Friends and colleagues,
I am writing to provide our annual update on Roivant. These updates are usually restricted to our shareholders, but we are sharing this year’s letter more broadly to announce an upcoming change in my role from CEO to Executive Chairman and the promotion of Matt Gline to Chief Executive Officer.
Reflections on 2020
Much has transpired in the world and at our company since my last annual update in January 2020. One year ago we had just completed our $3 billion transaction with Sumitomo Dainippon Pharma (DSP), and we were evaluating how to reinvest in our business. At the same time, SARS-CoV-2 was still a distant virus barely on our minds. Today it has afflicted the entire world sparing literally no one from its effects.
COVID-19 touched my family in a direct way. My wife Apoorva, a doctor, gave birth to our first child in February. She then made the difficult decision to return to work at her hospital in March to treat patients during the first peak of the pandemic, helping her colleagues while separating herself from our newborn son for two months. She was infected in the line of duty, and so was another family member, also a frontline doctor, who was hospitalized for two weeks including time in the ICU. Our family’s story is just one of millions last year.
Notwithstanding the pandemic, at Roivant we had a year full of significant accomplishments. Dermavant delivered two positive Phase 3 studies with highly differentiated efficacy and safety data for our novel dermatology product tapinarof in psoriasis. These trials mark the seventh and eighth consecutive successful Phase 3 trials run by companies we have built. We have also made significant clinical progress at Immunovant (Nasdaq: IMVT), Aruvant, and across our pipeline of potentially transformative therapies. Last month, we were thrilled to see the FDA approve Urovant’s vibegron for overactive bladder and Myovant’s relugolix for prostate cancer. These two Vants are controlled by Sumitovant, a wholly-owned subsidiary of DSP.
Matt will share some thoughts on our go-forward strategy below. In sum, despite the difficult year for our world, Roivant is in the strongest position in our history as a company. In 2021, medicines that we developed are now actually helping patients in the real world. Our pipeline is increasingly comprised of first-in-class and best-in-class drugs. We are on the cusp of embarking on our first wholly-owned commercial launch with tapinarof. We are not only developing drugs but have also invested aggressively to discover new drugs in-house by using cutting-edge computational approaches. We continue to attract top talent at every level of our organization and at our growing family of Vants. We are proud to see Sumitovant’s continued success. We continue to operate from a position of financial strength with a cash position of approximately $2 billion which empowers us to think for the long run. Having advanced over 40 medicines into development across 20 Vants in recent years, we are now well-positioned to accelerate our growth by reinvesting aggressively in our platform.
I am also proud to announce that we recently made the decision to promote Matt Gline to serve as Roivant’s new CEO, while I will assume the role of Executive Chairman.
For many of our employees and close partners, this decision will not be a surprise since it reflects how Roivant has been operating as a business over the past year. Following our strategic alliance with DSP in December 2019, my role has evolved to overseeing key strategic decisions at Roivant, while Matt has worked in partnership with our senior management team, including Eric Venker and Mayukh Sukhatme, to lead the day-to-day business. He also works closely with our Vant Chair Frank Torti to oversee our Vants and with Ben Zimmer to oversee our technology businesses. This distributed management model has worked very well for our business over the past year. It was put to the test last spring when I had to temporarily step back from Roivant to deal with difficult family circumstances in the face of COVID-19 – and our company passed that test with flying colors. Thanks to our senior team’s leadership, Roivant is operating as smoothly as it ever has. I am grateful that we have such a deep bench of capable leaders, and Matt is extremely well-suited to lead this group going forward, with full alignment from our management team and board.
Over the last five years, Matt has worked hand-in-hand with me as a partner to successfully lead Roivant through our strategic evolution and growth. He commands fierce loyalty across all parts of the organization, unanimous and enthusiastic support from our board of directors, and deep respect from every member of our management team – comprising some of the most talented people I’ve ever worked with. He has consistently pushed me to think about our business differently, for the better. His appointment to the role of CEO is just one example of our commitment as a company to elevate our employees at every level by constantly providing greater responsibilities and opportunities.
As Executive Chairman I will be able to focus more exclusively on guiding Roivant’s strategy in partnership with Matt, in particular focusing on our expansion into drug discovery and on consummating large collaborations that unlock value with new partners. Meanwhile, Matt will take over my direct reports and run the business, working closely with Roivant’s other senior leaders. Our employees, investors, and partners will continue to hear regularly from me as well as from Matt.
On a separate note, some of you have noticed my entry into the sphere of public dialogue last year with multiple op-eds in The Wall Street Journal and other forums. I expect to continue to publicly share my personal views this year, including through the publication of my forthcoming book about capitalism and democracy. When I do so, I am expressing my personal viewpoints as a citizen, not Roivant’s opinions as a company. Nonetheless, we believe it is important to separate my increasing public engagement from Roivant’s day-to-day operations to avoid even the appearance of commingling the two, and we hope that today’s announcement will add further clarity on this point. It is worth noting that Matt and I differ considerably in our personal perspectives on many societal issues. We are proud that Roivant is a place where leaders with diverse perspectives can work together to achieve our shared goal of delivering important medicines rapidly to patients.
As a company we are as committed as ever to transforming the pharmaceutical industry. Nearly seven years into the journey, we are proud of what we have accomplished, but we are still in the early innings. Leading Roivant as your CEO has been the greatest honor of my career, and I am excited to work with Matt in our new respective roles. I am certain that Roivant’s greatest accomplishments are still ahead of us. Please see below for a note from Matt to all of you.
A Note from Matt Gline
It is a true privilege to become Roivant’s new CEO, and I could not be more excited for the challenge. Working as Roivant’s CFO for the past five years has been a pleasure, and I believe the CFO job here to be one of the very best jobs in the world. Against that backdrop, when Vivek first approached me last summer to ask about my interest in the CEO role, I had to give it some serious thought.
I am able to take on the role because of the many ways in which our team has grown stronger over the past two years. The diversity of skills and experiences around the table allows each of us to focus on our respective strengths. I am thankful for Vivek’s continued partnership, and I am confident that he and I together will be able to effectively lead the team and to lean on our colleagues to supplement our own abilities.
Historically, Roivant’s model has been to identify promising drug targets, and then to partner with other institutions to license rights to drugs against those targets. Over the last six years, we built a pipeline of over 40 investigational medicines in this way. However, in recent years our team’s rate of identifying drug targets internally has continued to increase and begun to encompass earlier stage targets where we have traditionally not been as active.
Consequently, we have made the major strategic decision to begin designing and discovering novel molecules of our own. Roivant has always been modality agnostic and therapeutic area agnostic, and we are applying that same philosophy to our discovery work, with efforts spanning small molecules and biologics. We are doing much of this work in a unique way, combining the best of what has always made us unique (an investor lens applied to target selection, deep scientific expertise, and a machine for development execution) with significant investments in computationally powered capabilities that we have built for drug discovery.
I want to highlight in particular our work in the field of targeted protein degradation. We believe that protein degraders represent a new treatment modality likely to transform the treatment of many diseases in the coming decade. Unlike other novel modalities in genetic or cellular medicine (e.g. mRNA, gene therapy, CAR-T, gene editing, etc.), degraders are small molecules which can be manufactured using conventional techniques and in many cases delivered orally. We believe the design of novel protein degraders will be greatly facilitated through computational tools and artificial intelligence. To date we have allocated over $300 million to this effort with more than 10 degraders in preclinical development. We recently announced the acquisition of Oncopia Therapeutics and a partnership with Dr. Shaomeng Wang at the University of Michigan to bolster our existing capabilities in computational drug discovery and clinical development. In the coming years we expect to make substantial R&D investments in order to become the global leader in this area of medicine.
Our discovery efforts build on top of our established proficiencies in target identification, creative development strategy, and technology-enabled clinical development execution. The strength of this foundation is critical to our growth, and also continues to power our core business model in finding and in-licensing promising, innovative medicines for development.
Most importantly, as I assume my new role and we take on these new challenges, I would like to thank the entire team at Roivant, as well as our shareholders and partners, for the hard work and support that have gotten us to where we are. I am grateful for your continued efforts, and I look forward to our work together in the years ahead.