Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity File Number | 001-40782 | |
Entity Registrant Name | ROIVANT SCIENCES LTD. | |
Entity Central Index Key | 0001635088 | |
Entity Incorporation, State or Country Code | D0 | |
Entity Tax Identification Number | 98-1173944 | |
Entity Address, Address Line One | 7th Floor | |
Entity Address, Address Line Two | 50 Broadway | |
Entity Address, City or Town | London | |
Entity Address, Country | GB | |
Entity Address, Postal Zip Code | SW1H 0DB | |
Country Region | 44 | |
City Area Code | 207 | |
Local Phone Number | 400 3347 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 771,742,197 | |
Common Stock [Member] | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Shares, $0.0000000341740141 per share | |
Trading Symbol | ROIV | |
Security Exchange Name | NASDAQ | |
Redeemable Warrants, each whole warrant exercisable for one Common Share at an exercise price of $11.50 per share [Member] | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Redeemable Warrants, each whole warrant exercisable for one Common Share at an exercise price of $11.50 per share | |
Trading Symbol | ROIVW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 1,434,093 | $ 1,676,813 |
Other current assets | 127,065 | 121,774 |
Total current assets | 1,561,158 | 1,798,587 |
Property and equipment, net | 36,270 | 39,086 |
Operating lease right-of-use assets | 51,631 | 53,251 |
Investments measured at fair value | 296,243 | 304,317 |
Intangible assets, net | 145,037 | 144,881 |
Other assets | 46,307 | 49,482 |
Total assets | 2,136,646 | 2,389,604 |
Current liabilities: | ||
Accounts payable | 50,035 | 37,830 |
Accrued expenses | 119,329 | 167,129 |
Operating lease liabilities | 11,348 | 11,693 |
Current portion of long-term debt (includes $27,490 and $26,940 accounted for under the fair value option at June 30, 2023 and March 31, 2023, respectively) | 44,406 | 40,720 |
Other current liabilities | 19,886 | 15,076 |
Total current liabilities | 245,004 | 272,448 |
Liability instruments measured at fair value | 103,723 | 63,546 |
Operating lease liabilities, noncurrent | 51,812 | 53,476 |
Long-term debt, net of current portion (includes $187,140 and $180,700 accounted for under the fair value option at June 30, 2023 and March 31, 2023, respectively) | 385,069 | 375,515 |
Other liabilities | 16,899 | 17,032 |
Total liabilities | 802,507 | 782,017 |
Commitments and contingencies (Note 10) | ||
Shareholders' equity: | ||
Common shares, par value $0.0000000341740141 per share, 7,000,000,000 shares authorized and 767,137,861 and 760,143,393 shares issued and outstanding at June 30, 2023 and March 31, 2023, respectively | 0 | 0 |
Additional paid-in capital | 4,981,910 | 4,933,137 |
Accumulated deficit | (4,064,570) | (3,772,754) |
Accumulated other comprehensive loss | (6,610) | (2,617) |
Shareholders' equity attributable to Roivant Sciences Ltd. | 910,730 | 1,157,766 |
Noncontrolling interests | 423,409 | 449,821 |
Total shareholders' equity | 1,334,139 | 1,607,587 |
Total liabilities and shareholders' equity | $ 2,136,646 | $ 2,389,604 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Current liabilities: | ||
Current portion of long-term debt accounted for under fair value option | $ 27,490 | $ 26,940 |
Long term debt accounted under fair value option | $ 187,140 | $ 180,700 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.00000003417 | $ 0.00000003417 |
Common stock, shares authorized (in shares) | 7,000,000,000 | 7,000,000,000 |
Common stock, shares issued (in shares) | 767,137,861 | 760,143,393 |
Common stock, shares outstanding (in shares) | 767,137,861 | 760,143,393 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||
Revenue, net | $ 21,624 | $ 4,319 |
Operating expenses: | ||
Cost of revenues | 4,214 | 1,726 |
Research and development (includes $7,953 and $12,243 of share-based compensation expense for the three months ended June 30, 2023 and 2022, respectively) | 125,133 | 135,830 |
Acquired in-process research and development | 12,500 | 0 |
Selling, general and administrative (includes $41,192 and $60,551 of share-based compensation expense for the three months ended June 30, 2023 and 2022, respectively) | 156,190 | 149,072 |
Total operating expenses | 298,037 | 286,628 |
Loss from operations | (276,413) | (282,309) |
Change in fair value of investments | 7,564 | 24,547 |
Change in fair value of debt and liability instruments | 54,512 | 41,213 |
Interest income | (16,715) | (1,981) |
Interest expense | 8,912 | 2,612 |
Other (income) expense, net | (4,593) | 1,085 |
Loss before income taxes | (326,093) | (349,785) |
Income tax expense | 1,752 | 3,999 |
Net loss | (327,845) | (353,784) |
Net loss attributable to noncontrolling interests | (36,029) | (21,975) |
Net loss attributable to Roivant Sciences Ltd. | $ (291,816) | $ (331,809) |
Net loss per common share - basic (in dollars per share) | $ (0.38) | $ (0.48) |
Net loss per common share - diluted (in dollars per share) | $ (0.38) | $ (0.48) |
Weighted average shares outstanding - basic (in dollars per share) | 759,273,550 | 695,878,859 |
Weighted average shares outstanding - diluted (in dollars per share) | 759,273,550 | 695,878,859 |
Product Revenue, Net [Member] | ||
Revenues: | ||
Revenue, net | $ 16,659 | $ 141 |
License, Milestone and Other Revenue [Member] | ||
Revenues: | ||
Revenue, net | $ 4,965 | $ 4,178 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based compensation | $ 49,260 | $ 72,794 |
Research and Development Expense [Member] | ||
Share-based compensation | 7,953 | 12,243 |
Selling, General and Administrative Expense [Member] | ||
Share-based compensation | $ 41,192 | $ 60,551 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Condensed Consolidated Statements of Comprehensive Loss [Abstract] | ||
Net loss | $ (327,845) | $ (353,784) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | (4,148) | 5,767 |
Total other comprehensive (loss) income | (4,148) | 5,767 |
Comprehensive loss | (331,993) | (348,017) |
Comprehensive loss attributable to noncontrolling interests | (36,184) | (22,174) |
Comprehensive loss attributable to Roivant Sciences Ltd. | $ (295,809) | $ (325,843) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest - USD ($) $ in Thousands | Redeemable Noncontrolling Interest [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Noncontrolling Interests [Member] | Total |
Beginning balance at Mar. 31, 2022 | $ 22,491 | ||||||
Ending balance at Jun. 30, 2022 | 22,491 | ||||||
Beginning balance at Mar. 31, 2022 | $ 0 | $ 4,421,614 | $ (946) | $ (2,763,724) | $ 381,999 | $ 2,038,943 | |
Beginning balance (in shares) at Mar. 31, 2022 | 694,975,965 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common shares in connection with equity incentive plans and tax withholding payments | $ 0 | (8,329) | 0 | 0 | 0 | (8,329) | |
Issuance of common shares in connection with equity incentive plans and tax withholding payments (in shares) | 4,739,781 | ||||||
Issuance of subsidiary common shares to the Company | $ 0 | (251) | 0 | 0 | 251 | 0 | |
Issuance of subsidiary common shares to the Company (in shares) | 0 | ||||||
Issuance of the Company's common shares related to settlement of transaction consideration | $ 0 | 0 | 0 | 0 | 0 | 0 | |
Issuance of the Company's common shares related to settlement of transaction consideration (in shares) | 1,455,719 | ||||||
Share-based compensation expense | $ 0 | 61,590 | 0 | 0 | 11,204 | 72,794 | |
Share-based compensation expense (in shares) | 0 | ||||||
Foreign currency translation adjustment | $ 0 | 0 | 5,966 | 0 | (199) | 5,767 | |
Net loss | 0 | 0 | 0 | (331,809) | (21,975) | (353,784) | |
Ending balance at Jun. 30, 2022 | $ 0 | 4,474,624 | 5,020 | (3,095,533) | 371,280 | 1,755,391 | |
Ending balance (in shares) at Jun. 30, 2022 | 701,171,465 | ||||||
Beginning balance at Mar. 31, 2023 | 0 | ||||||
Ending balance at Jun. 30, 2023 | $ 0 | ||||||
Beginning balance at Mar. 31, 2023 | $ 0 | 4,933,137 | (2,617) | (3,772,754) | 449,821 | 1,607,587 | |
Beginning balance (in shares) at Mar. 31, 2023 | 760,143,393 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common shares in connection with equity incentive plans and tax withholding payments | $ 0 | 14,395 | 0 | 0 | 0 | 14,395 | |
Issuance of common shares in connection with equity incentive plans and tax withholding payments (in shares) | 6,994,468 | ||||||
Subsidiary stock options exercised | $ 0 | 503 | 0 | 0 | 387 | 890 | |
Cash contributions to majority-owned subsidiaries | 0 | (623) | 0 | 0 | 623 | 0 | |
Dividend declared by subsidiary | 0 | 0 | 0 | 0 | (6,000) | (6,000) | |
Share-based compensation expense | $ 0 | 34,498 | 0 | 0 | 14,762 | 49,260 | |
Share-based compensation expense (in shares) | 0 | ||||||
Foreign currency translation adjustment | $ 0 | 0 | (3,993) | 0 | (155) | (4,148) | |
Net loss | 0 | 0 | 0 | (291,816) | (36,029) | (327,845) | |
Ending balance at Jun. 30, 2023 | $ 0 | $ 4,981,910 | $ (6,610) | $ (4,064,570) | $ 423,409 | $ 1,334,139 | |
Ending balance (in shares) at Jun. 30, 2023 | 767,137,861 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (327,845) | $ (353,784) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 49,260 | 72,794 |
Change in fair value of investments | 7,564 | 24,547 |
Change in fair value of debt and liability instruments | 54,512 | 41,213 |
Depreciation and amortization | 5,839 | 2,678 |
Non-cash lease expense | 1,620 | 2,004 |
Other | (5,640) | 6,581 |
Changes in assets and liabilities, net of effects from acquisition and divestiture: | ||
Other current assets | (4,639) | (11,315) |
Accounts payable | 11,940 | (19,451) |
Accrued expenses | (49,960) | (18,177) |
Operating lease liabilities | (2,009) | (2,304) |
Other | 9,426 | 3,132 |
Net cash used in operating activities | (249,932) | (252,082) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (403) | (7,459) |
Other | 508 | 0 |
Net cash provided by (used in) investing activities | 105 | (7,459) |
Cash flows from financing activities: | ||
Proceeds from subsidiary debt financings, net of financing costs paid | 0 | 159,899 |
Repayment of debt by subsidiary | (7,344) | (7,344) |
Payment of offering and loan origination costs | 0 | (2,250) |
Payments on principal portion of finance lease obligations | (464) | 0 |
Taxes paid related to net settlement of equity awards | (5,743) | (8,329) |
Proceeds from exercise of the Company's and subsidiary stock options | 21,028 | 0 |
Net cash provided by financing activities | 7,477 | 141,976 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (117) | 0 |
Net change in cash, cash equivalents and restricted cash | (242,467) | (117,565) |
Cash, cash equivalents and restricted cash at beginning of period | 1,692,115 | 2,074,034 |
Cash, cash equivalents and restricted cash at end of period | 1,449,648 | 1,956,469 |
Non-cash investing and financing activities: | ||
Dividend payable | 6,000 | 0 |
Intangible assets acquired but not paid | 0 | 146,172 |
Other | $ (33) | $ 691 |
Description of Business and Liq
Description of Business and Liquidity | 3 Months Ended |
Jun. 30, 2023 | |
Description of Business and Liquidity [Abstract] | |
Description of Business and Liquidity | Note 1—Description of Business and Liquidity (A) Description of Business Roivant Sciences Ltd. (inclusive of its consolidated subsidiaries, the “Company” or “RSL”) aims to improve health by rapidly delivering innovative medicines and technologies to patients. The Company does this by building biotech and healthcare technology companies (“Vants”) and deploying technology to drive greater efficiency in research and development and commercialization. In addition to biopharmaceutical subsidiaries, the Company also builds technology Vants focused on improving the process of developing and commercializing medicines. The Company was founded on April 7, 2014 as a Bermuda exempted limited company. VTAMA® (tapinarof) was approved by the United States Food and Drug Administration (“FDA”) in May 2022 for the treatment of plaque psoriasis in adult patients. The Company has determined that it has one operating and reporting segment as it allocates resources and assesses financial performance on a consolidated basis. The Company’s subsidiaries are wholly owned subsidiaries and majority-owned or controlled subsidiaries. Refer to Note 3, “Equity Method Investments” for further discussion of the Company’s investments in unconsolidated entities. On September 30, 2021, RSL completed its business combination (the “Business Combination”) with Montes Archimedes Acquisition Corp. (“MAAC”), a special purpose acquisition company, and began trading on Nasdaq under the ticker symbol “ROIV.” (B) Liquidity The Company has incurred significant losses and negative cash flows from operations since its inception. As of June 30, 2023, the Company had cash and cash equivalents of approximately $1.4 billion and its accumulated deficit was approximately $4.1 billion. For the three months ended June 30, 2023 and 2022, the Company incurred net losses of approximately $327.8 million and $353.8 million, respectively. The Company has historically financed its operations primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements. Through its subsidiary, Dermavant Sciences Ltd., the Company has launched its first commercial product, VTAMA, following approval by the FDA in May 2022. The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals to market its product candidates, dependence on key products, dependence on third-party service providers, such as contract research organizations, and protection of intellectual property rights. Management expects to incur additional losses in the future to fund its operations and conduct product research and development and recognizes the need to raise additional capital to fully implement its business plan. The Company intends to raise such additional capital through the issuance of equity securities, debt financings or other sources in order to further implement its business plan. However, if such financing is not available at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay or discontinue the development of its product candidates or take other steps to conserve capital. The Company expects its existing cash and cash equivalents will be sufficient to fund its committed operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of these condensed consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies (A) Basis of Presentation and Principles of Consolidation The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and follow the requirements of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 filed with the SEC. The unaudited condensed consolidated balance sheet at March 31, 2023 has been derived from the audited consolidated financial statements at that date. In the opinion of management, the unaudited condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Certain prior year amounts were reclassified to conform to current year presentation. Operating results for the three months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2024, for any other interim period, or for any other future year. Any references in these notes to applicable accounting guidance are meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Updates (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). The unaudited condensed consolidated financial statements include the accounts of RSL and the subsidiaries in which it has a controlling financial interest, most often through a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to noncontrolling interests in its unaudited condensed consolidated statements of operations equal to the percentage of common stock ownership interest retained in the respective operations by the noncontrolling parties. The Company presents noncontrolling interests as a component of shareholders’ equity on its unaudited condensed consolidated balance sheets. The Company accounts for changes in its ownership interest in its subsidiaries while control is retained as equity transactions. The carrying amount of the noncontrolling interest is adjusted to reflect the change in RSL’s ownership interest in the subsidiary. Any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest is adjusted is recognized within shareholders’ equity attributable to RSL. (B) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs, expenses, contingent liabilities, share-based compensation and research and development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. (C) Concentrations Financial instruments that potentially subject the Company to concentration of credit risk include cash and cash equivalents. The Company maintains cash deposits and cash equivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company has established guidelines relative to diversification and maturities to maintain safety and liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe that it is exposed to any significant credit risk related to these instruments. The Company has long-lived assets in different geographic locations. As of June 30, 2023 and March 31, 2023, a majority of the Company’s long-lived assets were located in the United States. (D) Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash. The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands): June 30, 2023 March 31, 2023 Cash and cash equivalents $ 1,434,093 $ 1,676,813 Restricted cash (included in “Other current assets”) 5,264 5,011 Restricted cash (included in “Other assets”) 10,291 10,291 Cash, cash equivalents and restricted cash $ 1,449,648 $ 1,692,115 (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, freight charges, 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 revenues 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” and “Other 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, “Equity Method 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: • 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. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments include shares of common stock of Arbutus Biopharma Corporation (“Arbutus”); shares of common stock of Heracles Parent, L.L.C., the parent entity of Datavant, (as defined and discussed in Note 3, “Equity Method Investments”); liability instruments issued, including warrant and earn-out shares liabilities issued in connection with the Company’s business combination with MAAC (as discussed in Note 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 common stock and investments in common stock with a readily determinable fair value are classified as Level 1, and their fair value is determined based upon quoted market prices in an active market. The shares of common stock of Heracles Parent, L.L.C., the parent entity of Datavant (as defined and discussed in Note 3, “Equity Method Investments”) and liability instruments issued, excluding the Public Warrants (as defined and discussed in Note 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. The Company evaluates in-licensed agreements for IPR&D projects to determine if the acquisition 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. 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: 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. 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. • Licenses of intellectual property: • Milestone payments: • Royalties and commercial milestone payments: 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. 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, 2023 and March 31, 2023. 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. Additionally, milestone payments made in connection with regulatory approvals and sales-based milestones are capitalized and amortized to cost of revenue over the remaining useful life of the asset. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments [Abstract] | |
Equity Method Investments | Note 3—Equity Method Investments The Company maintains equity method investments in certain entities. The most significant of these were our investments in Arbutus and Datavant, which are accounted for using the fair value option. Investment in Arbutus The Company holds an investment in Arbutus in the form of 38,847,462 common shares of Arbutus. 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, 2023, RSL held approximately 23% of issued and outstanding shares of Arbutus. At June 30, 2023 and March 31, 2023, the aggregate fair value of the Company’s investment in Arbutus was $89.3 million and $117.7 million, respectively , with the Company recognizing unrealized losses on its investment in Arbutus of $28.4 million and $10.5 million in the accompanying condensed consolidated statements of operations 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, 2023, the Company’s minority equity interest represented approximately 17% of the outstanding Class A units in Ciox Parent. Ciox Parent’s capital structure includes several classes of preferred units that, among other features, have liquidation preferences and conversion 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, 2023 and March 31, 2023, the fair value of the Company’s investment was $199.4 million and $178.6 million, respectively , with the Company recognizing an unrealized gain of $20.9 million and an unrealized loss of $7.0 million on its investment in Datavant in the accompanying condensed consolidated statements of operations for the three months ended respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Jun. 30, 2023 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 4—Intangible Assets In July 2018, Dermavant acquired the worldwide rights (other than for China) with respect to certain intellectual property rights retained by Welichem Biotech Inc. (“Welichem”) to VTAMA and related compounds from Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Ltd. (collectively, “GSK”) pursuant to an asset purchase agreement. GSK previously acquired rights to a predecessor formulation from Welichem pursuant to an asset purchase agreement between GSK and Welichem entered into in May 2012. The Company evaluated the agreement and determined that the acquired assets did not meet the definition of a business and thus the transaction was accounted for as an asset acquisition. Following the FDA approval of VTAMA in May 2022, the Company became obligated to pay a regulatory milestone to GSK of £100.0 million (approximately $126 million on the date of achievement) following the receipt of marketing approval of VTAMA in the United States. The milestone was paid in July 2022. Additionally, the first sale of VTAMA in May 2022 resulted in the achievement of a milestone to Welichem Biotech Inc. of CAD$25.0 million (approximately $20 million on the date of achievement). The milestone was paid in August 2022. Both of the above milestones were capitalized as intangible assets upon achievement and are being amortized over their estimated useful lives. The following table summarizes the Company’s recognized intangible assets: Remaining Weighted Average Estimated Useful Lives (in years) June 30, 2023 (in thousands) Gross amount 15.3 $ 155,284 Less: accumulated amortization (10,247 ) Net book value $ 145,037 The Company’s intangible assets are denominated in currencies other than U.S. dollar and therefore are subject to foreign currency movements. Amortization expense was $2.4 million and $0.7 million for the three months ended June 30, 2023 and 2022 respectively, and was recorded as part of “Cost of revenues” in the accompanying condensed consolidated statement of operations. Future amortization expense is approximately $7.1 million for the remainder of the year ended March 31, 2024, $9.5 million for each of the years ended from March 31, 2025 through March 31, 2028 and $100.1 million thereafter. |
Certain Balance Sheet Component
Certain Balance Sheet Components | 3 Months Ended |
Jun. 30, 2023 | |
Certain Balance Sheet Components [Abstract] | |
Certain Balance Sheet Components | Note 5— Certain Balance Sheet Components (A) Other Current Assets Other current assets at June 30, 2023 and March 31, 2023 consisted of the following (in thousands): June 30, 2023 March 31, 2023 Prepaid expenses $ 64,658 $ 60,827 Trade receivables, net 37,064 30,379 Restricted cash 5,264 5,011 Inventory 4,225 2,761 Income tax receivable 2,850 2,356 Other 13,004 20,440 Total other current assets $ 127,065 $ 121,774 (B) Accrued Expenses Accrued expenses at June 30, 2023 and March 31, 2023 consisted of the following (in thousands): June 30, 2023 March 31, 2023 Research and development expenses $ 57,160 $ 76,278 Compensation-related expenses 19,923 55,186 Sales allowances 16,800 17,569 Other expenses 25,446 18,096 Total accrued expenses $ 119,329 $ 167,129 (C) Other Current Liabilities Other current liabilities at June 30, 2023 and March 31, 2023 consisted of the following (in thousands): June 30, 2023 March 31, 2023 Deferred revenue $ 10,569 $ 12,444 Income tax payable 1,244 542 Other 8,073 2,090 Total other current liabilities $ 19,886 $ 15,076 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt [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 for the $117.5 million in total funding from NovaQuest, Dermavant agreed to make fixed payments to NovaQuest under the NovaQuest Agreement upon regulatory approval of tapinarof. For each of the atopic dermatitis and psoriasis indications, Dermavant is required to make quarterly payments to NovaQuest totaling $176.3 million per indication over a six-year period following regulatory approval of tapinarof for the applicable indication in the United States. In the event that Dermavant receives regulatory approval for one indication, and Dermavant terminates the development of the other indication for any reason other than a Technical Failure (as defined below), then Dermavant will be required to make the above-referenced quarterly payments to NovaQuest up to $440.6 million over a 15-year period for the approved indication, which are referred to as 15-year Payments. A Technical Failure is deemed to occur for an indication if the development program for such indication is terminated due to (1) significant safety concerns, (2) material adverse developments or (3) the receipt by Dermavant of a complete response letter or a final non-approval letter from the FDA is expected to result in significant delay in or cost to reach commercialization for the applicable indication. In addition, Dermavant is required to make up to $141.0 million in payments to NovaQuest upon achievement of certain commercial milestones. In the event that Dermavant is required to start making 15-year Payments, then Dermavant has the right to offset such amounts by up to $88.1 million of the commercial milestone payments, with such offset being applied to the quarterly payments in reverse chronological order (such that the final quarterly payments owed will be used first to offset the commercial milestone payments). The NovaQuest Agreement does not contain any royalty payment requirements on commercialization of tapinarof. Upon receiving FDA approval for the psoriasis indication, Dermavant made its first quarterly payment of $7.3 million under the NovaQuest Agreement in May 2022 and has made cumulative quarterly payments totaling $36.7 million as of June 30, 2023. At issuance, the Company concluded that certain features of the long-term debt would be considered derivatives that would require bifurcation. In lieu of bifurcating various features in the agreement, the Company has elected the fair value option for this financial instrument and records the changes in the fair value within the statements of operations at the end of each reporting period. Direct costs and fees related to the debt issued under the NovaQuest Agreement were recognized in earnings. As of June 30, 2023 and March 31, 2023, the fair value of the debt was $214.6 million and $207.6 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 was as follows (in thousands): June 30, 2023 March 31, 2023 Fair value of long-term debt $ 214,630 $ 207,640 Less: current portion (27,490 ) (26,940 ) Total long-term debt, net $ 187,140 $ 180,700 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, 2023. In connection with the funding of the Credit Facility, Dermavant issued a warrant to XYQ Luxco to purchase 1,199,072 common shares of Dermavant at an exercise price of $0.01 per common share. Outstanding debt obligations to XYQ Luxco were as follows (in thousands): June 30, 2023 March 31, 2023 Principal amount $ 40,000 $ 40,000 Exit fee 5,000 5,000 Less: unamortized discount and debt issuance costs (9,555 ) (10,170 ) Total debt, net 35,445 34,830 Less: current portion — — Total long-term debt, net $ 35,445 $ 34,830 Revenue Interest Purchase and Sale Agreement In May 2021, Dermavant, as seller, entered into a $160.0 million revenue interest purchase and sale agreement (the “RIPSA”) for its investigational product tapinarof with XYQ Luxco, NovaQuest Co-Investment Fund XVII, L.P., an affiliate of NovaQuest Capital Management, LLC, and MAM Tapir Lender, LLC, an affiliate of Marathon Asset Management, L.P., together with U.S. Bank National Association, as collateral agent. Under the terms of the RIPSA, Dermavant is obligated to pay royalties based on a capped single-digit revenue interest in net sales of tapinarof for all dermatological indications in the United States, up to a cap of $344.0 million, in exchange for the $160.0 million in committed funding, which was paid to Dermavant in June 2022 following the approval of tapinarof by the FDA. The transaction is accounted for as debt. Over the term of the arrangement, the effective interest rate will be updated prospectively each reporting period based on the carrying amount of the note, payments made to date, and the estimated remaining cash flows related to the note. The RIPSA carrying balance was as follows (in thousands): June 30, 2023 Carrying balance $ 184,079 Less: unamortized issuance costs (4,679 ) Total debt, net 179,400 Less: current portion (16,916 ) Total long-term debt, net $ 162,484 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Jun. 30, 2023 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note 7—Shareholders’ Equity At-the-Market Equity Offering Program On September 19, 2022, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”) to sell its common shares having an aggregate offering price of up to $400.0 million from time to time through an “at-the-market” equity offering program under which Cowen acts as the Company’s agent (the “ATM Facility”). As of June 30, 2023, the Company had $400.0 million of remaining capacity available under the ATM Facility. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 8—Share-Based Compensation (A) RSL Equity Incentive Plans RSL has three equity incentive plans: the Roivant Sciences Ltd. 2021 Equity Incentive Plan (the “RSL 2021 EIP”), the Roivant Sciences Ltd. Amended and Restated 2015 Equity Incentive Plan, and the Roivant Sciences Ltd. Amended and Restated 2015 Restricted Stock Unit Plan (collectively, the “RSL Equity Plans”). The RSL 2021 EIP was approved and adopted in connection with the Business Combination and became effective immediately prior to closing. At June 30, 2023, a total of 41,793,359 common shares were available for future grants under the RSL 2021 EIP. Stock Options and Performance Stock Options Activity for stock options and performance stock options under the RSL Equity Plans for the three months ended June 30, 2023 was as follows: Number of Options Options outstanding at March 31, 2023 154,271,791 Granted 4,351,602 Exercised (4,965,387 ) Forfeited/Canceled (606,221 ) Options outstanding at June 30, 2023 153,051,785 Options exercisable at June 30, 2023 84,263,636 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, 2023 was as follows: Number of Shares Non-vested balance at March 31, 2023 20,700,788 Granted 3,628,644 Vested (2,372,501 ) Forfeited (537,674 ) Non-vested balance at June 30, 2023 21,419,257 Capped Value Appreciation Rights March 2020 CVAR Grants As of June 30, 2023, there are 1,176,198 non-service-vested capped value appreciation rights (“CVARs”) and 29,084,574 service-vested CVARs relating to the March 2020 grants. During the three months ended June 30, 2023, 1,711,450 service-vested CVARs subject to the knock-in condition satisfied both the applicable hurdle price and the knock-in condition on the applicable measurement date, and as a result, 534,942 common shares were issued upon their settlement. November 2021 CVAR Grants Activity for CVARs under the RSL 2021 EIP for the three months ended June 30, 2023 is as follows: Number of CVARs Non-vested balance at March 31, 2023 3,222,645 Vested (325,655 ) Forfeited (32,413 ) Non-vested balance at June 30, 2023 2,864,577 During the three months ended June 30, 2023, 325,655 common shares were issued upon their settlement. (B) Subsidiary Equity Incentive Plans Certain subsidiaries of RSL adopt their own equity incentive plan (“EIP”). Each EIP is generally structured so that the applicable subsidiary, and its affiliates’ employees, directors, officers and consultants are eligible to receive non-qualified and incentive stock options, stock appreciation rights, restricted share awards, restricted stock unit awards, and other share awards under their respective EIP. The Company recorded share-based compensation expense of $14.9 million and $11.5 million for the three months ended June 30, 2023 and 2022, respectively , related to subsidiary EIPs . |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | Note 9—Income Taxes The Company’s effective tax rate for the three months ended June 30 The Company assesses the realizability of its deferred tax assets at each balance sheet date based on available positive and negative evidence in order to determine the amount which is more likely than not to be realized and records a valuation allowance as necessary. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10—Commitments and Contingencies (A) Commitments In conjunction with Dermavant’s entry into the GSK Agreement in 2018, Dermavant entered into a clinical supply agreement pursuant to which GSK would provide a supply of tapinarof and clinical product at an agreed upon price during the Company’s clinical trials. In April 2019, Dermavant entered into a commercial supply agreement with GSK to continue to provide certain quantities of tapinarof and commercial product at agreed upon minimum quantities and price. The commercial supply agreement commenced in April 2022 upon completion of certain quality and regulatory conditions. In July 2022, Dermavant and GSK amended the terms of the clinical supply and commercial supply agreements which released GSK of certain commitments to supply tapinarof and released Dermavant of certain commitments to purchase tapinarof in exchange for a supplementary fee. Other supply and purchase commitments under the agreements remain in effect. In addition, Dermavant and Thermo Fisher Scientific (“TFS”) entered into a Commercial Manufacturing and Supply Agreement for which TFS agreed to provide a supply of tapinarof to Dermavant at an agreed upon price. In November 2021, the Company’s subsidiary, Immunovant, Inc. (“Immunovant”), entered into a Product Service Agreement with Samsung Biologics Co., Ltd. (“Samsung”) by which Samsung will manufacture and supply Immunovant with batoclimab drug substance for commercial sale and perform other manufacturing-related services with respect to batoclimab. As of June 30, 2023, the minimum purchase commitment related to this agreement is estimated to be approximately $26.5 million. In May 2021, the Company entered into a master subscription agreement with Palantir Technologies Inc. (“Palantir”) for access to Palantir’s proprietary software for a five-year period. As of June 30, 2023, the remaining minimum payments for this software subscription are $19.1 million. The Company, primarily through its subsidiaries, has entered into commitments under various asset acquisition and license agreements. Additionally, the Company through its subsidiaries enters into agreements with contract service providers to assist in the performance of its R&D activities. Expenditures to contract research organizations and contract manufacturing organizations represent significant costs in the clinical development of its product candidates. Subject to required notice periods and certain obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. The Company expects to enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources. The Company also has commitments relating to its long-term debt and leases. Refer to Note 6, “Long-Term Debt” for further information. There have been no material changes to the commitments relating to the Company’s leases during the three months ended June 30, 2023 outside the ordinary course of business. For further information regarding the Company’s lease commitments, refer to Note 15, “Leases” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2023. (B) Loss Contingencies The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company accrues for loss contingencies when available information indicates that it is probable that a liability has been incurred and the amount of such loss can be reasonably estimated, and if the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation or claim, including an estimable range, if possible. Immunovant Securities Litigation In February 2021, a putative securities class action complaint was filed against Immunovant and certain of its current and former officers in the U.S. District Court for the Eastern District of New York on behalf of a class consisting of those who acquired Immunovant’s securities from October 2, 2019 and February 1, 2021. The complaint alleged that Immunovant and certain of its officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, by making false and misleading statements regarding the safety of batoclimab and sought unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. In December 2021, the U.S. District Court appointed a lead plaintiff. In March 2022, the lead plaintiff filed an amended complaint adding both (i) the Company and (ii) Immunovant’s directors and underwriters as defendants, and asserting additional claims under Section 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, on behalf of a putative class consisting of those who purchased or otherwise acquired Immunovant’s securities pursuant and/or traceable to Immunovant’s follow-on public offering on or about September 2, 2020. In February 2023, after further briefing on the amended complaint the U.S. District Court issued an order permitting the lead plaintiff to file a second amended complaint. That second amended complaint was filed in March 2023. The defendants’ served motions to dismiss the second amended complaint on April 28, 2023. The fully briefed motions to dismiss, including defendants’ opening briefs, lead plaintiff’s opposition and defendants’ replies, were filed with the court on June 30, 2023. Acuitas Declaratory Judgment Action In March 2022, Acuitas Therapeutics Inc. (“Acuitas”) filed a lawsuit in the U.S. District Court for the Southern District of New York (“SDNY”) against two of the Company’s affiliates, Genevant and Arbutus, seeking a declaratory judgment that certain patents held by Arbutus and licensed by Genevant are not infringed by the manufacture, use, offer for sale, sale or importation into the United States of COMIRNATY, Pfizer’s and BioNTech’s vaccine for COVID-19 and are otherwise invalid. On September 6, 2022, Acuitas filed a First Amended Complaint. In response, on October 4, 2022, Genevant and Arbutus filed a motion to dismiss the first amended complaint for lack of a controversy and supporting brief. Briefing on this motion was completed in mid-November. On August 4, 2023, Acuitas voluntarily dismissed the action in the SDNY and re-filed a complaint in the U.S. District Court for the District of New Jersey. Each of Genevant and Arbutus intends to continue to vigorously defend the case. (C) Indemnification Agreements The Company is a party to a number of agreements entered into in the ordinary course of business that contain typical provisions that obligate the Company to indemnify the other parties to such agreements upon the occurrence of certain events. The aggregate maximum potential future liability of the Company under such indemnification provisions is uncertain. The Company also indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits. The maximum amount of potential future indemnification is unlimited; however, the Company currently maintains director and officer liability insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify its directors and officers. To date, the Company has not incurred any material costs related to these indemnification obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements as of June 30, 2023 and March 31, 2023. |
Earn-Out Shares, Public Warrant
Earn-Out Shares, Public Warrants and Private Placement Warrants | 3 Months Ended |
Jun. 30, 2023 | |
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: a. 2,033,591 common shares to Patient Square Capital LLC (the “MAAC Sponsor”) and 10,000 common shares issued to each of MAAC’s independent directors (collectively, the “20% Earn-Out Shares”), which will vest if the closing price of the Company’s common shares is greater than or equal to $15.00 over any twenty thirty b. 1,016,796 common shares issued to the MAAC Sponsor and 5,000 common shares issued to each of MAAC’s independent directors (collectively, the “10% Earn-Out Shares” and, together with the 20% 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 $20.00 over any twenty thirty 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”). The Vesting Period commenced on November 9, 2021 and ends no later than September 30, 2026 (the “Vesting Period”). The Vesting Period will, if a definitive purchase agreement with respect to a Sale (as defined in the Sponsor Support Agreement) is entered into on or prior to the end of such period, be extended to the earlier of one day after the consummation of such Sale and the termination of such definitive transaction agreement, and if a Sale occurs during such Vesting Period, then all of the Earn-Out Shares unvested as of such time will automatically vest immediately prior to the consummation of such Sale. If any Earn-Out Shares have not vested on or prior to the end of such Vesting Period, then such Earn-Out Shares will be forfeited. The Earn-Out Shares require liability classification and are classified as “Liability instruments measured at fair value” on the condensed consolidated balance sheets. The Earn-Out Shares liability is subject to remeasurement at each balance sheet date with changes in fair value recognized in the Company’s statements of operations. As of June 30, 2023, no Earn-Out Shares have vested. Public Warrants and Private Placement Warrants Immediately following the Business Combination, the Company had 10,214,365 outstanding warrants for the purchase of one of the Company’s common shares, which were held by the MAAC Sponsor at an exercise price of $11.50 (the “Private Placement Warrants”), and 20,535,896 outstanding warrants for the purchase of one of the Company’s common shares, which were held by MAAC’s shareholders at an exercise price of $11.50 (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”). Pursuant to the Warrant Agreement, dated October 6, 2020, by and between the Montes Archimedes Acquisition Corp. (“MAAC”) and Continental Stock Transfer & Trust Company, as predecessor warrant agent, as modified by the Warrant Assumption Agreement, dated September 30, 2021, by and among MAAC, the Company and American Stock Transfer & Trust Company, LLC as successor warrant agent (as modified, the “Warrant Agreement”), the Warrants 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 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 statements of operations. As of June 30, 2023, 60,021 Public Warrants have been exercised and no Warrants have been redeemed. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements [Abstract] | |
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, 2023 and March 31, 2023, by level, within the fair value hierarchy (in thousands): As of June 30, 2023 As of March 31, 2023 Level 1 Level 2 Level 3 Balance as of June 30, 2023 Level 1 Level 2 Level 3 Balance as of March 31, 2023 Assets: Money market funds $ 1,240,912 $ — $ — $ 1,240,912 $ 1,496,726 $ — $ — $ 1,496,726 Investment in Datavant Class A units — — 199,448 199,448 — — 178,579 178,579 Investment in Arbutus common shares 89,349 — — 89,349 117,708 — — 117,708 Other investments 7,446 — — 7,446 8,030 — — 8,030 Total assets at fair value $ 1,337,707 $ — $ 199,448 $ 1,537,155 $ 1,622,464 $ — $ 178,579 $ 1,801,043 Liabilities: Debt issued by Dermavant to NovaQuest $ — $ — $ 214,630 $ 214,630 $ — $ — $ 207,640 $ 207,640 Liability instruments measured at fair value (1) 50,780 — 52,943 103,723 29,895 — 33,651 63,546 Total liabilities at fair value $ 50,780 $ — $ 267,573 $ 318,353 $ 29,895 $ — $ 241,291 $ 271,186 (1) At June 30, 2023, Level 1 includes the fair value of the Public Warrants of $50.8 million, and Level 3 includes the fair value of the Earn-Out Shares of $24.0 million, Private Placement Warrants of $25.6 million, and other liability instruments issued of $3.3 million. At March 31, 2023, Level 1 includes the fair value of the Public Warrants of $29.9 million, and Level 3 includes the fair value of the Earn-Out Shares of $15.2 million, Private Placement Warrants of $15.2 million, and other liability instruments issued of $3.3 million. 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, 2023. Level 3 Disclosures The Company measures its Level 3 assets and liabilities at fair value based on significant inputs not observable in the market, which causes them to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the Level 3 assets and liabilities uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an ongoing basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value related to updated assumptions and estimates are recorded within the statements of operations at the end of each reporting period. The fair value of Level 3 assets and liabilities may change significantly as additional data are obtained, impacting the Company’s assumptions regarding probabilities of potential scenarios used to estimate fair value. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact the Company’s results of operations in future periods. The changes in fair value of the Level 3 assets during the three months ended June 30, 2023 and 2022 were as follows (in thousands): Balance at March 31, 2022 $ 193,963 Changes in fair value of investment in Datavant, included in net loss (7,019 ) Balance at June 30, 2022 $ 186,944 Balance at March 31, 2023 $ 178,579 Changes in fair value of investment in Datavant, included in net loss 20,869 Balance at June 30, 2023 $ 199,448 The changes in fair value of the Level 3 liabilities during the three months ended June 30, 2023 and 2022 were as follows (in thousands): Balance at March 31 $ 204,293 Payments related to long-term debt (7,344 ) Changes in fair value of debt and liability instruments, included in net loss 46,946 Balance at June 30, 2022 $ 243,895 Balance at March 31, 2023 $ 241,291 Payments related to long-term debt (7,344 ) Changes in fair value of debt and liability instruments, included in net loss 33,626 Balance at June 30, 2023 $ 267,573 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: Point Estimate Used Input As of June 30, 2023 As of March 31, 2023 Volatility 90.0% 100.0% Risk-free rate 4.81% 4.02% Debt issued by Dermavant to NovaQuest The fair value of the debt instrument as of June 30, 2023 and March 31, 2023 represents the fair value of amounts payable to NovaQuest calculated using the Monte Carlo simulation method under the income approach determined by using probability assessments of the expected future payments through 2032. The future payments are based on significant inputs that are not observable in the market which are subject to remeasurement at each reporting date. The estimates of fair value may not be indicative of the amounts that could ultimately be paid by Dermavant to NovaQuest. Earn-Out Shares The fair value of the Earn-Out Shares issued as part of the Business Combination was calculated using the Monte Carlo simulation method under the income approach. The model was structured to include the lock-up periods to which the Earn-Out Shares are subject. Refer to Note 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: Point Estimate Used Input As of June 30, 2023 As of March 31, 2023 Volatility 78.8% 79.9% Risk-free rate 4.44% 3.76% As of June 30, 2023, the fair value of the Earn-Out Shares was $24.0 million. Earn-Out Shares were included in “ Liability instruments measured at fair value Private Placement Warrants The fair value of the Private Placement Warrants issued as part of the Business Combination was calculated using the Monte Carlo simulation method under the income approach. The model was structured to incorporate the redemption features as discussed in Note 11, “Earn-Out Shares, Public Warrants and Private Placement Warrants” and the added restriction by which the Company cannot redeem the Private Placement 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: Point Estimate Used Input As of June 30, 2023 As of March 31, 2023 Volatility 50.3% 50.5% Risk-free rate 4.45% 3.76% Term (in years) 3.25 3.50 As of June 30, 2023, the fair value of the Private Placement Warrants was $25.6 million. The Private Placement Warrants were included in “ Liability instruments measured at fair value |
Net Loss per Common Share
Net Loss per Common Share | 3 Months Ended |
Jun. 30, 2023 | |
Net Loss per Common Share [Abstract] | |
Net Loss per Common Share | Note 13—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, 2023 and 2022, potentially dilutive securities were as follows: June 30, 2023 June 30, 2022 Stock options and performance stock options 153,051,785 154,298,546 Restricted stock units and performance stock units (non-vested) 21,419,257 26,423,932 March 2020 CVARs (1) 30,260,772 32,011,996 November 2021 CVARs (non-vested) 2,864,577 4,431,637 Restricted common stock (non-vested) 647,530 456,426 Earn-Out Shares (non-vested) 3,080,387 3,080,387 Private Placement Warrants 10,214,365 10,214,365 Public Warrants 20,475,875 20,475,875 Other stock based awards and instruments issued 6,102,362 5,067,978 (1) Refer to Note 8, “Share-Based Compensation” for details regarding settlement of CVARs. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14—Subsequent Events In July 2023, VantAI Holdings, Inc. (“VantAI”), a wholly-owned subsidiary of the Company, completed a transaction pursuant to which SK, Inc. contributed $6 million to VantAI in exchange for preferred shares in VantAI (the “VantAI Preferred Financing”). In August 2023, the Company and SK Biopharmaceuticals Co., Ltd. (“SK Bio”) completed a transaction pursuant to which SK Bio purchased all of the Company’s shares in Proteovant Sciences, Inc. in exchange for $47.5 million. On August 2, 2023, the Company delivered a notice of redemption (the “Notice of Redemption”) to holders of its outstanding Warrants stating that it will redeem all Warrants that remain outstanding following 5:00 p.m. New York City Time on September 1, 2023 (the “Redemption Date”) for a redemption price of $0.10 per Warrant (the “Redemption Price”). Under the terms of the Warrant Agreement, the Company is entitled to redeem the Public Warrants at a redemption price of $0.10 per Public Warrant if (i) the last reported sales price (the “Reference Value”) of the Company’s common shares is at least $10.00 per share for any twenty (20) trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which a Notice of Redemption is given and (ii) if the Reference Value is less than $18.00 per share, the outstanding Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants. This share price performance requirement was satisfied as of July 28, 2023. Prior to redemption, Warrant holders may elect to exercise the Warrants on a “cashless basis” (a “Make-Whole Exercise”) whereby, in lieu of paying the Company the $11.50 exercise price per common share, the surrendering holder will receive a certain number of the Company’s common shares as determined in accordance with the terms of the Warrant Agreement and based on: (i) the period of time between the Redemption Date and the expiration of the Warrants and (ii) the “redemption fair market value” (being the volume-weighted average price of the Company’s common shares for the ten (10) trading days immediately following the date of the Notice of Redemption) (the “Redemption Fair Market Value”). The Company will inform holders of Warrants of the Redemption Fair Market Value no later than one (1) business day after the ten (10) trading day period ends. In no event will the number of common shares issued in connection with a Make-Whole Exercise exceed 0.361 common shares per Warrant. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and follow the requirements of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 filed with the SEC. The unaudited condensed consolidated balance sheet at March 31, 2023 has been derived from the audited consolidated financial statements at that date. In the opinion of management, the unaudited condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Certain prior year amounts were reclassified to conform to current year presentation. Operating results for the three months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2024, for any other interim period, or for any other future year. Any references in these notes to applicable accounting guidance are meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Updates (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). The unaudited condensed consolidated financial statements include the accounts of RSL and the subsidiaries in which it has a controlling financial interest, most often through a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation. |
Principles of Consolidation | For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to noncontrolling interests in its unaudited condensed consolidated statements of operations equal to the percentage of common stock ownership interest retained in the respective operations by the noncontrolling parties. The Company presents noncontrolling interests as a component of shareholders’ equity on its unaudited condensed consolidated balance sheets. The Company accounts for changes in its ownership interest in its subsidiaries while control is retained as equity transactions. The carrying amount of the noncontrolling interest is adjusted to reflect the change in RSL’s ownership interest in the subsidiary. Any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest is adjusted is recognized within shareholders’ equity attributable to RSL. |
Use of Estimates | (B) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs, expenses, contingent liabilities, share-based compensation and research and development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
Concentrations | (C) Concentrations Financial instruments that potentially subject the Company to concentration of credit risk include cash and cash equivalents. The Company maintains cash deposits and cash equivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company has established guidelines relative to diversification and maturities to maintain safety and liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe that it is exposed to any significant credit risk related to these instruments. The Company has long-lived assets in different geographic locations. As of June 30, 2023 and March 31, 2023, a majority of the Company’s long-lived assets were located in the United States. |
Cash, Cash Equivalents, and Restricted Cash | (D) Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash. The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands): June 30, 2023 March 31, 2023 Cash and cash equivalents $ 1,434,093 $ 1,676,813 Restricted cash (included in “Other current assets”) 5,264 5,011 Restricted cash (included in “Other assets”) 10,291 10,291 Cash, cash equivalents and restricted cash $ 1,449,648 $ 1,692,115 |
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. |
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, freight charges, 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 revenues 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” and “Other assets” on the accompanying condensed consolidated balance sheets. |
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, “Equity Method Investments.” |
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.” |
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: • 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. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments include shares of common stock of Arbutus Biopharma Corporation (“Arbutus”); shares of common stock of Heracles Parent, L.L.C., the parent entity of Datavant, (as defined and discussed in Note 3, “Equity Method Investments”); liability instruments issued, including warrant and earn-out shares liabilities issued in connection with the Company’s business combination with MAAC (as discussed in Note 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 common stock and investments in common stock with a readily determinable fair value are classified as Level 1, and their fair value is determined based upon quoted market prices in an active market. The shares of common stock of Heracles Parent, L.L.C., the parent entity of Datavant (as defined and discussed in Note 3, “Equity Method Investments”) and liability instruments issued, excluding the Public Warrants (as defined and discussed in Note 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. |
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. |
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. The Company evaluates in-licensed agreements for IPR&D projects to determine if the acquisition 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. |
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. 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: 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. 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. • Licenses of intellectual property: • Milestone payments: • Royalties and commercial milestone payments: 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. 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, 2023 and March 31, 2023. Trade receivables, net is included in “Other current assets” on the accompanying condensed consolidated balance sheets. |
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. Additionally, milestone payments made in connection with regulatory approvals and sales-based milestones are capitalized and amortized to cost of revenue over the remaining useful life of the asset. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands): June 30, 2023 March 31, 2023 Cash and cash equivalents $ 1,434,093 $ 1,676,813 Restricted cash (included in “Other current assets”) 5,264 5,011 Restricted cash (included in “Other assets”) 10,291 10,291 Cash, cash equivalents and restricted cash $ 1,449,648 $ 1,692,115 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Intangible Assets [Abstract] | |
Recognized Intangible Assets | The following table summarizes the Company’s recognized intangible assets: Remaining Weighted Average Estimated Useful Lives (in years) June 30, 2023 (in thousands) Gross amount 15.3 $ 155,284 Less: accumulated amortization (10,247 ) Net book value $ 145,037 |
Certain Balance Sheet Compone_2
Certain Balance Sheet Components (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Certain Balance Sheet Components [Abstract] | |
Other Current Assets | Other current assets at June 30, 2023 and March 31, 2023 consisted of the following (in thousands): June 30, 2023 March 31, 2023 Prepaid expenses $ 64,658 $ 60,827 Trade receivables, net 37,064 30,379 Restricted cash 5,264 5,011 Inventory 4,225 2,761 Income tax receivable 2,850 2,356 Other 13,004 20,440 Total other current assets $ 127,065 $ 121,774 |
Accrued Expenses | Accrued expenses at June 30, 2023 and March 31, 2023 consisted of the following (in thousands): June 30, 2023 March 31, 2023 Research and development expenses $ 57,160 $ 76,278 Compensation-related expenses 19,923 55,186 Sales allowances 16,800 17,569 Other expenses 25,446 18,096 Total accrued expenses $ 119,329 $ 167,129 |
Other Current Liabilities | Other current liabilities at June 30, 2023 and March 31, 2023 consisted of the following (in thousands): June 30, 2023 March 31, 2023 Deferred revenue $ 10,569 $ 12,444 Income tax payable 1,244 542 Other 8,073 2,090 Total other current liabilities $ 19,886 $ 15,076 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) - Dermavant [Member] | 3 Months Ended |
Jun. 30, 2023 | |
Funding Agreement with NovaQuest [Member] | |
Debt Instrument [Line Items] | |
Long-Term Debt | The carrying balance of the debt issued to NovaQuest was as follows (in thousands): June 30, 2023 March 31, 2023 Fair value of long-term debt $ 214,630 $ 207,640 Less: current portion (27,490 ) (26,940 ) Total long-term debt, net $ 187,140 $ 180,700 |
Credit Facility with XYQ Luxco [Member] | |
Debt Instrument [Line Items] | |
Long-Term Debt | Outstanding debt obligations to XYQ Luxco were as follows (in thousands): June 30, 2023 March 31, 2023 Principal amount $ 40,000 $ 40,000 Exit fee 5,000 5,000 Less: unamortized discount and debt issuance costs (9,555 ) (10,170 ) Total debt, net 35,445 34,830 Less: current portion — — Total long-term debt, net $ 35,445 $ 34,830 |
Revenue Interest Purchase and Sale Agreement with XYQ Luxco, NovaQuest [Member] | |
Debt Instrument [Line Items] | |
Long-Term Debt | The RIPSA carrying balance was as follows (in thousands): June 30, 2023 Carrying balance $ 184,079 Less: unamortized issuance costs (4,679 ) Total debt, net 179,400 Less: current portion (16,916 ) Total long-term debt, net $ 162,484 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation [Abstract] | |
Activity for Stock Options and Performance Stock Options | Activity for stock options and performance stock options under the RSL Equity Plans for the three months ended June 30, 2023 was as follows: Number of Options Options outstanding at March 31, 2023 154,271,791 Granted 4,351,602 Exercised (4,965,387 ) Forfeited/Canceled (606,221 ) Options outstanding at June 30, 2023 153,051,785 Options exercisable at June 30, 2023 84,263,636 |
Activity for Restricted Stock Units and Performance Stock Units | Activity for restricted stock units and performance stock units under the RSL Equity Plans for the three months ended June 30, 2023 was as follows: Number of Shares Non-vested balance at March 31, 2023 20,700,788 Granted 3,628,644 Vested (2,372,501 ) Forfeited (537,674 ) Non-vested balance at June 30, 2023 21,419,257 |
Activity for Capped Value Appreciation Rights | Activity for CVARs under the RSL 2021 EIP for the three months ended June 30, 2023 is as follows: Number of CVARs Non-vested balance at March 31, 2023 3,222,645 Vested (325,655 ) Forfeited (32,413 ) Non-vested balance at June 30, 2023 2,864,577 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets and Liabilities are Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and March 31, 2023, by level, within the fair value hierarchy (in thousands): As of June 30, 2023 As of March 31, 2023 Level 1 Level 2 Level 3 Balance as of June 30, 2023 Level 1 Level 2 Level 3 Balance as of March 31, 2023 Assets: Money market funds $ 1,240,912 $ — $ — $ 1,240,912 $ 1,496,726 $ — $ — $ 1,496,726 Investment in Datavant Class A units — — 199,448 199,448 — — 178,579 178,579 Investment in Arbutus common shares 89,349 — — 89,349 117,708 — — 117,708 Other investments 7,446 — — 7,446 8,030 — — 8,030 Total assets at fair value $ 1,337,707 $ — $ 199,448 $ 1,537,155 $ 1,622,464 $ — $ 178,579 $ 1,801,043 Liabilities: Debt issued by Dermavant to NovaQuest $ — $ — $ 214,630 $ 214,630 $ — $ — $ 207,640 $ 207,640 Liability instruments measured at fair value (1) 50,780 — 52,943 103,723 29,895 — 33,651 63,546 Total liabilities at fair value $ 50,780 $ — $ 267,573 $ 318,353 $ 29,895 $ — $ 241,291 $ 271,186 (1) At June 30, 2023, Level 1 includes the fair value of the Public Warrants of $50.8 million, and Level 3 includes the fair value of the Earn-Out Shares of $24.0 million, Private Placement Warrants of $25.6 million, and other liability instruments issued of $3.3 million. At March 31, 2023, Level 1 includes the fair value of the Public Warrants of $29.9 million, and Level 3 includes the fair value of the Earn-Out Shares of $15.2 million, Private Placement Warrants of $15.2 million, and other liability instruments issued of $3.3 million. |
Changes 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, 2023 and 2022 were as follows (in thousands): Balance at March 31, 2022 $ 193,963 Changes in fair value of investment in Datavant, included in net loss (7,019 ) Balance at June 30, 2022 $ 186,944 Balance at March 31, 2023 $ 178,579 Changes in fair value of investment in Datavant, included in net loss 20,869 Balance at June 30, 2023 $ 199,448 |
Changes in Fair Value of the Level 3 Liabilities | The changes in fair value of the Level 3 liabilities during the three months ended June 30, 2023 and 2022 were as follows (in thousands): Balance at March 31 $ 204,293 Payments related to long-term debt (7,344 ) Changes in fair value of debt and liability instruments, included in net loss 46,946 Balance at June 30, 2022 $ 243,895 Balance at March 31, 2023 $ 241,291 Payments related to long-term debt (7,344 ) Changes in fair value of debt and liability instruments, included in net loss 33,626 Balance at June 30, 2023 $ 267,573 |
Private Placement Warrants [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair Value Calculation Using Significant Unobservable Inputs | Significant unobservable inputs used to calculate the fair value of the Private Placement Warrants included the following: Point Estimate Used Input As of June 30, 2023 As of March 31, 2023 Volatility 50.3% 50.5% Risk-free rate 4.45% 3.76% Term (in years) 3.25 3.50 |
Earn-Out Shares [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair Value Calculation Using Significant Unobservable Inputs | Significant unobservable inputs used to calculate the fair value of the Earn-Out Shares included the following: Point Estimate Used Input As of June 30, 2023 As of March 31, 2023 Volatility 78.8% 79.9% Risk-free rate 4.44% 3.76% |
Datavant [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair Value Calculation Using Significant Unobservable Inputs | The fair value was calculated using significant unobservable inputs including the following: Point Estimate Used Input As of June 30, 2023 As of March 31, 2023 Volatility 90.0% 100.0% Risk-free rate 4.81% 4.02% |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Net Loss per Common Share [Abstract] | |
Potentially Dilutive Securities | As of June 30, 2023 and 2022, potentially dilutive securities were as follows: June 30, 2023 June 30, 2022 Stock options and performance stock options 153,051,785 154,298,546 Restricted stock units and performance stock units (non-vested) 21,419,257 26,423,932 March 2020 CVARs (1) 30,260,772 32,011,996 November 2021 CVARs (non-vested) 2,864,577 4,431,637 Restricted common stock (non-vested) 647,530 456,426 Earn-Out Shares (non-vested) 3,080,387 3,080,387 Private Placement Warrants 10,214,365 10,214,365 Public Warrants 20,475,875 20,475,875 Other stock based awards and instruments issued 6,102,362 5,067,978 (1) Refer to Note 8, “Share-Based Compensation” for details regarding settlement of CVARs. |
Description of Business and L_2
Description of Business and Liquidity (Details) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 USD ($) Segment | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Description of Business [Abstract] | |||
Number of operating segment | Segment | 1 | ||
Number of reporting segment | Segment | 1 | ||
Liquidity [Abstract] | |||
Cash and cash equivalents | $ 1,434,093 | $ 1,676,813 | |
Accumulated deficit | (4,064,570) | $ (3,772,754) | |
Net loss | $ (327,845) | $ (353,784) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 |
Cash, Cash Equivalents, and Restricted Cash [Abstract] | ||||
Cash and cash equivalents | $ 1,434,093 | $ 1,676,813 | ||
Restricted cash (included in "Other current assets") | 5,264 | 5,011 | ||
Restricted cash (included in "Other assets") | 10,291 | 10,291 | ||
Cash, cash equivalents and restricted cash | $ 1,449,648 | $ 1,692,115 | $ 1,956,469 | $ 2,074,034 |
Equity Method Investments, Inve
Equity Method Investments, Investment in Arbutus (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Investments [Abstract] | |||
Number of shares acquired (in shares) | 767,137,861 | 760,143,393 | |
Aggregate fair value investment | $ 296,243 | $ 304,317 | |
Arbutus Biopharma Corporation [Member] | |||
Investments [Abstract] | |||
Equity method investment ownership percentage | 23% | ||
Aggregate fair value investment | $ 89,300 | $ 117,700 | |
Unrealized gain (losses) on investments | $ (28,400) | $ (10,500) | |
Closing price of common stock (in dollars per share) | $ 2.3 | $ 3.03 | |
Arbutus Biopharma Corporation [Member] | Common Stock [Member] | |||
Investments [Abstract] | |||
Number of shares acquired (in shares) | 38,847,462 |
Equity Method Investments, In_2
Equity Method Investments, Investment in Datavant (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 27, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Investments [Abstract] | ||||
Aggregate fair value investment | $ 296,243 | $ 304,317 | ||
Datavant Merger [Member] | ||||
Investments [Abstract] | ||||
Proceeds from sale of investment | $ 320,000 | |||
Equity method investment ownership percentage | 17% | |||
Aggregate fair value investment | $ 199,400 | $ 178,600 | ||
Unrealized gain (losses) on investments | $ 20,900 | $ 7,000 |
Intangible Assets (Details)
Intangible Assets (Details) $ in Thousands, £ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||||||
Aug. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | May 31, 2022 USD ($) | May 31, 2022 GBP (£) | May 31, 2022 CAD ($) | |
Recognized Intangible Assets [Abstract] | ||||||||
Remaining weighted average estimated useful lives | 15 years 3 months 18 days | |||||||
Gross amount | $ 155,284 | |||||||
Less: accumulated amortization | (10,247) | |||||||
Net book value | 145,037 | $ 144,881 | ||||||
Future amortization expense, remainder of 2024 | 7,100 | |||||||
Future amortization expense, 2025 | 9,500 | |||||||
Future amortization expense, 2026 | 9,500 | |||||||
Future amortization expense, 2027 | 9,500 | |||||||
Future amortization expense, 2028 | 9,500 | |||||||
Future amortization expense, thereafter | 100,100 | |||||||
Cost of Revenues [Member] | ||||||||
Recognized Intangible Assets [Abstract] | ||||||||
Amortization of intangible assets | $ 2,400 | $ 700 | ||||||
GSK [Member] | ||||||||
Intangible Assets [Abstract] | ||||||||
Milestone payable | $ 126,000 | £ 100 | ||||||
Milestone amount paid | $ 126,000 | |||||||
Welichem Biotech Inc [Member] | ||||||||
Intangible Assets [Abstract] | ||||||||
Milestone payable | $ 20,000 | $ 25 | ||||||
Milestone amount paid | $ 20,000 |
Certain Balance Sheet Compone_3
Certain Balance Sheet Components, Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Other Current Assets [Abstract] | ||
Prepaid expenses | $ 64,658 | $ 60,827 |
Trade receivables, net | 37,064 | 30,379 |
Restricted Cash | 5,264 | 5,011 |
Inventory | 4,225 | 2,761 |
Income tax receivable | 2,850 | 2,356 |
Other | 13,004 | 20,440 |
Total other current assets | $ 127,065 | $ 121,774 |
Certain Balance Sheet Compone_4
Certain Balance Sheet Components, Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Accrued Expenses [Abstract] | ||
Research and development expenses | $ 57,160 | $ 76,278 |
Compensation-related expenses | 19,923 | 55,186 |
Sales allowances | 16,800 | 17,569 |
Other expenses | 25,446 | 18,096 |
Total accrued expenses | $ 119,329 | $ 167,129 |
Certain Balance Sheet Compone_5
Certain Balance Sheet Components, Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Other Current Liabilities [Abstract] | ||
Deferred revenue | $ 10,569 | $ 12,444 |
Income tax payable | 1,244 | 542 |
Other | 8,073 | 2,090 |
Total other current liabilities | $ 19,886 | $ 15,076 |
Long-Term Debt, Funding Agreeme
Long-Term Debt, Funding Agreement with NovaQuest (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 71 Months Ended | |||
Oct. 31, 2018 | May 31, 2022 | Jun. 30, 2023 | Apr. 30, 2028 | Mar. 31, 2023 | Aug. 31, 2018 | |
Carrying Balance of Debt Issued [Abstract] | ||||||
Less: current portion | $ (27,490) | $ (26,940) | ||||
Total long-term debt, net | $ 187,140 | 180,700 | ||||
Dermavant [Member] | Funding Agreement with NovaQuest [Member] | ||||||
Funding Agreement with NovaQuest [Abstract] | ||||||
Face amount | $ 17,500 | $ 100,000 | ||||
Proceeds from Issuance of Debt | 117,500 | |||||
Frequency of periodic payment | quarterly | |||||
Periodic payment | $ 36,700 | |||||
Maximum milestone payment obligation | $ 440,600 | |||||
Quarterly payments made | $ 7,300 | |||||
Carrying Balance of Debt Issued [Abstract] | ||||||
Fair value of long-term debt | 214,630 | 207,640 | ||||
Less: current portion | (27,490) | (26,940) | ||||
Total long-term debt, net | $ 187,140 | $ 180,700 | ||||
Dermavant [Member] | Funding Agreement with NovaQuest [Member] | Forecast [Member] | ||||||
Funding Agreement with NovaQuest [Abstract] | ||||||
Frequency of periodic payment | quarterly | |||||
Periodic payment | $ 176,300 | |||||
Debt instrument, term | 6 years | |||||
Dermavant [Member] | Funding Agreement with NovaQuest [Member] | Maximum [Member] | ||||||
Funding Agreement with NovaQuest [Abstract] | ||||||
Debt instrument, term | 15 years | |||||
Maximum milestone payment obligation | 141,000 | |||||
Right to offset of commercial milestones payment | $ 88,100 |
Long-Term Debt, Credit Facility
Long-Term Debt, Credit Facility with XYQ Luxco (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||
May 31, 2021 | Jun. 30, 2023 | Mar. 31, 2023 | |
Outstanding Debt Obligations [Abstract] | |||
Total debt, net | $ 385,069 | $ 375,515 | |
Less: current portion | (44,406) | (40,720) | |
Dermavant [Member] | Credit Facility with XYQ Luxco [Member] | |||
Loan and Credit Agreements by Dermavant [Abstract] | |||
Proceeds from Lines of Credit | $ 40,000 | ||
Debt instrument, term | 5 years | ||
Interest rate | 10% | ||
Debt instrument exit fee and end of term charge | $ 5,000 | ||
Reduction in exit fee | $ 4,000 | ||
Warrants issued (in shares) | 1,199,072 | ||
Exercise price of warrants (in dollars per share) | $ 0.01 | ||
Outstanding Debt Obligations [Abstract] | |||
Principal amount | 40,000 | 40,000 | |
Exit fee | 5,000 | 5,000 | |
Less: unamortized discount and debt issuance costs | (9,555) | (10,170) | |
Total debt, net | 35,445 | 34,830 | |
Less: current portion | 0 | 0 | |
Total long-term debt, net | $ 35,445 | $ 34,830 |
Long-Term Debt, Revenue Interes
Long-Term Debt, Revenue Interest Purchase and Sale Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Jun. 30, 2022 | May 31, 2021 | Jun. 30, 2023 | Mar. 31, 2023 | |
Carrying Balance [Abstract] | ||||
Total debt, net | $ 385,069 | $ 375,515 | ||
Less: current portion | (44,406) | $ (40,720) | ||
Dermavant [Member] | Revenue Interest Purchase and Sale Agreement with XYQ Luxco, NovaQuest [Member] | ||||
Revenue Interest Purchase and Sale Agreement [Abstract] | ||||
Face amount | $ 160,000 | |||
Royalties entitled to receive | $ 344,000 | |||
Committed funding under revenue interest purchase and sale agreement received | $ 160,000 | |||
Carrying Balance [Abstract] | ||||
Carrying balance | 184,079 | |||
Less: unamortized issuance costs | (4,679) | |||
Total debt, net | 179,400 | |||
Less: current portion | (16,916) | |||
Total long-term debt, net | $ 162,484 |
Shareholders' Equity - (Details
Shareholders' Equity - (Details) - Cowen [Member] - At-the-Market Equity Offering Program[Member] - USD ($) $ in Millions | Jun. 30, 2023 | Sep. 19, 2022 |
Shareholders' Equity [Abstract] | ||
Common shares aggregate offering price authorized | $ 400 | |
Common shares aggregate offering price authorized, remaining capacity available | $ 400 |
Share-Based Compensation, Stock
Share-Based Compensation, Stock Options and Performance Stock Options under RSL Equity Plans (Details) | 3 Months Ended |
Jun. 30, 2023 IncentivePlans shares | |
Share-Based Compensation [Abstract] | |
Number of equity incentive plans | IncentivePlans | 3 |
RSL 2021 EIP [Member] | |
Share-Based Compensation [Abstract] | |
Common shares available for future grants (in shares) | 41,793,359 |
Stock Options and Performance Stock Options [Member] | RSL Equity Plans [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding, beginning balance (in shares) | 154,271,791 |
Granted (in shares) | 4,351,602 |
Exercised (in shares) | (4,965,387) |
Forfeited/Canceled (in shares) | (606,221) |
Options outstanding, ending balance (in shares) | 153,051,785 |
Options exercisable at June 30, 2023 (in shares) | 84,263,636 |
Share-Based Compensation, Restr
Share-Based Compensation, Restricted Stock Units and Performance Stock Units (Details) - Restricted Stock and Performance Stock Units [Member] - RSL Equity Plans [Member] | 3 Months Ended |
Jun. 30, 2023 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested balance, beginning (in shares) | 20,700,788 |
Granted (in shares) | 3,628,644 |
Vested (in shares) | (2,372,501) |
Forfeited (in shares) | (537,674) |
Non-vested balance, ending (in shares) | 21,419,257 |
Share-Based Compensation, CVARs
Share-Based Compensation, CVARs, Employee Stock Purchase Plan and Subsidiary Equity Incentive Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Subsidiary Equity Incentive Plans [Member] | ||
Subsidiary Equity Incentive Plans [Abstract] | ||
Share-based compensation expense | $ 14.9 | $ 11.5 |
CVARs [Member] | March 2020 CVAR Grants [Member] | ||
Share-Based Compensation [Abstract] | ||
Number of non-service-vested shares (in shares) | 1,176,198 | |
Number of service-vested shares (in shares) | 29,084,574 | |
Number of shares settled (in shares) | 1,711,450 | |
Number of shares issued (in shares) | 534,942 | |
CVARs [Member] | November 2021 CVAR Grants [Member] | ||
Share-Based Compensation [Abstract] | ||
Number of shares issued (in shares) | 325,655 | |
CVARs [Member] | RSL 2021 EIP [Member] | November 2021 CVAR Grants [Member] | ||
Capped Value Appreciation Rights [Abstract] | ||
Non-vested balance, beginning (in shares) | 3,222,645 | |
Vested (in shares) | (325,655) | |
Forfeited (in shares) | (32,413) | |
Non-vested balance, ending (in shares) | 2,864,577 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes [Abstract] | ||
Effective tax rate | (0.50%) | (1.10%) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
GSK [Member] | |
Commitments [Abstract] | |
Purchase certain quantities of inventory over period | 5 years |
Minimum purchase commitment related to agreement | $ 44.7 |
Samsung [Member] | |
Commitments [Abstract] | |
Minimum purchase commitment related to agreement | $ 26.5 |
Palantirs [Member] | |
Commitments [Abstract] | |
Proprietary software subscription period | 5 years |
Remaining minimum payments | $ 19.1 |
Earn-Out Shares, Public Warra_2
Earn-Out Shares, Public Warrants and Private Placement Warrants (Details) - MAAC Sponsor [Member] | 3 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Earn-Out Shares [Abstract] | |
Number of earn-out shares vested (in shares) | 0 |
Public Warrants and Private Placement Warrants [Abstract] | |
Period to exercise warrants after business combination | 30 days |
Warrants expiration period | 5 years |
Trading day period to calculate volume weighted average trading price | 30 days |
Maximum [Member] | |
Public Warrants and Private Placement Warrants [Abstract] | |
Earn-out share redemption price (in dollars per share) | $ / shares | $ 18 |
20% Earn-Out [Member] | |
Earn-Out Shares [Abstract] | |
Common shares issued (in shares) | 2,033,591 |
Percentage of earn-out shares | 20% |
10 % Earn-Out [Member] | |
Earn-Out Shares [Abstract] | |
Common shares issued (in shares) | 1,016,796 |
Percentage of earn-out shares | 10% |
Independent Directors [Member] | 20% Earn-Out [Member] | |
Earn-Out Shares [Abstract] | |
Common shares issued (in shares) | 10,000 |
Number of trading days to meet earn-out price threshold | 20 days |
Trading day period for earn-out shares | 30 days |
Independent Directors [Member] | 20% Earn-Out [Member] | Minimum [Member] | |
Earn-Out Shares [Abstract] | |
Earn-out share price (in dollars per share) | $ / shares | $ 15 |
Independent Directors [Member] | 10 % Earn-Out [Member] | |
Earn-Out Shares [Abstract] | |
Common shares issued (in shares) | 5,000 |
Number of trading days to meet earn-out price threshold | 20 days |
Trading day period for earn-out shares | 30 days |
Independent Directors [Member] | 10 % Earn-Out [Member] | Minimum [Member] | |
Earn-Out Shares [Abstract] | |
Earn-out share price (in dollars per share) | $ / shares | $ 20 |
Private Placement Warrants [Member] | |
Public Warrants and Private Placement Warrants [Abstract] | |
Class of warrant outstanding (in shares) | 10,214,365 |
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.5 |
Public Warrants [Member] | |
Public Warrants and Private Placement Warrants [Abstract] | |
Class of warrant outstanding (in shares) | 20,535,896 |
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.5 |
Warrant exercised (in shares) | 60,021 |
Public and Private Warrants [Member] | |
Public Warrants and Private Placement Warrants [Abstract] | |
Number of warrants redeemed (in shares) | 0 |
Fair Value Measurements, Assets
Fair Value Measurements, Assets and Liabilities are Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | |
Assets: [Abstract] | |||
Investment | $ 296,243 | $ 304,317 | |
Earn-Out Shares [Member] | |||
Recurring Fair Value Measurements [Abstract] | |||
Non financial liabilities at fair value | 24,000 | ||
Private Placement Warrants [Member] | |||
Liabilities: [Abstract] | |||
Total liabilities at fair value | 25,600 | ||
Arbutus Biopharma Corporation [Member] | |||
Assets: [Abstract] | |||
Investment | 89,300 | 117,700 | |
Level 1 [Member] | Warrant [Member] | Public Warrants [Member] | |||
Recurring Fair Value Measurements [Abstract] | |||
Financial liabilities at fair value | 50,800 | 29,900 | |
Level 3 [Member] | Earn-Out Shares [Member] | |||
Recurring Fair Value Measurements [Abstract] | |||
Non financial liabilities at fair value | 24,000 | 15,200 | |
Level 3 [Member] | Warrant [Member] | Private Placement Warrants [Member] | |||
Recurring Fair Value Measurements [Abstract] | |||
Financial liabilities at fair value | 25,600 | 15,200 | |
Level 3 [Member] | Liability Instruments Measured at Fair Value [Member] | |||
Recurring Fair Value Measurements [Abstract] | |||
Non financial liabilities at fair value | 3,300 | 3,300 | |
Recurring [Member] | |||
Assets: [Abstract] | |||
Total assets at fair value | 1,537,155 | 1,801,043 | |
Liabilities: [Abstract] | |||
Debt issued by Dermavant to NovaQuest | 214,630 | 207,640 | |
Liability instruments measured at fair value | [1] | 103,723 | 63,546 |
Total liabilities at fair value | 318,353 | 271,186 | |
Recurring [Member] | Money Market Funds [Member] | |||
Assets: [Abstract] | |||
Money market funds | 1,240,912 | 1,496,726 | |
Recurring [Member] | Common Shares [Member] | Datavant [Member] | |||
Assets: [Abstract] | |||
Investment | 199,448 | 178,579 | |
Recurring [Member] | Common Shares [Member] | Arbutus Biopharma Corporation [Member] | |||
Assets: [Abstract] | |||
Investment | 89,349 | 117,708 | |
Recurring [Member] | Other Investments [Member] | |||
Assets: [Abstract] | |||
Investment | 7,446 | 8,030 | |
Recurring [Member] | Level 1 [Member] | |||
Assets: [Abstract] | |||
Total assets at fair value | 1,337,707 | 1,622,464 | |
Liabilities: [Abstract] | |||
Debt issued by Dermavant to NovaQuest | 0 | 0 | |
Liability instruments measured at fair value | [1] | 50,780 | 29,895 |
Total liabilities at fair value | 50,780 | 29,895 | |
Recurring [Member] | Level 1 [Member] | Money Market Funds [Member] | |||
Assets: [Abstract] | |||
Money market funds | 1,240,912 | 1,496,726 | |
Recurring [Member] | Level 1 [Member] | Common Shares [Member] | Datavant [Member] | |||
Assets: [Abstract] | |||
Investment | 0 | 0 | |
Recurring [Member] | Level 1 [Member] | Common Shares [Member] | Arbutus Biopharma Corporation [Member] | |||
Assets: [Abstract] | |||
Investment | 89,349 | 117,708 | |
Recurring [Member] | Level 1 [Member] | Other Investments [Member] | |||
Assets: [Abstract] | |||
Investment | 7,446 | 8,030 | |
Recurring [Member] | Level 2 [Member] | |||
Assets: [Abstract] | |||
Total assets at fair value | 0 | 0 | |
Liabilities: [Abstract] | |||
Debt issued by Dermavant to NovaQuest | 0 | 0 | |
Liability instruments measured at fair value | [1] | 0 | 0 |
Total liabilities at fair value | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | Money Market Funds [Member] | |||
Assets: [Abstract] | |||
Money market funds | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | Common Shares [Member] | Datavant [Member] | |||
Assets: [Abstract] | |||
Investment | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | Common Shares [Member] | Arbutus Biopharma Corporation [Member] | |||
Assets: [Abstract] | |||
Investment | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | Other Investments [Member] | |||
Assets: [Abstract] | |||
Investment | 0 | 0 | |
Recurring [Member] | Level 3 [Member] | |||
Assets: [Abstract] | |||
Total assets at fair value | 199,448 | 178,579 | |
Liabilities: [Abstract] | |||
Debt issued by Dermavant to NovaQuest | 214,630 | 207,640 | |
Liability instruments measured at fair value | [1] | 52,943 | 33,651 |
Total liabilities at fair value | 267,573 | 241,291 | |
Recurring [Member] | Level 3 [Member] | Money Market Funds [Member] | |||
Assets: [Abstract] | |||
Money market funds | 0 | 0 | |
Recurring [Member] | Level 3 [Member] | Common Shares [Member] | Datavant [Member] | |||
Assets: [Abstract] | |||
Investment | 199,448 | 178,579 | |
Recurring [Member] | Level 3 [Member] | Common Shares [Member] | Arbutus Biopharma Corporation [Member] | |||
Assets: [Abstract] | |||
Investment | 0 | 0 | |
Recurring [Member] | Level 3 [Member] | Other Investments [Member] | |||
Assets: [Abstract] | |||
Investment | $ 0 | $ 0 | |
[1]At June 30, 2023, Level 1 includes the fair value of the Public Warrants of $50.8 million, and Level 3 includes the fair value of the Earn-Out Shares of $24.0 million, Private Placement Warrants of $25.6 million, and other liability instruments issued of $3.3 million. At March 31, 2023, Level 1 includes the fair value of the Public Warrants of $29.9 million, and Level 3 includes the fair value of the Earn-Out Shares of $15.2 million, Private Placement Warrants of $15.2 million, and other liability instruments issued of $3.3 million. |
Fair Value Measurements, Change
Fair Value Measurements, Changes in Fair Value of the Level 3 Assets (Details) - Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 178,579 | $ 193,963 |
Changes in fair value of investment in Datavant, included in net loss | $ 20,869 | $ (7,019) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Fair Value of Debt and Liability Instruments | Gain (Loss) on Fair Value of Debt and Liability Instruments |
Ending Balance | $ 199,448 | $ 186,944 |
Fair Value Measurements, Chan_2
Fair Value Measurements, Changes in Fair Value of the Level 3 Liabilities (Details) - Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 241,291 | $ 204,293 |
Payments related to long-term debt | (7,344) | (7,344) |
Changes in fair value of debt and liability instruments, included in net loss | $ 33,626 | $ 46,946 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Fair Value of Debt and Liability Instruments | Gain (Loss) on Fair Value of Debt and Liability Instruments |
Balance at end of period | $ 267,573 | $ 243,895 |
Fair Value Measurements, Fair V
Fair Value Measurements, Fair Value of Significant Unobservable Inputs (Details) $ in Millions | Jun. 30, 2023 USD ($) | Mar. 31, 2023 |
Earn-Out Shares [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Non financial liabilities at fair value | $ 24 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liability Instruments Measured at Fair Value | |
Private Placement Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Fair value liability | $ 25.6 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liability Instruments Measured at Fair Value | |
Volatility [Member] | Datavant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Investment in equity securities, measurement input | 0.90 | 1 |
Volatility [Member] | Earn-Out Shares [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Earn-out share, measurement input | 78.80% | 79.90% |
Volatility [Member] | Private Placement Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Private placement warrants, measurement input | 0.503 | 0.505 |
Risk-free Rate [Member] | Datavant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Investment in equity securities, measurement input | 0.0481 | 0.0402 |
Risk-free Rate [Member] | Earn-Out Shares [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Earn-out share, measurement input | 4.44% | 3.76% |
Risk-free Rate [Member] | Private Placement Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Private placement warrants, measurement input | 0.0445 | 0.0376 |
Term (in years) [Member] | Private Placement Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Private placement warrants, term | 3 years 3 months | 3 years 6 months |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details) - shares | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Stock Options and Performance Stock Options [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 153,051,785 | 154,298,546 | |
Restricted Stock Units and Performance Stock Units (Non-vested) [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 21,419,257 | 26,423,932 | |
March 2020 CVARs [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | [1] | 30,260,772 | 32,011,996 |
November 2021 CVARs (Non-vested) [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 2,864,577 | 4,431,637 | |
Restricted Common Stock (Non-vested) [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 647,530 | 456,426 | |
Earn-Out Shares (Non-vested) [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 3,080,387 | 3,080,387 | |
Private Placement Warrants [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 10,214,365 | 10,214,365 | |
Public Warrants [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 20,475,875 | 20,475,875 | |
Other Stock Based Awards and Instruments Issued [Member] | |||
Net Loss per Common Share [Abstract] | |||
Potentially dilutive securities (in shares) | 6,102,362 | 5,067,978 | |
[1]Refer to Note 8, “Share-Based Compensation” for details regarding settlement of CVARs. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | ||
Aug. 02, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | |
Forecast [Member] | SK Biopharmaceuticals Co Ltd [Member] | Proteovant [Member] | |||
Subsequent Events [Abstract] | |||
Purchase of equity | $ 47.5 | ||
Subsequent Events [Member] | |||
Subsequent Events [Abstract] | |||
Redemption price (in dollars per share) | $ 0.1 | ||
Subsequent Events [Member] | Public Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Redemption price (in dollars per share) | $ 0.1 | ||
Subsequent Events [Member] | Minimum [Member] | Public Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Number of trading days | 20 days | ||
Subsequent Events [Member] | Minimum [Member] | Private Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Exercise price of warrants (in dollars per share) | $ 18 | ||
Subsequent Events [Member] | Maximum [Member] | Public Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Number of trading days | 30 days | ||
Subsequent Events [Member] | Common Stock [Member] | Public and Private Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Exercise price (in dollars per share) | $ 11.5 | ||
Trading day for volume-weighted average price of the Common Shares | 10 days | ||
Number of shares issued in connection with a Make-Whole Exercise (in shares) | 0.361 | ||
Subsequent Events [Member] | Common Stock [Member] | Minimum [Member] | Public Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Sale price (in dollars per share) | $ 10 | ||
Subsequent Events [Member] | Common Stock [Member] | Minimum [Member] | Public and Private Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Number of trading days for warrants redemption fair market value | 1 day | ||
Subsequent Events [Member] | Common Stock [Member] | Maximum [Member] | Public and Private Warrants [Member] | |||
Subsequent Events [Abstract] | |||
Number of trading days for warrants redemption fair market value | 10 days | ||
Subsequent Events [Member] | VantAI Preferred Financing [Member] | SK, Inc. [Member] | |||
Subsequent Events [Abstract] | |||
Contributions from issuance of shares | $ 6 |