||||
| Earn-Out Shares, Public Warrants and Private Placement Warrants |
Note 12—Earn-Out Shares, Public Warrants and Private Placement Warrants
Earn-Out Shares
In
connection with the Business Combination, the Company issued the following:
The Vesting Period commenced on November 9, 2021 and ends no later than September 30, 2026 (the “Vesting Period”). The Vesting Period will, if a definitive purchase agreement with respect to a Sale (as defined in the
Sponsor Support Agreement) is entered into on or prior to the end of such period, be extended to the earlier of one day after the consummation of such Sale and the termination of such definitive transaction agreement, and if a Sale occurs
during such Vesting Period, then all of the Earn-Out Shares unvested as of such time will automatically vest immediately prior to the consummation of such Sale. If any Earn-Out Shares have not vested on or prior to the end of such Vesting
Period, then such Earn-Out Shares will be forfeited.
The Earn-Out Shares require liability classification and are classified as “Liability instruments measured at fair value” on the condensed consolidated balance sheets. The Earn-Out Shares liability is subject to remeasurement at each balance
sheet date with changes in fair value recognized in the Company’s statements of operations. As of September 30, 2023, no Earn-Out
Shares have vested.
Public Warrants and Private Placement Warrants
Immediately following the Business Combination, the Company had 10,214,365 outstanding warrants for the
purchase of one of the Company’s common shares, which were held by the MAAC Sponsor at an exercise price of $11.50 (the “Private
Placement Warrants”), and 20,535,896 outstanding warrants for the purchase of one of the Company’s common shares, which were held by
MAAC’s shareholders at an exercise price of $11.50 (the “Public Warrants” and, together with the Private Placement
Warrants, the “Warrants”). Pursuant to the Warrant Agreement, dated October 6, 2020, by and between the Montes Archimedes Acquisition Corp. (“MAAC”) and Continental Stock Transfer & Trust Company, as predecessor warrant agent, as modified
by the Warrant Assumption Agreement, dated September 30, 2021, by and among MAAC, the Company and American Stock Transfer & Trust Company, LLC as successor warrant agent (as modified, the “Warrant Agreement”), the Warrants became
exercisable 30 days following the completion of the Business Combination and would expire five years after the completion of the Business Combination, or earlier upon redemption or liquidation.
Prior to their settlement, the Warrants required liability classification and were classified as “Liability instruments measured at fair value” on the condensed consolidated balance sheets. The Private Placement
Warrants liability and Public Warrants liability were subject to remeasurement with changes in fair value recognized in the Company’s statements of operations. The Warrants were remeasured immediately prior to settlement. These remeasurements
were recognized in “Change in fair value of debt and liability instruments” in the accompanying condensed consolidated statements of operations.
Under the terms of the Warrant Agreement, the Company was entitled to redeem the Public Warrants at a redemption price of $0.10
per Public Warrant because the last reported sales price (the “Reference Value”) of the Company’s common shares was at least $10.00
per share for any twenty (20) trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which RSL gave a Notice of Redemption. In addition, because the Reference Value was less than $18.00 per share, the outstanding Private Placement Warrants were also required to be concurrently called for redemption on the same terms as the
outstanding Public Warrants. This share price performance requirement was satisfied as of July 28, 2023. On August 2, 2023, the Company announced that it would redeem all Warrants that remain outstanding on September 1, 2023 (the “Redemption
Date”).
Prior
to the Redemption Date, Warrant holders were permitted to exercise the Warrants (i) for cash, at an exercise price of $11.50 per common
share, or (ii) on a “cashless basis” whereby, in lieu of paying the Company the $11.50 exercise price per common share, the
surrendering holder would receive approximately 0.2495 common shares per Warrant as determined in accordance with the terms of the
Warrant Agreement.
Of the 20,475,875 Public Warrants that were outstanding as of June 30, 2023, 397 Public Warrants were exercised for cash at an exercise price of $11.50 per common share in exchange for an aggregate of 397 common shares
and 20,061,507 were exercised on a cashless basis in exchange for an aggregate of 5,005,531 common shares. The remaining 413,971 unexercised
Public Warrants were redeemed at the $0.10 redemption price. In addition, all of the Private Placement Warrants were exercised on a
cashless basis in exchange for an aggregate of 2,548,621 common shares.
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Fair Value Measurements |
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| Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements |
Note 13—Fair Value Measurements
Recurring Fair Value Measurements
The
following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and March 31, 2023, by level, within the fair value hierarchy (in thousands):
There were no transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy that occurred during the six months ended September 30, 2023.
Level 3 Disclosures
The Company measures its Level 3 assets and liabilities at fair value based on significant inputs not observable in the market, which causes them to be classified as a Level 3 measurement within the fair value hierarchy.
The valuation of the Level 3 assets and liabilities uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an ongoing basis
as additional data impacting the assumptions and estimates are obtained. Changes in the fair value related to updated assumptions and estimates are recorded within the statements of operations at the end of each reporting period.
The
fair value of Level 3 assets and liabilities may change significantly as additional data are obtained, impacting the Company’s assumptions regarding probabilities of potential scenarios used to estimate fair value. In evaluating this information,
considerable judgment is required to interpret the data used to develop the assumptions and estimates. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value
amounts, and such changes could materially impact the Company’s results of operations in future periods.
The changes in fair value of the Level 3 assets during the six
months ended September 30, 2023 and 2022 were as follows (in thousands):
The changes in fair value
of the Level 3 liabilities during the six months ended September 30, 2023 and 2022 were as follows (in thousands):
Investment in Datavant
The Company elected the fair value option to account for the investment in Datavant. The estimate of fair value for this investment was determined using the income approach and implementation of the option pricing method
(“OPM”). The OPM allows for the allocation of a company’s equity value among the various equity capital owners (preferred and common shareholders). The OPM uses the preferred shareholders’ liquidation preferences, participation rights, dividend
policy, and conversion rights to determine how proceeds from a liquidity event shall be distributed among the various ownership classes at a future date. The fair value was calculated using significant unobservable inputs including the following:
Debt issued by Dermavant to NovaQuest
The fair value of the debt instrument as of September 30, 2023 and March 31, 2023 represents the fair value of amounts payable to NovaQuest calculated using the Monte Carlo simulation method under the income
approach determined by using probability assessments of the expected future payments through 2032. The future payments are based on significant inputs that are not observable in the market which are subject to remeasurement at each reporting
date. The estimates of fair value may not be indicative of the amounts that could ultimately be paid by Dermavant to NovaQuest.
Earn-Out Shares
The fair value of the Earn-Out Shares issued as part of the Business Combination was calculated using the Monte Carlo simulation method under the income approach. The model was structured to include the lock-up periods to
which the Earn-Out Shares are subject. Refer to Note 12, “Earn-Out Shares, Public Warrants and Private Placement Warrants” for additional details. Significant unobservable inputs used to calculate the fair value of the Earn-Out Shares included the
following:
As of
September 30, 2023 and March 31, 2023, the fair value of the Earn-Out Shares was $27.6 million and $15.2 million, respectively. Earn-Out Shares were included in “” in the accompanying condensed consolidated balance sheets.
Private Placement Warrants
Prior to their settlement, the fair value of the Private Placement Warrants issued as part of the Business Combination was calculated using the Monte Carlo simulation method under the income approach. The model was
structured to incorporate the redemption features as discussed in Note 12, “Earn-Out Shares, Public Warrants and Private Placement Warrants” and the added restriction by which the Company could not redeem the Private Placement Warrants if the
Reference Value was greater than $18.00. Significant
unobservable inputs used to calculate the fair value of the Private Placement Warrants included the following:
In August 2023, the Company announced that it would redeem all Warrants that remain outstanding on September 1, 2023. All of the Private Placement Warrants were exercised. As of March 31, 2023, the fair value of the Private
Placement Warrants was $15.2 million, which was included in “” in the accompanying condensed consolidated balance sheets.
|
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Net Loss per Common Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss per Common Share |
Note 14—Net Loss per Common Share
Basic net loss per
common share is computed by dividing net loss attributable to Roivant Sciences Ltd. by the weighted-average number of common stock outstanding during the period. Diluted net loss per common share is computed by dividing the net loss
attributable to Roivant Sciences Ltd. by the diluted weighted-average number of common stock outstanding during the period.
For periods of loss, diluted loss per share is calculated similar to basic loss per share as the effect of including all potentially dilutive common stock equivalents is anti-dilutive. All outstanding common stock
equivalents have been excluded from the computation of diluted loss per share because their effect was anti-dilutive due to the net loss.
As of September 30,
2023 and 2022, potentially dilutive securities were as follows:
|
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Subsequent Events |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Subsequent Events [Abstract] | |
| Subsequent Events |
Note 15—Subsequent Events
In October 2023, the Company’s subsidiary, Immunovant, completed an
underwritten public offering of 8,475,500 shares of its common stock (including 1,526,316 shares of common stock purchased by the Company on the same terms as other investors in the offering and the full exercise of the underwriters’ option to
purchase 1,105,500 additional shares of common stock) at a price to the public of $38.00 per share. Concurrent with the public offering, the Company purchased 4,473,684
shares of Immunovant’s common stock in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended, at the same price per share as investors in the public
offering of $38.00 per share. The net proceeds to Immunovant were approximately $466.6 million after deducting underwriting discounts and commissions, placement agent fees and offering expenses. The Company’s participation in Immunovant’s October
offering resulted in an equity ownership interest in Immunovant of approximately 55%, and the Company will continue to consolidate
Immunovant.
On October 22, 2023, the Company, the Company’s subsidiary Telavant
Holdings, Inc. (“Telavant”), Pfizer Inc. (“Pfizer”) and Roche Holdings, Inc. (“Roche”) entered into a Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which Roche agreed to acquire all of the issued and outstanding shares of
capital stock of Telavant on the terms and subject to the conditions set forth in the Purchase Agreement (the “Roche Transaction”). Telavant holds the rights to RVT-3101, an anti-TL1A antibody in development for ulcerative colitis (“UC”) and
Crohn’s disease. The Company owns 75% of the issued and outstanding shares of common stock and preferred stock of Telavant and
Pfizer owns the remaining 25%, in each case on an as-converted basis.
The total consideration to be paid by Roche is comprised of (i) $7.1 billion in cash at the closing of the Roche Transaction, subject to certain customary adjustments as set forth in the Purchase Agreement, and
(ii) a one-time milestone payment of $150 million in cash payable upon the initiation of a Phase 3 trial in UC, as described in
more detail in the Purchase Agreement, in each case to be paid to all of Telavant’s equity holders, including holders of restricted stock units, on a pro rata basis relative to their ownership of
Telavant prior to the closing of the Roche Transaction. The Company expects to receive cash proceeds of approximately $5.2 billion
upon closing of the Roche Transaction and is eligible to receive approximately $110 million for its portion of a one-time milestone
payment upon Phase 3 initiation in UC.
The Company is in the process of evaluating the accounting impact
on the consolidated financial statements. The Roche Transaction is expected to close in the fourth quarter of calendar year 2023 or the first quarter of calendar year 2024. The closing of the Roche Transaction is subject to the satisfaction
or waiver of certain customary closing conditions, including certain regulatory approvals. The Purchase Agreement contains customary representations, warranties and covenants related to the Roche
Transaction. The Purchase Agreement also includes customary termination provisions and provides that, if the Roche Transaction has not been consummated by July 23, 2024, the parties may terminate the Purchase Agreement and abandon the Roche
Transaction.
|
Summary of Significant Accounting Policies (Policies) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation |
The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”) for interim financial information and follow the requirements of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, these unaudited condensed
consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be
condensed or omitted. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial
statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 filed with the SEC. The unaudited condensed consolidated balance sheet at March 31, 2023 has been derived from the audited
consolidated financial statements at that date. In the opinion of management, the unaudited condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary to present fairly the financial
position of the Company and its results of operations and cash flows for the interim periods presented. Certain prior year amounts were reclassified to conform to current year presentation. Operating results for the six months ended September 30,
2023 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2024, for any other interim period, or for any other future year.
Any references in these notes to applicable accounting guidance are meant to refer to the authoritative U.S. GAAP as found in the Accounting
Standards Codification (‘‘ASC’’) and Accounting Standards Updates (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). The unaudited condensed consolidated financial statements include the accounts of RSL and the subsidiaries in
which it has a controlling financial interest, most often through a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation.
|
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| Principles of Consolidation |
For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to
noncontrolling interests in its unaudited condensed consolidated statements of operations equal to the percentage of common stock ownership interest retained in the respective operations by the noncontrolling parties. The Company presents
noncontrolling interests as a component of shareholders’ equity on its unaudited condensed consolidated balance sheets.
The Company accounts for changes in its ownership interest in its subsidiaries while control is retained as equity transactions. The carrying
amount of the noncontrolling interest is adjusted to reflect the change in RSL’s ownership interest in the subsidiary. Any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest
is adjusted is recognized within shareholders’ equity attributable to RSL.
|
|||||||||||||||||||||||||||||||||||||||||||||
| Use of Estimates |
(B) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs, expenses, contingent liabilities, share-based compensation and research and
development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
|
|||||||||||||||||||||||||||||||||||||||||||||
| Concentrations |
(C) Concentrations
Financial instruments that potentially subject the Company to concentration of credit risk include cash and cash equivalents. The Company
maintains cash deposits and cash equivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company has established guidelines relative to diversification and maturities to maintain safety and
liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe that it is exposed to any significant credit risk related to these instruments.
The Company has long-lived assets in different geographic locations. As of September 30, 2023 and March 31, 2023, a majority of the Company’s
long-lived assets were located in the United States.
|
|||||||||||||||||||||||||||||||||||||||||||||
| Cash, Cash Equivalents, and Restricted Cash |
(D) Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash. The Company
considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted
cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands):
|
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| Contingencies |
(E) Contingencies
The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company continually
assesses any litigation or other claims it may confront to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. The Company accrues for all contingencies at the earliest date at
which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the
Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible.
|
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| Investments |
(F) Investments
Investments in equity securities may be accounted for using (i) the fair value option, if elected, (ii) fair value through earnings if fair
value is readily determinable or (iii) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable. The election to use
the measurement alternative is made for each eligible investment.
The Company has elected the fair value option to account for certain investments over which the Company has significant influence. The Company
believes the fair value option best reflects the underlying economics of the investment. See Note 3, “Equity Method Investments.”
|
|||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements |
(G) Fair Value Measurements
The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance
establishes a fair value hierarchy for financial instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are
inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market
participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. Fair value is defined as the exchange price, or exit price, representing the amount that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a
three-tier fair value hierarchy that distinguishes among the following:
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value
requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement.
The Company’s financial instruments include shares of common stock of Arbutus Biopharma Corporation (“Arbutus”); shares of common stock of
Heracles Parent, L.L.C., the parent entity of Datavant, (as defined and discussed in Note 3, “Equity Method Investments”); liability instruments issued, including warrant and earn-out shares liabilities issued in connection with the Company’s
business combination with MAAC (as discussed in Note 12, “Earn-Out Shares, Public Warrants and Private Placement Warrants”); its investments in other entities; cash and cash equivalents consisting of money market funds; accounts payable; and
long-term debt.
The shares of Arbutus common stock and
investments in common stock with a readily determinable fair value are classified as Level 1, and their fair value is determined based upon quoted market prices in an active market. The shares of common stock of Heracles Parent, L.L.C., the
parent entity of Datavant (as defined and discussed in Note 3, “Equity Method Investments”) and liability instruments issued, excluding the Public Warrants (as defined and discussed in Note 12, “Earn-Out Shares, Public Warrants and Private
Placement Warrants”), are classified as Level 3 within the fair value hierarchy as the assumptions and estimates used in the valuations are unobservable in the market. Prior to their settlement, the Public Warrants were publicly traded and
therefore were classified as Level 1 as the Public Warrants had a readily determinable fair value. Cash and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature.
Money market funds are included in Level 1 of the fair value hierarchy and are valued at the closing price reported by an actively traded exchange. The carrying value of long-term debt issued by Dermavant Sciences Ltd. (together with its wholly
owned subsidiaries, “Dermavant”), which is stated at amortized cost, approximates fair value based on current interest rates for similar types of borrowings and therefore is included in Level 2 of the fair value hierarchy. Long-term debt issued
by Dermavant for which the fair value option has been elected is included in Level 3 of the fair value hierarchy as the assumptions and estimates used in the valuation are unobservable in the market.
|
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| Significant Accounting Policies /Recently Adopted/ Issued Accounting Pronouncements |
(H) Significant Accounting Policies
There were no significant changes to the Company’s significant accounting policies from those disclosed in the Company’s Form 10-K for the year
ended March 31, 2023.
(I) Recently Adopted Accounting Pronouncements
The Company did not adopt any material accounting pronouncements during the six months ended September 30, 2023.
(J) Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the
specified effective date. Unless otherwise disclosed above, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its condensed consolidated financial statements and disclosures.
|
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Summary of Significant Accounting Policies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash, Cash Equivalents, and Restricted Cash |
Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted
cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands):
|
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Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||
| Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||
| Recognized Intangible Assets |
The following table summarizes the Company’s recognized intangible assets:
|
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Certain Balance Sheet Components (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain Balance Sheet Components [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Current Assets |
Other current assets at September 30, 2023 and March 31, 2023 consisted of the following (in thousands):
|
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| Accrued Expenses |
Accrued expenses at September 30, 2023 and March 31, 2023 consisted of the following (in thousands):
|
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| Other Current Liabilities |
Other current liabilities at September 30, 2023 and March 31, 2023 consisted of the following (in thousands):
|
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Long-Term Debt (Tables) - Dermavant [Member] |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Funding Agreement with NovaQuest [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt |
The carrying balance of the debt issued to NovaQuest was as follows (in thousands):
|
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| Credit Facility with XYQ Luxco [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt |
Outstanding debt obligations to XYQ Luxco were as follows (in thousands):
|
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| Revenue Interest Purchase and Sale Agreement with XYQ Luxco, NovaQuest [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt |
The RIPSA carrying balance was as follows (in thousands):
|
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Share-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||
| Share-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||
| Activity for Stock Options and Performance Stock Options |
Activity for stock options and performance stock options under the RSL Equity Plans for the six months ended September 30, 2023 was as follows:
|
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| Activity for Restricted Stock Units and Performance Stock Units |
Activity for restricted stock units and performance stock units under the RSL Equity Plans for the six months ended September 30, 2023 was as
follows:
|
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| Activity for Capped Value Appreciation Rights |
Activity for CVARs under the RSL 2021 EIP for the six months ended September 30, 2023 was as follows:
|
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets and Liabilities are Measured at Fair Value on Recurring Basis |
The
following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and March 31, 2023, by level, within the fair value hierarchy (in thousands):
|
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| Changes in Fair Value of the Level 3 Assets |
The changes in fair value of the Level 3 assets during the six
months ended September 30, 2023 and 2022 were as follows (in thousands):
|
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| Changes in Fair Value of the Level 3 Liabilities |
The changes in fair value
of the Level 3 liabilities during the six months ended September 30, 2023 and 2022 were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Private Placement Warrants [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Calculation Using Significant Unobservable Inputs | Significant
unobservable inputs used to calculate the fair value of the Private Placement Warrants included the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earn-Out Shares [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Calculation Using Significant Unobservable Inputs | Significant unobservable inputs used to calculate the fair value of the Earn-Out Shares included the
following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Datavant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Calculation Using Significant Unobservable Inputs | The fair value was calculated using significant unobservable inputs including the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potentially Dilutive Securities |
As of September 30,
2023 and 2022, potentially dilutive securities were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Liquidity (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|
|
Sep. 30, 2023
USD ($)
|
Jun. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
Segment
|
Sep. 30, 2022
USD ($)
|
Mar. 31, 2023
USD ($)
|
|
| Description of Business [Abstract] | |||||||
| Number of operating segment | Segment | 1 | ||||||
| Number of reporting segment | Segment | 1 | ||||||
| Liquidity [Abstract] | |||||||
| Cash and cash equivalents | $ 1,408,231 | $ 1,408,231 | $ 1,676,813 | ||||
| Accumulated deficit | (4,368,897) | (4,368,897) | $ (3,772,754) | ||||
| Net loss | $ (331,118) | $ (327,845) | $ (315,921) | $ (353,784) | $ (658,963) | $ (669,705) | |
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|---|---|
| Cash, Cash Equivalents, and Restricted Cash [Abstract] | ||||
| Cash and cash equivalents | $ 1,408,231 | $ 1,676,813 | ||
| Restricted cash (included in "Other current assets") | 5,474 | 5,011 | ||
| Restricted cash (included in "Other assets") | 9,483 | 10,291 | ||
| Cash, cash equivalents and restricted cash | $ 1,423,188 | $ 1,692,115 | $ 1,612,646 | $ 2,074,034 |
Equity Method Investments, Investment in Arbutus (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Mar. 31, 2023 |
|
| Investments [Abstract] | |||||
| Number of shares acquired (in shares) | 800,792,365 | 800,792,365 | 760,143,393 | ||
| Aggregate fair value investment | $ 250,393 | $ 250,393 | $ 304,317 | ||
| Arbutus Biopharma Corporation [Member] | |||||
| Investments [Abstract] | |||||
| Equity method investment ownership percentage | 23.00% | 23.00% | |||
| Aggregate fair value investment | $ 78,900 | $ 78,900 | $ 117,700 | ||
| Unrealized gain (losses) on investments | $ (10,500) | $ (31,100) | $ (38,800) | $ (41,600) | |
| Closing price of common stock (in dollars per share) | $ 2.03 | $ 2.03 | $ 3.03 | ||
| Arbutus Biopharma Corporation [Member] | Common Stock [Member] | |||||
| Investments [Abstract] | |||||
| Number of shares acquired (in shares) | 38,847,462 | 38,847,462 | |||
Equity Method Investments, Investment in Datavant (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Mar. 31, 2023 |
|
| Investments [Abstract] | |||||
| Aggregate fair value investment | $ 250,393 | $ 250,393 | $ 304,317 | ||
| Datavant Merger [Member] | |||||
| Investments [Abstract] | |||||
| Equity method investment ownership percentage | 17.00% | 17.00% | |||
| Aggregate fair value investment | $ 164,300 | $ 164,300 | $ 178,600 | ||
| Unrealized gain (losses) on investments | $ (35,100) | $ (21,900) | $ (14,300) | $ (28,900) | |
Certain Balance Sheet Components, Other Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Mar. 31, 2023 |
|---|---|---|
| Other Current Assets [Abstract] | ||
| Prepaid expenses | $ 60,718 | $ 60,827 |
| Trade receivables, net | 52,118 | 30,379 |
| Restricted Cash | 5,474 | 5,011 |
| Inventory | 4,905 | 2,761 |
| Income tax receivable | 2,506 | 2,356 |
| Other | 17,675 | 20,440 |
| Total other current assets | $ 143,396 | $ 121,774 |
Certain Balance Sheet Components, Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Mar. 31, 2023 |
|---|---|---|
| Accrued Expenses [Abstract] | ||
| Research and development expenses | $ 72,554 | $ 76,278 |
| Compensation-related expenses | 30,723 | 55,186 |
| Sales allowances | 18,944 | 17,569 |
| Other expenses | 30,702 | 18,096 |
| Total accrued expenses | $ 152,923 | $ 167,129 |
Certain Balance Sheet Components, Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Mar. 31, 2023 |
|---|---|---|
| Other Current Liabilities [Abstract] | ||
| Deferred revenue | $ 5,798 | $ 12,444 |
| Income tax payable | 1,358 | 542 |
| Other | 1,443 | 2,090 |
| Total other current liabilities | $ 8,599 | $ 15,076 |
Long-Term Debt, Credit Facility with XYQ Luxco (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | ||
|---|---|---|---|
May 31, 2021 |
Sep. 30, 2023 |
Mar. 31, 2023 |
|
| Outstanding Debt Obligations [Abstract] | |||
| Total debt, net | $ 389,445 | $ 375,515 | |
| Less: current portion | (48,998) | (40,720) | |
| Dermavant [Member] | Credit Facility with XYQ Luxco [Member] | |||
| Loan and Credit Agreements by Dermavant [Abstract] | |||
| Proceeds from Lines of Credit | $ 40,000 | ||
| Debt instrument, term | 5 years | ||
| Interest rate | 10.00% | ||
| Debt instrument exit fee and end of term charge | $ 5,000 | ||
| Reduction in exit fee | $ 4,000 | ||
| Warrants issued (in shares) | 1,199,072 | ||
| Exercise price of warrants (in dollars per share) | $ 0.01 | ||
| Outstanding Debt Obligations [Abstract] | |||
| Principal amount | 40,000 | 40,000 | |
| Exit fee | 5,000 | 5,000 | |
| Less: unamortized discount and debt issuance costs | (8,905) | (10,170) | |
| Total debt, net | 36,095 | 34,830 | |
| Less: current portion | 0 | 0 | |
| Total long-term debt, net | $ 36,095 | $ 34,830 |
Long-Term Debt, Revenue Interest Purchase and Sale Agreement (Details) - USD ($) $ in Thousands |
1 Months Ended | |||
|---|---|---|---|---|
Jun. 30, 2022 |
May 31, 2021 |
Sep. 30, 2023 |
Mar. 31, 2023 |
|
| Carrying Balance [Abstract] | ||||
| Total debt, net | $ 389,445 | $ 375,515 | ||
| Less: current portion | (48,998) | (40,720) | ||
| Dermavant [Member] | Revenue Interest Purchase and Sale Agreement with XYQ Luxco, NovaQuest [Member] | ||||
| Revenue Interest Purchase and Sale Agreement [Abstract] | ||||
| Face amount | $ 160,000 | |||
| Royalties entitled to receive | $ 344,000 | |||
| Committed funding under revenue interest purchase and sale agreement received | $ 160,000 | |||
| Carrying Balance [Abstract] | ||||
| Carrying balance | 189,714 | 178,571 | ||
| Less: unamortized issuance costs | (4,397) | (4,806) | ||
| Total debt, net | 185,317 | 173,765 | ||
| Less: current portion | (20,878) | (13,780) | ||
| Total long-term debt, net | $ 164,439 | $ 159,985 | ||
Shareholders' Equity - (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 3 Months Ended | |
|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
Sep. 19, 2022 |
|
| Common Stock [Member] | |||
| Shareholders' Equity [Abstract] | |||
| Sale of common shares (in shares) | 19,600,685 | ||
| Common Stock [Member] | Investor [Member] | |||
| Shareholders' Equity [Abstract] | |||
| Sale of common shares (in shares) | 19,600,685 | ||
| Purchase price (in dollars per share) | $ 10.21 | $ 10.21 | |
| Net proceeds from sale of common stock | $ 199.8 | ||
| Cowen [Member] | At-the-Market Equity Offering Program[Member] | |||
| Shareholders' Equity [Abstract] | |||
| Common shares aggregate offering price authorized | $ 400.0 | ||
| Common shares aggregate offering price authorized, remaining capacity available | $ 400.0 | $ 400.0 |
Share-Based Compensation, Stock Options and Performance Stock Options under RSL Equity Plans (Details) |
6 Months Ended |
|---|---|
|
Sep. 30, 2023
IncentivePlans
shares
| |
| Share-Based Compensation [Abstract] | |
| Number of equity incentive plans | IncentivePlans | 3 |
| RSL 2021 EIP [Member] | |
| Share-Based Compensation [Abstract] | |
| Common shares available for future grants (in shares) | 41,722,310 |
| Stock Options and Performance Stock Options [Member] | RSL Equity Plans [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward] | |
| Options outstanding, beginning balance (in shares) | 154,271,791 |
| Granted (in shares) | 4,497,911 |
| Exercised (in shares) | (9,411,537) |
| Forfeited/Canceled (in shares) | (604,245) |
| Options outstanding, ending balance (in shares) | 148,753,920 |
| Options exercisable at September 30, 2023 (in shares) | 86,575,431 |
Share-Based Compensation, Restricted Stock Units and Performance Stock Units (Details) - Restricted Stock and Performance Stock Units [Member] - RSL Equity Plans [Member] |
6 Months Ended |
|---|---|
|
Sep. 30, 2023
shares
| |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
| Non-vested balance, beginning (in shares) | 20,700,788 |
| Granted (in shares) | 4,123,913 |
| Vested (in shares) | (4,023,340) |
| Forfeited (in shares) | (727,950) |
| Non-vested balance, ending (in shares) | 20,073,411 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Income Taxes [Abstract] | ||||
| Effective tax rate | (1.10%) | (0.70%) | (0.80%) | (0.90%) |
Commitments and Contingencies (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Sep. 30, 2023
USD ($)
| |
| GSK [Member] | |
| Commitments [Abstract] | |
| Purchase certain quantities of inventory over period | 5 years |
| Minimum purchase commitment related to agreement | $ 42.6 |
| Samsung [Member] | |
| Commitments [Abstract] | |
| Minimum purchase commitment related to agreement | $ 18.7 |
| Palantirs [Member] | |
| Commitments [Abstract] | |
| Proprietary software subscription period | 5 years |
| Remaining minimum payments | $ 19.1 |
Fair Value Measurements, Changes in Fair Value of the Level 3 Assets (Details) - Level 3 [Member] - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
| Beginning Balance | $ 178,579 | $ 193,963 |
| Changes in fair value of investment in Datavant, included in net loss | $ (14,254) | $ (28,942) |
| Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Fair Value of Debt and Liability Instruments | Gain (Loss) on Fair Value of Debt and Liability Instruments |
| Ending Balance | $ 164,325 | $ 165,021 |
Fair Value Measurements, Changes in Fair Value of the Level 3 Liabilities (Details) - Level 3 [Member] - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
| Balance at beginning of period | $ 241,291 | $ 204,293 |
| Payments related to long-term debt | (14,687) | (14,687) |
| Exercise of Private Placement Warrants | (28,090) | |
| Changes in fair value of debt and liability instruments, included in net loss | $ 49,631 | $ 37,705 |
| Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Fair Value of Debt and Liability Instruments | Gain (Loss) on Fair Value of Debt and Liability Instruments |
| Balance at end of period | $ 248,145 | $ 227,311 |
Fair Value Measurements, Fair Value of Significant Unobservable Inputs (Details) $ in Millions |
Sep. 30, 2023
USD ($)
|
Mar. 31, 2023
USD ($)
|
|---|---|---|
| Earn-Out Shares [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Non financial liabilities at fair value | $ 27.6 | $ 15.2 |
| Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liability Instruments Measured at Fair Value | |
| Private Placement Warrants [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liability Instruments Measured at Fair Value | |
| Volatility [Member] | Datavant [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Investment in equity securities, measurement input | 1 | 1 |
| Volatility [Member] | Earn-Out Shares [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Earn-out share, measurement input | 69.30% | 79.90% |
| Volatility [Member] | Private Placement Warrants [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Private placement warrants, measurement input | 0.505 | |
| Risk-free Rate [Member] | Datavant [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Investment in equity securities, measurement input | 0.0507 | 0.0402 |
| Risk-free Rate [Member] | Earn-Out Shares [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Earn-out share, measurement input | 4.80% | 3.76% |
| Risk-free Rate [Member] | Private Placement Warrants [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Private placement warrants, measurement input | 0.0376 | |
| Term (in years) [Member] | Private Placement Warrants [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
| Private placement warrants, term | 3 years 6 months |
Net Loss per Common Share (Details) - shares |
6 Months Ended | |||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|||
| Stock Options and Performance Stock Options [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 148,753,920 | 154,836,057 | ||
| Restricted Stock Units and Performance Stock Units (Non-vested) [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 20,073,411 | 25,214,766 | ||
| March 2020 CVARs [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | [1] | 28,753,677 | 32,011,996 | |
| November 2021 CVARs (Non-vested) [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 2,506,499 | 4,060,128 | ||
| Restricted Common Stock (Non-vested) [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 487,005 | 772,018 | ||
| Earn-Out Shares (Non-vested) [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 3,080,387 | 3,080,387 | ||
| Private Placement Warrants [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 0 | 10,214,365 | ||
| Public Warrants [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 0 | 20,475,875 | ||
| Other Stock Based Awards and Instruments Issued [Member] | ||||
| Net Loss per Common Share [Abstract] | ||||
| Potentially dilutive securities (in shares) | 5,611,820 | 6,209,162 | ||
| ||||
Subsequent Events (Details) - Subsequent Events [Member] - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | |
|---|---|---|
Oct. 22, 2023 |
Oct. 31, 2023 |
|
| Immunovant, Inc. [Member] | Underwritten Public Offering [Member] | ||
| Subsequent Events [Abstract] | ||
| Net proceeds of common stock | $ 466.6 | |
| Roche Transaction [Member] | ||
| Subsequent Events [Abstract] | ||
| Consideration to be received in cash | $ 7,100.0 | |
| Consideration to be received from milestone | $ 150.0 | |
| Pfizer [Member] | Telavant Holdings, Inc [Member] | ||
| Subsequent Events [Abstract] | ||
| Ownership percentage | 25.00% | |
| RSL [Member] | Immunovant, Inc. [Member] | ||
| Subsequent Events [Abstract] | ||
| Ownership percentage | 55.00% | |
| RSL [Member] | Telavant Holdings, Inc [Member] | ||
| Subsequent Events [Abstract] | ||
| Ownership percentage | 75.00% | |
| RSL [Member] | Roche Transaction [Member] | ||
| Subsequent Events [Abstract] | ||
| Consideration to be received in cash | $ 5,200.0 | |
| Consideration to be received from milestone | $ 110.0 | |
| Common Stock [Member] | Roivant participation of Immunovant Stock offering [Member] | ||
| Subsequent Events [Abstract] | ||
| Common shares purchased by RSL (in shares) | 1,526,316 | |
| Option purchase additional shares of common stock (in shares) | 1,105,500 | |
| Sale price (in dollars per share) | $ 38 | |
| Common Stock [Member] | Immunovant, Inc. [Member] | Underwritten Public Offering [Member] | ||
| Subsequent Events [Abstract] | ||
| Common shares issued (in shares) | 8,475,500 | |
| Common Stock [Member] | Immunovant, Inc. [Member] | Private Placement [Member] | ||
| Subsequent Events [Abstract] | ||
| Common shares purchased by RSL (in shares) | 4,473,684 | |
| Sale price (in dollars per share) | $ 38 |