MYOVANT SCIENCES LTD.

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated StatementStatements of Shareholders’ (Deficit) Equity

Condensed Consolidated Statements of Cash Flows

MYOVANT SCIENCES LTD.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1—Description of Business

Myovant Sciences Ltd. (or together with its wholly ownedwholly-owned subsidiaries, the Company)“Company”) is a clinical-stage biopharmaceuticalhealthcare company focused on developing and commercializing innovative therapiestreatments for women’s health and endocrine diseases.prostate cancer. The Company is developing its lead product candidate,a relugolix combination tablet (relugolix 40 mg plus estradiol 1.0 mg and norethindrone acetate 0.5 mg) for the treatment ofwomen with heavy menstrual bleeding associated with uterine fibroids endometriosis-associatedand for pain andassociated with endometriosis, a relugolix monotherapy tablet (120 mg) for men with advanced prostate cancer, and its secondan additional product candidate, MVT-602, an oligopeptide kisspeptin-1 receptor agonist, for the treatment of female infertility as part of assisted reproduction. Both relugolix and MVT-602 were licensed to the Company by Takeda Pharmaceuticals International AG, or Takeda, on April 29, 2016.

The Company is an exempted company limited companyby shares incorporated under the laws of Bermuda in February 2016 under the name Roivant Endocrinology Ltd. The Company changed its name to Myovant Sciences Ltd. in May 2016. The Company has four wholly owned subsidiaries. Roivant Endocrinology Inc. was incorporated in Delaware in April 2016 and subsequently changed its name to Myovant Sciences, Inc., or MSI. Myovant Holdings Limited, or MHL, a private limited company incorporated under the laws of England and Wales, and Myovant Sciences GmbH, or MSG, a company with limited liability formed under the laws of Switzerland, were each organized in August 2016. Myovant Sciences Ireland Limited, or MSIL, a company with limited liability formed under the laws of Ireland, was organized in April 2017. MSG holds the Company's intellectual property rights and is the Company’s principal operating subsidiary.

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 has incurred, and expects to continue to incur, significant and increasing operating losses and negative operating cash flows at leastas it continues to develop its product candidates and prepares for potential future regulatory approvals and commercialization of relugolix combination tablet and relugolix monotherapy tablet. To date, the next several years. The Company has not generated any revenue, and it does not expect to generate revenue unless and until it successfully completes development and obtains regulatory approval for at least one of its product candidates. The Company believes it currently has sufficient cashfunded its operations primarily from the issuance and financing commitments available to it to meet its financial needs for at least the next 12 months. The Company may need to obtain further funding through other public or private offeringssale of its capitalcommon shares and from debt financing collaborationarrangements. See Note 2(C), Summary of Significant Accounting Policies—Going Concern and licensing arrangementsManagement’s Plans.

On December 27, 2019, Sumitovant Biopharma Ltd. (“Sumitovant”), a subsidiary of Sumitomo Dainippon Pharma Co., Ltd. (“DSP”) became the Company’s majority shareholder and a related party after acquiring 45,008,604 of the Company’s outstanding common shares, representing approximately 50.2% of the Company’s common shares outstanding on December 27, 2019. The common shares were acquired from the Company’s former majority shareholder, Roivant Sciences Ltd. (“Roivant,” “RSL,” or other sources. Adequate“former majority shareholder”) at the closing of a transaction between Roivant and DSP. See Note 7 for additional funding may not be available to the Company on acceptable terms, or at all.information.

Note 2—Summary of Significant Accounting Policies

(A) Basis of Presentation:Presentation

The Company'sCompany’s fiscal year ends on March 31, and its first three fiscal quarters end on June 30, September 30 and December 31. The Company has determined that it has 1 operating and reporting segment as it allocates resources and assesses financial performance on a consolidated basis.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States, or U.S., generally accepted accounting principles, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017,2019, filed with the U.S. Securities and Exchange Commission, or the SEC, on June 14, 2017.May 24, 2019. The unaudited consolidated balance sheet at March 31, 20172019 has been derived from the audited consolidated financial statements at that date. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented have been included. Operating results for the three and nine months ended December 31, 20172019 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2018,2020, for any other interim period or for any other future year. Certain prior year amounts have been reclassified to conform with the current period presentation. These reclassifications had no effect on the previously reported results of operations.

Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP as foundincluded in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, issued by the Financial Accounting Standards Board, or FASB. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly ownedwholly-owned subsidiaries. The Company has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs, and expenses, including compensation and other expenses allocated to the Company under its services agreements with Roivant Sciences, Inc., or RSI, and Roivant Sciences GmbH, or RSG, each a wholly owned subsidiaryevaluation of the Company’s parent company, Roivant Sciences Ltd., or RSL,ability to continue as well asa going concern, share-based compensation expenses, research and development, or R&D, costs,expenses and accruals, and income taxes. 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 at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses incurred during the reporting period, that are not readily apparent from other sources. Estimates and assumptions are periodically reviewed in light of changes in circumstances, facts, or experience. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates.

Debt issuance costs includeThe Company has evaluated whether there are conditions and events, considered in the costs of debt financings undertaken byaggregate, that raise substantial doubt about the Company, including legal fees, accounting fees, and other direct costs ofCompany’s ability to continue as a going concern within one year after the financing. Debt issuance costs related to a recognized debt liability are presented indate the unaudited condensed consolidated balance sheetfinancial statements are issued. During the nine months ended December 31, 2019, the Company incurred net losses of $224.1 million and used $201.9 million of cash and cash equivalents in operations. The Company expects to continue to incur significant and increasing operating losses and negative operating cash flows as it continues to develop its product candidates and prepares for potential future regulatory approvals and commercialization of relugolix combination tablet and relugolix monotherapy tablet. In addition, the Company expects that its outstanding debt levels will increase in future periods, which will result in an increase in its quarterly interest payment obligations. The Company has not generated any revenue to date and does not expect to generate revenue unless and until it successfully completes development and obtains regulatory approval for at least one of its product candidates. Based on its current operating plan, the Company expects that its existing cash, cash equivalents, and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements at least through the end of the Company’s fiscal year ending March 31, 2020. This estimate is based on the Company’s current assumptions, including assumptions relating to its ability to manage its spend, that might prove to be wrong, and it could use its available capital resources sooner than it currently expects. Current cash, cash equivalents and marketable securities will not be sufficient to enable the Company to complete all necessary development and regulatory activities and commercially launch relugolix combination tablet or relugolix monotherapy tablet. The Company anticipates that it will continue to incur net losses and negative operating cash flows for the foreseeable future.

Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed consolidated financial statements and footnotes have been prepared on the basis that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the carrying amountpossible inability of the debt liability, consistent with debt discounts, and are amortizedCompany to interest expense over the term of the related debt using the effective interest method. Further, debt discounts createdcontinue as a result of the allocation of proceeds received from a debt issuance to warrants issued in conjunction with the debt issuance are amortized to interest expense under the effective interest method over the life of the recognized debt liability.going concern.

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period, reduced, where applicable, for outstanding yet unvested shares of restricted common stock. DilutedThe computation of diluted net loss per common share is computed by dividingbased on the net loss applicable to common shareholders by the diluted weighted-average number of common shares outstanding during the period calculated in accordance with the treasuryplus, when their effect is dilutive, incremental shares consisting of shares subject to stock method. For the three and nine months ended December 31, 2017, 1.3 million restricted share awards andoptions, restricted stock units, were not includedrestricted stock awards, performance stock units, and warrants. In periods in which the calculationCompany reports a net loss, all common share equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equal. Potentially dilutive common shares have been excluded from the diluted net loss per common share computations in all periods presented because such securities have an anti-dilutive effect on net loss per common share due to the Company’s net loss. There are no reconciling items used to calculate the weighted-average number of diluted weighted-averagetotal common shares outstanding because they were anti-dilutive given thefor basic and diluted net loss per common share.

Cash as reported on the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash and consists of the Company. Additionally, forfollowing (in thousands):

Investments in marketable securities are held in a custodial account at a financial institution and managed by the Company’s investment advisor based on the Company’s investment guidelines. The Company considers all highly liquid investments in securities with a maturity of greater than three and nine months endedat the time of purchase to be marketable securities. As of December 31, 2017, 3.3 million2019, the Company’s marketable securities consisted of commercial paper and 3.1 million, respectively,highly rated corporate bonds with maturities of options togreater than three months but less than twelve months at the time of purchase. These short-term commercial paper and corporate debt securities are classified as current assets on the Company’s unaudited condensed consolidated balance sheets under the caption marketable securities.

The Company classifies its marketable securities as available-for-sale at the time of purchase common shares were not includedand reevaluates such designation at each balance sheet date. Unrealized gains and losses on available-for-sale commercial paper and short-term corporate debt securities are excluded from earnings and are recorded in accumulated other comprehensive (loss) income until realized. Any unrealized losses are evaluated for other-than-temporary impairment at each balance sheet date. Realized gains and losses are determined based on the calculation because they were anti-dilutive. For the threespecific identification method and nine months ended December 31, 2016, 1.1 million restricted share awards and 1.3 million options to purchase common shares were not includedare recorded in the calculation of diluted weighted-average common shares outstanding because they were anti-dilutive given the net loss of the Company.other (income) expense, net. See Note 3 for additional information.

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:

The Company’s financial instruments include cash, cash equivalents consisting of commercial paper, corporate bonds, and money market funds, marketable securities consisting of commercial paper and corporate bonds, accounts payable and long-term debt.debt obligations. Cash, cash equivalents, and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. Marketable securities are recorded at their estimated fair value and are included in Level 2 of the fair value hierarchy. The carrying value of the Company's long-termCompany’s debt approximates fair value based on current interest rates for similar types of borrowings and is included in Level 2 of the fair value hierarchy.

Note 3—Accrued Expenses4—Fair Value Measurements

Note 4—Long-term Debt6—Financing Arrangements

In October 2017, the Company, its subsidiaries, MSI, MHL, MSG and MSIL, as guarantors, and NovaQuest Capital Management, or NovaQuest, entered into (i) a Securities Purchase Agreement, or the NovaQuest Securities Purchase Agreement, and (ii) an Equity Purchase Agreement, or the NovaQuest Equity Purchase Agreement. Pursuant to the NovaQuest Securities Purchase Agreement, the Company has the option, at its discretion, to issue up toissued $60.0 million aggregate principal amount of notes, to NovaQuestof which $6.0 million was issued in October 2017 and concurrent$54.0 million was issued in December 2018. Concurrent with each purchase of notes, NovaQuest iswas obligated to purchase up to $20.0 million of the Company’s common shares on a pro rata basis, subject to certain terms and conditions, throughconditions. With the issuance of $6.0 million aggregate principal amount of notes in October 2017, NovaQuest purchased 138,361 common shares for $2.0 million, and with the issuance of $54.0 million aggregate principal amount of notes in December 31, 2018.2018, NovaQuest purchased 1,082,977 common shares for $18.0 million. The equity purchase price for each such purchase will bewas equal to 105% of the average of the volume-weighted average price for the five consecutive trading days immediately prior to the relevant purchase date. The Company has committed that it will issue at least $30.0 million aggregate principal amount of notes through December 31, 2018, subject to certain terms and conditions, of which $6.0 million aggregate principal amount was issued in October 2017. With this issuance of $6.0 million aggregate principal amount of notes in October 2017, NovaQuest also purchased 138,361 common shares for $2.0 million in accordance with the terms of the NovaQuest Securities Purchase Agreement.

The notes bore interest at a rate of 15% per annum, of which 5% was payable quarterly, and 10% was payable on a deferred basis on the earlier of the Amortization Date (as defined below) and the repayment in full of the notes. The scheduled maturity of the notes was October 16, 2023. The Company incurred financing expenses relatedwas required to amortize the principal amount of the notes in equal quarterly installments commencing on November 1, 2021, or the Amortization Date, provided certain terms and conditions were met. Early redemption of the notes was subject to a redemption charge. The Company’s obligations under the NovaQuest Securities Purchase Agreement were secured by a second-lien security interest in substantially all of $1.0 million which are recorded as an offset to long-term debtthe Company’s and its subsidiaries’ respective assets (other than intellectual property). The NovaQuest Securities Purchase Agreement included customary affirmative and restrictive covenants and representations and warranties, including a minimum cash covenant that applied commencing on the Company's condensed consolidated balance sheets. These deferred financing costs are being amortized overAmortization Date, and also included customary events of default and a default interest rate of an additional 5% applied to the termoutstanding note balance.

During each of the debt using the effective interest method,three and are included in interest expense in the Company’s condensed consolidated statements of operations. During the threenine months ended December 31, 2017,2019 and 2018, interest expense included $0.1 million and $0.3 million, respectively, of amortized deferred financing costs related to the NovaQuest notes. During each of the three-month periods ended December 31, 2019 and 2018, the Company paid NovaQuest an annual debt administration fee of $0.3 million.

Outstanding debtThe Company repaid all of its obligations are as follows (in thousands):

In October 2017, the Company, its subsidiaries, MSI, MHL, MSG and MSIL as guarantors, and Hercules Capital, Inc., or Hercules, entered into a Loan Agreement, or the Hercules Loan Agreement, which providesprovided up to $40.0 million principal amount of term loans, or the Term Loans. A first tranche of $25.0 million principal amount was funded upon execution of the Hercules Loan Agreement in October 2017 and the remaining $15.0 million principal amount is available at the Company’s discretion throughwas funded in March 31, 2018.

The Term Loans bearbore interest at a variable per annum rate at the greater of (i) the prime rate plus 4.00% and (ii) 8.25%. The current interest rate on the Term Loans was 8.50% at8.75% as of December 31, 2017.2019. The scheduled maturity date of the Term Loans mature on May 1, 2021, subject to extension towas November 1, 2021 if certain milestones are met.2021. The Company iswas obligated to make monthly interest payments of accrued interest untilduring the Interest-only Period (through June 1, 2019, or the Interest-only Period,2020), subject to certain terms and conditions, followed by monthly installments of principal and interest through the maturity date. The Interest-only Period may be extended until June 1, 2020 if certain milestones are met as defined in the Hercules Loan Agreement. Prepayment of the Term Loans iswas subject to a prepayment charge. Thecharge and the Company iswas also obligated to pay an end of term charge of 6.55% of the principal amount at maturity.of the Term Loans funded under the Hercules Loan Agreement. The Company’s obligations under the Hercules Loan Agreement arewere secured by a first lien security interest in substantially all of the Company’s and its subsidiaries’ respective assets other(other than intellectual property.property). The Hercules Loan Agreement includesincluded customary affirmative and restrictive covenants and representations and warranties, including a minimum cash covenant that ceases to apply if the Company achieves certain clinical development and financing milestones as set forth in the Hercules Loan Agreement. The Hercules Loan Agreement also includes customary events of default. Upon the occurrence of an event of default, a default interest rate of an additional 5.00% may be applied to the outstanding principal balance, and Hercules may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Hercules Loan Agreement.warranties.

Concurrent with each funding of the Term Loans, the Company iswas required to issue to Hercules a warrant, or the Warrants, to purchase a number of its common shares equal to 3.00% of the principal amount of the relevant Term Loan funded divided by the exercise price, which will bewas based on the lowest three-day volume-weighted average price for the three consecutive trading days prior to the funding date for such Term Loan. The Warrants may be exercised on a cashless basis and are immediately exercisable through the seventh anniversary of the applicable funding date. In connection with the first tranche funded under the Hercules Loan Agreement, the Company issued a Warrant to Hercules exercisable for an aggregate of 49,800 of its common shares at an exercise price of $15.06 per common share. TheConcurrent with the funding of the second tranche, the Company accountedissued a Warrant to Hercules exercisable for the Warrant as an equity instrument since it was indexed to the Company’saggregate of 23,910 of its common shares at an exercise price of $18.82 per common share.

During the three and met the criteria for classification in shareholders’ equity. The relative fair value of the Warrant on the date of issuance was approximately $0.5nine months ended December 31, 2019, interest expense included $0.4 million and was treated as a$1.3 million, respectively, of amortized debt discount and issuance costs related to the Term Loans. This amount will be amortized to interest expense using the effective interest method over the life of the Term Loans. The Company estimated the fair value of the Warrant using the Black-Scholes model based on the following key assumptions:

On December 27, 2019, the Company and its subsidiary, Myovant Sciences GmbH, entered into the DSP Loan Agreement which is further discussed in Note 7. On December 30, 2019, the Company borrowed $113.7 million under the DSP Loan Agreement, the proceeds of which were used to repay all outstanding obligations under the NovaQuest Securities Purchase Agreement and the Hercules Loan Agreement and to satisfy certain other fees and expenses. The repayments resulted in a loss on extinguishment of debt obligations areof $4.9 million, which is included under the caption loss on extinguishment of debt in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended December 31, 2019. The loss on extinguishment of debt was calculated as follows (in thousands):

Note 5—7—Related Party Transactions

On October 31, 2019, the Company’s former majority shareholder, Roivant, and Sumitovant, a subsidiary of DSP, entered into a Transaction Agreement (the “DSP-Roivant Agreement”), which among other things, provided for DSP to acquire all of the Company’s outstanding common shares held by Roivant. In July 2016,addition, on October 31, 2019, the Company and DSP entered into a letter agreement pursuant to which, among other things, the Company and DSP would enter into an investor rights agreement and loan agreement upon the closing of the transactions contemplated by the DSP-Roivant Agreement (the “Closing”).

The Investor Rights Agreement also contains certain protections for the Company. ForCompany’s minority shareholders for so long as DSP or certain of its affiliates beneficially owns more than 50% of the Company’s common shares. These protections include: (i) a requirement that Sumitovant vote its shares for the election of independent directors in accordance with the recommendation of the Company’s board of directors (the “board”) or in the same proportion as the shareholders not affiliated with Sumitovant vote their shares; (ii) a requirement that the audit committee of the Company’s board be composed solely of three independent directors; (iii) a requirement that any general and administrative,transaction proposed by DSP or G&A, and R&D activities performed by RSI employees, RSI chargescertain of its affiliates that would increase DSP’s beneficial ownership to over 60% of the Company the employee compensation expense plus a pre-determined mark-up. Employee compensation expense, inclusive of base salary and fringe benefits, is determined based upon the relative percentage of time utilized on Company matters by the respective employee. All other third-party costs are billed to the Company at cost. The accompanying interim unaudited condensed consolidated financial statements include third-party expenses incurred on behalfoutstanding voting power of the Company must be approved by the Company’s audit committee (if occurring prior to December 27, 2022), and be conditioned on the approval of shareholders not affiliated with Sumitovant approving the transaction by a majority of the common shares held by such shareholders; and a requirement that any related person transactions between DSP or certain of its affiliates and the Company must be approved by the Company’s audit committee.

Pursuant to the Investor Rights Agreement, the Company also agreed that at all times that DSP beneficially owns more than 50% of the Company’s common shares, DSP, by purchasing common shares in the open market or from the Company in certain specified circumstances, will have been incurredthe right to maintain its percentage ownership in the Company’s common shares in the event of a financing event or acquisition event conducted by RSIthe Company, or specified other events, subject to specific conditions.

As a result of the closing of the DSP-Roivant Agreement described above, on December 27, 2019 all of the Company’s outstanding common shares held directly or indirectly by Roivant and RSL.

Under the Services Agreements, for the three months ended December 31, 20172019 and 2016,2018, the Company incurred expenses (inclusive of $2.9third-party pass-through costs billed to the Company) of $0.2 million and $2.7$0.4 million, respectively, inclusive of the pre-determined mark-up. ForUnder the Services Agreements, for the nine months ended December 31, 20172019 and 2016,2018, the Company incurred expenses (inclusive of $5.0third-party pass-through costs billed to the Company) of $0.6 million and $6.8$4.6 million, respectively, inclusive of the pre-determined mark-up. These amounts are included in R&D and G&AIn addition, Roivant previously allocated share-based compensation expense to the Company based upon the service performedrelative percentage of time spent by Roivant and its subsidiaries’ employees on the Company’s matters. The Company recorded share-based compensation expense allocated from Roivant of $0.1 million for each of the three months ended December 31, 2019 and 2018, respectively, and $0.3 million and $0.5 million for the nine months ended December 31, 2019 and 2018, respectively.

On December 22, 2019, the Company’s board of directors approved, subject to the closing of the DSP-Roivant transaction and shareholder approval and certain other conditions, the adoption of the Company’s Fifth Amended and Restated Bye-Laws (the “New Bye-Laws”), which amended and restated the Company’s bye-laws to, among other things, (i) remove the procedures established in June 2019 providing RSL with the power, under certain circumstances, to appoint a majority of directors on the Services Agreements.Company’s board and related powers, (ii) revises certain other aspects of the Company’s corporate governance and (iii) make other minor wording changes and additions, removal and revisions of defined terms. The New Bye-Laws became effective on January 23, 2020.

Note 6—8—Income Taxes

The Company is not subject to taxation under the laws of Bermuda since it was organized as a Bermuda Exempted Limited Company, for which there is no current tax regime. The Company’s provision for income taxestax expense is primarily based on income taxes in the United StatesU.S. for federal, state and local taxes. The Company’s effective income tax rate for the three months ended December 31, 20172019 and 20162018 was 0.51%(0.22)% and (0.36)%0.00%, respectively. The Company’s effective income tax rate for the nine months ended December 31, 20172019 and 20162018 was (0.64)(0.31)% and (0.06)(0.12)%, respectively. The Company'sCompany’s effective income tax rate for all periods presented differs fromis driven by the Bermuda federal statutory rate of 0% primarily due to the U.S. permanent unfavorable tax differences,Company’s jurisdictional earnings by location and a valuation allowance that effectively eliminates the Company'sCompany’s global net deferred tax assets in the United States. On December 22, 2017, the President of the United States signed into law an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as “the Tax Cuts and Jobs Act”), which introduced a comprehensive set of tax reforms. The Tax Cuts and Jobs Act significantly revises U.S. tax law by, among other provisions, lowering the U.S. federal statutory income tax rate from 35% to 21% and eliminating or reducing certain income tax deductions.

The Company assesses the realizability of itsthe 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.

Note 7—9—Shareholders’ Equity

Note 10—Share-Based Compensation

In June 2016, the Company adopted its 2016 Equity Incentive Plan, or as amended, the 2016 Plan, under which 4.5 million common shares were originally reserved for grant.issuance. Pursuant to the “evergreen” provision contained in the 2016 Plan, the number of common shares reserved for issuance under the 2016 Plan automatically increases on April 1 of each year, commencing on (and including) April 1, 2017 and ending on (and including) April 1, 2026, in an amount equal to 4% of the total number of shares of capital stock outstanding on March 31 of the preceding fiscal year, or a lesser number of shares as determined by the Company’s board of directors. On April 1, 2017,2019, the number of common shares authorized for issuance increased automatically to 6.9by 2.9 million shares in accordance with the evergreen provision of the 2016 Plan.

On August 26, 2019 (the “repricing date”), the Company’s Board of Directors approved a stock option repricing program (the “repricing”) whereby certain previously granted and still outstanding vested and unvested stock options held by current employees and certain executives were 3.4 millionrepriced on a 1-for-one basis to $7.78 per share, which represented the closing market price of the Company’s common shares on the repricing date. To be eligible to participate in the stock option repricing program, 735,428 vested stock options to certain executives as of the repricing date are subject to a one-year exercise restriction period beginning from the repricing date. No other terms of the repriced stock options were modified, and the repriced stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates. As a result of the repricing, 5,095,013 vested and unvested stock options outstanding with original exercise prices ranging from $8.82 to $24.44, and a weighted averagemedian exercise price of $9.47 and 1.7$17.28 per share, were repriced under this program. The repricing resulted in one-time incremental stock-based compensation expense of $9.2 million, restricted share awards and restrictedwhich will be recognized over the remaining term of the repriced stock units had been granted.options.

On August 26, 2019, the nine months ended December 31, 2017 and 2016, the CompanyCompany’s Board of Directors granted options to purchaseperformance stock units covering a total of 2.2 million and 1.3 million408,510 common shares, respectively,of which two-thirds of the shares (272,338 shares) subject to its employeeseach performance stock unit vests based upon the passage of time, and directors under the 2016 Plan. Theremaining one-third of the shares (136,172 shares) subject to each performance stock unit vests if the Company recordedachieves certain clinical trial and regulatory milestones. Total share-based compensation expense related toassociated with the performance stock options issued to Company employees and directorsunits is based on the fair value of $2.1 million and $0.9 million, respectively, for the three months ended December 31, 2017 and 2016 and $4.9 million and $1.2 million, respectively, for the nine months ended December 31, 2017 and 2016. At December 31, 2017, total unrecognized compensation expense related to unvested options issued to employees and directors was $24.5 million, which is expected to be recognized over the remaining weighted-average service period of 3.08 years.

Share-based compensation expense is included in R&D and G&A expenses in the accompanying interim unaudited condensed consolidated statements of operations consistent with the grantee’s salary.

The Company’s Principal Executive Officer was granted 66,845 RSL RSUs during the fiscal year ended March 31, 2017. These RSUs will vest to the extent certain RSL performance criteria are achieved and certain RSL liquidity conditions are satisfied within specified years of the grant date, provided that the Company’s Principal Executive Officer has provided continued service to RSL, the Company, or any of their respective subsidiaries through such date. As of December 31, 2019, the performance conditions had not been met and were granted to consultants underdeemed not probable of being met. For the 2016 Plan. During thethree and nine months ended December 31, 2016, 0.1 million options were granted to consultants under the 2016 Plan.

Note 8—Commitments and Contingencies11—Leases

The Company leases 40,232 square feet of office space located in Brisbane, California pursuant to an operating lease agreement, as amended, that expires in May of 2026. The Company has the option to extend the lease term for an additional seven years but is not reasonably certain that it will exercise the option and has therefore excluded it from the lease term. The lease agreement, as amended, required the Company to deliver an irrevocable standby letter of credit for the duration of the lease in the amount of $0.5 million to the landlord, the amount of which is subject to reduction of approximately $0.2 million if certain conditions are met.

During October 2019, the Company entered into commitments undera Sublease Agreement, or sublease, for an additional 20,116 square feet of office space within the same building as its license agreement with Takeda, services agreements with RSI and RSG (See Note 5), and financing agreements with NovaQuest and Hercules (See Note 4). In addition, the Company has entered into services agreements with third parties for pharmaceutical R&D and manufacturing activities and has a lease agreement forcurrent corporate office space located in Brisbane, California. The manufacturing agreements can be terminated bysublease term expires in February of 2024, with total expected minimum payments over the sublease term of approximately $3.7 million. The sublease required the Company with 30 days written notice. Expenditures to contract research organizations, or CROs, and contract manufacturing organizations, or CMOs, represent significant costsdeliver an irrevocable standby letter of credit to the sublessor for the duration of the lease in the amount of $0.2 million.

The components of operating lease expense for the Company’s clinical developmentBrisbane, California office space were as follows (in thousands):

As of December 31, 2019, the Company’s operating leases for its product candidates. Subject to required notice periodsBrisbane, California office space had a weighted average remaining lease term of 5.9 years and a weighted average discount rate of 12.3%.

As of December 31, 2019, maturities of operating lease liabilities for the Company's obligations under binding purchase orders,Company’s Brisbane, California office space were as follows (in thousands):

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 liability can be reasonably estimated. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the loss contingency, including an estimable range, if possible. The Company is currently not involved in any material legal proceedings.

In the nine months ended December 31, 2017, there were no other material changes outside the ordinarynormal course of business, the Company enters into agreements with contract service provides to assist in the performance of its R&D and clinical and commercial manufacturing activities. Subject to required notice periods and the Company’s 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, clinical and commercial manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.

The Company has agreed to indemnify its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification liability is unlimited; however, the Company holds directors’ and officers’ liability insurance which limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. In the normal course of business, the Company also enters into contracts and agreements with service providers and other parties with which it conducts business that contain indemnification provisions pursuant to which the Company has agreed to indemnify the party against certain types of third-party claims. The Company has agreed to indemnify DSP against certain losses, claims, liabilities and related expenses incurred by DSP, subject to the specified contractualterms of the DSP Loan Agreement (See Note 7). The Company has not experienced any material losses related to these indemnification obligations, set forthand no material claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related accruals have been established.

Under the Takeda License Agreement, the Company will pay Takeda a fixed, high single-digit royalty on net sales of relugolix and MVT-602 products in the contractual obligations tableCompany’s territory, subject to certain agreed reductions. Takeda will pay the Company a royalty at the same rate on net sales of relugolix products for prostate cancer in the Takeda Territory, subject to certain agreed reductions. Royalties are required to be paid, on a product-by-product and country-by-country basis, until the latest to occur of the expiration of the last to expire valid claim of a licensed patent covering such product in such country, the expiration of regulatory exclusivity for such product in such country, or 10 years after the first commercial sale of such product in such country. Under the Takeda License Agreement, there was no upfront payment and there are no payments upon the achievement of clinical development or marketing approval milestones. As the amount and timing of any potential future payments under the Takeda License Agreement are not probable and estimable, no such potential commitments have been included in the Company’s Annual Reportunaudited condensed consolidated balance sheet.

In May 2018, the Company entered into a Commercial Manufacturing and Supply Agreement with Takeda, or the Takeda Commercial Supply Agreement. Pursuant to the Takeda Commercial Supply Agreement, Takeda agreed to supply the Company and the Company agreed to obtain from Takeda certain quantities of relugolix drug substance according to agreed-upon quality specifications and in order to commercialize relugolix in accordance with the Takeda Agreement. Under the Takeda Commercial Supply Agreement, the Company and Takeda entered into an initial firm order in which Takeda supplied the Company with relugolix drug substance at a fixed price per kilogram through December 31, 2019. For relugolix drug substance manufactured or delivered on Form 10-Kor after such date, the Company will pay Takeda a price per kilogram of relugolix drug substance to be agreed upon between the parties at the beginning of each fiscal year.

The initial term of the Takeda Commercial Supply Agreement began on May 30, 2018 and will continue for five years. At the year ended March 31, 2017.end of the initial term, the Takeda Commercial Supply Agreement will automatically renew for successive one-year terms, unless either party gives notice of termination to the other at least 12 months prior to the end of the then-current term. The Takeda Commercial Supply Agreement may be terminated by either party upon 90 days’ notice of an uncured material breach of its terms by the other party, or immediately upon notice to the other party of a party’s bankruptcy. Each party will also have the right to terminate the Takeda Commercial Supply Agreement, in whole or in part, for any reason upon 180 days’ prior written notice to the other party, provided that any then-open purchase orders will remain in effect and be binding on both parties. The Takeda Commercial Supply Agreement, including any then-open purchase order thereunder, will terminate immediately upon the termination of the Takeda Agreement in accordance with its terms.

The following discussion and analysis of our financial condition, results of operations and cash flows should be read in conjunction with (1) the interim unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and (2) the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended March 31, 20172019 included in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission, or the SEC, on June 14, 2017.May 24, 2019. Unless the context requires otherwise, references in this reportQuarterly Report on Form 10-Q to “Myovant,” the “Company,” “we,” “us,” and “our” refer to Myovant Sciences Ltd. and its wholly-owned subsidiaries.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “to be,” “will,” “would”“would,” or the negative or plural of these words, or similar expressions or variations, although not all forward-looking statements contain these identifying words. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur and actual results could differ materially from those projected in theexpressed or implied by these forward-looking statements.

The forward-looking statements appearing in a number of places throughout this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things:

Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors known and unknown that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussedparticularly in the section titled “Risk Factors” set forth in Part II,II. Item 1A1A. of this Quarterly Report on Form 10-Q, and in our other filings with the United States, or U.S., Securities and Exchange Commission, or SEC. These risks are not exhaustive. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

We are a clinical-stage biopharmaceuticalhealthcare company focused on developing and commercializing innovative therapiestreatments for women’s health and endocrine diseases. Our goal is to be the leading global biopharmaceutical company focused on women's health and endocrine diseases in areas of high unmet medical need.prostate cancer. Our lead product candidate is relugolix, ana once-daily, oral, once-daily, small molecule that acts as a gonadotropin-releasing hormone, or GnRH, receptor antagonist.antagonist that is currently being evaluated in multiple Phase 3 clinical studies across three distinct indications. We are developing a relugolix combination tablet (relugolix 40 mg plus estradiol 1.0 mg and norethindrone acetate 0.5 mg) for women with heavy menstrual bleeding associated with uterine fibroids and for pain associated with endometriosis, and a relugolix monotherapy tablet (120 mg) for men with advanced prostate cancer. In addition, we are developing MVT-602, an oligopeptide kisspeptin-1 receptor agonist, for the treatment of female infertility as a part of assisted reproduction. Both relugolix and MVT-602 were licensed to us by Takeda Pharmaceuticals International AG, or Takeda, on April 29, 2016.

Since our inception, we have devoted substantially all of our efforts to identifying and in-licensing our product candidates, organizing and staffing our company, raising capital, preparing for and advancing the clinical development of our product candidates and preparing for potential future regulatory approvals and commercialization of relugolix combination tablet and relugolix monotherapy tablet.

On May 14, 2019 and July 23, 2019, we announced that the Phase 3 LIBERTY 1 and LIBERTY 2 studies, respectively, evaluating once-daily relugolix combination therapy in women with heavy menstrual bleeding associated with uterine fibroids, met their primary efficacy endpoint and six key secondary endpoints. Relugolix combination therapy in these studies consisted of relugolix 40 mg plus estradiol 1.0 mg and norethindrone acetate 0.5 mg. On July 23, 2019, we also announced that a separate clinical study of relugolix combination tablet met all required and pre-specified U.S. Food and Drug Administration, or FDA, criteria for bioequivalence. The relugolix combination tablet is the formulation intended to be offered to women should relugolix combination tablet receive FDA approval. On February 10, 2020, we announced positive one-year safety and efficacy data from the Phase 3 LIBERTY open-label extension study, including an 87.7% response rate on the primary endpoint, an 89.9% mean reduction in menstrual loss from baseline to one year, and maintenance of one-year bone mineral density consistent with the 6-month LIBERTY 1 and 2 results. We currently expect to submit a New Drug Application (“NDA”) to the FDA for a once-daily, oral, relugolix combination tablet for the treatment of heavy menstrual bleeding associated with uterine fibroids endometriosis-associated painin April 2020. We expect that this submission will include complete one-year safety and efficacy data from the LIBERTY open-label extension study, key data that may positively impact the labeled duration of use of the relugolix combination tablet. The priority review voucher previously expected to be received from Roivant Sciences and Sumitomo Dainippon Pharma Co., Ltd. (“DSP”) was not issued to Roivant Sciences and DSP and therefore we expect to submit the NDA for heavy menstrual bleeding associated with uterine fibroids without a priority review voucher. We also plan to submit a Marketing Authorisation Application (“MAA”) to the European Medicines Agency in the first quarter of calendar year 2020.

On November 19, 2019, we announced that the Phase 3 HERO study evaluating the safety and efficacy of once-daily, oral relugolix monotherapy (120 mg) in men with advanced prostate cancer.cancer met its primary efficacy endpoint with a 96.7% response rate, and all tested key secondary endpoints, while demonstrating 54% fewer major cardiovascular events as compared with leuprolide injections administered every 3 months. Based on the positive HERO results, we currently expect to submit an NDA to the FDA for relugolix monotherapy tablet for men with advanced prostate cancer in the second quarter of calendar year 2020. We enrolled 434 men with metastatic prostate cancer in the HERO study, comprised of 295 men from the original HERO study and an additional cohort of 139 men that completed enrollment in July 2019. A key objective of enrolling these men was to assess the secondary objective of demonstrating that relugolix monotherapy can delay the time to progression of the lethal state of the disease, castration-resistant prostate cancer, as compared to leuprolide. We currently expect to present top-line results on the castration resistance-free survival endpoint in the cohort of 434 men with metastatic disease in the third quarter of calendar year 2020.

We have incurred, and expect to continue to incur, significant operating losses and negative operating cash flows as we continue to develop our product candidates and prepare for the treatmentpotential future regulatory approvals and commercialization of female infertility as part of the hormonal preparation used in assisted reproduction. Both relugolix combination tablet and MVT-602 were licensed to us by Takeda.

In November 2016, we completed our initial public offering, or IPO, in which we raised net proceeds of approximately $200.0 million. As of December 31, 2017,2019, and March 31, 2017,2019, we had an accumulated deficit of $180.2$726.1 million and $85.1$502.0 million, respectively. We recordedhad net losses of $41.8$85.6 million and $8.1$70.6 million for the three months ended December 31, 20172019 and 2016,2018, respectively, and net losses of $95.0$224.1 million and $61.8$198.5 million for the nine months ended December 31, 20172019 and 2016,2018, respectively. As of December 31, 2019, we had $98.9 million of cash, cash equivalents, and marketable securities available to us, as compared to $156.1 million of cash and cash equivalents available to us as of March 31, 2019. As of December 31, 2019, approximately $286.3 million of borrowing capacity remains available to us under the DSP Loan Agreement. We have determined that we have one operatingare permitted to request quarterly draws under the DSP Loan Agreement, subject to certain terms and reporting segment.

Our lead product candidate,We are currently developing relugolix is currently being developed for the treatment ofin three target indications: heavy menstrual bleeding associated with uterine fibroids, endometriosis-associatedfibroids; pain associated with endometriosis; and advanced prostate cancer. Relugolix is an oral, once-daily, small molecule that acts as a GnRH receptor antagonist that binds to and inhibits GnRH receptors in the anterior pituitary gland. Inhibition of GnRH receptors decreases the release of gonadotropins (luteinizing hormone and follicle-stimulating hormone), thereby decreasing the downstream production of estrogen and progesterone by the ovaries in women and testosterone by the testes in men.

As a GnRH receptor antagonist, relugolix has a clinically-validatedclinically validated mechanism of action in each of our three target indications. Lowering estrogen and progesterone levels decreaseshas previously been demonstrated to effectively decrease heavy menstrual bleeding in women with uterine fibroids and improvesto reduce the pelvic pain associated with endometriosis. We are developing relugolix combination therapy (relugolix 40 mg plus estradiol 1.0 mg and norethindrone acetate 0.5 mg) administered orally once-daily, with the goal of optimizing estradiol levels to achieve the long-term benefit of relugolix on symptoms of uterine fibroids and endometriosis, while maintaining bone health and mitigating side effects from a low-estrogen state such as vasomotor symptoms. We expect to launch in our women’s health indications with a single-tablet regimen of relugolix combination therapy administered orally once-daily. We have recently conducted a bioequivalence study to demonstrate the bioequivalence of the relugolix combination tablet with the co-administered regimen used in the LIBERTY clinical program (one relugolix 40 mg tablet and one tablet containing estradiol 1.0 mg and norethindrone acetate 0.5 mg). The relugolix combination tablet met FDA bioequivalence criteria. During December 2019, we successfully completed one-year stability studies, which are required for FDA approval of the relugolix combination tablet. We believe our combination approach with relugolix has the potential to have a better safety and tolerability profile than the currently approved GnRH agonist therapies and has the potential to be used longer-term. One-year safety and efficacy data from the Phase 3 LIBERTY open-label extension study demonstrated an 87.7% response rate in reducing heavy menstrual bleeding, an average reduction of 89.9% in blood loss from baseline at one year, and maintenance of bone mineral density, consistent with the results of LIBERTY 1 and 2.The goal of our relugolix combination tablet is to provide women with uterine fibroids and endometriosis a once-daily oral medical alternative to hysterectomy and other invasive procedures often recommended to treat these conditions.

Decreasing testosterone slows the growth and progression of advanced prostate cancer, and is the central objective of treatment oncesuch as when the disease has recurredrecurs or the prostate-specific antigen, or PSA, is rising following definitive treatment with prostatectomy or radiation therapy ortherapy. We are evaluating relugolix monotherapy as a once-daily oral treatment to lower testosterone. It is being evaluated at a three-times higher dose in men presenting with advanced prostate cancer. cancer than the women’s health indications (120 mg orally once-daily following a single 360 mg loading dose compared to 40 mg once daily). We are developing our women’s health relugolix combination and our advanced prostate cancer relugolix monotherapy treatments with the potential of bringing to market two distinct branded products.

We initiated a Phase 3 clinical program in January 2017, evaluating relugolix combination therapy in women with heavy menstrual bleeding associated with uterine fibroids. The program consistsconsisted of two international,multinational, replicate pivotal clinical trialsstudies (LIBERTY 1 and LIBERTY 2) of relugolix combination therapy (relugolix 40 mg plus estradiol 1.0 mg and norethindrone acetate 0.5 mg) in women with heavy menstrual bleeding associated with uterine fibroids. Women in the LIBERTY 1 and LIBERTY 2 studies underwent a screening period requiring up to two menstrual cycles to document heavy menstrual bleeding and were randomized in a 1:1:1 ratio to one of three groups. Women received treatment either with relugolix combination therapy for 24 weeks, relugolix 40 mg once-daily monotherapy for 12 weeks followed by relugolix combination therapy once-daily for an additional 12 weeks, or placebo once-daily for 24 weeks.

In the primary endpoint analysis, 73.4% of women receiving once-daily oral relugolix combination therapy (relugolix 40 mg plus estradiol 1.0 mg and norethindrone acetate 0.5 mg) achieved the responder criteria compared with 18.9% of women receiving placebo (p < 0.0001). A response was defined as a menstrual blood loss volume of less than 80 mL and a 50 percent or greater reduction from baseline in menstrual blood loss volume during the last 35 days of the 24-week treatment period measured using the alkaline hematin method. On average, women receiving relugolix combination therapy experienced an 84.3% reduction in menstrual blood loss from baseline, a clinically relevant secondary endpoint.

We initiated a Phase 3 clinical program in June 2017, evaluating relugolix combination therapy in women with pain associated with endometriosis. The program consists of two multinational replicate pivotal clinical studies, which we refer to as SPIRIT 1 and SPIRIT 2. Each trial randomizesstudy randomized women 1:1:1 to one of three treatment arms: relugolix 40 mg once dailyonce-daily co-administered in combination with commercially available low-dose hormonal add-back therapy for 24 weeks (1.0 mg estradiol and 0.5 mg norethindrone acetate); relugolix 40 mg once dailyonce-daily monotherapy for 12 weeks followed by relugolix 40 mg once dailyonce-daily co-administered with low-dose hormonal add-back therapy for an additional 12 weeks,weeks; or placebo once dailyonce-daily for a period of 24 weeks. We expect to enroll approximately 390 womencompleted patient recruitment into SPIRIT 2 in eachAugust 2019 and SPIRIT 1 in October 2019 and the enrollment of 623 and 638 patients in the two replicate LIBERTYSPIRIT 2 and SPIRIT 1 and LIBERTY 2 trials.studies, respectively. Eligible women completing the initial 24-week period will beare offered an active treatment extension with relugolix 40 mg once dailyonce-daily co-administered in combination with low-dose hormonal add-back therapy for an additional 28-week80-week period, or a total treatment period of 52104 weeks, to evaluate the safety of longer-term treatment. We expect to complete enrollment for the LIBERTY 1 and LIBERTY 2 trials during calendar year 2018 and anticipate results from these trials during calendar year 2019.

We expect to report top-line results from SPIRIT 2 and SPIRIT 1 in the first and second quarters of calendar year 2018 and anticipate results from these trials during calendar year 2019.2020, respectively.

We initiated a Phase 3 clinical trial, the HERO study in March of 2017, forevaluating the safety and efficacy of relugolix in men with advanced prostate cancer. Our Phase 3cancer, which we refer to as the HERO trial is enrollingstudy. The HERO study randomized 934 men with advanced prostate cancer who require androgen deprivation therapy, and randomizes menor ADT, in a 2:1 ratio to treatment with either oral relugolix 120 mg once dailyonce-daily (after a single oral loading dose of 360 mg) or a depot injection of leuprolide (per national or regional product label) for a period of at least 48 weeks. We expect to enroll approximately 915 men into this trial, with approximately 610 men enrolled into the active treatment arm and 305 men into the leuprolide arm. The decrease in enrollment from 1,125 to 915 reflects a change in the strategy in China. The decrease in enrollment does not affect the statistical powering of the primary endpoint analysis, which has always been based on the first 915 patients enrolled in the HERO trial. We are in discussions with Takeda regarding the strategy for registration of relugolix for prostate cancer in China. Based on FDA discussions, we are onlybelieve that we will be required to conduct only one Phase 3 trialstudy with a single relugolix arm to gain approval for relugolix in men with advanced prostate cancer in the United States; however,U.S. Nonetheless, we have designed the trialstudy to include a second arm with leuprolide to demonstrate that treatment with relugolix is noninferior to leuprolide in achieving sustained suppression of testosterone to castrate levels over 48 weeks, an outcome expected to be required for approval in other major markets.markets such as Europe and Japan.

On November 19, 2019, we announced that the Phase 3 HERO study evaluating the safety and efficacy of once-daily, oral relugolix monotherapy (120 mg) over 48 weeks in 934 men with advanced prostate cancer met its primary efficacy endpoint with a 96.7% response rate, and all tested key secondary endpoints, while demonstrating 54% fewer major cardiovascular events as compared with leuprolide injections administered every 3 months. We currently anticipate submitting an NDA for relugolix monotherapy tablet for men with advanced prostate cancer in the second quarter of calendar year 2020.

We enrolled 434 men with metastatic prostate cancer in the HERO study, comprised of 295 men from the original HERO study and an additional cohort of 139 men that completed enrollment in July 2019. We filed an amendment to the HERO study protocol to enroll 139 additional men with metastatic prostate cancer and to add the secondary objective of demonstrating that relugolix can delay the time to progression to the lethal state of the disease, castration-resistant prostate cancer, as compared to leuprolide. We believe that relugolix, a direct GnRH receptor antagonist, has the potential to delay the time to castration-resistant disease as compared with leuprolide, a GnRH agonist, because relugolix more rapidly suppresses testosterone and PSA and more fully suppresses FSH than leuprolide. We currently expect to complete enrollment duringreport top-line results on the castration resistance-free survival endpoint in the cohort of 434 men with metastatic prostate cancer in the third quarter of calendar year 20182020. We may conduct additional clinical studies to further support the commercial potential of relugolix in prostate cancer in the U.S. and anticipate results from this Phase 3 study during calendar year 2019.other major markets.

As part of our license agreement with Takeda, or the Takeda License Agreement, we acquired the worldwide rights to MVT-602, our second product candidate, which previously has been evaluated in over 150 men. MVT-602 is an oligopeptide kisspeptinkisspeptin-1 receptor agonist. Kisspeptin, the ligand, is a naturally-occurringnaturally occurring peptide that stimulates GnRH release and is required for puberty and maintenance of normal reproductive function, including production of sperm, follicular maturation and ovulation, and production of estrogen and progesterone in women and testosterone in men.  MSG, our wholly owned subsidiary, holds global commercial rights to MVT-602. In a Phase 1 study in healthy female volunteers conducted in the second half of 2017, a single injection of MVT-602 was observed to cause a dose-dependent luteinizing hormone surge. We intend to conduct additional Phase 1 evaluation of MVT-602 in women to further characterize the pharmacokinetic and pharmacodynamic profile of MVT-602 prior to the expected initiation of a Phase 2 proof-of-concept clinical trial in calendar year 2018. MVT-602 is being developed as a potential treatment for female infertility in women as part of assisted reproduction, such as in vitro fertilization.fertilization, or IVF. Approximately 1.5 million assisted reproduction cycles are performed each year worldwide. Further, approximately 25% of women suffering from infertility have problems achieving ovulation, including the inability to produce fully matured eggs or the failure to ovulate, most commonly resulting from hormonal dysfunction in the GnRH-luteinizing hormone/follicle-stimulating hormone axis. We believe MVT-602 has the potential to be a safer alternative to human chorionic gonadotropin as a part of assisted reproduction for the treatment of female infertility.

WeTo date, we have not generated any revenue, and we do not expect to generate any revenue, from the sale of any products unless orand until we obtain regulatory approval of and commercialize relugolix combination tablet, relugolix monotherapy tablet, MVT-602, or a potential future product candidate.

Since inception, our operationsOur research and development, or R&D, expenses to date have been primarily been limited to the licensein-licensing of the rights to relugolix and MVT-602, the expansion of our team, and the initiation and ongoing activities of our Phase 3clinical programs. Our research and development, or R&D expenses include:include program-specific costs, as well as costs that are not allocated to a specific program.

Unallocated costs primarily include employee-related expenses, such as salaries, share-based compensation, benefits and travel expenses for our R&D personnel;

R&D activities will continue to behave been central to our business model. We expect our overall R&D expenses to increase significantly indecrease over the futurenext few quarters as we conductexpect to complete our Phase 3 programs for relugolix, expand our employee base and increase personnel relatedstudies. However, we also expect the decreases in clinical study expenses conduct further Phase 1 evaluationwill be partially offset by increases in women followed by a Phase 2 proof-of-concept trial for MVT-602 andother R&D expenses as we prepare to seek regulatory approvalsubmissions for our product candidates.candidates and establish a medical affairs function, and incur manufacturing expenses in connection with preparations for our anticipated commercial launches of relugolix combination tablet and relugolix monotherapy tablet. Product candidates in later stages of clinical development, such as relugolix, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. studies.

We expectcannot determine with certainty the duration and costs of the current or future clinical studies of our share-based compensation expense to increase as we continue to increase our number of employees and hire additional senior executives.

In addition, the probability of success for relugolix combination tablet, relugolix monotherapy tablet, MVT-602 and any other product candidates will depend on numerous factors, including competition, manufacturing capability and commercial viability. As a result, we are unable to determine with certainty the duration and completion costs of our clinical programs or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates. Our R&D activities may be subject to change from time to time as we evaluate our priorities and available resources.

General and administrative, or G&A, expenses consist primarily of personnel related expenses,costs, such as salaries, benefits, share-based compensation and travel expenses for our executive, finance, human resources, legal, commercial operations and other administrative functions. G&A expenses also include expenses incurred under agreements with third parties relating to legal, accounting, fees,auditing and tax services, rent and facilities costs, information technology costs, commercial operations, and general overheadoverhead. G&A expenses andin the periods presented also include costs billed and allocated to us underfrom our former majority shareholder pursuant to Services Agreements and consulting services relatingthat were terminated on December 27, 2019 (See Note 7 to our formation and corporate matters.the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q).

We anticipate that our G&A expenses will continue to increase in the future to support the growth ofperiods as we expand our operations and the costs of operating as a public company.operations. These increases will likely include costs related to the hiring of additional personnel, costs to implement and fees to outside consultants, lawyers, and accountants, expenses related to maintaining compliance with New York Stock Exchange, or NYSE, rules and SEC requirements, and insurance and investor relations costs andupgrade certain information technology systems, professional services fees and additional rent and other facilities related costs. WeIn particular, we expect to incur increased costs associated with establishing sales, marketing, and commercialization functions in advance of potential regulatory approvals and commercialization of our share-based compensation expense to increase as we continue to increase our number of employees and hire additional senior executives. In addition, ifproduct candidates. If relugolix combination tablet, relugolix monotherapy tablet, or MVT-602 obtains regulatory approval for marketing, we expect thatsales, marketing, and commercialization costs to be significant.

Loss on extinguishment of debt represents the difference between the carrying amount of our previously outstanding debt with Hercules and NovaQuest and the amounts we would incur expenses associated with building medical affairs, sales and marketing teams.paid to retire the outstanding debt obligations on December 31, 2019.