QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
11-12 St. James’s Square |
Not Applicable | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
per share warrant exercisable for one Common Share at an exercise price of $11.50 per share |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
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Emerging growth company |
Page |
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Item 1. |
6 |
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6 |
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7 |
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8 |
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9 |
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10 |
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11 |
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Item 2. |
31 |
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Item 3. |
43 |
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Item 4. |
44 |
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Item 1. |
45 |
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Item 1A. |
45 |
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Item 2. |
109 |
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Item 3. |
109 |
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Item 4. |
109 |
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Item 5. |
109 |
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Item 6. |
109 |
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111 |
• |
Our limited operating history and the inherent uncertainties and risks involved in biopharmaceutical product development may make it difficult for us to execute on our business model and for you to assess our future viability. |
• |
We may never achieve or maintain profitability. |
• |
We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to successfully market our products, acquire or in-license new products or product candidates, complete the development and commercialization of our products and product candidates and continue to pursue our drug discovery efforts. |
• |
We have limited experience as a commercial company and the marketing and sale of VTAMA ® (tapinarof) or any future products may be unsuccessful or less successful than anticipated. |
• |
We may not be successful in our efforts to acquire, in-license or discover new product candidates. |
• |
We face risks associated with the allocation of capital and personnel across our businesses. |
• |
We face risks associated with the Vant structure. |
• |
The global pandemic resulting from the outbreak of the novel strain of coronavirus, SARS-CoV-2, COVID-19, could adversely impact our business, including the marketing of our products and our ongoing clinical trials and preclinical studies. |
• |
Clinical trials and preclinical studies are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes. We may encounter substantial delays in clinical trials, or may not be able to conduct or complete clinical trials or preclinical studies on the expected timelines, if at all. |
• |
Our approach to the discovery and development of product candidates from our small molecule discovery engine is unproven, which makes it difficult to predict the time, cost of development and likelihood of successfully developing any product candidates from these platforms. |
• |
Certain of our product candidates are novel, complex and difficult to manufacture. |
• |
Obtaining approval of a new drug is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or another regulator may delay, limit or deny approval. |
• |
Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of product candidates that we may identify and pursue for their intended uses, which would prevent, delay or limit the scope of regulatory approval and commercialization. |
• |
Our products and product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval, cause us to suspend or discontinue clinical trials, abandon further development or limit the scope of any approved label or market acceptance. |
• |
We depend on the knowledge and skills of our senior leaders and may not be able to manage our business effectively if we are unable to attract and retain key personnel. |
• |
We will need to expand our organization and may experience difficulties in managing this growth, which could disrupt operations. |
• |
If we are unable to obtain and maintain patent and other intellectual property protection for our technology, products and product candidates or if the scope of the intellectual property protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. |
• |
If the patent applications we hold or have in-licensed with respect to our products or product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our current and future products or product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize our products. |
• |
Patent terms and their scope may be inadequate to protect our competitive position on current and future products and product candidates for an adequate amount of time. |
• |
If our performance does not meet market expectations, the price of our securities may decline. |
• |
We have incurred and will continue to incur increased costs as a result of operating as a public company and our management has devoted and will continue to devote a substantial amount of time to new compliance initiatives. |
• |
Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act could have a material adverse effect on our business. |
• |
Anti-takeover provisions in our memorandum of association, bye-laws and Bermuda law could delay or prevent a change in control, limit the price investors may be willing to pay in the future for our Common Shares and could entrench management. |
• |
Our largest shareholders and certain members of our management own a significant percentage of our Common Shares and will be able to exert significant control over matters subject to shareholder approval. |
• |
our limited operating history and risks involved in biopharmaceutical product development; |
• |
our limited experience as a commercial-stage company and ability to successfully commercialize VTAMA ® (tapinarof); |
• |
our ability to raise additional capital to fund our business on acceptable terms or at all; |
• |
the fact that we will likely incur significant operating losses for the foreseeable future; |
• |
the impact of public health outbreaks, epidemics or pandemics (such as the COVID-19 pandemic) on our business (including our clinical trials and preclinical studies), operations and financial condition and results; |
• |
our ability to acquire, in-license or discover new product candidates; |
• |
our Vant structure and the potential that we may fail to capitalize on certain development opportunities; |
• |
clinical trials and preclinical studies, which are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes; |
• |
the unproven nature of our approach to the discovery and development of product candidates from our small molecule discovery engine; |
• |
the novelty, complexity and difficulty of manufacturing certain of our products and product candidates, including any manufacturing problems that result in delays in development or commercialization of our products and product candidates; |
• |
difficulties we may face in enrolling and retaining patients in clinical trials and/or clinical development activities; |
• |
the results of our clinical trials not supporting our proposed claims for a product candidate; |
• |
changes in interim, top-line and/or preliminary data from our clinical trials changing as more data becoming available or being delayed due to audit and verification process; |
• |
changes in product manufacturing or formulation that could lead to the incurrence of costs or delays; |
• |
the failure of any third-party we contract with to conduct, supervise and monitor our clinical trials to perform in a satisfactory manner or to comply with applicable requirements; |
• |
the fact that obtaining approvals for new drugs is a lengthy, extensive, expensive and unpredictable process that may end with our inability to obtain regulatory approval by the FDA or other regulatory agencies in other jurisdictions; |
• |
the failure of our clinical trials to demonstrate substantial evidence of the safety and efficacy of our products and product candidates, including, but not limited to, scenarios in which our products and product candidates may cause adverse effects that could delay regulatory approval, discontinue clinical trials, limit the scope of approval or generally result in negative media coverage of us; |
• |
our inability to obtain regulatory approval for a product or product candidate in certain jurisdictions, even if we are able to obtain approval in certain other jurisdictions; |
• |
our ability to effectively manage growth and to attract and retain key personnel; |
• |
any business, legal, regulatory, political, operational, financial and economic risks associated with conducting business globally; |
• |
our ability to obtain and maintain patent and other intellectual property protection for our technology, products and product candidates; |
• |
the inadequacy of patent terms and their scope to protect our competitive position; |
• |
the failure to issue (or the threatening of their breadth or strength of protection) or provide meaningful exclusivity for our current and future products and product candidates of our patent applications that we hold or have in-licensed; |
• |
the fact that we do not currently and may not in the future own or license any issued composition of matter patents covering certain of our products and product candidates and our inability to be certain that any of our other issued patents will provide adequate protection for such products and product candidates; |
• |
the fact that our largest shareholders (and certain members of our management team) own a significant percentage of our stock and will be able to exert significant control over matters subject to shareholder approval; |
• |
the outcome of any pending or potential litigation, including but not limited to our expectations regarding the outcome of any such litigation and costs and expenses associated with such litigation; |
• |
changes in applicable laws or regulations; |
• |
the possibility that we may be adversely affected by other economic, business and/or competitive factors; and |
• |
any other risks and uncertainties, including those described under Part II, Item 1A. “Risk Factors.” |
Item 1. |
Financial Statements (Unaudited). |
June 30, 2022 |
March 31, 2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use |
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Restricted cash, net of current portion |
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Investments measured at fair value |
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Intangible assets, net |
— | |||||||
Other assets |
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Total assets |
$ | $ | ||||||
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses |
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Operating lease liabilities |
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Current portion of long-term debt (includes $ |
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Deferred revenue |
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Other current liabilities |
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Total current liabilities |
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Liability instruments measured at fair value |
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Operating lease liabilities, noncurrent |
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Long-term debt, net of current portion (includes $accounted for under the fair value option at June 30, 2022 and March 31, 2022, respectively) |
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Deferred revenue, noncurrent |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 10) |
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Redeemable noncontrolling interest |
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Shareholders’ equity: |
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Common shares, par value $ per share, |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Shareholders’ equity attributable to Roivant Sciences Ltd. |
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Noncontrolling interests |
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Total shareholders’ equity |
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Total liabilities, redeemable noncontrolling interest and shareholders’ |
$ | $ | ||||||
Three Months Ended June 30, |
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2022 |
2021 |
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Revenue, net |
$ | $ | ||||||
Operating expenses: |
||||||||
Cost of revenues |
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Research (includes $ of share-based compensation expense for the three months ended June 30, 2022 and 2021, respectively) |
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Acquired in-process research and development |
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Selling, general and administrative (includes $ |
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Total operating expenses |
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Loss from operations |
( |
) | ( |
) | ||||
Change in fair value of investments |
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Change in fair value of debt and liability instruments |
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Gain on termination of Sumitomo Options |
( |
) | ||||||
Other expense (income), net |
( |
) | ||||||
Loss before income taxes |
( |
) | ( |
) | ||||
Income tax expense |
||||||||
Net loss |
( |
) | ( |
) | ||||
Net loss attributable to noncontrolling interests |
( |
) | ( |
) | ||||
Net loss attributable to Roivant Sciences Ltd. |
$ | ( |
) | $ | ( |
) | ||
Net loss per common share—basic and diluted (1) |
$ | ( |
) | $ | ( |
) | ||
Weighted average shares outstanding—basic and diluted (1) |
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(1) |
Retroactively restated for the stock subdivision as described in Note 7. |
Three Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
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 |
||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest |
Common Stock |
Additional Paid-in Capital |
Subscription Receivable |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
Total Shareholders’ Equity |
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Shares |
Amount |
|||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 |
$ | $ | — | $ | $ | — | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
Issuance of y |
— | — | — | ( |
) | — | — | — | — | |||||||||||||||||||||||||||
Stock options exercised and equity instruments vested and settled, net of tax withholding |
— | — | ( |
) |
— | — | — | ( |
) | |||||||||||||||||||||||||||
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 |
$ | $ | — | $ | $ | — | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||
Shareholders’ Equity (1) |
||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest |
Common Stock |
Additional Paid-in Capital |
Subscription Receivable |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
Total Shareholders’ Equity |
|||||||||||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
$ |
( |
) | $ |
$ |
( |
) | $ |
$ | ||||||||||||||||||||||||
Issuance of subsidiary warrants |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Cash contribution to majority-owned subsidiaries |
— | — | — | ( |
) | — | — | — | ||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Balance at June 30, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
(1) |
Retroactively restated for the stock subdivision as described in Note 7. |
Three Months Ended June 30, |
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2022 |
2021 |
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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 termination of Sumitomo Options |
( |
) | ||||||
Other |
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Changes in assets and liabilities, net of effects from acquisition and divestiture: |
||||||||
Accounts payable |
( |
) | ( |
) | ||||
Accrued expenses |
( |
) | ( |
) | ||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Deferred revenue |
( |
) | ( |
) | ||||
Other |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchase of property and equipment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
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Proceeds from subsidiary debt financings, net of financing costs paid |
||||||||
Repayment of debt by subsidiary |
( |
) | ( |
) | ||||
Payment of offering and loan origination costs |
( |
) | ( |
) | ||||
Taxes paid related to net settlement of equity instruments |
( |
) | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
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|
|
|
|
|||||
Net change in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ||||
Cash, cash equivalents and restricted cash at beginning of period |
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|
|
|
|
|||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
|
|
|
|
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Non-cash investing and financing activities: |
||||||||
Offering costs included in accounts payable and accrued expenses |
$ | $ | ||||||
Intangible assets acquired but not paid |
$ | $ | ||||||
Other |
$ | $ |
June 30, 2022 |
March 31, 2022 |
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Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
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. |
• |
Licenses of intellectual property: non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are not distinct from other promises, the Company applies judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the related revenue recognition accordingly. |
• |
Milestone payments: re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price on a cumulative catch-up basis in earnings in the period of the adjustment. |
• |
Royalties and commercial milestone payments: pre-specified level of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Achievement of these royalties and commercial milestones may solely depend upon performance of the licensee. |
a. |
Prompt Pay and Cash Pay Discounts: The Company generally provides invoice discounts on product sales to its customers for prompt payment and/or cash payment. The Company estimates the amount of such discounts that will be utilized and deducts the amount from its gross product revenues and accounts receivable at the time such revenues are recognized. |
b. |
Customer Fees: The Company pays fees to its customers for account management, data management, and other administrative services. To the extent the services received are distinct from sales of products to the customer, the Company records these payments in selling, general and administrative expenses. |
c. |
Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a wholesaler or specialty distributor. Contracted customers, which currently consist primarily of public health service institutions, federal government entities, pharmaceutical benefit managers, and health maintenance organizations, generally purchase the product at a discounted price. The wholesaler or specialty distributor, in turn, charges back to the Company the difference between the price initially paid by the wholesaler or specialty distributor and the discounted price paid to the wholesaler or specialty distributor by the contracted customer. The allowance for chargebacks is based on actual chargebacks received and an estimate of sales to contracted customers. |
d. |
Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program and the Medicare Part D prescription drug benefit as well as contracted discounts with pharmaceutical benefit managers and health maintenance organizations. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements with payers or statutory requirements pertaining to Medicaid and Medicare benefit providers. The allowance for rebates is based on contractual or statutory discount rates, estimated payer mix, and expected utilization. The Company’s estimates for expected utilization of rebates are based on historical data received from wholesalers, specialty distributors, and pharmacies since launch, as well as analog data from similar products. The Company monitors sales trends and adjusts the allowance on a regular basis to reflect the most recent rebate experience. The Company’s liability for these rebates consists of invoices received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. |
e. |
Co-payment Assistance: The Company offers co-payment assistance to patients. Co-payment assistance is accrued based on an estimate of the number of co-payment assistance claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. |
f. |
Product Returns: Consistent with industry practice, the Company offers its customers limited product return rights for damages, shipment errors, and expiring product; provided that the return is within a specified period around the product expiration date as set forth in the applicable individual distribution or customer agreement. The Company does not allow product returns for product that has been dispensed to a patient. In arriving at its estimate for product returns, the Company considers historical product returns, the underlying product demand, and industry specific data. |
Weighted Average Estimated Useful Lives |
June 30, 2022 |
|||||||
Gross amount |
$ |
|||||||
Less: accumulated amortization |
( |
) | ||||||
Net book value |
$ |
|||||||
June 30, 2022 |
March 31, 2022 |
|||||||
Research and development expenses |
$ | $ | ||||||
Compensation-related expenses |
||||||||
Other expenses |
||||||||
Total accrued expenses |
$ | $ | ||||||
June 30, 2022 |
March 31, 2022 |
|||||||
Fair value of long-term debt |
$ | $ | ||||||
Less: current portion |
( |
) | ||||||
Total long-term debt, net |
$ | $ | ||||||
June 30, 2022 |
March 31, 2022 |
|||||||
Principal amount |
$ | $ | ||||||
Exit fee |
||||||||
Less: unamortized discount and debt issuance costs |
( |
) | ( |
) | ||||
Total debt, net |
||||||||
Less: current portion |
||||||||
Total long-term debt, net |
$ | $ | ||||||
June 30, 2022 |
||||
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, 2022 |
||||
Granted |
||||
Forfeited/Canceled |
( |
) | ||
Options outstanding at June 30, 2022 |
||||
Options exercisable at June 30, 2022 |
||||
Number of Shares |
||||
Non-vested balance at March 31, 2022 |
||||
Granted |
||||
Vested |
( |
) | ||
Forfeited |
( |
) | ||
Non-vested balance at June 30, 2022 |
||||
Number of CVARs |
||||
Non-vested balance at March 31, 2022 |
||||
Vested |
( |
) | ||
Forfeited |
( |
) | ||
Non-vested balance at June 30, 2022 |
||||
a. | Earn-Out Shares”), which will vest if the closing price of the Company’s common shares is greater than or equal to $ trading day period during the Vesting Period (defined below). y |
b. | Earn-Out Shares” and, together with the Earn-Out Shares, the “Earn-Out Shares”), each in respect of its MAAC Class B Shares, will vest if the closing price of the Company’s common shares is greater than or equal to $ |
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 June 30, 2022 |
As of March 31, 2022 |
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Level 1 |
Level 2 |
Level 3 |
Balance as of June 30, 2022 |
Level 1 |
Level 2 |
Level 3 |
Balance as of March 31, 2022 |
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Assets: |
||||||||||||||||||||||||||||||||
Money market funds |
$ | $ | — | $ | — | $ | $ | $ | — | $ | — | $ | ||||||||||||||||||||
Investment in Datavant Class A units |
— | — | — | — | ||||||||||||||||||||||||||||
Investment in Sio common shares |
— | — | — | — | ||||||||||||||||||||||||||||
Investment in Arbutus common shares |
— | — | — | — | ||||||||||||||||||||||||||||
Other investment |
— | — | — | — | ||||||||||||||||||||||||||||
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) |
At June 30, 2022, Level 1 includes the fair value of the Public Warrants of $ Earn-Out Shares of $Earn-Out Shares of $. |
Balance at March 31, 2022 |
$ | |||
Changes in fair value of investment in Datavant, included in net loss |
( |
) | ||
|
|
|||
Balance at June 30, 2022 |
$ | |||
|
|
Balance at March 31, 2021 |
$ | |||
Changes in fair value of debt and liability instruments, included in net loss |
||||
Termination of DSP Options |
( |
) | ||
|
|
|||
Balance at June 30, 2021 |
$ | |||
|
|
|||
Balance at March 31, 2022 |
$ | |||
Payments related to long-term debt |
( |
) | ||
Changes in fair value of debt and liability instruments, included in net loss |
||||
|
|
|||
Balance at June 30, 2022 |
$ | |||
|
|
Point Estimate Used |
|||||||
Input |
As of June 30, 2022 |
As of March 31, 2022 |
|||||
Volatility |
% |
|
|
% | |||
Risk-free rate |
% |
|
|
% |
Point Estimate Used |
||||||||
Input |
As of June 30, 2022 |
As of March 31, 2022 |
||||||
Volatility |
% |
% | ||||||
Risk-free rate |
% |
% |
Point Estimate Used |
|||||||
Input |
As of June 30, 2022 |
As of March 31, 2022 |
|||||
Volatility |
% |
|
% | ||||
Risk-free rate |
% |
|
% | ||||
Term (in years) |
|
|
|
Three Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Interest income |
$ | ( |
) | $ | ( |
) | ||
Interest expense |
||||||||
Other expense (income) |
( |
) | ||||||
|
|
|
|
|||||
Total |
$ | $ | ( |
) | ||||
|
|
|
|
June 30, 2022 |
June 30, 2021 |
|||||||
Stock options and performance stock options |
||||||||
Restricted stock units and performance stock units (non-vested) |
||||||||
March 2020 CVARs (1) |
||||||||
November 2021 CVARs |
||||||||
Restricted common stock (non-vested) |
||||||||
Earn-Out Shares (non-vested) |
||||||||
Private Placement Warrants |
||||||||
Public Warrants |
||||||||
Other instruments issued |
(1) |
Refer to Note 8, “Share-Based Compensation” for details regarding settlement of CVARs. |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | commercially launched VTAMA ® (tapinarof) cream 1% for the treatment of plaque psoriasis in adults; |
• | conducted nine international Phase 3 trials, the last eight of which have been successful; |
• | consummated a $3 billion upfront partnership with Sumitomo Pharma (“Sumitomo”); |
• | received six FDA approvals for drugs developed by Vants launched by Roivant, including VTAMA and four drugs that received FDA approval after their transfer to Sumitomo; |
• | built a broad and differentiated pipeline of drugs and drug candidates ranging from early discovery to commercial stage; and |
• | launched Roivant Discovery, our small molecule discovery engine, consisting of a collection of advanced computational physics capabilities, integrated with an in-house wet lab facility. |
Product/Product Candidate |
Indication |
Vant |
Modality |
Phase | ||||
VTAMA ® (tapinarof) |
Psoriasis | Dermavant | Topical | Commercial | ||||
VTAMA ® (tapinarof) |
Atopic Dermatitis | Dermavant | Topical | Phase 3 | ||||
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 |
Warm Autoimmune Hemolytic Anemia | Immunovant | Biologic | Phase 2 or 3 | ||||
Batoclimab |
Other Indications | Immunovant | Biologic | Phase 2 or 3 | ||||
Namilumab |
Sarcoidosis | Kinevant | Biologic | Phase 2 | ||||
RVT-2001 |
Transfusion-Dependent Anemia in Patients with Lower-Risk MDS |
Hemavant | Small Molecule | Phase 1/2 |
* |
Reflects an ongoing trial that is designed to serve as one of two potentially registrational trials for brepocitinib. |
• | A quantum mechanics-based molecular dynamics software platform to predict the interactions, energies and conformational behavior of targets and generate novel drug candidates; |
• | A supercomputing cluster composed of over 800 graphics processing units; |
• | A suite of degrader-specific ML tools; |
• | A wet lab fully equipped for synthetic chemistry, crystallography, biophysics, biochemistry and biology. |
Roivant Ownership | ||||||||
Vant |
Basic 1 |
Fully Diluted 2 | ||||||
Dermavant |
100 | % | 83 | % | ||||
Immunovant |
63 | % 3 |
57 | % 3 | ||||
Priovant |
75 | % | 70 | % | ||||
Proteovant |
60 | % | 54 | % | ||||
Genevant |
83 | % | 67 | % | ||||
Kinevant |
88 | % | 81 | % | ||||
Hemavant |
100 | % | 100 | % | ||||
Affivant |
100 | % | 99 | % | ||||
Arbutus |
26 | % 3 |
24 | % 3 | ||||
Lokavant |
90 | % | 84 | % | ||||
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. |
* |
As of June 30, 2022, 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) |
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 | |||
Roivant Discovery |
Roivant | Updates on QUAISAR platform and degrader discovery |
Ongoing | |||
Batoclimab |
Immunovant | Initiate two additional pivotal programs, including TED | 2H 2022 | |||
VTAMA ® (tapinarof) |
Dermavant | Topline data from Phase 3 trials in atopic dermatitis | 1H 2023 | |||
Brepocitinib |
Priovant | Topline data from potentially registrational Phase 2 trial in systemic lupus erythematosus |
2H 2023 | |||
RVT-2001 |
Hemavant | Data from RVT-2001 Phase 1/2 trial in lower-risk MDS |
2H 2023 | |||
Namilumab |
Kinevant | Topline data from Phase 2 in sarcoidosis | 1H 2024 | |||
Batoclimab |
Immunovant | Topline data from Phase 3 in MG | 2H 2024 |
• | Dermavant : Since its launch in late May, VTAMA has had approximately 14,000 prescriptions written by more than 3,000 unique prescribers based on the latest available IQVIA data through August 5 for prescriptions and July 29 for prescribers. VTAMA became the most prescribed branded topical for the treatment of psoriasis in the U.S. within eight weeks of launch. In July, Torii Pharmaceutical and Japan Tobacco announced positive topline results from their Phase 3 study of tapinarof in atopic dermatitis. In this trial, tapinarof showed statistical superiority to vehicle on the primary endpoint of efficacy, IGA response at week 8. In addition, tapinarof showed statistical superiority to vehicle for EASI achievement rate at week 8, the key secondary endpoint of efficacy. There were no new observed safety or tolerability findings reported. |
• | Priovant |
• | 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: |
• | employee-related expenses, such as salaries, share-based compensation, and benefits, for research and development personnel; and |
• | 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; and |
• | our ability to maintain a continued acceptable safety profile of our product candidates following approval of our product candidates. |
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Revenue, net |
$ | 4,319 | $ | 7,735 | $ | (3,416 | ) | |||||
Operating expenses: |
||||||||||||
Cost of revenues |
1,726 | 742 | 984 | |||||||||
Research and development |
135,830 | 78,515 | 57,315 | |||||||||
Acquired in-process research and development |
— | 111 | (111 | ) | ||||||||
Selling, general and administrative |
149,072 | 82,754 | 66,318 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
286,628 | 162,122 | 124,506 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(282,309 | ) | (154,387 | ) | (127,922 | ) | ||||||
|
|
|
|
|
|
|||||||
Change in fair value of investments |
24,547 | 8,619 | 15,928 | |||||||||
Change in fair value of debt and liability instruments |
41,213 | 4,585 | 36,628 | |||||||||
Gain on termination of Sumitomo Options |
— | (66,472 | ) | 66,472 | ||||||||
Other expense (income), net |
1,716 | (134 | ) | 1,850 | ||||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(349,785 | ) | (100,985 | ) | (248,800 | ) | ||||||
Income tax expense |
3,999 | 93 | 3,906 | |||||||||
|
|
|
|
|
|
|||||||
Net loss |
(353,784 | ) | (101,078 | ) | (252,706 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss attributable to noncontrolling interests |
(21,975 | ) | (18,895 | ) | (3,080 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss attributable to Roivant Sciences Ltd. |
$ | (331,809 | ) | $ | (82,183 | ) | $ | (249,626 | ) | |||
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Revenue, net |
$ | 4,319 | $ | 7,735 | $ | (3,416 | ) |
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Cost of revenues |
$ | 1,726 | $ | 742 | $ | 984 |
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Program-specific costs: |
||||||||||||
Batoclimab |
$ | 17,077 | $ | 13,688 | $ | 3,389 | ||||||
Brepocitinib |
12,302 | — | 12,302 | |||||||||
Tapinarof |
10,440 | 9,757 | 683 | |||||||||
ARU-1801 |
9,847 | 2,278 | 7,569 | |||||||||
LSVT-1701 |
6,088 | 1,366 | 4,722 | |||||||||
ARU-2801 |
3,456 | 1,302 | 2,154 | |||||||||
AFVT-2101 |
3,312 | 4,751 | (1,439 | ) | ||||||||
Other program-specific costs |
17,981 | 14,762 | 3,219 | |||||||||
|
|
|
|
|
|
|||||||
Total program-specific costs |
80,503 | 47,904 | 32,599 | |||||||||
|
|
|
|
|
|
|||||||
Unallocated internal costs: |
||||||||||||
Share-based compensation |
12,243 | 1,615 | 10,628 | |||||||||
Personnel-related expenses |
34,447 | 22,092 | 12,355 | |||||||||
Other expenses |
8,637 | 6,904 | 1,733 | |||||||||
|
|
|
|
|
|
|||||||
Total research and development expenses |
$ | 135,830 | $ | 78,515 | $ | 57,315 | ||||||
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Selling, general and administrative |
$ | 149,072 | $ | 82,754 | $ | 66,318 |
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Change in fair value of investments |
$ | 24,547 | $ | 8,619 | $ | 15,928 |
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Change in fair value of debt and liability instruments |
$ | 41,213 | $ | 4,585 | $ | 36,628 |
Three Months Ended June 30, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Gain on termination of Sumitomo Options |
$ | — | $ | (66,472 | ) | $ | 66,472 |
• | contractual payments related to our long-term debt (see Note 6, “Long-Term Debt” of our condensed consolidated financial statements); |
• | obligations under our operating leases; |
• | certain commitments to Palantir Technologies Inc. (“Palantir”) totaling $30.0 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 $36.0 million; and |
• | certain commitments to GSK pursuant to a commercial supply agreement entered between Dermavant and GSK. In conjunction with the purchase agreement of tapinarof between our subsidiary, Dermavant and GSK, Dermavant entered into a clinical supply agreement for 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 will 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 $48.2 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. |
Three Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Net cash used in operating activities |
$ | (252,082 | ) | $ | (141,170 | ) | ||
Net cash used in investing activities |
$ | (7,459 | ) | $ | (2,339 | ) | ||
Net cash provided by financing activities |
$ | 141,976 | $ | 10,210 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. |
Controls and Procedures. |
Item 1. |
Legal Proceedings. |
Item 1A. |
Risk Factors. |
• | successfully 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 small molecule discovery engine and advance those product candidates into preclinical studies and clinical trials; |
• | successfully market our healthcare technology products and services; |
• | 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 the U.S. Food and Drug Administration (the “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. |
• | 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 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 defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our current or future products or product candidates; and |
• | our ability to hire, attract and retain qualified personnel. |
• | our ability to recruit and retain effective sales, marketing and customer service personnel; |
• | our ability to obtain 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 these 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 sell and market our current and future products and, if approved, product candidates, including as a result of government- or employer-imposed remote work orders and travel and workplace visitor restrictions; |
• | a decrease in patient health care utilization due to quarantines, travel restrictions, work from home orders or other public health measures; |
• | delays or disruptions in our commercial supply chain including as a result of quarantines, travel restrictions, work from home orders or other public health measures; |
• | delays or difficulties in enrolling patients in our clinical trials, and the consequences of such delays or difficulties, including terminating clinical trials prematurely; |
• | delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; |
• | delays or disruptions in nonclinical experiments due to unforeseen circumstances at contract research organizations (“CROs”), and vendors along their supply chain; |
• | increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19, being forced to quarantine or not accepting home health visits; |
• | diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; |
• | interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (particularly any procedures that may be deemed non-essential), which may impact the integrity of subject data and clinical study endpoints; |
• | interruption or delays in the operations of the FDA and comparable non-U.S. regulatory agencies, which may impact review and approval timelines; |
• | interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; |
• | limitations on employee resources that would otherwise be focused on the conduct of our clinical trials and preclinical studies, including because of sickness of employees or their families, the desire of employees to avoid contact with large groups of people and increased reliance on working from home or mass transit disruptions; |
• | other disruptions to our business generally, including remote working activities and the implementation of new health and safety requirements for our employees; and |
• | waiver or suspension of patent or other intellectual property rights. |
• | increased operating expenses and cash requirements; |
• | the assumption of indebtedness or contingent liabilities; |
• | the issuance of our or our subsidiaries’ equity securities which would result in dilution to existing shareholders; |
• | assimilation of operations, intellectual property and products, including difficulties associated with integrating new personnel; |
• | diversion of management time and focus away from operating our business; |
• | the loss of key personnel and uncertainties in our ability to maintain key business relationships; |
• | risks and uncertainties associated with the counterparty to any such transaction; |
• | our inability to eventually generate revenue from acquired technology or products or product candidates sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs; |
• | litigation or other claims, including claims from terminated employees, customers, former shareholders or other third parties. |
• | conducting research and development activities in new therapeutic areas or treatment approaches in which we have little to no experience; |
• | diversion of financial and managerial resources from existing operations; |
• | actual or potential conflicts among new and existing Vants to the extent they have overlapping or competing areas of focus or pipeline products; |
• | successfully negotiating a proposed acquisition, in-license or investment in a timely manner and at a price or on terms and conditions favorable to us; |
• | successfully combining and integrating a potential acquisition into our existing business to fully realize the benefits of such acquisition; |
• | the impact of regulatory reviews on a proposed acquisition, in-license or investment; and |
• | the outcome of any legal proceedings that may be instituted with respect to the proposed acquisition, in-license or investment. |
• | 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; |
• | 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 labeling 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 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 labeling statements, such as warnings or contraindications, require other labeling 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 labeling 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 labeling 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 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 labeling 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 labeling; |
• | 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 $11,803 to $23,607 for each false claim or statement for penalties assessed after December 13, 2021, 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 personal data and 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. |
• | Roflumilast, a PDE4 inhibitor, a potential competitor to VTAMA, which in May 2022 was approved by the FDA for the treatment of plaque psoriasis in adults in the U.S. under the brand name VTAMA cream and which is also in development by Dermavant for the topical treatment of atopic dermatitis; |
• | Ruxolitinib, a topical Janus kinase inhibitor, a potential competitor to VTAMA, in development by Dermavant for the topical treatment of atopic dermatitis; |
• | Teprotumumab, an insulin-like growth factor-1 receptor inhibitor, which in January 2020 was approved by the FDA for the treatment of TED, a potential competitor to batoclimab, in development by Immunovant for the treatment of TED and other autoimmune diseases; |
• | VYVGART ™ (efgartigimod alfa-fcab), a neonatal Fc receptor blocker, which in December 2021 was approved by the FDA for the treatment of MG in adults who test positive for the anti-acetylcholine receptor antibody, a potential competitor to batoclimab, in development by Immunovant for the treatment of MG and other autoimmune diseases; |
• | Efgartigimod, an anti-FcRn antibody fragment, nipocalimab, an anti-FcRn antibody, Zilucoplan, a peptide inhibitor of C5, and inebilizumab, a CD19-targeted humanized monoclonal antibody, all potential competitors to batoclimab, in development by Immunovant for the treatment of MG and other autoimmune diseases; |
• | Ultomiris (Ravulizumab-cwvz), a complement inhibitor, which in April 2022 was approved by the FDA for the treatment of generalized MG in adults who are anti-acetylcholine receptor antibody-positive, a potential competitor to batoclimab, in development by Immunovant for the treatment of MG and other autoimmune diseases; |
• | Rituximab, a monoclonal antibody, a potential competitor to batoclimab, in development by Immunovant for the treatment of TED, WAIHA and other autoimmune diseases; |
• | Fostamatinib, a syk inhibitor, ibrutinib, a BTK inhibitor, and ANX005, an antibody inhibitor, all potential competitors to batoclimab, in development by Immunovant for the treatment of WAIHA and other autoimmune diseases; and |
• | 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 labeling, marketing or promotional restrictions; |
• | decreased demand for our products, existing product candidates or any future product candidate, 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; |
• | the ability of our board of directors to prevent the transfer of capital stock, or the exercise of rights with respect to our capital stock, if the effect of such transfer or exercise of rights would result in a shareholder holding more than 9.9% of the total issued and outstanding shares of our capital stock on a fully diluted basis; and |
• | requiring advance notice for shareholder proposals and nominations and placing limitations on convening shareholder meetings. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
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 | |||||||||||
10.1#†* | Employment Agreement between Roivant Sciences, Inc. and Mayukh Sukhatme, dated as of May 19, 2020 | S-1/A | 333-26 | 10.39 | July 28, 2022 | |||||||||||
31.1 | 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 | |||||||||||
31.2 | 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 | |||||||||||
32.1 | 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 | |||||||||||
32.2 | 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 |
# | Portions of this exhibit have been omitted because they are both (i) not material and (ii) would likely cause competitive harm to Roivant Sciences Ltd. if publicly disclosed. |
† | Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the Securities and Exchange Commission. |
* | Previously filed. |
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 |
Exhibit 31.1
CERTIFICATION
I, Matthew Gline, certify that:
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 registrants 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)) 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) | [Reserved]; |
(c) | Evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: August 15, 2022
/s/ MATTHEW GLINE |
Matthew Gline |
Principal Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Richard Pulik, certify that:
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 registrants 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)) 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) | [Reserved]; |
(c) | Evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: August 15, 2022
/s/ RICHARD PULIK |
Richard Pulik |
Principal Financial Officer |
Exhibit 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the Exchange Act) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Matthew Gline, Principal Executive Officer of Roivant Sciences Ltd. (the Company), hereby certifies that, to the best of his knowledge:
1. | The Companys Quarterly Report on Form 10-Q for the period ended June 30, 2022, 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. |
Dated: August 15, 2022
/s/ MATTHEW GLINE |
Matthew Gline |
Principal Executive Officer |
A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to the Company, and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
Exhibit 32.2
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the Exchange Act) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Richard Pulik, Principal Financial Officer of Roivant Sciences Ltd. (the Company), hereby certifies that, to the best of his knowledge:
1. | The Companys Quarterly Report on Form 10-Q for the period ended June 30, 2022, 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. |
Dated: August 15, 2022
/s/ RICHARD PULIK |
Richard Pulik |
Principal Financial Officer |
A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to the Company, and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Current portion of long-term debt | $ 27,300 | |
Long term debt accounted under fair value option | $ 200,700 | $ 177,400 |
Common stock, par or stated value per share | $ 0.00000003 | $ 0.00000003 |
Common stock, shares authorized | 7,000,000,000 | 7,000,000,000 |
Common stock, shares issued | 701,171,465 | 694,975,965 |
Common stock, shares outstanding | 701,171,465 | 694,975,965 |
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Share-based compensation | $ 72,794 | $ 19,269 |
Research and Development Expense [Member] | ||
Share-based compensation | 12,243 | 1,615 |
General and Administrative Expense [Member] | ||
Share-based compensation | $ 60,551 | $ 17,654 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
||||
Statement of Stockholders' Equity [Abstract] | |||||
Net loss | $ (353,784) | $ (101,078) | [1] | ||
Other comprehensive income (loss): | |||||
Foreign currency translation adjustment | 5,767 | (2,439) | |||
Total other comprehensive income (loss) | 5,767 | (2,439) | |||
Comprehensive loss | (348,017) | (103,517) | |||
Comprehensive loss attributable to noncontrolling interests | (22,174) | (18,682) | |||
Comprehensive loss attributable to Roivant Sciences Ltd. | $ (325,843) | $ (84,835) | |||
|
Condensed Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest - USD ($) $ in Thousands |
Total |
Redeemable Noncontrolling Interest [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Subscriptions Receivables [Member] |
AOCI Attributable to Parent [Member] |
Accumulated Deficit [Member] |
Noncontrolling Interest [Member] |
||
---|---|---|---|---|---|---|---|---|---|---|
Balance, temporary equity at Mar. 31, 2021 | $ 22,491 | |||||||||
Balance at Mar. 31, 2021 | [1] | $ 2,039,514 | $ 0 | $ 3,814,805 | $ (100,000) | $ 1,445 | $ (1,918,462) | $ 241,726 | ||
Balance, shares at Mar. 31, 2021 | [1] | 651,576,293 | ||||||||
Issuance of subsidiary warrants | [1] | 2,075 | 2,051 | 24 | ||||||
Cash contribution to majority-owned subsidiaries | [1] | 0 | (2,973) | 2,973 | ||||||
Share-based compensation | [1] | 19,269 | 11,091 | 8,178 | ||||||
Foreign currency translation adjustment | [1] | (2,439) | (2,652) | 213 | ||||||
Net loss | [1] | (101,078) | (82,183) | (18,895) | ||||||
Balance, temporary equity at Jun. 30, 2021 | 22,491 | |||||||||
Balance at Jun. 30, 2021 | [1] | 1,957,341 | $ 0 | 3,824,974 | (100,000) | (1,207) | (2,000,645) | 234,219 | ||
Balance, shares at Jun. 30, 2021 | [1] | 651,576,293 | ||||||||
Balance, temporary equity at Mar. 31, 2022 | 22,491 | |||||||||
Balance at Mar. 31, 2022 | 2,038,943 | 4,421,614 | (946) | (2,763,724) | 381,999 | |||||
Balance, shares at Mar. 31, 2022 | 694,975,965 | |||||||||
Issuance of subsidiary common shares to the Company | (251) | 251 | ||||||||
Stock options exercised and equity instruments vested and settled, net of tax withholding, Shares | 4,739,781 | |||||||||
Stock options exercised and equity instruments vested and settled, net of tax withholding | (8,329) | (8,329) | $ 0 | |||||||
Issuance of the Company's common shares related to settlement of transaction consideration, shares | 1,455,719 | |||||||||
Share-based compensation | 72,794 | 61,590 | 11,204 | |||||||
Foreign currency translation adjustment | 5,767 | 5,966 | (199) | |||||||
Net loss | (353,784) | (331,809) | (21,975) | |||||||
Balance, temporary equity at Jun. 30, 2022 | $ 22,491 | |||||||||
Balance at Jun. 30, 2022 | $ 1,755,391 | $ 4,474,624 | $ 5,020 | $ (3,095,533) | $ 371,280 | |||||
Balance, shares at Jun. 30, 2022 | 701,171,465 | |||||||||
|
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
||||
Cash flows from operating activities: | |||||
Net loss | $ (353,784) | $ (101,078) | [1] | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Share-based compensation | 72,794 | 19,269 | |||
Change in fair value of investments | 24,547 | 8,619 | |||
Change in fair value of debt and liability instruments | 41,213 | 4,585 | |||
Gain on termination of Sumitomo Options | 0 | (61,472) | |||
Other | 11,263 | 838 | |||
Changes in assets and liabilities, net of effects from acquisition and divestiture: | |||||
Accounts payable | (19,451) | (6,343) | |||
Accrued expenses | (18,177) | (7,340) | |||
Operating lease liabilities | (2,304) | (1,957) | |||
Deferred revenue | (1,730) | (2,141) | |||
Other | (6,453) | 5,850 | |||
Net cash used in operating activities | (252,082) | (141,170) | |||
Cash flows from investing activities: | |||||
Purchase of property and equipment | (7,459) | (2,339) | |||
Net cash used in investing activities | (7,459) | (2,339) | |||
Cash flows from financing activities: | |||||
Proceeds from subsidiary debt financings, net of financing costs paid | 159,899 | 36,400 | |||
Repayment of debt by subsidiary | (7,344) | (21,590) | |||
Payment of offering and loan origination costs | (2,250) | (4,600) | |||
Taxes paid related to net settlement of equity instruments | (8,329) | 0 | |||
Net cash provided by financing activities | 141,976 | 10,210 | |||
Net change in cash, cash equivalents and restricted cash | (117,565) | (133,299) | |||
Cash, cash equivalents and restricted cash at beginning of period | 2,074,034 | 2,141,676 | |||
Cash, cash equivalents and restricted cash at end of period | 1,956,469 | 2,008,377 | |||
Non-cash investing and financing activities: | |||||
Offering costs included in accounts payable and accrued expenses | 0 | 4,999 | |||
Intangible assets acquired but not paid | 146,172 | 0 | |||
Other | $ 691 | $ 6,654 | |||
|
Description of Business and Liquidity |
3 Months Ended |
---|---|
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [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, “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 June 30, 2022, the Company had cash and cash equivalents of approximately $1.9 billion and its accumulated deficit was approximately $3.1 billion. For the three months ended June 30, 2022 and 2021, the Company incurred net losses of $353.8 million and $101.1 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 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 |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 for the fiscal year ended March 31, 2022. The unaudited condensed consolidated balance sheet at March 31, 2022 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 three months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2023, 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. Additionally COVID-19 pandemic has had on its operations and financial results as of June 30, 2022 and through the issuance of these condensed consolidated financial statements. The Company’s analysis was informed by the facts and circumstances as they were known to the Company. This assessment considered the impact COVID-19 may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and expenses. (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 June 30, 2022 and March 31, 2022, 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. Restricted cash classified as a current asset consists of legally restricted non-interest bearing deposit accounts relating to the Company’s corporate credit card programs. Restricted cash classified as a long-term asset consists of restricted deposit accounts related to irrevocable standby letters of credit. 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) Inventory Inventories are recorded at the lower-of-cost or net realizable value, with cost determined based on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of the Company’s business, less reasonably predictable costs of completion, disposal, and transportation. The cost basis of the Company’s inventories is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. Inventories include the cost for raw materials, the cost to manufacture the raw materials into finished goods, and overhead. The Company performs an assessment of the recoverability of inventories during each reporting period and writes down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified. If they occur, such impairment charges are recorded as a component of cost of goods sold in the condensed consolidated statements of operations. Prior to initial regulatory approval, the Company expenses costs relating to the production of inventory as research and development expenses when incurred. After such time as the product receives initial regulatory approval, the Company capitalizes inventory costs related to the product. Inventory is included in “Other current assets” on the accompanying condensed consolidated balance sheets. (G) 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, “Investments.” (H) Intangible Assets, Net Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Note 4, “Intangible Assets.” (I) 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 Sio Gene Therapies Inc. (“Sio”); shares of common stock of Heracles Parent, L.L.C., the parent entity of Datavant, (as defined and discussed in Note 3, “Investments”); liability instruments issued, including warrant and earn-out shares liabilities issued in connection with the Company’s business combination with MAAC (see Note 11, “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 and Sio 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, “Investments”) and liability instruments issued, excluding the Public Warrants (as defined and discussed in Note 11, “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. The Public Warrants are publicly traded and therefore are classified as Level 1 as the Public Warrants have 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. (J) Research and Development Expenses Research and development (“R&D”) costs are expensed as incurred. Preclinical and clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. R&D costs primarily consist of costs associated with preclinical studies and clinical trials, including amounts paid to contract research organizations, contract manufacturing organizations, and other third parties that conduct R&D activities on behalf of the Company, as well as employee-related expenses, such as salaries, share-based compensation, and benefits, for employees engaged in R&D activities. (K) Acquired In-Process Research and Development Expenses Acquired in-process research and development (“IPR&D”) expenses include consideration for the purchase of IPR&D through asset acquisitions and license agreements as well as payments made in connection with asset acquisitions and license agreements upon the achievement of development milestones. These expenses were previously recorded in “Research and development” on the condensed consolidated statements of operations. Prior periods have been revised to conform to the current period presentation. The Company evaluates in-licensed agreements for IPR&D projects to determine if it meets the definition of a business and thus should be accounted for as a business combination. If the in-licensed agreement for IPR&D does not meet the definition of a business and the assets have not reached technological feasibility and therefore have no alternative future use, the Company expenses payments made under such license agreements as acquired in-process research and development expense in its condensed consolidated statements of operations. Payments for milestones achieved and payments for a product license prior to regulatory approval of the product are expensed in the period incurred. Payments made in connection with regulatory and sales-based milestones are capitalized and amortized to cost of revenue. (L) Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for its arrangements, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. License, Milestone, and Other Revenue The Company applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration, and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time. These judgments are discussed in more detail below.
Revenue is also generated by certain technology-focused contracts from subscription and service-based fees recognized for the use of certain technology internally developed. Subscription revenue is recognized ratably over the contract period. Product Revenue, Net The Company began recognizing product revenues after the initial product launch of VTAMA following approval by the FDA in May 2022. The Company sells VTAMA in the U.S. principally through wholesale, specialty distribution and pharmacy channels (collectively, “customers”). These customers subsequently resell the product to healthcare providers and patients. In addition to distribution agreements with customers, the Company enters into arrangements with healthcare providers and payers that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s product. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, either upon shipment or delivery to the customer. Revenues from product sales are recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration for which reserves are established that result from: (a) invoice discounts for prompt payment, cash payment and distribution service fees, (b) government and private payer rebates, chargebacks, discounts and fees, (c) performance rebates and administrative fees, (d) product returns and (e) costs of co-pay assistance programs for patients. These reserves are based on amounts earned or to be claimed on the related sale and are classified as reductions of accounts receivable (if the amount is payable to the customer) or accrued expenses and other current liabilities (if the amount is payable to a party other than a customer). Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration. The estimates of reserves established for variable consideration reflect current contractual and statutory requirements, the Company’s historical experience, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company adjusts these estimates in the period such change in estimate becomes known, which could affect net product revenue and earnings in the period of the adjustment. More specifically, these adjustments include the following:
Product revenue through June 30, 2022 has not been significant and is included in “Revenue, net” on the accompanying condensed consolidated statements of operations. Trade Receivables, Net The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in customer credit profiles. The Company reserves against trade receivables for estimated losses that may arise from a customer’s inability to pay, and any amounts determined to be uncollectible are written off against the reserve when it is probable that the receivable will not be collected. The reserve amount for estimated losses was de minimis as of June 30, 2022 and March 31, 2022. Trade receivables, net is included in “Other current assets” on the accompanying condensed consolidated balance sheets. (M) Cost of Revenues Cost of revenues related to the Company’s subscription and service-based revenue recognized for the use of technology developed consists primarily of employee, hosting, and third-party data costs. Following the initial product launch of VTAMA, the Company began to recognize cost of product revenues, which includes the cost of producing and distributing inventories related to product revenue during the respective period, including manufacturing, freight, and indirect overhead costs. Additionally, cost of product revenues may include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. Cost of product revenues through June 30, 2022 has not been significant and is included in “Cost of Revenues” on the accompanying condensed consolidated statements of operations. |
Investments |
3 Months Ended |
---|---|
Jun. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
Investments | Note 3—Investments Investment in Arbutus In October 2017, pursuant to a subscription agreement entered into by RSL and Arbutus, RSL acquired 16,013,540 shares of common stock of Arbutus and 1,164,000 shares of Arbutus’ Series A participating convertible preferred shares , which converted into 22,833,922 shares of Arbutus common stock in October 2021. The Company accounts for its investment in Arbutus as an equity method investment accounted for using the fair value option. Due to the Company’s significant influence over operating and financial policies, Arbutus is considered a related party of the Company. At June 30, 2022, RSL held approximatelyArbutus. At June 30, 2022 and March 31, 2022, the aggregate fair value of the Company’s investment in Arbutus was $105.3 million and $115.8 million, respectively, with the Company recognizing unrealized losses on its investment in Arbutus of $10.5 million and $11.7 million in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021, respectively. The fair value of the Company’s investment was determined using the closing price of Arbutus’s common stock on June 30, 2022 and March 31, 2022 of $2.71 and $2.98, respectively. Investment in Sio In February 2020, RSL’s ownership interest in Sio fell below 50.0%, and as a result, the Company deconsolidated Sio. The Company accounts for its investment in Sio as an equity method investment accounted for using the fair value option. Due to the Company’s significant influence over operating and financial policies, Sio is considered a related party of the Company. At June 30, 2022, RSL held approximately 25% of Sio’s issued and outstanding common shares. At June 30 , 2022 and March 31, 2022, the fair value of the Company’s investment in Sio was $ 6.7 million and $ 12.4 million, respectively, with the Company recognizing an unrealized loss on its investment in Sio of $ 5.7 million and an unrealized gain of $ 2.2 million in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021, respectively. The fair value of common shares held by the Company was determined using the closing price of Sio’s common stock on June 30, 2022 and March 31, 2022 of $ 0.36 and $ 0.67, respectively. Investment in Datavant In April 2020, following an equity raise completed by Datavant Holdings, Inc. (“Datavant”) along with a restructuring of Datavant’s equity classes, it was determined that RSL no longer controlled Datavant. As such, the Company deconsolidated Datavant as of April 2020. Due to the Company’s significant influence over operating and financial policies, Datavant is considered a related party of the Company. 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”), a provider of healthcare information services and technology solutions to hospitals, health systems, physician practices and authorized recipients of protected health records in the United States, 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”). The merger closed on July 27, 2021. At closing, the Company received approximately $ 320 million in cash and a minority equity stake in Ciox Parent. As of June 30, 2022, 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 features. Upon conversion of such preferred units into Class A units, the Company’s ownership interest would be diluted. Following the completion of the Datavant Merger, the Company’s minority equity interest became subject to the equity method of accounting. At such time, the fair value option was elected to continuously remeasure the investment to fair value each reporting period with changes in fair value reflected in earnings. As of June 30, 2022 and March 31, 2022, the fair value of the Company’s investment was $ 186.9 million and $ 193.9 million, respectively, with the Company recognizing an unrealized loss on its investment of $ 7.0 million for the three months ended June 30, 2022. 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 12, “Fair Value Measurements” for more information. |
Intangible Assets |
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Goodwill and Intangible Assets Disclosure [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 amortized over their estimated useful lives. As of June 30, 2022, the amounts owed to GSK and Welichem for these milestones were recorded as part of “Accounts payable” in the accompanying condensed consolidated balance sheet. The following table summarizes the Company’s recognized intangible assets (in thousands):
Amortization expense was $0.7 million for the three months ended June 30, 2022 and was recorded as part of “Cost of revenues” in the accompanying condensed consolidated statement of operations. Future amortization expense is approximately $6.7 million for the remainder of the year ended March 31, 2023, $8.9 million for each of the years ended from March 31, 2024 through March 31, 2027 and $103.1 million thereafter. |
Accrued Expenses |
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Accrued Liabilities and Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Note 5—Accrued Expenses Accrued expenses at June 30, 2022 and March 31, 2022 consisted of the following (in thousands):
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Note 6—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 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, Dermavant made its first quarterly payment of $7.3 million under the NovaQuest Agreement i n May 2022. 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 will record 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 June 30, 2022 and March 31, 2022, the fair value of the debt was $228.0 million and $177.4 million, respectively. Refer to Note 12, “Fair Value Measurements” for additional details regarding the fair value measurement. The carrying balance of the debt issued to NovaQuest is as follows (in thousands):
Credit Facility with XYQ Luxco In May 2021 , Dermavant entered into a $40.0 million senior secured credit facility (the “Credit Facility”) entered into by Dermavant and certain of its subsidiaries in May 2021 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 June 30, 2022. 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 p er common share. Outstanding debt obligations to XYQ Luxco are as follows (in thousands):
Revenue Interest Purchase and Sale Agreement In May 2021 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. (collectively, the “Purchasers”), together with U.S. Bank National Association, as collateral agent. Under the terms of the RIPSA, Dermavant issued to the Purchasersthe right to receive 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 $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 is as follows (in thousands):
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Shareholders' Equity |
3 Months Ended |
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Jun. 30, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Note 7—Shareholders’ Equity (A) RSL Common Stock On September 2.9262-for-1 condensed consolidated financial statements and related notes have been retroactively restated to reflect the stock split. Additionally , in connection with the closing of the Business Combination, the Company adjusted its authorized share capital to equal 7,000,000,000 common shares, par value $ 41740141 per share. Each common share has the right to one vote. The holders of common shares are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared by the board of directors since the Company’s inception.(B) Committed Equity Facility On February 14, 2022, the Company entered into a committed equity facility (the “Facility”) with an affiliate of Cantor Fitzgerald & Co. (“Cantor”). Under the terms of the Facility, Cantor has committed to purchase up to an aggregate of $250.0 million in the Company’s common shares from time to time at the request of the Company, subject to certain limitations and the satisfaction of certain conditions. Any sales of the Company’s common shares to Cantor under the Facility will be made at 99% of the volume-weighted average price of the Company’s common shares on Nasdaq on a given trading day. In consideration for entry into the Facility, the Company paid Cantor an upfront commitment fee in the form of 145,986 common shares. As of June 30, 2022, $250.0 million of the Company’s common shares remained available for sale under the Facility. |
Share-Based Compensation |
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Share-Based Compensation | Note 8—Share-Based Compensation (A) RSL Equity Incentive Plans RSL has three equity incentives 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 June 30, 2022, a total of 13,190,403 common shares were available for future grants under the RSL 2021 EIP. Stock Options and Performance Stock Options Activity for stock options and performance options under the RSL Equity Plans for the three months ended June 30, 2022 is 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 three months ended June 30, 2022 is as follows:
Capped Value Appreciation Rights March 2020 CVAR Grants In March 12.68 , over (b) the hurdle price of either $6.40 or $11.50 , as applicable to each grant. On March 30, 2022, the Company amended the outstanding CVARs that were granted in March 2020. Pursuant to the amendment, in the event any CVARs have satisfied the time-based service and liquidity event vesting requirements (“service-vested CVARs”) but have not satisfied the applicable hurdle price on an applicable measurement date, then such CVARs will be deemed to remain outstanding and the applicable award holder will be provided the right to earn such CVARs if the hurdle price is satisfied on subsequent annual “hurdle measurement dates” prior to the original expiration date of the CVARs, being March 31, 2026. The “hurdle measurement dates” are March 30 of each of years 2023 through 2026. If the hurdle price is not satisfied on any such subsequent annual hurdle measurement date prior to the expiration date of the CVARs, then the CVARs will be forfeited in their entirety on the expiration date. As of June 30, 2022, there are 11,826,924 non-service-vested CVARs and 20,185,072 service-vested CVARs relating to the March 2020 grants. The hurdle price was not satisfied for these service-vested CVARs and as such they remain outstanding. November 2021 CVAR Grants Activity for CVARs under the RSL 2021 EIP for the three months ended June 30, 2022 is as follows:
(B) Subsidiary Equity Incentive Plans Certain wholly 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 $11.5 million and $8.2 million for the three months ended June 30, 2022 and 2021, respectively, related to subsidiary EIPs. |
Income Taxes |
3 Months Ended |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9—Income Taxes The Company’s effective tax rate for the three months ended June 30, 2022 and 2021 was (1.1)% and (0.1)%, 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 & Contingencies |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | Note 10—Commitments and Contingencies (A) Commitments In conjunction with the purchase agreement of tapinarof between the Company’s subsidiary, Dermavant and GSK, Dermavant entered into a clinical supply agreement for 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 will 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 $48.2 million. In November 202 1, 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 June 30, 2022, the minimum purchase commitment related to this agreement is estimated to be approximately $36.0 million. In May 202 1, 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 June 30, 2022, the remaining minimum payments for this software subscription are $30.0 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 operating leases. Refer to Note 6 , “Long-Term Debt” for further information. There have been no material changes to the commitments relating to the Company’s operating leases during the three months ended June 30, 2022 outside the ordinary course of business. For further information regarding the Company’s lease commitments, refer to Note 12, “Leases” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2022. (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. On December 29, 2021, the U.S. District Court appointed a lead plaintiff. On February 1, 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. On March 15, 2022, the lead plaintiff filed a further amended complaint. On May 27, 2022, the defendants, including the Company, filed motions to dismiss that amended complaint. The fully briefed motion to dismiss, including defendants’ opening briefs, lead plaintiff’s opposition and defendants’ replies must be filed with the court or before September 9, 2022. 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. filed a lawsuit in the U.S. District Court for the Southern District of New York against two of the Company’s affiliates, Genevant and Arbutus, seeking a declaratory judgment that U.S. Patents 8,058,069, 8,492,359, 8,822,668, 9,006,417, 9,364,435, 9,404,127, 9,504,651, 9,518,272 and 11,141,378 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 June 24, 2022, Genevant and Arbutus informed the court of their intent to file a motion to dismiss the lawsuit for lack of an actual controversy. Each of Genevant and Arbutus intend 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 maintain director and officer liability insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify its directors. To date, the Company has not incurred any material costs related to these indemnification obligations and have not accrued any liabilities related to such obligations in the condensed consolidated financial statements as of June 30, 2022 and March 31, 2022. |
Earn-Out Shares, Public Warrants and Private Placement Warrants |
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Earn Out Shares Public Warrants and Private Placement Warrants [Abstract] | ||||||||||||
Earn-Out Shares, Public Warrants and Private Placement Warrants | Note 11—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 Earn-Out Shares liability is subject to remeasurement at each balance sheet date with changes in fair value recognized in the Company’s statement of operations. As of June 30, 2022, 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”). Pursuant to the agreement governing these warrants, the Private Placement Warrants and Public The Private Placement Warrants are generally identical to the Public Warrants, except that (i) the Private Placement Warrants (including the common stock issuable upon exercise of the Private Placement Warrants) were not transferable, assignable or salable until 30 days after the completion of the Business Combination (ii) they will not be redeemable by the Company when the price per share of the Company’s common stock equals or exceeds $18.00, and (iii) the Private Placement Warrants may be exercised by holders on a cashless basis. If the Private Placement Warrants are held by holders other than the MAAC Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants. The Private Placement Warrants and Public Warrants require liability classification and are classified as “Liability instruments measured at fair value” on the condensed consolidated balance sheets. The Private Placement Warrants liability and Public Warrants liability are subject to remeasurement at each balance sheet date with changes in fair value recognized in the Company’s statement of operations. As of June 30, 2022, 60,021 Public Warrants have been exercised and none redeemed. |
Fair Value Measurements |
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Fair Value Measurements | Note 12—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 June 30, 2022 and March 31, 2022, 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 three months ended June 30, 2022. 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 three months ended June 30, 2022 were as follows (in thousands):
There were no Level 3 assets held during the three months ended June 30, 2021. The changes in fair value of the Level 3 liabilities during the three months ended June 30, 2022 and 2021 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 June 30, 2022 and March 31, 2022 represents the fair value of amounts payable to NovaQuest 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 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 11, “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 Jun Earn-Out Shares was $7.2 million. Earn-Out Shares are included in “Liability instruments measured at fair value” in the accompanying condensed consolidated balance sheets. Private Placement Warrants The fair 11, Shares, Public Warrants and Private Placement Warrants” and the added restriction by which the Company cannot redeem the Private Warrants if the Reference Value is greater than $18.00. Significant unobservable inputs used to calculate the fair value of the Private Placement Warrants included the following:
As of Jun e 30, 2022, the fair value of the Private Placement Warrants was $6.1 million. The Private Placement Warrants are included in “Liability instruments measured at fair value” in the accompanying condensed consolidated balance sheets. |
Other Expense (Income), Net |
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Other Expense (Income), Net | Note 13—Other Expense (Income), Net Other expense (income), net was as follows (in thousands):
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Net Loss per Common Share |
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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 June 30, 2022 and 2021, potentially dilutive securities were as follows:
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Summary of Significant Accounting Policies (Policies) |
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Basis of Presentation and Principles of Consolidation | (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 for the fiscal year ended March 31, 2022. The unaudited condensed consolidated balance sheet at March 31, 2022 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 three months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2023, 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. |
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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. Additionally COVID-19 pandemic has had on its operations and financial results as of June 30, 2022 and through the issuance of these condensed consolidated financial statements. The Company’s analysis was informed by the facts and circumstances as they were known to the Company. This assessment considered the impact COVID-19 may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and expenses. |
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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 June 30, 2022 and March 31, 2022, a majority of the Company’s long-lived assets were located in the United States. |
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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. Restricted cash classified as a current asset consists of legally restricted non-interest bearing deposit accounts relating to the Company’s corporate credit card programs. Restricted cash classified as a long-term asset consists of restricted deposit accounts related to irrevocable standby letters of credit. 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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Inventory | (F) Inventory Inventories are recorded at the lower-of-cost or net realizable value, with cost determined based on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of the Company’s business, less reasonably predictable costs of completion, disposal, and transportation. The cost basis of the Company’s inventories is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. Inventories include the cost for raw materials, the cost to manufacture the raw materials into finished goods, and overhead. The Company performs an assessment of the recoverability of inventories during each reporting period and writes down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified. If they occur, such impairment charges are recorded as a component of cost of goods sold in the condensed consolidated statements of operations. Prior to initial regulatory approval, the Company expenses costs relating to the production of inventory as research and development expenses when incurred. After such time as the product receives initial regulatory approval, the Company capitalizes inventory costs related to the product. Inventory is included in “Other current assets” on the accompanying condensed consolidated balance sheets. |
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Investments | (G) 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, “Investments.” |
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Intangible Assets, Net | (H) Intangible Assets, Net Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Note 4, “Intangible Assets.” |
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Fair Value Measurements | (I) 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 Sio Gene Therapies Inc. (“Sio”); shares of common stock of Heracles Parent, L.L.C., the parent entity of Datavant, (as defined and discussed in Note 3, “Investments”); liability instruments issued, including warrant and earn-out shares liabilities issued in connection with the Company’s business combination with MAAC (see Note 11, “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 and Sio 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, “Investments”) and liability instruments issued, excluding the Public Warrants (as defined and discussed in Note 11, “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. The Public Warrants are publicly traded and therefore are classified as Level 1 as the Public Warrants have 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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Research and Development Expenses | (J) Research and Development Expenses Research and development (“R&D”) costs are expensed as incurred. Preclinical and clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. R&D costs primarily consist of costs associated with preclinical studies and clinical trials, including amounts paid to contract research organizations, contract manufacturing organizations, and other third parties that conduct R&D activities on behalf of the Company, as well as employee-related expenses, such as salaries, share-based compensation, and benefits, for employees engaged in R&D activities. |
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Acquired In-Process Research and Development Expenses | (K) Acquired In-Process Research and Development Expenses Acquired in-process research and development (“IPR&D”) expenses include consideration for the purchase of IPR&D through asset acquisitions and license agreements as well as payments made in connection with asset acquisitions and license agreements upon the achievement of development milestones. These expenses were previously recorded in “Research and development” on the condensed consolidated statements of operations. Prior periods have been revised to conform to the current period presentation. The Company evaluates in-licensed agreements for IPR&D projects to determine if it meets the definition of a business and thus should be accounted for as a business combination. If the in-licensed agreement for IPR&D does not meet the definition of a business and the assets have not reached technological feasibility and therefore have no alternative future use, the Company expenses payments made under such license agreements as acquired in-process research and development expense in its condensed consolidated statements of operations. Payments for milestones achieved and payments for a product license prior to regulatory approval of the product are expensed in the period incurred. Payments made in connection with regulatory and sales-based milestones are capitalized and amortized to cost of revenue. |
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Revenue Recognition | (L) Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for its arrangements, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. License, Milestone, and Other Revenue The Company applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration, and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time. These judgments are discussed in more detail below.
Revenue is also generated by certain technology-focused contracts from subscription and service-based fees recognized for the use of certain technology internally developed. Subscription revenue is recognized ratably over the contract period. Product Revenue, Net The Company began recognizing product revenues after the initial product launch of VTAMA following approval by the FDA in May 2022. The Company sells VTAMA in the U.S. principally through wholesale, specialty distribution and pharmacy channels (collectively, “customers”). These customers subsequently resell the product to healthcare providers and patients. In addition to distribution agreements with customers, the Company enters into arrangements with healthcare providers and payers that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s product. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, either upon shipment or delivery to the customer. Revenues from product sales are recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration for which reserves are established that result from: (a) invoice discounts for prompt payment, cash payment and distribution service fees, (b) government and private payer rebates, chargebacks, discounts and fees, (c) performance rebates and administrative fees, (d) product returns and (e) costs of co-pay assistance programs for patients. These reserves are based on amounts earned or to be claimed on the related sale and are classified as reductions of accounts receivable (if the amount is payable to the customer) or accrued expenses and other current liabilities (if the amount is payable to a party other than a customer). Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration. The estimates of reserves established for variable consideration reflect current contractual and statutory requirements, the Company’s historical experience, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company adjusts these estimates in the period such change in estimate becomes known, which could affect net product revenue and earnings in the period of the adjustment. More specifically, these adjustments include the following:
Product revenue through June 30, 2022 has not been significant and is included in “Revenue, net” on the accompanying condensed consolidated statements of operations. Trade Receivables, Net The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in customer credit profiles. The Company reserves against trade receivables for estimated losses that may arise from a customer’s inability to pay, and any amounts determined to be uncollectible are written off against the reserve when it is probable that the receivable will not be collected. The reserve amount for estimated losses was de minimis as of June 30, 2022 and March 31, 2022. Trade receivables, net is included in “Other current assets” on the accompanying condensed consolidated balance sheets. |
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Cost of Revenues | (M) Cost of Revenues Cost of revenues related to the Company’s subscription and service-based revenue recognized for the use of technology developed consists primarily of employee, hosting, and third-party data costs. Following the initial product launch of VTAMA, the Company began to recognize cost of product revenues, which includes the cost of producing and distributing inventories related to product revenue during the respective period, including manufacturing, freight, and indirect overhead costs. Additionally, cost of product revenues may include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. Cost of product revenues through June 30, 2022 has not been significant and is included in “Cost of Revenues” on the accompanying condensed consolidated statements of operations. |
Summary of Significant Accounting Policies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Aggregate Amounts of 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) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets [Table Text Block] | The following table summarizes the Company’s recognized intangible assets (in thousands):
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Accrued Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities and Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses at June 30, 2022 and March 31, 2022 consisted of the following (in thousands):
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Long-Term Debt (Tables) |
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Novaquest [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The carrying balance of the debt issued to NovaQuest is as follows (in thousands):
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Schedule of Debt [Table Text Block] | Outstanding debt obligations to XYQ Luxco are as follows (in thousands):
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Revenue Interest Purchase And Sale Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Debt [Table Text Block] | The RIPSA carrying balance is as follows (in thousands):
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Share-Based Compensation (Tables) |
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | Activity for stock options and performance options under the RSL Equity Plans for the three months ended June 30, 2022 is as follows:
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Summary of Restricted Stock Units | Activity for restricted stock units and performance stock units under the RSL Equity Plans for the three months ended June 30, 2022 is as follows:
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CVARs [Member] | 2021 EIP [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Capped Value Appreciation Rights | Activity for CVARs under the RSL 2021 EIP for the three months ended June 30, 2022 is as follows:
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Fair Value Measurements (Tables) |
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Schedule of Assets and Liabilities Measured at Fair Value on a 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 June 30, 2022 and March 31, 2022, by level, within the fair value hierarchy (in thousands):
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Schedule of Change in Fair Value Of The Level 3 Assets | The changes in fair value of the Level 3 assets during the three months ended June 30, 2022 were as follows (in thousands):
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Schedule of change in the fair value of the derivative warrant liabilities | The changes in fair value of the Level 3 liabilities during the three months ended June 30, 2022 and 2021 were as follows (in thousands):
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Private Placement Warrants [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Significant Unobservable Inputs Using Valuation Techniques | Significant unobservable inputs used to calculate the fair value of the Private Placement Warrants included the following:
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Earnout Shares [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Significant Unobservable Inputs Using Valuation Techniques | Significant unobservable inputs used to calculate the fair value of the Earn-Out Shares included the following :
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Datavant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Significant Unobservable Inputs Using Valuation Techniques | The fair value was calculated using significant unobservable inputs including the following:
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Other Expense (Income), Net (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Expense, Net From Continuing Operations | Other expense (income), net was as follows (in thousands):
|
Net Loss per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of potentially dilutive securities | As of June 30, 2022 and 2021, potentially dilutive securities were as follows:
|
Description of Business and Liquidity - Additional Information (Detail) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
Segment
|
Jun. 30, 2021
USD ($)
|
[1] |
Mar. 31, 2022
USD ($)
|
|||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Number of operating and reporting segments | Segment | 1 | |||||
Cash and cash equivalents | $ 1,942,215 | $ 2,060,400 | ||||
Accumulated deficit | (3,095,533) | $ (2,763,724) | ||||
Net loss | $ (353,784) | $ (101,078) | ||||
|
Summary of Significant Accounting Policies - Schedule of Aggregate Amounts of Cash, Cash Equivalents, and Restricted Cash (Detail) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 1,942,215 | $ 2,060,400 |
Restricted cash | 14,254 | 13,634 |
Cash, cash equivalents and restricted cash | $ 1,956,469 | $ 2,074,034 |
Investments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jul. 27, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
Oct. 31, 2021 |
Oct. 31, 2017 |
|
Investments [Line Items] | ||||||
Aggregate fair value investment | $ 301,287 | $ 325,834 | ||||
Common stock acquired | 701,171,465 | 694,975,965 | ||||
Datavant Merger [Member] | ||||||
Investments [Line Items] | ||||||
Proceeds from sale of investment | $ 320,000 | |||||
Datavant Merger [Member] | Combined Company [Member] | ||||||
Investments [Line Items] | ||||||
Equity method investment ownership percentage | 17.00% | |||||
Arbutus Biopharma Corporation [Member] | ||||||
Investments [Line Items] | ||||||
Preferred stock Owned, Balance, Shares of Arbutus | 1,164,000 | |||||
Aggregate fair value investment | $ 105,300 | $ 115,800 | ||||
Unrealized gain (loss) on investments | $ (10,500) | $ (11,700) | ||||
Closing price of common stock | $ 2.71 | $ 2.98 | ||||
Equity method investment ownership percentage | 26.00% | |||||
Common stock acquired | 16,013,540 | |||||
Investment owned conversion includes both preferred stock and common stock | 22,833,922 | |||||
Sio Gene Therapies Inc [Member] | ||||||
Investments [Line Items] | ||||||
Aggregate fair value investment | $ 6,700 | $ 12,400 | ||||
Unrealized gain (loss) on investments | $ (5,700) | $ 2,200 | ||||
Closing price of common stock | $ 0.36 | $ 0.67 | ||||
Equity method investment ownership percentage | 25.00% | |||||
Datavant Holdings, Inc [Member] | ||||||
Investments [Line Items] | ||||||
Aggregate fair value investment | $ 186,900 | $ 193,900 | ||||
Unrealized gain (loss) on investments | $ (7,000) |
Intangible Assets - Additional Information (Detail) € in Millions, $ in Millions, $ in Millions |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
|
Mar. 31, 2028
USD ($)
|
Mar. 31, 2027
USD ($)
|
Mar. 31, 2026
USD ($)
|
Mar. 31, 2025
USD ($)
|
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
Jun. 30, 2022
EUR (€)
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2022
CAD ($)
|
|
Schedule of Intangible Assets [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year | $ 6.7 | |||||||||
Finite-Lived Intangible Asset, Expected Amortization, Year One | $ 8.9 | |||||||||
Finite-Lived Intangible Asset, Expected Amortization, Year Two | $ 8.9 | |||||||||
Finite-Lived Intangible Asset, Expected Amortization, Year Three | $ 8.9 | |||||||||
Finite-Lived Intangible Asset, Expected Amortization, Year Four | $ 8.9 | |||||||||
Finite-Lived Intangible Asset, Expected Amortization, Year Five and After | $ 103.1 | |||||||||
Cost of Sales [Member] | ||||||||||
Schedule of Intangible Assets [Line Items] | ||||||||||
Amortization of Intangible Assets | $ 0.7 | |||||||||
GSK [Member] | ||||||||||
Schedule of Intangible Assets [Line Items] | ||||||||||
Milestone payable | € 100.0 | $ 126.0 | ||||||||
Welichem Biotech Inc [Member] | ||||||||||
Schedule of Intangible Assets [Line Items] | ||||||||||
Milestone payable | $ 20.0 | $ 25.0 |
Intangible Assets - Summary of Intangible Assets (Detail) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Schedule of Intangible Assets [Line Items] | |
Gross amount | $ 146,172 |
Less accumulated amortization | (742) |
Net book value | $ 145,430 |
Weighted average estimated useful lives | 16 years 6 months |
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Accrued Liabilities [Line Items] | ||
Total accrued expenses | $ 109,354 | $ 127,531 |
R&D Expenses [Member] | ||
Accrued Liabilities [Line Items] | ||
Total accrued expenses | 68,914 | 66,188 |
Employee Related Expenses [Member] | ||
Accrued Liabilities [Line Items] | ||
Total accrued expenses | 17,845 | 44,262 |
Other Expenses [Member] | ||
Accrued Liabilities [Line Items] | ||
Total accrued expenses | $ 22,595 | $ 17,081 |
Long-Term Debt - Summary of Debt Issued to NovaQuest (Detail) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Line Items] | ||
Total long-term debt, net | $ 200,700 | $ 177,400 |
Novaquest [Member] | ||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Line Items] | ||
Fair value of long-term debt | 228,000 | 177,400 |
Less: current portion | (27,300) | 0 |
Total long-term debt, net | $ 200,700 | $ 177,400 |
Long-Term Debt - Summary of Outstanding Debt Obligations to XYQ Luxco (Detail) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: current portion | $ 33,304 | $ 0 |
Total long term debt, net | 383,720 | 210,025 |
Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 40,000 | 40,000 |
Exit fee | 5,000 | 5,000 |
Less: unamortized discount and debt issuance costs | (11,862) | (12,375) |
Total debt, net | 33,138 | 32,625 |
Less: current portion | 0 | 0 |
Total long term debt, net | $ 33,138 | $ 32,625 |
Long-Term Debt - Summary of RIPSA Carrying Balance (Detail) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: current portion | $ (33,304) | $ 0 |
Total long term debt, net | 383,720 | $ 210,025 |
Revenue Interest Purchase And Sale Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Carrying balance | 161,056 | |
Less: unamortized issuance costs | (5,170) | |
Total debt, net | 155,886 | |
Less: current portion | (6,004) | |
Total long term debt, net | $ 149,882 |
Long-Term Debt - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|
May 31, 2021 |
Oct. 31, 2018 |
Jun. 30, 2022 |
May 31, 2022 |
Mar. 31, 2022 |
Aug. 31, 2018 |
|
Class of warrants or rights number of shares called by each warrant or right | 1,199,072 | |||||
Credit Facility [Member] | ||||||
Proceeds from credit facility | $ 40,000 | |||||
Debt Instrument, Term | 5 years | |||||
Interest rate | 10.00% | |||||
Exit fee / end of term charge | $ 5,000 | |||||
Debt Instrument, Fee Amount | $ 4,000 | |||||
Exercise price of warrants (in dollars per share) | $ 0.01 | |||||
Revenue Interest Purchase And Sale Agreement [Member] | ||||||
Securities Purchased under Agreements to Resell | $ 160,000 | $ 160,000 | ||||
Committed Funding Under RIPSA | $ 344,000 | |||||
Novaquest [Member] | ||||||
Debt Instrument, Face Amount | $ 17,500 | $ 100,000 | ||||
Proceeds from Issuance of Debt | $ 117,500 | |||||
Repayments of debt | $ 7,300 | |||||
Debt fair value | $ 228,000 | $ 177,400 | ||||
Novaquest [Member] | Regulatory Milestone [Member] | ||||||
Milestone payment due over six year period | $ 176,300 | |||||
Maximum amount required milestone payments | 440,600 | |||||
Possible offset of regulatory milestone payments with commercial milestone | 88,100 | |||||
Novaquest [Member] | Commercial Milestone [Member] | ||||||
Maximum amount required milestone payments | $ 141,000 |
Shareholders' Equity - Additional Information (Detail) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Feb. 14, 2022
USD ($)
shares
|
Jun. 30, 2022
USD ($)
$ / shares
shares
|
Mar. 31, 2022
$ / shares
shares
|
|
Class of Stock [Line Items] | |||
Common stock, shares authorized | 7,000,000,000 | 7,000,000,000 | |
Common stock, par or stated value per share | $ / shares | $ 0.00000003 | $ 0.00000003 | |
Cantor Fitzgerald Co. [Member] | |||
Class of Stock [Line Items] | |||
Purchase Obligation | $ | $ 250.0 | ||
Percentage of common shares volume-weighted average price | 99.00% | ||
Upfront commitment fee number of shares issued | shares | 145,986 | ||
Common Shares Value Available For Sale | $ | $ 250.0 | ||
Roivant Common Shares [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 7,000,000,000 | ||
Common stock, par or stated value per share | $ / shares | $ 0.00000003 | ||
Common Stock, Voting Rights | one vote | ||
Stockholders Equity Note Stock Split Exchange Ratio 1 | 2.9262 |
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
|
Subsidiary Equity Incentive Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 11.5 | $ 8.2 | |
2015 EIP [Member] | CVARs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation by share based award equity instruments other than options non vested number | 11,826,924 | ||
Share based compensation by share based award equity instruments other than options vested number | 20,185,072 | ||
2021 EIP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common shares reserved for future issuance | 13,190,403 | ||
2021 EIP [Member] | CVARs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation by share based award equity instruments other than options non vested number | 4,431,637 | 6,285,250 |
Share-Based Compensation - Summary of Restricted Stock Units (Detail) - Restricted Stock And Performance Stock Units [Member] - R S L Equity Plans Member |
3 Months Ended |
---|---|
Jun. 30, 2022
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested balance, beginning | 21,956,749 |
Granted | 8,080,813 |
Vested | (2,514,982) |
Forfeited | (1,098,648) |
Non-vested balance, ending | 26,423,932 |
Share-Based Compensation - Summary of Performance Options Activity (Detail) - Stock options and performance stock options [Member] - R S L Equity Plans Member |
3 Months Ended |
---|---|
Jun. 30, 2022
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding ,Beginning balance | 80,364,904 |
Options Granted | 74,165,410 |
Options Forfeited | (231,768) |
Stock options outstanding , Ending balance | 154,298,546 |
Stock options outstanding , Options exercisable | 47,438,548 |
Share-Based Compensation - Summary of Capped Value Appreciation Rights (Detail) - CVARs [Member] - 2021 EIP [Member] |
3 Months Ended |
---|---|
Jun. 30, 2022
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested balance, beginning | 6,285,250 |
Forfeited | (294,250) |
Vested | (1,559,363) |
Non-vested balance, ending | 4,431,637 |
Income Taxes - Additional Information (Detail) |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Line Items] | ||
Effective tax rate | (1.10%) | (0.10%) |
Commitments and Contingencies - Additional Information (Detail) - GSK [Member] - USD ($) $ in Millions |
1 Months Ended | |
---|---|---|
Jul. 31, 2022 |
Jun. 30, 2022 |
|
Long term purchase commitment, Period | 5 years | |
Long term purchase commitment minimum amount | $ 48.2 | |
Samsung Biologics Co., Ltd. ("Samsung") [Member] | ||
Long term purchase commitment minimum amount | $ 36.0 | |
Palantirs [Member] | ||
Other Commitment, to be Paid, Remainder of Fiscal Year | $ 30.0 |
Earn-Out Shares, Public Warrants and Private Placement Warrants - Additional Information (Detail) |
3 Months Ended |
---|---|
Jun. 30, 2022
$ / shares
shares
| |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Common Stock Warrants | 60,021 |
Earn out shares, Vested | 0 |
Roivant Common Shares [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Fifteen Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Number of trading days to meet earn out price threshold | 20 days |
Trading day period for earn out shares | 30 days |
Earn-Out share price | $ / shares | $ 15 |
Roivant Common Shares [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Twenty Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Trading day period for earn out shares | 30 days |
Earn-Out share price | $ / shares | $ 20 |
MAAC Independent Director [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Fifteen Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Stock Issued During Period, Shares, New Issues | 10,000 |
MAAC Independent Director [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Twenty Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Stock Issued During Period, Shares, New Issues | 5,000 |
MAAC Sponsor [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Fifteen Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Stock Issued During Period, Shares, New Issues | 2,033,591 |
MAAC Sponsor [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Twenty Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Stock Issued During Period, Shares, New Issues | 1,016,796 |
MAAC Sponsor [Member] | Roivant Common Shares [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Fifteen Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Portion of Share Subject to Earnout | 20.00% |
MAAC Sponsor [Member] | MAAC Independent Director [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Twenty Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Portion of Share Subject to Earnout | 20.00% |
MAAC Sponsor [Member] | MAAC Independent Director [Member] | Sponsor Support Agreement [Member] | Share Price Equal or Exceeds Ten Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Portion of Share Subject to Earnout | 10.00% |
Roivant Warrant [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Time To Warrant Exercisability | 30 days |
Warrants and Rights Outstanding, Term | 5 years |
Private Placement Warrants [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.5 |
Class of Warrant or Right, Outstanding | 10,214,365 |
Public Warrants [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.5 |
Class of Warrant or Right, Outstanding | 20,535,896 |
Common Class A [Member] | Share Price Equal or Exceeds Eighteen Dollar [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Share Redemption Trigger Price | $ / shares | $ 18 |
Common Class A [Member] | Roivant Warrant [Member] | |
Earn Out Shares Public Warrants and Private Placement Warrants [Line Items] | |
Time To Warrant Exercisability | 30 days |
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | $ 301,287 | $ 325,834 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in Trust Account | 1,277,879 | 1,623,678 |
Debt issued by Dermavant to NovaQuest | 228,000 | 177,400 |
Liability instruments measured at fair value | 28,181 | 44,912 |
Total liabilities at fair value | 256,181 | 222,312 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in Trust Account | 1,090,935 | 1,429,715 |
Liability instruments measured at fair value | 12,286 | 18,019 |
Total liabilities at fair value | 12,286 | 18,019 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in Trust Account | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in Trust Account | 186,944 | 193,963 |
Debt issued by Dermavant to NovaQuest | 228,000 | 177,400 |
Liability instruments measured at fair value | 15,895 | 26,893 |
Total liabilities at fair value | 243,895 | 204,293 |
Money Market Funds [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 976,592 | 1,297,844 |
Money Market Funds [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 976,592 | 1,297,844 |
Other Investment [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 2,378 | 3,659 |
Other Investment [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 2,378 | 3,659 |
Sio Gene Therapies Inc [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 6,700 | 12,400 |
Sio Gene Therapies Inc [Member] | Common Shares [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 6,688 | 12,447 |
Sio Gene Therapies Inc [Member] | Common Shares [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 6,688 | 12,447 |
Arbutus Biopharma Corporation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 105,300 | 115,800 |
Arbutus Biopharma Corporation [Member] | Common Shares [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 105,277 | 115,765 |
Arbutus Biopharma Corporation [Member] | Common Shares [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 105,277 | 115,765 |
Datavant [Member] | Common Shares [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | 186,944 | 193,963 |
Datavant [Member] | Common Shares [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment | $ 186,944 | $ 193,963 |
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Millions |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Warrant | Public Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial liabilities at fair value | $ 12.3 | $ 18.0 |
Warrant | Private Placement Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial liabilities at fair value | 6.1 | 9.1 |
Earnout Shares [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non financial liabilities at fair value | 7.2 | 9.2 |
Liability Instruments Measured At Fair Value [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non financial liabilities at fair value | $ 2.6 | $ 8.6 |
Fair Value Measurements - Additional Information (Detail) - Liability Instruments Measured At Fair Value [Member] $ in Millions |
Jun. 30, 2022
USD ($)
|
---|---|
Private Placement Warrants | |
Fair Value Disclosures [Line Items] | |
Derivative Liability | $ 6.1 |
Earnout Shares [Member] | |
Fair Value Disclosures [Line Items] | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | $ 7.2 |
Fair Value Measurements - Change in the Fair Value of the Derivative Warrant Liabilities (Detail) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Balance at beginning of period | $ 204,293 | $ 217,993 |
Changes in fair value of debt and liability instruments, included in net loss | 46,946 | 4,585 |
Termination of DSP Options | (61,472) | |
Payments related to long-term debt | (7,344) | |
Balance at end of period | $ 243,895 | $ 161,106 |
Fair Value Measurements - Schedule of Change IN Fair Value of the Level 3 Assets (Detail) - Fair Value, Inputs, Level 3 [Member] $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | $ 193,963 |
Changes in fair value of investment in Datavant, included in net loss | (7,019) |
Ending Balance | $ 186,944 |
Fair Value Measurements - Schedule of Fair Value of Significant Unobservable Inputs Using Valuation Techniques (Detail) - yr |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Volatility | Datavant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset Measurement Input | 95.00% | 110.00% |
Volatility | Earnout Shares [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset Measurement Input | 82.10% | 82.30% |
Volatility | Private Placement Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset Measurement Input | 56.00% | 56.50% |
Risk-free rate | Datavant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset Measurement Input | 2.93% | 1.62% |
Risk-free rate | Earnout Shares [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset Measurement Input | 3.00% | 2.43% |
Risk-free rate | Private Placement Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset Measurement Input | 3.00% | 2.43% |
Term (in years) | Private Placement Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Measurement Input | 4.25 | 4.5 |
Other Expense (Income), Net - Summary of Other Expense, Net From Continuing Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Other Expense, Net [Abstract] | ||
Interest income | $ (1,981) | $ (71) |
Interest expense | 2,612 | 2,513 |
Other expense (income) | 1,085 | (2,576) |
Total | $ 1,716 | $ (134) |
Net Loss per Common Share - Summary Of Potentially Dilutive Securities (Detail) - shares |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|||
Stock options and performance stock options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 154,298,546 | 80,491,345 | ||
Restricted stock units and performance stock units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 26,423,932 | 24,324,525 | ||
March 2020 CVARs [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | [1] | 32,011,996 | 32,447,626 | |
November 2021 CVARs [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,431,637 | |||
Restricted common stock (non-vested) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 456,426 | 1,720,090 | ||
Earn-Out Shares (non-vested) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,080,387 | |||
Private Placement Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 10,214,365 | |||
Public Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 20,475,875 | |||
Other instruments issued [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,067,978 | 5,452,793 | ||
|
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