FinanceLooker

Excrept from filing document 2025-03-31

The aggregate market value of the registrant s common stock held by non affiliates of the registrant based on the closing price of the registrant s common stock on The Nasdaq Global Select Market as of September 30 2024 the last business day of the registrant s most recently completed second fiscal quarter was approximately 1 866 6 million based on the closing price of the registrant s common stock on The Nasdaq Global Select Market of 28 51 per share
Portions of the registrant s Proxy Statement for its 2025 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10 K to the extent stated herein Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant s fiscal year ended March 31 2025
This Annual Report on Form 10 K for the fiscal year ended March 31 2025 this Annual Report contains forward looking statements that involve substantial risks and uncertainties In some cases you can identify forward looking statements by the words anticipate believe can continue could design estimate expect forecast goal hope intend may might objective ongoing plan potential predict project should target will and would or the negative of these terms or other comparable terminology intended to identify statements about the future These statements involve known and unknown risks uncertainties and other factors that may cause our actual results levels of activity performance or achievements to be materially different from the information expressed or implied by these forward looking statements Although we believe that we have a reasonable basis for each forward looking statement contained in this Annual Report we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future about which we cannot be certain Forward looking statements include statements about
the potential advantages and differentiated profile of our product candidates compared to existing therapies for the applicable indications including potential benefits of IMVT 1402 s product attributes and potential best in class profile
the effects of global factors geopolitical tensions and adverse macroeconomic conditions on our business operations and supply chain including the potential impact on our clinical trial plans and timelines such as the enrollment activation and initiation of additional clinical trial sites and the results of our clinical trials
our estimates of our expenses ongoing losses future revenue capital requirements and needs for or ability to obtain future financing to complete the clinical trials for and commercialize our product candidates
You should refer to Item 1A Risk Factors and elsewhere in this document for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward looking statements As a result of these factors we cannot assure you that the forward looking statements in this Annual Report will prove to be accurate Furthermore if our forward looking statements prove to be inaccurate the inaccuracy may be material
In light of the significant uncertainties in these forward looking statements you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all
In addition statements that we believe and similar statements reflect our beliefs and opinions on the relevant subject These statements are based upon information available to us as of the date of this Annual Report and while we believe such information forms a reasonable basis for such statements such information may be limited or incomplete and our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of all potentially available relevant information
We undertake no obligation to publicly update any forward looking statements whether as a result of new information future events or otherwise except as required by law We qualify all of our forward looking statements by these cautionary statements
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website www immunovant com SEC filings webcasts press releases and conference calls We use these mediums including our website to communicate with our stockholders and the public about our company our product candidates and other matters It is possible that the information that we make available may be deemed to be material information We therefore encourage investors and others interested in our company to review the information that we make available on our website Information contained on or that can be accessed through our website is not incorporated by reference into this Annual Report on Form 10 K and you should not consider information on our website to be part of this Annual Report on Form 10 K
We obtained the industry and market data in this Annual Report on Form 10 K from our own research as well as from industry and general publications surveys and studies conducted by third parties Industry and general publications studies and surveys generally state that the information contained therein has been obtained from sources believed to be reliable These third parties may in the future alter the manner in which they conduct surveys and studies regarding the markets in which we operate our business As a result you should carefully consider the inherent risks and uncertainties associated with the industry and market data contained in this Annual Report on Form 10 K including those discussed in Part I Item 1A Risk Factors
You should consider carefully the risks described under Risk Factors in Part I Item 1A of this Annual Report on Form 10 K References to we us and our in this section titled Summary Risk Factors refer to Immunovant Inc and its wholly owned subsidiaries A summary of the risks that could materially and adversely affect our business financial condition operating results and prospects include the following
Enrollment and retention of patients in clinical trials is an expensive and time consuming process and could be made more difficult or rendered impossible by multiple factors outside our control and we may not be able to enroll patients in our trials on our anticipated timelines
The results of our nonclinical studies and clinical trials may not support our proposed claims for our product candidates or regulatory approval on a timely basis or at all and the results of earlier studies and trials may not be predictive of future trial results
Interim top line or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
Our product candidates may be associated with adverse events or cause undesirable side effects or have other properties that could delay or prevent their regulatory approval cause us to suspend or discontinue clinical trials abandon further development or limit the commercial viability of any approved label or market acceptance
Our business operations clinical development plans and timelines and supply chain could be adversely affected by the effects of health epidemics and pandemics on manufacturing clinical trials and other business activities performed by us or by third parties with whom we conduct business including our contract manufacturers contract research organizations suppliers shippers and others
Our business could be adversely affected by economic downturns changes in inflation and interest rates changes in international trade policies and tariffs natural disasters political crises geopolitical events such as the crises in Ukraine and the Middle East or other macroeconomic conditions which may in the future negatively impact our business and financial performance
We rely on third parties to conduct supervise and monitor our clinical trials and if those third parties perform in an unsatisfactory manner or fail to comply with applicable requirements or our quality management program fails to detect such events in a timely manner it may harm our business
We do not have our own manufacturing capabilities and rely on third parties to produce clinical supplies and commercial supplies of our product candidates The manufacture of biologics is complex and we or our third party manufacturers may encounter difficulties in production or our quality management program may fail to detect quality issues at our third party manufacturers which may delay or prevent our ability to obtain marketing approval or commercialize our product candidates if approved
Raising additional funds by issuing equity securities will cause dilution to existing stockholders Raising additional funds through debt financings may involve restrictive covenants and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights
We rely on the license agreement with HanAll Biopharma Co Ltd the HanAll Agreement to provide us rights to the core intellectual property relating to IMVT 1402 and batoclimab Any termination or loss of significant rights under the HanAll Agreement would adversely affect our development or commercialization of IMVT 1402 and batoclimab
We and the third parties with whom we work are subject to stringent and changing privacy data protection and information security laws contractual obligations self regulatory schemes government regulation industry standards and other obligations related to data privacy and security The actual or perceived failure by us or the third parties with whom we work to comply with such obligations could result in harm to our reputation regulatory investigations or actions significant fines and liability disruption of our clinical trials or other material adverse effects on our business
If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business our share price and trading volume could decline and has declined in the past upon downgrades of our common stock
Immunovant is a clinical stage immunology company dedicated to enabling normal lives for people with autoimmune diseases Our focus is on developing IMVT 1402 a potentially best in class inhibitor of the neonatal fragment crystallizable receptor FcRn to address autoimmune diseases driven by high levels of pathogenic immunoglobulin G IgG antibodies FcRn is involved in preventing the degradation of IgG antibodies and inhibition of FcRn has been shown to reduce levels of total IgG and pathogenic IgG antibodies
We believe that FcRn inhibition has broad therapeutic and commercial potential to address IgG mediated autoimmune diseases in several therapeutic areas including but not limited to endocrinology neurology rheumatology and dermatology Third party estimates suggest over four million patients in the United States and Europe could benefit from anti FcRn treatments across more than 20 indications currently being evaluated in clinical trials by multiple companies with two indications that are already approved and launched quickly reaching billions of dollars in sales
In a Phase 1 clinical trial healthy adults dosed with IMVT 1402 showed deep dose dependent IgG reductions We expect to be able to reach approximately 80 IgG reductions with continued weekly dosing of 600 mg of IMVT 1402 offering deeper IgG reductions than observed with other competitor anti FcRn programs There has been consistent evidence observed across the class in eight indications in Phase 2 and 3 trials with FcRn inhibitors that deeper IgG reductions correlate with meaningful improvements in clinical outcomes This has also been validated with Immunovant s own Phase 2 and 3 studies evaluating its first generation anti FcRn antibody batoclimab formerly referred to as IMVT 1401 in Graves disease GD myasthenia gravis MG and chronic inflammatory demyelinating polyneuropathy CIDP which showed that IgG reductions of greater than or equal to 70 led to meaningfully better outcomes compared to reductions below 70 across a range of clinical measures
In the Phase 1 clinical trial across all evaluated doses IMVT 1402 demonstrated no or minimal reductions in albumin and no or minimal increases in LDL cholesterol levels which are off target effects observed in some anti FcRn antibodies including batoclimab We are pursuing the rapid development of IMVT 1402 because of its best in class potential with the 600 mg dose expected to reach approximately 80 IgG reduction We believe IMVT 1402 s profile has the potential to offer best in class efficacy in addition to its potentially favorable safety profile and convenient administration with a simple self administered auto injector expected at launch As previously disclosed we will make a final decision about future development and regulatory submissions for batoclimab in the future based on the aggregate information available at the time
We are currently progressing a broad set of programs for IMVT 1402 Over the last fiscal year we announced the clearance of six investigational new drug IND applications to support clinical trials to evaluate IMVT 1402 We have initiated studies in five indications including potentially registrational trials in GD difficult to treat rheumatoid arthritis D2T RA MG and CIDP and a proof of concept trial in cutaneous lupus erythematosus CLE We also plan to initiate a potentially registrational trial evaluating IMVT 1402 in Sjögren s disease SjD and a second potentially registrational trial in GD in the summer of 2025 Our primary focus is to execute these six indications first with plans to assess new indications in the future All studies evaluating IMVT 1402 are being conducted using the intended commercial drug formulation and delivery device the YpsoMate autoinjector developed by Ypsomed AG which is utilized for multiple approved products
Data and insights from batoclimab including our operational trial experience relationships with investigators and prior results are being leveraged to inform and potentially accelerate our development programs for IMVT 1402 In March 2025 we announced top line results of our Phase 3 study of batoclimab in MG which met its primary endpoint of change in the Myasthenia Gravis Activities of Daily Living MG ADL score from baseline in acetylcholine receptor antibody positive AChR patients The 680 mg dose set a new benchmark for magnitude of benefit with a 5 6 point mean improvement and 93 MG ADL response rate Batoclimab demonstrated strong durability of Minimal Symptom Expression MG ADL 0 or 1 MSE with 75 of patients who achieved MSE on 680 mg dose by week 6 maintaining MSE status for 6 weeks On the same day we also announced the initial results from period 1 of the Phase 2b study of batoclimab in CIDP following standard of care washout which demonstrated a mean improvement in the adjusted inflammatory neuropathy cause and treatment aINCAT disability score of 1 8 across batoclimab arms and an 84 responder rate in those patients who achieved an IgG lowering greater than or equal to 70 In both batoclimab studies deeper IgG reductions correlated with better clinical outcomes across a range of assessments and timepoints IMVT 1402 600 mg dosing was observed in its Phase 1 trial to have similarly deep IgG reductions to batoclimab 680 mg dosing supporting IMVT 1402 development in these indications without the albumin and LDL side effects observed with batoclimab To add to the strong data sets we have previously reported with batoclimab in GD and TED we expect to report six month remission data in GD this summer and Phase 3 TED data in the second half of calendar year 2025
IMVT 1402 and batoclimab are fully human monoclonal antibodies that target the neonatal fragment crystallizable receptor FcRn These antibodies are the result of a multi step multi year research program conducted in collaboration with HanAll Biopharma Co Ltd HanAll to design highly potent anti FcRn antibodies that may be optimized as a simple subcutaneous injection with dosing that has been shown to deliver better efficacy at the high dose and similar efficacy at the low dose compared to standard FcRn inhibition by competitors
We plan to expand the use of FcRn inhibitors in indications that benefit a greater number of patients with several potential first and best in class indications such as GD D2T RA and CLE with significant unmet medical need We believe the probability of technical success for IMVT 1402 is strong given its potential to achieve best in class IgG reductions along with the batoclimab data we have generated in GD the IMVT 1402 case study data presented in CLE and a competitor s data in RA
We plan to leverage the potential best in class profile of IMVT 1402 in indications where the anti FcRn mechanism already has established a commercial presence such as MG and CIDP Data generated by batoclimab in these indications support our hypothesis that IMVT 1402 could potentially offer best in class efficacy at the high dose with the convenience of a well established self administered autoinjector and a potentially favorable safety profile
We plan to focus on clinical execution to maintain our head start in the indications listed above and to be nearly first and potentially best in class for indications such as SjD where we can launch in close proximity to in class competition and expect a differentiated clinical profile Data generated by a competitor in SjD supports our belief that IMVT 1402 could potentially offer best in class efficacy at the high dose due to best in class IgG reductions with the convenience of a well established self administered autoinjector and potentially favorable safety profile
We intend to thoroughly evaluate potential additional indications based on the degree of unmet medical need the potential benefit offered by anti FcRn treatment the target patient population size and the commercial potential
Our research and development programs are organized and managed by therapeutic area and our clinical trials address specific target indications within these areas The following is our current development pipeline and anticipated milestones
Autoimmune diseases are conditions where an immune response is inappropriately directed against the body s own healthy cells and tissues According to the Autoimmune Association more than 50 million people in the United States U S suffer from one of more than 100 diagnosed autoimmune diseases Predisposing factors may include genetic susceptibility environmental triggers and other factors not yet known Many of these diseases are associated with high levels of pathogenic IgG antibodies In healthy people IgG antibodies are the most abundant type of antibody produced by the human immune system accounting for approximately 75 of antibodies in the plasma and are important in the defense against pathogens such as viruses and bacteria In IgG mediated autoimmune diseases an important subset of autoimmune diseases IgG antibodies inappropriately develop against normal proteins found in the body directing the immune system to attack specific organs or organ systems
IgG antibodies are continuously being removed from circulation and internalized in cellular organelles called endosomes FcRn is the primary protein responsible for preventing the degradation of IgG antibodies The role of FcRn is to bind to the IgG antibodies under the more acidic conditions of the endosome and transport them to the cell surface where the neutral pH causes them to be released back into circulation
Inhibition of FcRn such as through the use of an anti FcRn antibody has been shown to reduce levels of pathogenic IgG antibodies Anti FcRn antibodies including our product candidates bind to FcRn thereby blocking IgG antibodies from forming complexes with FcRn under the more acidic conditions of the endosome As a result unbound IgG antibodies are degraded in the lysosome rather than being transported by FcRn for release back into circulation This anti FcRn mechanism of action is depicted in the graphic below
Treatment for IgG driven autoimmune diseases varies widely however many patients are commonly treated using intravenous or subcutaneous immunoglobulins IVIg SCIg corticosteroids plasma exchange PLEX and immunomodulatory therapies Despite the availability of the therapies there remains significant unmet medical need For example although immunoglobulin therapy IVIg SCIg is effective it may be associated with significant side effects and complications such as severe headache thromboembolism and hemolysis Additionally IVIg therapy imposes a burden on patients time and at home administration options remain limited IVIg supply constraints have occurred and IVIg is also not available in all markets SCIg therapy often requires frequent administration at multiple infusion sites using an external pump to deliver the requisite volume of therapy which presents challenges to patients requiring therapy on a continuous basis
Corticosteroid therapy though effective has well known serious adverse effects e g weight gain hypertension diabetes and osteoporosis especially with chronic use PLEX requires central venous access and is not universally available
Immunomodulatory therapies are all associated with significant potential risks including the possibility of malignancy and infection For example these include azathioprine cytopenia cyclosporine hypertension nephrotoxicity mycophenolate blood dyscrasias including neutropenia and red blood cell RBC aplasia rituximab renal toxicity and cyclophosphamide cardiac pulmonary and renal toxicity as well as bone marrow suppression and infertility The currently available treatments are associated with significant potential risk of adverse effects generally impose a high burden on patient s time and effort and may be subject to restricted availability There remains a high unmet need for safe and effective targeted therapies for patients suffering from autoantibody driven disease
IMVT 1402 is a fully human monoclonal antibody that inhibits FcRn with a potentially best in class profile offering potentially best in class efficacy a favorable route of administration and a potentially favorable safety profile
In September and November of 2023 we announced results from a Phase 1 clinical trial in healthy adults in New Zealand In the study s 300 mg multiple ascending dose MAD cohort a statistically significant reduction of 63 from baseline in mean total IgG levels was observed after four weekly 300 mg subcutaneous doses of IMVT 1402 In the 600 mg MAD cohort we observed a statistically significant reduction of 74 from baseline in mean total IgG levels after four weekly 600 mg subcutaneous doses of IMVT 1402 No or minimal reductions in albumin and no or minimal increases in LDL cholesterol levels were observed in healthy adults administered IMVT 1402 in either dose cohort the changes in albumin and LDL cholesterol were similar to those observed with placebo administration Across all doses evaluated treatment with IMVT 1402 was generally well tolerated with only mild or moderate treatment emergent adverse events observed
Based on trial results announced to date and the strength of its potential best in class profile we are pursuing development of IMVT 1402 in endocrinology neurology rheumatology dermatology and possibly other therapeutic areas with a focus on indications representing first in class opportunities or opportunities where we can leverage our own batoclimab or existing in class clinical data to build confidence in a best in class profile Currently potentially registrational clinical trials evaluating IMVT 1402 for the treatment of GD MG CIDP and D2T RA and a proof of concept study in CLE are enrolling participants We plan to initiate a potentially registrational trial to evaluate IMVT 1402 in SjD and a second potentially registrational trial in GD in the summer of 2025
GD is an autoimmune disease that affects the thyroid gland Patients with GD develop IgG autoantibodies that bind to the thyroid stimulating hormone receptor TSHR Ab present on the thyroid gland which induces increased and uncontrolled secretion of thyroid hormones resulting in hyperthyroidism GD is the most common cause of hyperthyroidism and occurs at all ages but especially in adults aged between 20 and 50 years and can impact women of reproductive age Because thyroid hormones play an important role in controlling functions of many organs such as heart central and peripheral nervous system muscle bone and skin the presence of excessive thyroid hormones is associated with a variety of signs and symptoms including enlarged thyroid gland goiter palpitations arrhythmia anxiety weight loss insomnia osteoporosis and pretibial myxedema The presence of TSHR Ab is also involved in the pathogenesis of Graves ophthalmopathy GO also known as TED which is more likely to occur in patients with GD who have a more severe degree of hyperthyroidism larger goiter history of smoking or have been treated with radioiodine RAI
The treatment of GD has seen minimal innovation in therapeutic options over the past 70 plus years Antithyroid drugs ATDs as the only existing pharmacological therapy do not address the underlying disease pathology characterized by high levels of TSHR Ab A conservative analysis of Inovalon claims data estimates that the prevalence of Graves patients is approximately 880 000 in the U S and further analysis suggests that there are approximately 330 000 patients who have relapsed on ATDs and who have opted not to pursue ablation Other market sizing analyses by various methods suggest that 25 30 of Graves patients are relapsed uncontrolled on or intolerant to ATDs representing a potentially significant unmet medical need
The main treatment goal of GD is to reduce thyroid hormone levels There are 3 options currently available surgery RAI and ATDs The most commonly prescribed ATDs in the U S are the thionamides methimazole and propylthiouracil An internal chart review of over 1 000 patient records from over 140 endocrinologists and a patient survey of 100 patients indicate that approximately 25 30 of GD patients remain uncontrolled on ATDs A recent study showed that Graves patients with persistent stimulating TSHR Ab levels had a 6 fold increased risk for relapse after ATD withdrawal Collectively these data suggest that a treatment for GD targeting the reduction or elimination of circulating stimulating TSHR Ab would address the underlying autoimmune pathogenesis of the disease and would restore normal thyroid function
Surgery which involves partial or entire removal of the thyroid gland thyroidectomy is an option especially for patients with large goiters women planning pregnancy and in some cases patients who have failed to respond to ATDs Although any such surgical procedure may lead to an immediate resolution of the hyperthyroidism it is associated with potential complications including parathyroid gland injury which may lead to hypocalcemia and damage of the laryngeal nerve Treatment with RAI destroys the thyroid using ionizing radiation It is considered an alternative to medical management in several countries especially if ATDs are contraindicated or among patients who do not respond to this drug class Since RAI can worsen TED it is not recommended in patients with TED or in smokers who are at higher risk of developing TED and in women who are pregnant or lactating Finally recent data suggest an association between RAI and increased risk for several types of cancer In addition RAI is associated with sustained increases in TSHR Ab titers risk for de novo TED and worsening of pre existing TED Both thyroidectomy and RAI may result in hypothyroidism requiring lifelong treatment with thyroid hormone replacement Given these risks the treatment paradigm for GD continues to shift away from RAI and thyroidectomy resulting in an increasing number of patients who are not controlled on ATDs but who are choosing not to undergo ablation Rates of surgery and RAI have declined significantly in the U S in recent years to about 11 of patients in 2021 according to an analysis of claims data from more than half of patients in 2005
In December 2023 and September 2024 we announced results from a proof of concept Phase 2 clinical trial NCT05907668 of batoclimab for the treatment of uncontrolled GD which enrolled subjects who were hyperthyroid despite ATD therapy This study represents the first evaluation of an FcRn inhibitor as a potential treatment for GD
Participants in the trial received 12 weeks of high dose batoclimab 680 mg weekly by subcutaneous injection SC followed by 12 weeks of lower dose batoclimab 340 mg weekly SC At the end of the first 12 weeks a mean IgG reduction of 77 and a 76 response rate defined as T3 and T4 falling below the upper limit of normal ULN without increasing the ATD dose were observed Also 56 of subjects treated with higher dose batoclimab achieved an ATD Free Response defined as T3 and T4 falling below the ULN and the patient simultaneously tapering completely off their ATD at the end of the first 12 weeks During weeks 13 to 24 lower 340 mg dose batoclimab resulted in mean IgG reduction of 65 with a correspondingly lower responder rate of 68 and a lower ATD Free Response rate of 36 at the end of the second 12 weeks Patients who achieved at least a 70 IgG reduction at the end of the evaluation period had nearly a threefold higher ATD Free Response rate than those who did not 60 vs 23 Additional data for certain thyroidal and extrathyroidal manifestations of GD showed a 60 response rate achieved by week 2 demonstrating the rapidity of response to weekly higher dose batoclimab Improvements in proptosis and lid aperture were also observed at both week 12 and week 24 Batoclimab was generally well tolerated with no new safety signals observed This clinical trial is ongoing with additional data expected in the summer of calendar year 2025 including remission data from the 24 week post treatment follow up period
We believe data from our Phase 2 proof of concept trial evaluating batoclimab in GD demonstrate the potential of FcRn inhibition for the treatment of GD by modifying the underlying disease pathology which is driven by stimulating TSHR Ab In addition these data represent strong evidence that deeper IgG reduction correlates with better clinical outcomes in GD for patients whose disease remains uncontrolled on ATDs indicating potential for IMVT 1402 to be the best in class FcRn inhibitor
We initiated a potentially registrational trial evaluating IMVT 1402 in adults with GD in December 2024 This Phase 2b study NCT06727604 is a randomized placebo controlled 52 week trial in Graves patients who are hyperthyroid despite treatment with an ATD for 12 or more weeks prior to beginning the study The study is expected to enroll approximately 240 participants randomized 1 1 1 to one of two blinded treatment groups each receiving IMVT 1402 600 mg weekly SC or a matched placebo group Participants will be evaluated over two consecutive 26 week blinded treatment periods Over the course of the treatment periods background ATD treatment will be titrated to the lowest effective dose including elimination of ATD treatment to maintain normal thyroid lab values Following the initial 26 week period participants in the IMVT 1402 treatment group 2 will be assigned to either continued treatment with IMVT 1402 at the same dose or matching placebo for the second 26 week study period based on the participant s thyroid stimulating hormone receptor autoantibodies TRAb value and euthyroid status determined at week 26 The study s primary endpoint is the proportion of participants who are euthyroid and off ATD at study week 26 A key secondary endpoint will measure the proportion of participants who become euthyroid and stop ATD treatment at week 52 We expect to report top line results from this trial in 2027
In the summer of 2025 we plan to initiate a second potentially registrational trial evaluating IMVT 1402 in adults with GD This study is a randomized placebo controlled 26 week trial in Graves patients who are hyperthyroid despite treatment with an ATD for 12 or more weeks prior to beginning the study The study is expected to enroll approximately 210 participants randomized 1 1 1 to one of three blinded treatment groups receiving IMVT 1402 600 mg weekly SC IMVT 1402 300 mg weekly SC or matched placebo group Over the course of the treatment periods background ATD treatment will be titrated to the lowest effective dose including elimination of ATD treatment to maintain normal thyroid lab values The study s primary endpoint is the proportion of participants in the 600 mg weekly SC dose group who are euthyroid and are off ATD versus placebo at study week 26 A key secondary endpoint will measure the proportion of participants in the 600 mg weekly SC dose group who have T3 Total T3 or FT3 and FT4 ULN and are off ATD versus placebo More details on the trial design are described in the figure below
MG is an autoimmune disorder associated with muscle weakness and fatigue MG patients develop antibodies that lead to an immunological attack on critical signaling receptor proteins at the junction between nerve and muscle cells thereby inhibiting the ability of nerves to communicate properly with muscles This leads to muscle weakness intensified by activity which can be localized to ocular muscles or which can be more generalized throughout the body including muscles of respiration
The symptoms of the disease can be transient and in the early stages of the disease can remit spontaneously However as the disease progresses symptom free periods become less frequent and disease exacerbations can last for months or remain chronic After 15 to 20 years some weakness often becomes fixed with the most severely affected muscles frequently becoming atrophic Many patients find it difficult to perform daily activities due to both insufficient improvement in symptoms even after treatment and in some the complicating long term side effects of oral corticosteroids Approximately 15 to 20 of MG patients will experience at least one myasthenic crisis during which the impairment of muscles required to breathe can become life threatening
The prevalence of MG is estimated to be approximately 59 000 to 116 000 cases in the U S with 35 of patients not well controlled on the current standard of care representing approximately 20 000 to 35 000 patients with significant unmet medical need in the U S The majority of these patients demonstrate elevated serum levels of acetylcholine receptor AChR antibodies
Very early stage MG is symptomatically treated with acetylcholinesterase inhibitors As the disease progresses patients are typically treated with immunosuppressive agents such as glucocorticoids azathioprine mycophenolate mofetil and cyclosporine Thymectomy may be indicated for treatment in certain patients As MG becomes more advanced patients can be treated during exacerbations with IVIg which provides therapeutic benefit through multiple potential mechanisms including the saturation of FcRn Physicians direct patients with more advanced chronic disease and patients in times of crisis to therapies that reduce levels of circulating IgG antibodies via PLEX or a variant of PLEX immunoadsorption More recent novel mechanism of action therapies include FcRn inhibitors which generally reduced IgG by 60 70 in their Phase 3 trials at approved doses and complement inhibitors
In March 2025 we announced top line results from a randomized quadruple blind placebo controlled Phase 3 trial NCT05403541 to assess the efficacy and safety of batoclimab in adults with MG Following screening participants with moderate to severe MG were randomized into Period 1 where they received high dose batoclimab 680 mg or low dose batoclimab 340 mg or placebo weekly SC for 12 weeks Responders to batoclimab in Period 1 defined in the protocol as 2 point improvement in the MG ADL score from baseline were re randomized 1 1 1 to batoclimab 340 mg SC weekly or 340 mg SC every other week or placebo weekly SC for 12 weeks Period 2 The primary endpoint of the study was mean change from baseline in MG ADL in AChR participants at week 12 end of Period 1
Batoclimab met its primary endpoint of mean change from baseline in MG ADL in AChR participants Among the AChR population participants randomized to 680 mg of batoclimab administered weekly SC QW achieved a 5 6 point mean improvement in MG ADL at week 12 n 57 p 0 001 while those randomized to 340 mg of batoclimab QW achieved a 4 7 point mean improvement n 52 p 0 05 and those randomized to placebo demonstrated a 3 6 point mean improvement n 55 p 0 05
93 of AChR participants receiving batoclimab 680 mg QW achieved an MG ADL response at week 12 Subjects in the 680 mg batoclimab treatment arm showed a mean reduction in IgG levels of 74 vs 64 in the 340 mg batoclimab arm 42 of the AChR subjects treated with batoclimab 680 mg QW achieved MSE defined as having an MG ADL score of 0 or 1 at week 12 Of those subjects that achieved MSE prior to or by week 6 75 maintained their MSE status for 6 weeks Safety and tolerability were observed to be consistent with prior batoclimab studies
We are planning to leverage the data and learnings from the batoclimab MG study including our operational trial experience relationships with investigators and prior results to inform and accelerate our program with IMVT 1402
We believe our Phase 3 batoclimab data demonstrates the meaningful potential efficacy benefit in MG with deeper IgG suppression than is available with current treatments deeper disease control and more durable clinical responses The 340 mg arm of batoclimab was observed to reduce MG ADL in line with other FcRn competitors approved or in development for MG while the 680 mg arm had the greatest absolute MG ADL reduction observed in a global Phase 3 trial Further IMVT 1402 s improved tolerability profile positions it to demonstrate a potentially superior therapeutic benefit even versus batoclimab Ad hoc analysis on the cohort of patients with no missed doses in the last 4 weeks of the treatment period shows a 6 point change from baseline in MG ADL score 680 mg dose Many of the currently available treatments including the approved FcRn inhibitors can leave patients with burdensome administration requirements significant side effects or long wait times to see treatment effect in contrast with the simple subcutaneous autoinjector for IMVT 1402 and safety and tolerability profile observed to date
We initiated a potentially registrational trial evaluating IMVT 1402 in adults with MG in March 2025 This Phase 3 trial is a randomized placebo controlled 26 week trial This study is expected to enroll approximately 230 participants randomized 1 1 1 to one of three blinded treatment groups receiving IMVT 1402 600 mg weekly SC IMVT 1402 300 mg weekly SC or matched placebo group for the 12 week induction period Participants on treatment will continue to be on the same treatment for the 14 week maintenance period while patients on placebo will receive IMVT 1402 600 mg weekly SC The study s primary endpoint is the change in MG ADL from baseline at week 12 We expect to report top line results from this trial in 2027
CIDP is believed to be an immune mediated neuropathy characterized by demyelination of peripheral nerves and nerve roots that is driven by pathologic autoreactive IgG antibodies The estimated prevalence of CIDP is approximately 58 000 patients in the U S with approximately 30 inadequately controlled on treatment representing approximately 16 000 patients with significant unmet medical need in the U S
CIDP typically presents with progressive or relapsing symmetric involvement of both proximal and distal extremity muscle weakness over the course of several weeks While the pathophysiology of CIDP is not completely understood passive serum transfer animal models and the response of CIDP patients to intravenous immunoglobulin plasma exchange and FcRn blockade suggests that autoantibodies are involved in its pathogenesis Autoantibody induced degeneration and demyelination would be expected to cause characteristic electrophysiologic alterations of the peripheral nerves and is clinically manifested by the sensorimotor deficits of CIDP
IVIg corticosteroids and PLEX are first line therapies in the treatment of CIDP For patients who fail to achieve objective improvement i e of impairment and disability after three months of treatment with a first line agent another agent may be tried Alternative options include rituximab cyclophosphamide or cyclosporine despite limited evidence supporting their use Once objective improvement is achieved the patient may be switched to maintenance treatment the goal of which is to reduce the dose or frequency of treatment while still controlling disease For maintenance therapy patients may be switched from IVIg to SCIg and immunomodulatory agents such as azathioprine cyclosporine or mycophenolate may be used for IVIg dose reducing corticosteroid sparing or PLEX frequency reducing effect For long term management of clinically stable patients therapy should be periodically reduced or stopped to assess if treatment is still required An anti FcRn inhibitor has also been approved for the treatment of CIDP however we believe there is still meaningful room to improve on efficacy
In March 2025 we announced initial results from Period 1 of the randomized quadruple blind placebo controlled Phase 2b trial designed to assess the efficacy and safety of batoclimab in adult patients with active CIDP NCT05581199 To ensure the enrollment of patients with active CIDP the trial design incorporates inclusion criteria tied to active disease and a formal adjudication committee as well as a washout phase during which participants must worsen by at least 1 point on the aINCAT disability scale to remain in the trial Period 1 was a non placebo controlled 12 week run in period during which participants whose disease had worsened during standard of care washout then received either 340 mg or 680 mg batoclimab QW SC
Combined data for 73 patients both dose cohorts of Period 1 demonstrated a 1 8 point improvement in aINCAT disability score compared to Period 1 baseline at week 12 An 84 responder rate with response defined as an aINCAT score improvement 1 was observed among all patients whose level of IgG was reduced by 70 as compared to 44 among patients with 70 IgG reductions Other CIDP scales also demonstrated meaningful improvements for the pooled dose cohorts at week 12 The study remains blinded and is ongoing No new safety signals were observed
We are planning to leverage the data and learnings from the batoclimab CIDP study including our operational trial experience relationships with investigators and prior results to inform and accelerate our program with IMVT 1402
We believe our Phase 2b batoclimab data demonstrates the meaningful potential efficacy benefit in CIDP with deeper IgG suppression than is available with current treatments The combined results of the batoclimab 340 mg and 680 mg dose arms achieved a best in class mean change from baseline in aINCAT score at week 12 of 1 8 double the change observed from the approved competitor Batoclimab also had meaningful efficacy improvements in many functional secondary endpoints including grip strength a disability scale and a physician reported muscle function scale Many of the currently available treatments including the approved FcRn inhibitors can leave patients with burdensome administration requirements significant side effects or long wait times to see treatment effect in contrast with the simple subcutaneous autoinjector for IMVT 1402 and safety and tolerability profile observed to date
We initiated a potentially registrational trial evaluating IMVT 1402 in adults with CIDP in March 2025 This Phase 2b trial is a randomized placebo controlled 24 week trial in CIDP patients The study is expected to enroll approximately 162 participants randomized 2 1 to one either receiving IMVT 1402 600 mg weekly SC or matched placebo for the 24 week treatment period The study s primary endpoint will evaluate the proportion of participants remaining relapse free aINCAT at week 24 We expect to report top line results from this trial in 2028
Rheumatoid Arthritis RA is a chronic progressive autoimmune disease that causes inflammation in the joints and surrounding tissues Inadequate control of the joint inflammation associated with RA may result in irreversible joint erosions The estimated prevalence of severe RA in the U S is approximately 490 000 approximately 15 of whom are autoantibody positive with inadequate response to prior biologic or targeted synthetic disease modifying anti rheumatic drugs DMARDs representing approximately 70 000 patients with significant unmet medical need in the U S Several autoantibodies have been identified in RA including rheumatoid factor RF and anti citrullinated protein antibodies ACPA These RA specific autoantibodies are found in 70 80 of RA patients and exacerbate inflammation via immune complex formation Positivity for RF and ACPA seems to have an amplifying effect on disease resulting in an aggressive phenotype with more severe disease manifestations Seropositive RA is also associated with poor outcomes on currently available therapies
Therapeutic approaches for RA are intended to help control joint inflammation damage and other associated disease manifestations Currently available treatments include a variety of conventional oral targeted synthetic and biologic DMARD treatments These therapies primarily function by modulating the immune response and limiting the activity of pro inflammatory cytokines such as tumor necrosis factor alpha TNF α interleukin 6 IL 6 and others impacting the pathogenesis of RA While many patients experience symptom relief and disease control with these agents D2T RA patients continue to experience active disease despite undergoing multiple lines of therapy with different mechanisms of action For these patients therapeutic options remain very limited while the risk of irreversible joint damage persists highlighting a critical unmet medical need Innovative strategies and novel therapeutic targets are needed to improve outcomes and quality of life for this patient population
Because of the role of FcRn in preventing the degradation of IgG autoantibodies such as ACPAs FcRn inhibition is an attractive mechanism as a potential treatment for ACPA positive RA Recent in class anti FcRn data from a Phase 2a placebo controlled proof of concept trial evaluating nipocalimab in patients with RA demonstrated that deeper ACPA IgG reduction correlated with improved rates of clinical response
We initiated a potentially registrational trial evaluating IMVT 1402 in ACPA positive D2T RA in December 2024 This trial NCT06754462 is expected to enroll approximately 120 participants into an initial 16 week open label active treatment period To ensure the enrollment of patients with active D2T RA the trial inclusion criteria require elevated ACPA levels and prior inadequate response to two or three but no more than three classes of biologics or targeted synthetic DMARDs The study will evaluate IMVT 1402 s 600 mg weekly SC during the open label induction phase of the trial with the intent of maximizing reduction in ACPA levels Participants achieving a response at weeks 14 and 16 per the American College of Rheumatology response criteria 20 ACR20 will be randomized in a 1 1 1 ratio to receive blinded treatment with either IMVT 1402 600 mg IMVT 1402 300 mg or placebo weekly SC for 12 weeks The primary endpoint will assess the proportion of such participants who maintain the ACR20 response at week 28 Eligible participants who complete week 28 will have the option to receive IMVT 1402 for an additional period of 48 weeks as part of a long term extension period We expect to report initial results from the period 1 open label portion of this trial in 2026
Sjögren s disease formerly referred to as Sjögren s syndrome is a chronic autoimmune disease characterized by lymphocytic infiltration of the salivary and lacrimal glands It is classically associated with severe dryness of the eyes and mouth the latter frequently associated with difficulty swallowing or speaking tooth decay gum disease and impaired quality of life Up to 50 of affected individuals also develop extra glandular manifestations that can impact a variety of organ systems such as the joints skin lungs gastrointestinal tract nervous system or kidneys
SjD may occur in isolation primary SjD or in association with another systemic autoimmune disease such as rheumatoid arthritis secondary SjD It can be challenging to diagnose SjD based on symptoms alone due to the heterogeneity at presentation However serological testing including autoantibodies can help inform diagnosis Autoantibodies including anti Ro SSA and anti La SSB have been detected in approximately 50 70 of patients with primary SjD and play crucial roles in both the diagnosis and prognosis of the disease
The estimated prevalence of primary SjD is approximately 290 000 in the U S It is estimated that up to 30 of primary SjD patients have moderate to severe disease with anti Ro SSA antibodies representing approximately 90 000 SjD patients with significant unmet medical need in the U S
No therapies have been approved specifically for the treatment of SjD Therapeutic approaches for SjD disease include local agents such as pilocarpine hydrochloride and cevimeline hydrochloride for oral and ocular dryness as well as systemic treatments such as hydroxychloroquine methotrexate mycophenolate sodium azathioprine and cyclosporine to address organ manifestations This results in frequent visits with healthcare professionals and a high burden of treatment for Sjögren s patients suggesting a need for the development of novel treatments that target the underlying pathophysiological mechanism of this disease
Recent in class data from a Phase 2 placebo controlled multicenter trial evaluating nipocalimab in patients with SjD provides support for anti FcRn proof of mechanism The clear dose response on mean change in Clinical European League Against Rheumatism Sjögren s Syndrome Disease Activity Index ClinESSDAI score supports the potential correlation between degree of IgG suppression and improved clinical outcomes
is a randomized double blind placebo controlled parallel group study to assess the efficacy safety and tolerability of IMVT 1402 in adult participants with moderate to severe systemic primary SjD The trial is anticipated to enroll approximately 180 participants randomized in a 1 1 1 ratio to receive IMVT 1402 600 mg IMVT 1402 300 mg or placebo weekly SC for two 24 week blinded treatment periods The primary endpoint will assess the efficacy of IMVT 1402 compared to placebo as assessed by ClinESSDAI score at week 24 Participants assessed as responders at week 24 defined as participants that show an improvement of 4 points from baseline ClinESSDAI score will continue on treatment for a second 24 week period A key secondary endpoint will assess change from baseline in ClinESSDAI score at week 48 We expect to report top line results from this trial in 2028
CLE is a rare chronic skin disease characterized by skin specific disease activity inflammation and eventually damage Triggered by sun exposure CLE manifests as a recognizable rash and painful skin lesions often with related symptoms such as itching burning and alopecia
Subacute Cutaneous LE SCLE and Chronic Cutaneous LE CCLE are subtypes of CLE with distinct skin presentation and clinical course and high unmet medical need The estimated prevalence of SCLE and CCLE is approximately 153 000 in the U S Approximately 50 of these SCLE and CCLE patients do not adequately respond to first line therapies representing approximately 75 000 patients with potential significant unmet medical need in the U S IgG autoantibodies and immune complexes are observed to play a critical role in CLE disease pathophysiology
First line therapies are photoprotection topical steroids and broad spectrum therapies i e DMARDs antimalarials and corticosteroids followed by IVIg or off label biologics It is estimated that approximately 50 of patients are not optimally managed with or without topical steroids due to insufficient response relapse or risk of retinopathy following first line antimalarials
There is growing biologic and translational evidence supporting the role of IgG autoantibodies and immune complexes in the pathogenesis of CLE Furthermore published case studies using IVIg offer strong mechanistic evidence for the role of IgG autoantibodies in driving disease Blocking FcRn may disrupt CLE pathology by providing upstream inhibition of the inflammatory cascade triggered in cells by pathogenic antibodies and immune complexes
In addition in April 2025 we presented observations from a proof of principle case study evaluating IMVT 1402 in a SCLE patient over a period of 12 weeks The participant in the case study a 57 year old female had alopecia and skin manifestations in multiple locations with a baseline Cutaneous Lupus Erythematosus Disease area and Severity Index activity CLASI A score at screening of 36 which falls into the severe range on the clinical scale The participant received open label weekly treatment with 600 mg of IMVT 1402 for 12 weeks and saw significant clinical improvement in both skin lesions and alopecia By week 12 the participant had a greater than 60 reduction in CLASI A score to 13 A 5 point reduction in CLASI A is considered clinically meaningful and this participant improved by 23 points by week 12 The participant also achieved approximately 78 total IgG reduction from baseline by week 12 A second patient dosed in this study also showed significant clinical improvement with a CLASI A score of 18 at screening reduced to 8 by week 12 of QW dosing a 50 improvement We believe the initial data from this case study may provide important support for the mechanism and for the potential of IMVT 1402 as a first and best in class anti FcRn therapy in CLE
We initiated a proof of concept trial of IMVT 1402 in CLE in February 2025 This Phase 2b trial NCT06980805 is a randomized double blind placebo controlled trial to assess the safety tolerability and efficacy of IMVT 1402 in participants with active SCLE and or CCLE with or without systemic manifestations This trial is anticipated to enroll approximately 56 participants randomized 1 1 to IMVT 1402 600 mg QW SC or placebo QW SC for 12 weeks during Period 1 Participants who complete Period 1 will enter Period 2 during which all participants will receive IMVT 1402 600 mg QW SC for 14 weeks After completion of Period 2 participants will be rerandomized 1 1 to blinded IMVT 1402 300 mg or 600 mg SC QW for 26 weeks The primary endpoint will evaluate the efficacy of IMVT 1402 compared to placebo based on percent change from Period 1 baseline in CLASI A score at week 12 We expect to report top line results from this trial in 2026
In December 2017 Roivant Sciences GmbH RSG a wholly owned subsidiary of Roivant Sciences Ltd RSL entered into the HanAll Agreement Under the HanAll Agreement RSG received 1 the non exclusive right to manufacture and 2 the exclusive royalty bearing right to a develop import and use i the antibody referred to as batoclimab ii certain back up and next generation antibodies including IMVT 1402 and iii products containing such antibodies and b to commercialize such products in the U S Canada Mexico the E U the U K Switzerland the Middle East North Africa and Latin America the Licensed Territory for all human and animal uses during the term of the agreement With respect to these licenses RSG also received the right to grant a sublicense with prior written notice to HanAll of such sublicense to 1 a third party in any country in the Licensed Territory outside of the U S and E U 2 an affiliate of RSG in any country in the Licensed Territory and 3 a third party in the U S and E U only after submission of a biologics license application BLA in the U S or a Marketing Authorization Application in the E U Pursuant to the HanAll Agreement RSG granted to HanAll an exclusive royalty free license under certain RSG patents know how and other intellectual property controlled by RSG relating to such antibodies and products to develop manufacture and commercialize such antibodies and products for use outside of the Licensed Territory HanAll also reserves the right to conduct discovery or research activities with the batoclimab antibody and certain back up and next generation antibodies including IMVT 1402 with or through a contract research organization or service provider in the Licensed Territory
In December 2018 we obtained and assumed all of the rights title interest and future obligations under the HanAll Agreement from RSG including all rights to IMVT 1402 and batoclimab in the Licensed Territory pursuant to an assignment and assumption agreement between RSG and our wholly owned subsidiary Immunovant Sciences GmbH ISG for an aggregate purchase price of 37 8 million
Pursuant to the HanAll Agreement we will be responsible for future contingent payments and royalties including up to an aggregate of 420 0 million upon the achievement of certain regulatory and sales milestone events We are also obligated to pay HanAll tiered royalties ranging from the mid single digits to mid teens percentage of net sales of licensed products subject to standard offsets and reductions as set forth in the HanAll Agreement These royalty obligations apply on a product by product and country by country basis and end upon the latest of A the date on which the last valid claim of the licensed patents expire B the date on which the data or market exclusivity expires and C 11 years after the first commercial sale of the licensed product in each case with respect to a given product in a given country
Except for cost sharing in connection with the research program we are solely responsible at our expense for all other activities related to the research development and commercialization of licensed products for the Licensed Territory We may use a third party for manufacturing activities necessary for the research development and commercialization of licensed products for the Licensed Territory In addition under the HanAll Agreement we have agreed to use commercially reasonable efforts to develop and commercialize licensed products in the Licensed Territory Each party to the HanAll Agreement has agreed that neither it nor certain of its affiliates will clinically develop or commercialize certain competitive products in the Licensed Territory
Under the HanAll Agreement we have the sole right but not the obligation to control the prosecution defense and enforcement of the licensed patents in the Licensed Territory and HanAll has backup rights to prosecution defense and enforcement with respect to any licensed patents for which we elect not to exercise such rights
The HanAll Agreement will expire on a product by product basis on the expiration of the last royalty term with respect to a given licensed product unless earlier terminated We may terminate the HanAll Agreement in its entirety without cause upon 180 days written notice following 30 days of discussion Either party may terminate the HanAll Agreement upon 60 days written notice for uncured material breach or 30 days in the case of non payment or immediately upon written notice if the other party files a voluntary petition is subject to a substantiated involuntary petition or for certain other solvency events HanAll may terminate the HanAll Agreement if we or our affiliates challenge the validity or enforceability of any of the licensed patents
On November 17 2021 our wholly owned subsidiary ISG entered into a Product Service Agreement PSA with Samsung Biologics Co Ltd Samsung pursuant to which Samsung will manufacture and supply us with batoclimab drug substance for commercial sale if approved and perform other manufacturing related services with respect to batoclimab We previously entered in a Master Services Agreement MSA with Samsung dated April 30 2021 which governs certain terms of our relationship with Samsung Upon execution of the PSA we committed to purchase process performance qualification batches of batoclimab and pre approval inspection batches of batoclimab which may be used for regulatory submissions and pending regulatory approval commercial sale In addition we have a minimum obligation to purchase further batches of batoclimab in the four year period of 2026 through 2029
The PSA will continue until the later of December 31 2029 or the completion of the services thereunder unless the PSA is terminated earlier Either party may terminate the PSA on account of 1 the other party s material breach of the PSA that is not cured within a specified period after the termination notice 2 the other party s insolvency or bankruptcy or 3 certain force majeure events The remaining minimum purchase commitment related to this agreement was estimated to be approximately 43 6 million as of March 31 2025
We are a majority owned subsidiary of RSL and have benefited from our ability to leverage the Roivant model and the greater Roivant platform The period of time between our formation and operational maturation was shortened based on the support from centralized Roivant functions available since creation Consistent with its model Roivant has provided us with operational assistance as well as access to an embedded team of scientific experts physicians and technologists to help optimize clinical development and commercial strategies In the future we may have the ability to benefit from Roivant s economies of scale and scope including but not limited to the opportunity to
enter channel partnerships with other members of the Roivant family of companies including but not limited to technology focused companies built by Roivant with the goal of delivering efficiencies in the development and commercialization process
For a discussion on RSL s significant ownership of our shares of common stock and related possible risks please refer to Item 1A Risk Factors RSL owns a significant percentage of shares of our common stock and may exert significant control over matters subject to stockholder approval
We do not currently have our own sales or distribution capabilities and our marketing capabilities are limited In order to commercialize IMVT 1402 batoclimab or any future product candidate if approved for commercial sale we would have to develop additional infrastructure to support global product sales and marketing activities We intend to build a small targeted specialty sales organization in the U S targeting specialist physicians that treat high numbers of patients with autoimmune conditions We believe these physicians treat a majority of patients with the autoimmune indications for which we intend to seek regulatory approval and most often serve as the diagnosing and treating physicians for such indications We may opportunistically seek strategic collaborations to maximize the commercial opportunities for IMVT 1402 batoclimab or any future product candidates inside and outside the U S
We do not currently own or operate manufacturing facilities for the manufacturing testing storage and distribution of clinical or commercial quantities of our product candidates which include drug device combination products that we are developing We currently rely and intend to continue to rely on contract manufacturing organizations CMOs for drug substance drug product and delivery devices as well as labeling packaging and distribution and we do not have plans to develop our own manufacturing operations in the foreseeable future
Currently we contract with well established third party manufacturers for the manufacture of our drug substance and our drug product See Product Service Agreement and Master Services Agreement above for a description of the agreements pursuant to which Samsung will manufacture and supply us with batoclimab drug substance for commercial sale and perform other manufacturing related services with respect to batoclimab With respect to IMVT 1402 we have established arrangements with CMOs to supply drug substance and drug product to support our current and planned clinical trial programs We expect to enter into commercial supply arrangements prior to any potential approval of IMVT 1402
As our clinical needs and commercial plans continue to evolve we may engage additional third party manufacturers to support clinical trials for our product candidates as well as commercialization of our product candidates if approved In addition we have personnel with substantial technical and product development experience who actively manage the CMOs producing our product candidates and plan to use such personnel to manage CMOs for any other product candidates or products that we may develop in the future
Our outsourced approach to manufacturing relies on CMOs to first develop cell lines and manufacturing processes that are compliant with current good manufacturing practice cGMP then produce material for nonclinical studies and clinical trials Our agreements with CMOs may obligate them to develop a production cell line establish master and working cell banks develop and qualify upstream and downstream processes develop drug product process validate and in some cases develop suitable analytical methods for test and release as well as stability testing produce drug substance for nonclinical testing produce cGMP compliant drug substance or produce cGMP compliant drug product We conduct audits of CMOs prior to initiation of activities under these agreements and monitor operations to ensure compliance with the mutually agreed process descriptions and cGMP regulations
We expect to face intense competition from other biopharmaceutical companies who are developing agents for the treatment of autoimmune diseases including multiple agents in the same class as IMVT 1402 and batoclimab We are aware of several FcRn inhibitors that are in clinical development These include efgartigimod Argenx SE nipocalimab The Janssen Pharmaceutical Companies of Johnson Johnson and rozanolixizumab UCB In June 2023 the FDA approved VYVGART Hytrulo efgartigimod alfa and hyaluronidase qvfc for the treatment of generalized myasthenia gravis gMG in adults who test positive for the AChR antibody Previously the FDA approved VYVGART efgartigimod alfa fcab in the same patient population in December 2021 In June 2023 the FDA also approved RYSTIGGO rozanolixizumab noli for the treatment of gMG in adult patients who are AChR or anti muscle specific tyrosine kinase antibody positive In June 2024 the FDA expanded the label for VYVGART Hytrulo to include the treatment of CIDP In April 2025 the FDA approved the VYVGART Hytrulo prefilled syringe efgartigimod alfa and hyaluronidase qvfc for the treatment of adult patients with gMG who are AChR antibody positive and adult patients with CIDP In April 2025 IMAAVY
nipocalimab an anti FcRn monoclonal antibody was approved by the FDA for the treatment of MG in adult and pediatric patients aged 12 and older who are anti AChR and anti MuSK antibody positive Viridian Therapeutics is developing a portfolio of engineered FcRn inhibitors including VRDN 006 which is currently in Phase 1 development and VRDN 008 which is currently in preclinical development and have the potential to treat a broad array of autoimmune diseases
Our product candidates if approved may also face competition from agents with different mechanisms of action The most commonly prescribed first line agents for the treatment of MG are acetylcholinesterase inhibitors such as pyridostigmine which are marketed by several manufacturers of generic medicines IVIg is also routinely used for patients with MG SOLIRIS eculizumab marketed by AstraZeneca is an antibody inhibitor of the C5 protein approved in 2017 for the treatment of MG in patients who are positive for anti AChR antibodies Other C5 complement inhibitors approved in gMG include ULTOMIRIS ravulizumab cwvz which was approved in April 2022 and ZILBRYSQ zilucoplan approved in October 2023 In October 2024 Amgen announced positive data in patients who are positive for anti AChR antibodies for UPLIZNA inebilizumab a CD19 targeted humanized monoclonal antibody currently in Phase 3 development for the treatment of gMG
For CIDP our product candidates may also face competition from agents in Phase 3 with different mechanisms of action including C1 inhibitors riliprubart Sanofi DNTH103 Dianthus and C2 inhibitor empasiprubart Argenx SE
For GD we are aware of multiple agents with different mechanisms of action that are in early stage development including TSH antagonists being developed by Crinetics Pharmaceuticals and Lycia Therapeutics LCA 0321 and currently in IND enabling studies Biohaven s IgG degrader BHV 1300 in a Phase 1 study and Sanofi s BTK inhibitor rilzabrutinib in a Phase 2 study For patients with TED the first line of treatment is generally immunosuppressive therapy including high doses of corticosteroids Rituximab Roche a monoclonal antibody that binds to an antigen specific to antibody producing B cells and tocilizumab Roche an anti IL 6R monoclonal antibody may also be used as off label treatment options for TED and other IgG mediated autoimmune diseases In January 2020 the FDA approved Horizon Therapeutics TEPEZZA teprotumumab an anti insulin like growth factor 1 receptor IGF 1R antibody for the treatment of TED In September 2024 Viridian Therapeutics reported positive top line results for veligrotug VRDN 001 an IGF 1R antibody from a Phase 3 pivotal study in TED It is also advancing VRDN 003 a second anti IGF 1R therapy in Phase 3 development in TED
For RA which is the most common systemic autoimmune disease treatment options include a variety of conventional oral targeted synthetic and biologic DMARDs However for the subset of patients with D2T RA characterized by inadequate response to two or more biologic or targeted DMARDs no proven treatment options are available In November 2023 Janssen announced supportive data for nipocalimab from a Phase 2a study in patients with ACPA and or RF RA and who have had an inadequate response or intolerance to at least 1 prior anti TNF therapy
For CLE a dermatology focused therapeutic category with no treatment innovation for more than 50 years treatment options include prevention of exposure to sunlight with the utilization of both topical and systemic therapies such as antimalarials immunomodulators and immunosuppressives methotrexate mycophenolate With the significant unmet need and increasing demand for biologic therapies in dermatology and rheumatology the competitive landscape for SCLE and CCLE is a growing market for novel therapies and diagnostic tools in development Biogen is in Phase 2 3 with litifilimab BDCA2 and AstraZeneca is in Phase 3 anifrolumab IFNAR1 with many other early development programs
For SjD therapeutic approaches include a variety of local agents to address the associated dry eye and mouth and or immunosuppressive treatments to address the systemic manifestations of disease Although a variety of drug classes have been trialed to date there are no disease modifying therapies approved for the treatment of SjD Anti FcRns nipocalimab The Janssen Pharmaceutical Companies of Johnson Johnson and efgartigimod Argenx SE are currently in Phase 3 trials in SjD Our product may also face competition from other drug classes including TYK2 deucravacitinib CD40 dazodalibep BAFF ianalumab or BLyS APRIL telitacicept
Drug development is highly competitive and subject to rapid and significant technological advancements Our ability to compete will significantly depend upon our ability to complete necessary clinical trials and regulatory approval processes and effectively market any drug that we may successfully develop Our current and potential future competitors include pharmaceutical and biotechnology companies as well as academic institutions and government agencies The primary competitive factors that will affect the commercial success of any product candidate for which we may receive marketing approval include efficacy safety and tolerability profile dosing convenience price coverage reimbursement and public opinion Many of our existing or potential competitors have substantially greater financial technical and human resources than we do and significantly greater experience in the discovery and development of product candidates as well as in obtaining regulatory approvals of those product candidates in the U S and in foreign countries Many of our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a smaller number of our competitors In October 2023 Amgen completed its previously announced acquisition of Horizon Therapeutics for approximately 27 8 billion expanding its rare disease pipeline In February 2025 Alumic Inc and ACELYRIN INC who is advancing a subcutaneously delivered anti IGF 1R antibody for the treatment of TED announced they will merge in an all stock transaction Competition may reduce the number and types of patients available to us to participate in clinical trials because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors
Accordingly competitors may be more successful than us in obtaining regulatory approval for therapies and in achieving widespread market acceptance of their drugs It is also possible that the development of a cure or more effective treatment method for any of our targeted indications by a competitor could render our product candidates non competitive or obsolete or reduce the demand for its product candidate before it can recover its development and commercialization expenses
Our commercial success depends in part on our ability to obtain and maintain proprietary protection for IMVT 1402 batoclimab and any of our future product candidates their use in the planned indications discoveries product development technologies and know how to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary rights Our policy is to seek and continue to seek to protect our proprietary position by among other methods filing or in licensing U S and foreign patents and patent applications related to our proprietary technology inventions and improvements that are important to the development and implementation of our business We also rely on trademarks trade secrets know how continuing technological innovation and potential in licensing opportunities to develop and maintain our proprietary position
While we seek broad coverage under our existing patent applications there is a risk that competitors may make an alteration to any products we develop or processes we use which may provide sufficient basis for the competitor to avoid infringing our patent claims In addition patents if granted will expire and we cannot provide any assurance that any patents will be issued from our pending or any future applications or that any potentially issued patents will adequately protect our products or product candidates
Following our assumption of all rights title interest and obligations under the HanAll Agreement from RSG in December 2018 by virtue of the license of patent rights under the HanAll Agreement ISG is the exclusive licensee of certain patents patent applications and know how directed to batoclimab IMVT 1402 and certain back up and next generation antibodies and products containing such antibodies in the Licensed Territory As of May 29 2025 the in licensed patent portfolio includes a patent family covering batoclimab with pending patent applications and or issued patent s in the U S Argentina Brazil Canada European Patent Office Egypt Israel Mexico and Saudi Arabia This in licensed patent family was filed in 2015 and discloses anti FcRn antibodies including batoclimab pharmaceutical compositions thereof methods of treating autoimmune disease using the same polynucleotides encoding such antibodies expression vectors including such polynucleotides host cells transfected with such recombinant expression vectors methods of manufacturing such antibodies and methods of detecting FcRn in vivo or in vitro using such antibodies Notably in this in licensed patent family a U S patent was issued on July 2 2019 with claims directed to batoclimab as defined by its CDRs and epitope or antigen binding fragment thereof and a pharmaceutical composition comprising such antibody or antigen binding fragment thereof Furthermore another U S patent was issued in this in licensed patent family on January 28 2020 with claims directed to batoclimab as defined by its CDRs or antigen binding fragment thereof a pharmaceutical composition comprising such antibody or antigen binding fragment thereof as well as methods of treating various autoimmune diseases using such antibody or antigen binding fragment thereof polynucleotides and expression vectors encoding the same host cells transfected with such expression vectors and methods of producing such antibody or antigen binding fragment A further patent was issued in the U S on March 28 2023 with claims to an isolated anti FcRn antibody other than batoclimab or an antigen binding fragment thereof a pharmaceutical composition comprising such antibody or antigen binding fragment thereof as well as methods of treating various autoimmune diseases using such antibody or antigen binding fragment thereof polynucleotides and expression vectors encoding the same host cells transfected with such expression vectors and methods of preparing such antibody or antigen binding fragment A European patent in this family was issued on May 10 2023 with claims directed to batoclimab as defined by its heavy and light chain variable sequences There are also issued patents in this family in Brazil Canada Israel Mexico and Saudi Arabia In this family applications are pending in Argentina Mexico the U S and in Europe The patents of this patent family may expire in 2035 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
In addition the in licensed patent portfolio includes another patent family that discloses a pharmaceutical formulation for an anti FcRn antibody This patent family includes pending applications in the U S and in Europe Israel Canada Brazil Mexico and Argentina and any patent issued in this patent family may expire in 2041 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
Additionally as of May 29 2025 independent of the licensed patent portfolio ISG owns patent families directed to methods of treating thyroid eye disease Graves ophthalmopathy and methods of treating warm autoimmune hemolytic anemia using anti FcRn antibodies that include patent applications in the U S as well as foreign counterparts in certain jurisdictions Any patent issued from these patent families may expire in 2039 and 2040 respectively without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
ISG jointly owns rights with HanAll to a patent family covering IMVT 1402 and its uses to treat autoimmune disease which includes patent applications in the U S as well as foreign counterparts in certain jurisdictions including Brazil Canada Chile Colombia Egypt European Patent Office Israel Mexico Panama Peru and Saudi Arabia Notably in this patent family a U S patent was issued on March 12 2024 with claims directed to IMVT 1402 as defined by its CDRs a pharmaceutical composition comprising such antibody or antigen binding fragment thereof and methods of treating an autoimmune disease using such antibody or antigen binding fragment thereof The patents of this patent family may expire in 2043 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
ISG also owns patent families directed to methods of treating GD and methods of treating CIDP using anti FcRn antibodies including IMVT 1402 and batoclimab which include patent applications in the U S as well as foreign counterparts in certain jurisdictions Any patent issued from these patent families may expire in 2043 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
ISG also owns a Patent Cooperation Treaty PCT application directed to high concentration protein formulations with polysorbate excipients and methods of making the same Any patent issued from this patent family may expire in 2044 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
ISG also owns a PCT application directed to methods of improving anti FcRn therapies which describes specific dosing regimens for IMVT 1402 Any patent issued from this patent family may expire in 2044 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
ISG also owns a U S provisional application directed to formulations for anti FcRn antibodies Any patent issued from this patent family may expire in 2045 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
ISG also owns a U S provisional application directed to methods of treating skin diseases using anti FcRn antibodies including IMVT 1402 and batoclimab Any patent issued from this patent family may expire in 2046 without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees
In the U S if all maintenance fees are timely paid the natural expiration of a patent is generally 20 years from its earliest U S non provisional filing date or the PCT filing date if such U S application is a national phase application as the term of a patent granted on a utility patent application filed after June 8 1995 expires 20 years after the non provisional U S filing date or any earlier filing date relied upon under 35 U S C 120 121 or 365 c with the timely payment of maintenance fees In certain instances the patent term may be adjusted to add additional days to compensate for certain delays incurred by the U S Patent and Trademark Office USPTO in the examination process Additionally the patent and or the patent term may be extended for a period of time to compensate for at least a portion of the time a product candidate was undergoing FDA regulatory review However the patent extension granted for FDA regulatory review is only applied to a single patent that covers either the product candidate or a method of using or manufacturing the same which has not expired at the time of FDA approval Additionally the period of time the patent is extended may not exceed five years and the total patent term including the period of time the patent is extended must not exceed 14 years following FDA approval The duration of foreign patents varies in accordance with provisions of applicable local law but typically is also 20 years from the earliest effective non provisional filing date The protection afforded by a patent with respect to a particular product varies on a product by product basis from country to country and depends upon many factors including the type of patent its coverage the availability of regulatory related extensions the availability of legal remedies in the particular country and the validity and enforceability of the patent under the local laws
ISG owns a registered trademark for IMMUNOVANT and a registered trademark for its corporate logo in conjunction with IMMUNOVANT As of May 29 2025 this trademark portfolio includes pending trademark applications and or registered trademarks in the U S and or foreign jurisdictions Under the HanAll Agreement we have the right to market IMVT 1402 and batoclimab in the Licensed Territory under the trademarks of our choice subject to regulatory approval However upon termination of the HanAll Agreement we must assign to HanAll all rights title and interest in and to any and all trademarks we use in the development manufacture or commercialization of the licensed products
Furthermore we rely and will continue to rely upon trade secrets and know how and continuing technological innovation to develop and maintain our competitive position We seek to protect our proprietary information in part by using confidentiality and invention assignment agreements with our commercial partners collaborators employees and consultants These agreements are designed to protect our proprietary information and in the case of the invention assignment agreements to grant us ownership of technologies that are developed through a relationship with a third party These agreements may be breached and we may not have adequate remedies for any breach In addition our trade secrets may otherwise become known or be independently discovered by competitors To the extent that our commercial partners collaborators employees and consultants use intellectual property owned by others in their work for us disputes may arise as to the ownership of rights in related or resulting know how and inventions
Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties It is uncertain whether the issuance of any third party patent would require us to alter our development or commercial strategies for our product candidates or processes or to obtain licenses or cease certain activities Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future products may have an adverse impact on us If third parties prepare and file patent applications in the U S that also claim technology to which we have rights we may have to participate in derivation proceedings in the USPTO to determine priority of invention
The FDA and other regulatory authorities at federal state supranational national and local levels including in foreign countries extensively regulate among other things the research development testing manufacture quality control import export safety effectiveness labeling packaging storage distribution record keeping approval advertising promotion marketing post approval monitoring and post approval reporting of biologics such as those we are developing We along with third party contractors will be required to navigate the various nonclinical clinical and commercial approval requirements of the governing regulatory authorities of the countries in which we wish to conduct studies or seek approval or licensure of batoclimab IMVT 1402 or any future product candidate
In the U S the FDA regulates biologics under both the Federal Food Drug and Cosmetic Act and the Public Health Service Act and their implementing regulations The process required by the FDA before biologic product candidates may be marketed in the U S generally involves the following
completion of preclinical laboratory tests and animal studies performed in accordance with applicable regulations and guidance including the FDA s current Good Laboratory Practices GLP regulations International Council for Harmonisation ICH guidance and applicable requirements for the humane use of laboratory animals or other applicable regulations
conduct of adequate and well controlled human clinical trials in accordance with applicable IND regulations Good Clinical Practice GCP and other clinical trial related regulations and guidance to evaluate the safety purity and potency of the proposed biologic product candidate for each proposed indication
preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials that includes manufacturing information and substantial evidence of safety purity and potency from results of nonclinical testing and clinical trials
satisfactory completion of an FDA pre approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities methods and controls are adequate to preserve the biological product s continued safety purity and potency
FDA review and approval or licensure of the BLA including satisfactory completion of an FDA Advisory Committee review if applicable to permit commercial marketing or sale of the product for particular indications for use in the U S
Our product candidates are being developed to be registered as pre filled syringes and autoinjectors which means that they are subject to regulation as combination products because they are composed of both a biologic product and device product If approved and marketed individually each component would be subject to different regulatory pathways and reviewed by different centers within the FDA A combination product however is assigned to a center that will have primary jurisdiction over its regulation based on a determination of the combination product s primary mode of action which is the single mode of action that provides the most important therapeutic action In the case of our product candidates the primary mode of action is attributable to the biologic component of the product which means that the FDA s Center for Drug Evaluation and Research has primary jurisdiction over the premarket development review and approval of our product candidates Accordingly our product candidates are subject to the IND framework for premarket development and approval through the BLA pathway Based on our understanding of FDA s combination device expectations we do not anticipate that the FDA will require a separate medical device authorization for the syringe or autoinjector but this could change during the course of its review of any marketing application that we may submit
In the E U medicinal products can only be commercialized after a related marketing authorization MA has been granted A company may submit a marketing authorization application MAA either on the basis of the centralized or decentralized procedure or mutual recognition procedure
To obtain an MA for a product in the E U an applicant must submit an MAA either under a centralized procedure administered by the EMA or one of the procedures administered by the competent authorities of E U Member States decentralized procedure national procedure or mutual recognition procedure An MA may be granted only to an applicant established in the European Economic Area EEA which is comprised of the 27 Member States of the E U plus Norway Iceland and Liechtenstein We have focused on the centralized procedure as we expect it to be the relevant procedure for our product candidates
The centralized procedure provides for the grant of a single MA by the European Commission that is valid throughout the EEA Pursuant to Regulation EC No 726 2004 the centralized procedure is compulsory for specific products including for i medicinal products derived from biotechnological processes ii products designated as orphan medicinal products iii advanced therapy medicinal products ATMPs and iv products with a new active substance indicated for the treatment of HIV AIDS cancer neurodegenerative diseases diabetes auto immune and other immune dysfunctions and viral diseases For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients authorization through the centralized procedure is optional on related approval
Under the centralized procedure the European Medicines Agency s EMA Committee for Medicinal Products for Human Use CHMP conducts the initial assessment of a product The CHMP is also responsible for several post authorization and maintenance activities such as the assessment of modifications or extensions to an existing MA
Under the centralized procedure the maximum timeframe for the evaluation of an MAA is 210 days excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP Accelerated assessment may be granted by the CHMP in exceptional cases when a medicinal product targeting an unmet medical need is expected to be of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation If the CHMP accepts a request for accelerated assessment the time limit of 210 days will be reduced to 150 days excluding clock stops The CHMP can however revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment
An MA granted through the centralized procedure has in principle an initial validity of five years An MA granted through the centralized procedure may be renewed after five years on the basis of a re evaluation of the risk benefit balance by the EMA To support the application the MA holder must provide the EMA with a consolidated version of the eCTD Common Technical Document providing up to date data concerning the quality safety and efficacy of the product including all variations introduced since the MA was granted at least nine months before the MA ceases to be valid The European Commission may decide on justified grounds relating to pharmacovigilance to proceed with one further five year renewal period for the MA Once subsequently definitively renewed the MA shall be valid for an unlimited period Any authorization which is not followed by the actual placing of the medicinal product on the E U market for a centralized MA within three years after authorization ceases to be valid the so called sunset clause
The E U also provides opportunities for market exclusivity Upon receiving an MA in the E U innovative medicinal products generally receive eight years of data exclusivity and an additional two years of market exclusivity If granted data exclusivity prevents generic or biosimilar applicants from referencing the innovator s pre clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization during a period of eight years from the date on which the reference product was first authorized in the E U During the additional two year period of market exclusivity a generic or biosimilar marketing authorization can be submitted and the innovator s data may be referenced but no generic or biosimilar product can be marketed until the expiration of the market exclusivity period The overall ten year period will be extended to a maximum of eleven years if during the first eight years of those ten years the marketing authorization holder obtains an authorization for one or more new therapeutic indications which during the scientific evaluation prior to authorization is held to bring a significant clinical benefit in comparison with existing therapies
Our product candidates designed to be delivered to patients by dedicated medical devices may be subject to E U requirements applicable to combination products In the E U products that are a combination of a medicinal product and a medical device are regulated as either a medicinal product or a medical device depending on which component has the primary mode of action
Medical devices that incorporate a medicinal product as an integral part that has an action ancillary to the action of the medical device are regulated as medical devices in accordance with Regulation E U 2017 745 on Medical Devices MDR However the quality safety and usefulness of the medicinal product must also be verified as part of the device and a scientific opinion from a national competent authority of an E U Member State or from the EMA depending on its nature and therapeutic intention must be sought regarding the quality and safety of the medicinal product including the benefit or risk of its incorporation into the medical device Where a medical device incorporates a medicinal product as an integral part as a single use drug delivery system it is regulated as a medicinal product In this case the relevant General Safety and Performance Requirements GSPRs of the MDR will apply to the safety and performance of the device element
The U K s withdrawal from the E U on January 31 2020 commonly referred to as Brexit has changed the regulatory relationship between the U K and the E U The Medicines and Healthcare products Regulatory Agency MHRA is now the U K s standalone regulator for medicinal products and medical devices The United Kingdom is now a third country to the E U
The U K regulatory framework in relation to clinical trials is governed by the Medicines for Human Use Clinical Trials Regulations 2004 as amended which is derived from the CTD as implemented into U K national law through secondary legislation On January 17 2022 the MHRA launched an eight week consultation on reframing the U K legislation for clinical trials and which aimed to streamline clinical trials approvals enable innovation enhance clinical trials transparency enable greater risk proportionality and promote patient and public involvement in clinical trials The U K Government published its response to the consultation on March 21 2023 confirming that it would bring forward changes to the legislation and such changes were laid in parliament on December 12 2024 On April 10 2025 the Medicines for Human Use Clinical Trials Amendment Regulations 2024 came into law A 12 month implementation period will apply before the amended regulations come fully into force on April 10 2026 The main changes are to implement a risk proportionate approach where low risk trials can receive faster approval through automatic authorization the establishment of a combined review process to integrate ethics committee and regulatory approvals into a single approval and the implementation of enhanced transparency requirements to mandate the registration of clinical trials in a public registry and the publication of trial results within 12 months of trial completion
Marketing authorizations in the U K are governed by the Human Medicines Regulations SI 2012 1916 as amended Since January 1 2021 an applicant for the E U centralized procedure marketing authorization can no longer be established in the U K As a result since this date companies established in the U K cannot use the E U centralized procedure and instead must follow one of the U K national authorization procedures or one of the remaining post Brexit international cooperation procedures to obtain a marketing authorization to market products in the U K All existing E U marketing authorizations for centrally authorized products were automatically converted or grandfathered into U K marketing authorization effective in Great Britain only free of charge on January 1 2021 unless the marketing authorization holder opted out of this possibility Northern Ireland remained within the scope authorizations of the E U in relation to centrally authorized medicinal products until January 31 2025 However on January 31 2025 a new arrangement as part of the so called Windsor Framework came into effect and reintegrated Northern Ireland under the regulatory authority of the MHRA with respect to medicinal products as marketing authorizations valid in Great Britain became valid in the United Kingdom The Windsor Framework removes E U licensing processes and E U labeling and serialization requirements in relation to Northern Ireland and introduces a U K wide licensing process for medicines
The MHRA has also introduced changes to national marketing authorization procedures This includes introduction of procedures to prioritize access to new medicines that will benefit patients including a 150 day assessment route a rolling review procedure and the International Recognition Procedure Since January 1 2024 the MHRA may rely on the International Recognition Procedure IRP when reviewing certain types of marketing authorization applications This procedure is available for applicants for marketing authorization who have already received an authorization for the same product from a reference regulator These include the FDA the EMA and national competent authorities of individual EEA countries A positive opinion from the EMA and CHMP or a positive end of procedure outcome from the mutual recognition or decentralized procedures are considered to be authorizations for the purposes of the IRP
There is no pre marketing authorization orphan designation for medicinal products in the U K Instead the MHRA reviews applications for orphan designation in parallel to the corresponding marketing authorization application The criteria are essentially the same as those in the E U but have been tailored for the market This includes the criterion that prevalence of the condition in the U K rather than the E U must not be more than five in 10 000 Upon the grant of a marketing authorization with orphan status the medicinal product will benefit from up to 10 years of market exclusivity from similar products in the approved orphan indication The start of this market exclusivity period will be set from the date of first approval of the product in the U K
International Recognition Procedure Since January 1 2024 the MHRA may rely on the IRP when reviewing certain types of marketing authorization applications This procedure is available for applicants for marketing authorization who have already received an authorization for the same product from a reference regulator Reference Regulators include the FDA the EMA and national competent authorities of individual EEA countries A positive opinion from the CHMP or a positive end of procedure outcome from the mutual recognition or decentralized procedures are considered to be authorizations for the purposes of the IRP
National marketing authorization applications The MHRA offers a timeline of no more than 150 days excluding clock stop periods where further information is requested for the assessment of national applications for the marketing authorization of a medicinal product in the U K and
The rolling review route which allows companies to make an application in stages throughout the product s development rather than as a consolidated full dossier submission This route is available for new active substances in the U K
Prior to beginning the first clinical trial with a product candidate in the U S we must submit an IND to the FDA An IND is a request for authorization from the FDA to administer an investigational new drug product to humans The IND includes the clinical protocols and general development plan as well as results of animal and in vitro studies assessing the toxicology PK pharmacology and PD characteristics of the product candidate chemistry manufacturing and controls information and any available human data or literature to support the use of the investigational product An IND must become effective before human clinical trials may begin The IND automatically becomes effective 30 days after receipt by the FDA unless the FDA within the 30 day time period raises concerns or questions In such a case the IND may be placed on clinical hold until the IND sponsor and the FDA resolve the outstanding concerns or questions The FDA also may impose clinical holds at any time before or during clinical studies due to safety concerns or non compliance If the FDA imposes a clinical hold studies may not recommence without FDA authorization and then only under terms authorized by the FDA Submission of an IND therefore does not guarantee that FDA authorization to begin a clinical trial will be granted or that once begun issues will not arise that adversely impact suspend or terminate such studies
Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs which include the requirement that all research subjects provide their informed consent for their participation in any clinical study Clinical trials are conducted under protocols detailing among other things the objectives of the study the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments and additional information such as toxicology or Chemistry Manufacturing and Controls CMC data in support of the investigational product s For new indications a separate new IND is usually required Outside of the U S clinical trial applications are generally required to conduct clinical studies in each country Furthermore an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completed to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits
Regulatory authorities the IRB or the sponsor may suspend a clinical trial at any time on various grounds including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor known as a data safety monitoring board or independent data monitoring committee which provides direction for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds such as no demonstration of efficacy There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries Information about most clinical trials must be submitted within specific timeframes for publication on the
Phase 1 The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition These studies are designed to test the safety tolerability absorption metabolism distribution and elimination of the investigational product in humans the side effects associated with increasing doses and if possible to gain early evidence on pharmacodynamics and effectiveness
Phase 2 The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials
Phase 3 The investigational product is administered to an expanded patient population to further evaluate dosage to provide statistically significant evidence of clinical efficacy and to further test for safety generally at multiple global clinical trial sites These clinical trials are intended to establish the overall risk benefit ratio of the investigational product and to provide an adequate basis for product approval These trials may include comparisons with placebo and or other comparator treatments The duration of treatment is often extended to support chronic use of a product during marketing
In some cases the FDA may require or companies may voluntarily pursue additional clinical trials after a product is approved to gain more information about the product These so called Phase 4 studies may be made a condition to approval of the BLA or in certain circumstances mandated after approval These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication and are commonly intended to generate additional safety data regarding use of the product in a clinical setting or in some cases to support full approval for products that are approved via an accelerated pathway as described below During all phases of clinical development regulatory agencies require extensive monitoring and auditing of all clinical activities clinical data and clinical study investigators Annual progress reports detailing the results of the clinical studies must be submitted to the FDA and IND safety reports must be submitted to the FDA other regulators and investigators within a regulated timeframe for serious and unexpected adverse events any findings from other studies tests in laboratory animals or
testing that suggest a significant risk for human subjects or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure or adverse events reported by anti FcRn product candidates developed by others
Concurrent with clinical trials companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements The manufacturing process must be capable of consistently producing quality batches of the product candidate and among other things must develop methods for testing the identity strength quality and purity of the final product or for biologics the safety purity and potency The FDA may require such testing to occur on a lot by lot basis in order to release product for clinical use Additionally appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life
In the E U clinical trials are governed by the Clinical Trials Regulation EU No 536 2014 CTR which entered into application on January 31 2022 repealing and replacing the former Clinical Trials Directive 2001 20 CTD
The CTR is intended to harmonize and streamline clinical trial authorizations simplify adverse event reporting procedures improve the supervision of clinical trials and increase transparency Specifically the Regulation which is directly applicable in all E U Member States introduces a streamlined application procedure through a single entry point the E U portal the Clinical Trials Information System a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors A harmonized procedure for the assessment of applications for clinical trials has been introduced and is divided into two parts Part I assessment is led by the competent authorities of a reference Member State selected by the trial sponsor and relates to clinical trial aspects that are considered to be scientifically harmonized across E U Member States This assessment is then submitted to the competent authorities of all concerned Member States in which the trial is to be conducted for their review Part II is assessed separately by the competent authorities and Ethics Committees in each concerned E U Member State Individual E U Member States retain the power to authorize the conduct of clinical trials on their territory
The extent to which on going clinical trials will be governed by the CTR will depend on the duration of the individual clinical trial For clinical trials in relation to which an application for approval was made on the basis of the CTD before January 31 2023 the CTD continued to apply on a transitional basis until January 31 2025 after which all ongoing trials became subject to the provisions of the CTR The CTR will apply to clinical trials from an earlier date if the related clinical trial application was made on the basis of the CTR or if the clinical trial has already transitioned to the CTR framework before January 31 2025
In all cases clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki Medicines used in clinical trials must be manufactured in accordance with the guidelines on cGMP and in a GMP licensed facility which can be subject to GMP inspections
Assuming successful completion of all required testing in accordance with all applicable regulatory requirements the results of product development nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications The BLA must include all relevant data available from pertinent preclinical and clinical studies including negative or ambiguous results as well as positive findings together with detailed information relating to the product s chemistry manufacturing controls and proposed labeling among other information Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data The submission of a BLA requires payment of a substantial application user fee to FDA unless a waiver or exemption applies There can be no assurance that the FDA will accept the BLA for filing and even if filed that any approval will be granted on a timely basis if at all
Once a BLA has been submitted the FDA reviews the BLA within 60 days to determine if it is substantially complete before the agency accepts it for filing The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information In this event the BLA must be resubmitted with the additional information The resubmitted application also is subject to review before the FDA accepts it for filing Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act PDUFA the FDA s goal is to review standard applications within ten months after it accepts the application for filing or if the application qualifies for priority review six months after the FDA accepts the application for filing In both standard and priority reviews the FDA does not always meet PDUFA goal dates and the review process can be significantly extended by FDA requests for additional information or clarification or Company submissions of substantial data during the review The FDA reviews a BLA to determine among other things whether a product is safe pure and potent and the facility in which it is manufactured processed packed or held meets standards designed to assure the product s continued safety purity and potency The FDA may convene an advisory committee to provide clinical insight on application review questions with emphasis on risk and benefit of the molecule and proposed indications and provide a recommendation as to whether the application should be approved and under what conditions The FDA is not bound by the recommendations of an advisory committee but it considers such recommendations carefully when making decisions Before approving a BLA the FDA will typically inspect the facility or facilities where the product is manufactured The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to ensure consistent production of the product within required specifications Additionally before approving a BLA the FDA will typically inspect one or more clinical sites preclinical studies and or the sponsor to assure compliance with GCP If the FDA determines that the application manufacturing process or manufacturing facilities are not acceptable it will outline the deficiencies in the submission and often will request additional testing or information Notwithstanding the submission of any requested additional information the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval
After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and or its drug substance will be produced the FDA may issue an approval letter or a Complete Response letter An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications A Complete Response letter will describe all of the deficiencies that the FDA has identified in the BLA and where the FDA determines that the data supporting the application are inadequate to support approval the FDA may issue the Complete Response letter prior to inspections testing submitted product lots and or reviewing proposed labeling In issuing the Complete Response letter the FDA may recommend actions that the applicant might take to place the BLA in condition for approval including requests for additional information or clarification completion of other significant and time consuming requirements related to clinical trials and or conduct of additional preclinical studies or manufacturing activities Even if such data and information are submitted the FDA may determine that the BLA does not satisfy the criteria for approval FDA approval of a BLA must be obtained before a biologic may be marketed in the U S The FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied and may require additional clinical testing or safety information
If regulatory approval of a product is granted such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed which could limit the commercial value of the product For example the FDA may approve the BLA with a REMS to ensure the benefits of the product outweigh its risks A REMS is a safety strategy to manage a known or potential serious risk associated with a product and could include medication guides healthcare professional and or patient communication plans or elements to assure safe use such as restricted distribution methods patient registries and other risk minimization tools The FDA will evaluate if any labeling or risk management plans are necessary to ensure safe use of the product in the targeted patient population and indication Once approved the FDA has the authority to withdraw the product approval if compliance with pre and post marketing requirements is not maintained or if problems occur after the product reaches the marketplace The FDA may impose post marketing requirements and commitments such as additional manufacturing data or testing additional preclinical data or evaluation additional clinical data from Phase 3 studies e g long term extension data and may require one or more Phase 4 post market studies and surveillance to further assess and monitor the product s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post marketing studies
Any marketing application for a biologic submitted to the FDA for approval may be eligible for FDA programs intended to expedite the FDA review and approval process such as priority review fast track designation breakthrough therapy and accelerated approval
A product is eligible for priority review if it is intended to treat a serious condition and if approved would provide a significant improvement in safety or effectiveness Priority review designation means the FDA s goal under PDUFA is to take action on the marketing application within six months of the 60 day filing date compared with ten months under standard review To be eligible for a fast track designation the FDA must determine based on the request of a sponsor that a product is intended to treat a serious or life threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors Fast track designation is intended to facilitate development and expedite review of a product and also provides opportunities for frequent interactions with the FDA review team The FDA may also review complete sections of the BLA for a fast track product on a rolling basis before the entire application is submitted if the sponsor and FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the BLA The review clock generally does not begin until the final section of the BLA is submitted
In addition a sponsor can request designation of a product candidate as a breakthrough therapy A breakthrough therapy is defined as a drug or biologic that is intended alone or in combination with one or more other drugs or biologics to treat a serious or life threatening disease or condition and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints such as substantial treatment effects observed early in clinical development The FDA will take certain actions such as holding timely meetings and providing advice intended to expedite the development and review of an application for approval of a breakthrough therapy
Additionally products studied for their safety and effectiveness in treating serious or life threatening diseases or conditions and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval which means that they may be approved on the basis of adequate and well controlled clinical studies establishing that the product has an effect on a validated surrogate endpoint that is reasonably likely to predict a clinical benefit or on the basis of an effect on a clinical endpoint that can be measured earlier than survival or irreversible morbidity and is reasonably likely to predict an effect on survival irreversible morbidity or another clinical benefit As a condition of accelerated approval the FDA requires the sponsor to perform adequate and well controlled post marketing confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit Approval may be withdrawn if the confirmatory study does not verify the anticipated clinical benefit In addition the FDA currently requires as a condition for accelerated approval pre approval of promotional materials which the sponsor must plan to provide all commercial materials and seek approval prior to the launch of the product
Even if a product qualifies for one or more of these programs the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review and approval will not be shortened Furthermore priority review fast track designation breakthrough therapy designation and accelerated approval do not change the standards for approval and may not ultimately expedite the development or approval process
In the E U innovative products that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review programs such as the Priority Medicines PRIME scheme which provides incentives similar to the breakthrough therapy designation in the U S PRIME is a voluntary scheme aimed at enhancing the EMA s support for the development of medicinal products that target unmet medical needs Eligible products must target conditions for which there is an unmet medical need there is no satisfactory method of diagnosis prevention or treatment in the E U or if there is the new medicinal product will bring a major therapeutic advantage and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones Benefits accrue to sponsors of product candidates with PRIME designation including but not limited to early and proactive regulatory dialogue with the EMA frequent discussions on clinical trial designs and other development program elements and potentially accelerated MAA assessment once a dossier has been submitted
In the E U a conditional MA may be granted in cases where all the required safety and efficacy data are not yet available The European Commission may grant a conditional MA for a medicinal product if it is demonstrated that all of the following criteria are met i the benefit risk balance of the medicinal product is positive ii it is likely that the applicant will be able to provide comprehensive data post authorization iii the medicinal product fulfils an unmet medical need and iv the benefit of the immediate availability to patients of the medicinal product is greater than the risk inherent in the fact that additional data are still required The conditional MA is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures It is valid for one year and must be renewed annually until all related conditions have been fulfilled Once any pending studies are provided the conditional MA can be converted into a traditional MA However if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission the MA will cease to be renewed
An MA may also be granted under exceptional circumstances where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced These circumstances may arise in particular when the intended indications are very rare and in the state of scientific knowledge at that time it is not possible to provide comprehensive information or when generating data may be contrary to generally accepted ethical principles Like a conditional MA an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA However unlike the conditional MA an applicant for authorization in exceptional circumstances is not subsequently required to provide the missing data Although the MA under exceptional circumstances is granted definitively the risk benefit balance of the medicinal product is reviewed annually and the MA will be withdrawn if the risk benefit ratio is no longer favorable
Under the Orphan Drug Act the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition which is a disease or condition that affects fewer than 200 000 individuals in the U S or more than 200 000 individuals in the U S for which there is no reasonable expectation that the cost of developing and making available in the U S a drug or biologic for this type of disease or condition will be recovered from sales in the U S for that drug or biologic Orphan designation must be requested before submitting a BLA After the FDA grants orphan designation the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA The orphan drug designation does not convey any advantage in or automatically shorten the duration of the regulatory review or approval process
If a product that has orphan designation subsequently receives the first FDA approval for the disease for which it has such designation the product is entitled to orphan exclusivity which means that the FDA may not approve any other applications including a full BLA to market the same product for the same indication for seven years except in limited circumstances such as a showing of clinical superiority to the product with orphan drug exclusivity by means of greater effectiveness greater safety or providing a major contribution to patient care or in instances of drug supply issues Orphan exclusivity does not prevent FDA from approving a different drug or biologic for the same disease or condition or the same drug or biologic for a different disease or condition Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application fee A designated orphan product may not receive orphan exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation In addition exclusive marketing rights in the U S may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition
In the E U Regulation EC No 141 2000 as implemented by Regulation EC No 847 2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that i the product is intended for the diagnosis prevention or treatment of life threatening or chronically debilitating conditions ii either a such conditions affect not more than 5 in 10 000 persons in the E U when the application is made or b the product without the benefits derived from orphan status would not generate sufficient return in the E U to justify the necessary investment in developing the medicinal product and iii there exists no satisfactory authorized method of diagnosis prevention or treatment of the condition that has been authorized in the E U or even if such method exists the product will be of significant benefit to those affected by that condition
Regulation EC No 847 2000 sets out further provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product An application for the designation of a medicinal product as an orphan medicinal product must be submitted at any stage of development of the medicinal product but before filing of an MAA An MA for an orphan medicinal product may only include indications designated as orphan For non orphan indications treated with the same active pharmaceutical ingredient a separate marketing authorization has to be sought
Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers protocol assistance and access to the centralized marketing authorization procedure Upon grant of a marketing authorization orphan medicinal products are entitled to a ten year period of market exclusivity for the approved therapeutic indication which means that the EMA cannot accept another marketing authorization application or accept an application to extend for a similar product and the European Commission cannot grant a marketing authorization for the same indication for a period of ten years The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed pediatric investigation plan PIP No extension to any Supplementary Protection Certificate SPC can be granted on the basis of pediatric studies for orphan indications Orphan medicinal product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process
The period of market exclusivity may however be reduced to six years if at the end of the fifth year it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold Additionally an MA may be granted to a similar medicinal product with the same orphan indication during the 10 year period if i if the applicant consents to a second original orphan medicinal product application ii if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities or iii if the second applicant can establish that its product although similar is safer more effective or otherwise clinically superior to the original orphan medicinal product A company may voluntarily remove a product from the register of orphan products
Following the U K s departure from the E U there is no pre marketing authorization orphan designation in Great Britain Instead orphan designation is applied for at the same time as applying for a marketing authorization While the criteria to be granted an orphan medicinal product designation remain effectively the same in Great Britain as in the European Union the designation will be based on the prevalence of the relevant condition in Great Britain It is therefore possible that conditions that were or would have been designated as orphan conditions in Great Britain prior to the end of the Transition Period are or would no longer be and that conditions that were not or would not have been designated as orphan conditions in the E U will be designated as such in Great Britain The U K legislation offers similar market exclusivity conditions for medicinal products with an orphan designation However U K wide marketing authorization applications including orphan designation can only be submitted if there is no active orphan designation granted in the E U
Under the Pediatric Research Equity Act PREA a BLA or supplement to a BLA must contain data that are adequate to assess the safety and efficacy of the product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective The FDA may grant deferrals for submission of pediatric data or full or partial waivers The Food and Drug Administration Safety and Innovation Act FDASIA amended the Federal Food Drug and Cosmetic Act FDCA to require that a sponsor who is planning to submit a marketing application for a product that includes a new active ingredient new indication new dosage form new dosing regimen or new route of administration submit an initial Pediatric Study Plan PSP within sixty days of an end of Phase 2 meeting or if there is no such meeting as early as practicable before the initiation of the Phase 3 or Phase 2 3 study The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct including study objectives and design age groups relevant endpoints and statistical approach or a justification for not including such detailed information and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information The FDA and the sponsor must reach an agreement on the PSP A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies early phase clinical trials or other clinical development programs
Under the Best Pharmaceuticals for Children Act BPCA a drug or biologic product can also obtain pediatric market exclusivity in the U S Pediatric exclusivity if granted adds six months to existing exclusivity periods and patent terms This six month exclusivity which runs from the end of other exclusivity protection or patent term may be granted based on the voluntary completion of a pediatric study or studies in accordance with an FDA issued Written Request for such a study or studies within a defined timeframe
In the E U Regulation EC No 1901 2006 provides that all MAAs for new medicinal products must include the results of trials conducted in the pediatric population in compliance with a PIP agreed with the EMA s Pediatric Committee PDCO The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the medicinal product for which marketing authorization is being sought The PDCO may grant a deferral of the obligation to implement some or all of the measures provided in the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults Furthermore the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children the disease or condition for which the product is intended occurs only in adult populations or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients Once the marketing authorization is obtained in all E U Member States and study results are included in the product information even when negative the product is eligible for a six month extension to the SPC if any is in effect at the time of authorization or in the case of orphan medicinal products a two year extension of orphan market exclusivity For other countries outside of the E U such as certain countries in Eastern Europe Latin America or Asia the requirements governing the conduct of clinical trials product approval pricing and reimbursement vary from country to country In all cases the clinical trials are to be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki
Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA including among other things requirements relating to quality control and quality assurance record keeping reporting of adverse experiences periodic reporting product sampling and distribution and advertising and promotion of the product After approval most changes to the approved product such as adding new indications or other labeling claims are subject to prior FDA review and approval There also are continuing user fee requirements under which FDA assesses an annual program fee for each product identified in an approved BLA Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP which impose certain procedural and documentation requirements upon us and our third party manufacturers Changes to the manufacturing process are strictly regulated and depending on the significance of the change may require prior FDA approval before being implemented FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third party manufacturers that we may decide to use Accordingly manufacturers must continue to expend time money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance
The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market Later discovery of previously unknown problems with a product including adverse events of unanticipated severity or frequency involving our product candidates or anti FcRn product candidates developed by others or with manufacturing processes or failure to comply with regulatory requirements may result in revisions to the approved labeling to add new safety information imposition of post market studies or clinical studies to assess new safety risks or imposition of distribution restrictions or other restrictions under a REMS program Other potential consequences include among other things
restrictions on the marketing or manufacturing of a product mandated modification of promotional materials or issuance of corrective information issuance by FDA or other regulatory authorities of safety alerts Dear Healthcare Provider letters press releases or other communications containing warnings or other safety information about the product or complete withdrawal of the product from the market or product recalls
The FDA closely regulates the marketing labeling advertising and promotion of biologics A company can make only those claims relating to safety and efficacy purity and potency that are approved by the FDA and in accordance with the provisions of the approved label The FDA and other foreign regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off label uses and misbranding Failure to comply with these requirements can result in among other things adverse publicity warning letters corrective advertising and potential civil and criminal penalties including monetary penalties Physicians may prescribe in their independent medical judgment legally available products for uses that are not described in the product s labeling and that differ from those tested by us and approved by the FDA The FDA does not regulate the behavior of physicians in their choice of treatments The FDA does however restrict manufacturer s communications on the subject of off label use of their products and a company that is found to have improperly promoted off label uses may be subject to significant liability including investigation by federal and state authorities Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use or first publication or thirty days in advance of their first use if approved via the accelerated approval pathway Further if there are any modifications to the drug or biologic including changes in indications labeling or manufacturing processes or facilities the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement which may require the development of additional data or preclinical studies and clinical trials
Where an MA is granted in relation to a medicinal product in the E U the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing marketing promotion and sale of medicinal products Similar to the U S both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA the European Commission and or the competent regulatory authorities of the individual E U Member States The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports PSURs
All new MAAs must include a risk management plan RMP describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product The regulatory authorities may also impose specific obligations as a condition of the MA Such risk minimization measures or post authorization obligations may include additional safety monitoring more frequent submission of PSURs or the conduct of additional clinical trials or post authorization safety studies
In the E U the advertising and promotion of medicinal products are subject to both E U and E U Member States laws governing promotion of medicinal products interactions with physicians and other healthcare professionals misleading and comparative advertising and unfair commercial practices Although general requirements for advertising and promotion of medicinal products are established under E U legislation the details are governed by regulations in individual E U Member States and can differ from one country to another For example applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product s Summary of Product Characteristics SmPC as approved by the competent authorities in connection with an MA The SmPC is the document that provides information to physicians concerning the safe and effective use of the product Promotional activity that does not comply with the SmPC is considered off label and is prohibited in the E U Direct to consumer advertising of prescription medicinal products is also prohibited in the E U
The Patient Protection and Affordable Care Act Affordable Care Act signed into law in 2010 includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 BPCIA which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA approved reference biological product
Biosimilarity which requires that the biological product be highly similar to the reference product notwithstanding minor differences in clinically inactive components and that there be no clinically meaningful differences between the biological product and the reference product in terms of safety purity and potency can be shown through analytical studies animal studies and a clinical study or studies Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and for products that are administered multiple times to an individual the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic
Under the BPCIA an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA In addition the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed During this 12 year period of exclusivity another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant s own preclinical data and data from adequate and well controlled clinical trials to demonstrate the safety purity and potency of its product The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products
In the E U there is a special regime for biosimilars or biological medicinal products that are similar to an approved reference medicinal product but that do not meet the definition of a generic medicinal product owing to in particular differences relating to raw materials or differences in manufacturing processes of the biological medicinal product and the reference biological medicinal Biosimilars are approved in accordance with the same quality safety and efficacy standards which apply to biological medicinal products For such products the results of appropriate preclinical or clinical trials must be provided in support of an application for marketing authorization including comparative clinical and non clinical studies with the reference biological medicinal product to demonstrate that the biosimilar is both highly similar to the reference product notwithstanding natural variability inherent to all biological medicines and that there are no clinically meaningful differences between the biosimilar and the reference medicine in terms of safety quality and efficacy However the biosimilar manufacturer is not required to replicate the testing results or trial data contained in the dossier of the reference biological medicinal product
In the U S our current and future operations are subject to regulation and oversight by various federal state and local authorities in addition to the FDA including but not limited to Centers for Medicare Medicaid Services CMS or other divisions of the U S Department of Health and Human Services HHS such as the Office of Inspector General Office for Civil Rights and the Health Resources and Service Administration the U S Department of Justice DOJ and individual U S Attorney offices within the DOJ and state and local governments and regulatory authorities For example our clinical research sales marketing and scientific educational grant programs may have to comply with the anti fraud and abuse provisions of the Social Security Act the federal Anti Kickback Statute the false claims laws the privacy and security provisions of the Health Insurance Portability and Accountability Act of 1996 HIPAA and similar state laws each as amended as applicable Our business operations and current and future arrangements with investigators healthcare professionals consultants third party payors and customers may be subject to healthcare laws regulations and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business Such laws include without limitation state and federal anti kickback fraud and abuse false claims privacy and security price reporting and transparency and physician sunshine laws Some of our pre commercial activities are subject to certain of these laws
The federal Anti Kickback Statute prohibits among other things any person or entity from knowingly and willfully offering paying soliciting or receiving any remuneration directly or indirectly overtly or covertly in cash or in kind to induce or in return for purchasing leasing ordering or arranging for the purchase lease or order of any item or service reimbursable in whole or in part under Medicare Medicaid or other federal healthcare programs The term remuneration has been interpreted broadly to include anything of value The Anti Kickback Statute has been interpreted to apply to arrangements between therapeutic product manufacturers on one hand and for example prescribers purchasers third party payors pharmacies and pharmacy benefit managers on the other There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from the reach of the Anti Kickback Statute The exceptions and safe harbors are interpreted narrowly by enforcement authorities and practices that involve remuneration that may be alleged to be intended to induce prescribing purchasing or recommending any product payable by the federal health care programs may be subject to scrutiny if they do not qualify for an exception or safe harbor Failure to meet all of the requirements of a particular statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti Kickback Statute Instead where an arrangement does not clearly meet the terms of an applicable exception or safe harbor the legality of the arrangement will be evaluated on a case by case basis based on prudential factors that authorities including the HHS of Inspector General utilize to determine whether a particular arrangement poses a risk of fraud and abuse to the federal health care programs e g increasing costs to government payors Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor and we cannot rule out the possibility that enforcement authorities including the Office of Inspector General could scrutinize our practices in the future
Additionally the intent standard under the Anti Kickback Statute was amended by the Affordable Care Act to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation Violations of the Anti Kickback Statute can result in significant civil and criminal fines and penalties imprisonment and exclusion from federal healthcare programs In addition the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act FCA discussed below
The federal false claims laws including the FCA which can be enforced by private citizens through civil whistleblower or qui tam actions and the Civil Monetary Penalties Law prohibit any person or entity from among other things knowingly presenting or causing to be presented a false or fraudulent claim for payment to or approval by the federal government including federal healthcare programs such as Medicare and Medicaid knowingly making using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government or knowingly making a false statement to improperly avoid decrease or conceal an obligation to pay money to the federal government A claim includes any request or demand for money or property presented to the U S government Pharmaceutical and other healthcare companies have been and continue to be prosecuted under these laws among other things for various conduct For example enforcement has pursued manufacturers allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product and also for causing false claims to be submitted because of the marketing of the product for unapproved off label and thus generally non reimbursable uses
HIPAA created additional federal criminal statutes that prohibit among other things knowingly and willfully executing or attempting to execute a scheme to defraud or to obtain by means of false or fraudulent pretenses representations or promises any money or property owned by or under the control or custody of any healthcare benefit program including private third party payors willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying concealing or covering up by trick scheme or device a material fact or making any materially false fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits items or services Like the Anti Kickback Statute the Affordable Care Act amended the intent standard for certain healthcare fraud statutes that were added by HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation
In addition HIPAA as amended by Health Information Technology for Economic and Clinical Health Act of 2009 HITECH imposes certain requirements on covered entities which include certain healthcare providers health plans and healthcare clearinghouses and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy security and transmission of individually identifiable health information If we were to enter into a business associate relationship with a covered entity covered entities being group health plans certain healthcare providers and healthcare clearing houses or other business associates or otherwise act as a covered entity under HIPAA we would be subject to the data privacy security and security breach notification provisions of HIPAA as amended by HITECH Those regulations authorize the imposition of civil and criminal penalties damages injunctions attorneys fees and costs In addition many state laws govern the privacy and security of health information in specified circumstances many of which differ from each other in significant ways are often not pre empted by HIPAA and may have a more prohibitive effect than HIPAA thus complicating compliance efforts
Additionally the federal Physician Payments Sunshine Act the Sunshine Act within the Affordable Care Act and its implementing regulations require that certain manufacturers of drugs devices biological and medical supplies for which payment is available under Medicare Medicaid or the Children s Health Insurance Program with certain exceptions report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians defined to include doctors dentists optometrists podiatrists and chiropractors other healthcare professionals such as physician assistants and nurse practitioners and teaching hospitals or to entities or individuals at the request of or designated on behalf of the physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members
Many states have similar statutes or regulations to the above federal laws that may be broader in scope and may apply regardless of payor i e are not exclusive to government payors We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and or state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers drug pricing or marketing expenditures These laws may differ from each other in significant ways and may not have the same effect further complicating compliance efforts
We are subject to the Federal Drug Supply Chain Security Act DSCSA enacted by the U S government which requires development of an electronic pedigree to track and trace each prescription biologic at the salable unit level through the distribution system which will be effective incrementally over a 10 year period from its enactment on November 27 2013 In addition we must comply with state laws that require the registration of manufacturers and wholesale distributors of drug and biological products in a state including in certain states manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state Some states also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of distribution Compliance with DSCSA and current and future U S federal or state electronic pedigree requirements could require significant capital expenditures increase our operating costs and impose significant administrative burdens Several states have enacted legislation requiring pharmaceutical and biotechnology companies to establish marketing compliance programs file periodic reports with the state make periodic public disclosures on sales marketing pricing clinical trials and other activities and or register their sales representatives as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing and to prohibit certain other sales and marketing practices All of our activities are potentially subject to federal and state consumer protection and unfair competition laws Additionally to the extent that we have business operations in foreign countries sell any of our products in foreign countries and jurisdictions or engage with physicians from other countries including Canada or the E U we may be subject to additional comparable regulation
Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a costly endeavor If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to us we may be subject to penalties including without limitation significant civil criminal and or administrative penalties damages fines disgorgement imprisonment exclusion from participation in government programs such as Medicare and Medicaid injunctions private qui tam actions brought by individual whistleblowers in the name of the government or refusal to allow us to enter into government contracts contractual damages reputational harm administrative burdens diminished profits and future earnings additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non compliance with these laws and the curtailment or restructuring of our operations any of which could adversely affect our ability to operate our business and results of operations
Because our business involves the collection use storage and transmission of personal information we are subject to numerous federal state local and foreign laws regulations and other obligations relating to privacy data protection and information security Such laws include or may include Section 5 a of the Federal Trade Commission Act the California Consumer Privacy Act of 2018 as amended by the California Privacy Rights Act of 2020 the California Online Privacy Protection Act the European Union s General Data Protection Regulation 2016 679 E U GDPR the E U GDPR as it forms part of U K law by virtue of section 3 of the European Union Withdrawal Act 2018 U K GDPR and the European Union s ePrivacy Directive Countries around the world have adopted or are proposing similar laws and regulations relating to privacy data protection and information security and we may become subject to them as we expand our operations into new geographic markets
Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which Immunovant may obtain regulatory approval In the U S and in foreign markets sales of any products for which Immunovant receives regulatory approval for commercial sale will depend in part on the extent to which third party payors provide coverage and establish adequate reimbursement levels for such products In the U S third party payors include federal and state healthcare programs private managed care providers health insurers and other organizations Adequate coverage and reimbursement from governmental healthcare programs such as Medicare and Medicaid in the U S and commercial payors are critical to new product acceptance
Our ability to commercialize any products successfully also will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from third party payors which decide which therapeutics they will pay for and establish reimbursement levels Coverage and reimbursement by a third party payor may depend upon a number of factors including the third party payor s determination that use of a therapeutic is
We cannot be sure that coverage or reimbursement will be available for any product that we commercialize and if coverage and reimbursement are available what the level of reimbursement will be Coverage may also be more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities Reimbursement may impact the demand for or the price of any product for which we obtain regulatory approval
We may develop products that once approved may be administered by a physician and these products also may have difficulty obtaining coverage and adequate reimbursement levels based on payor cost sensitivities and the potential application of formulary management controls e g step edits through alternative therapies Additionally separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available which may impact physician utilization
Third party payors are increasingly challenging the price examining the medical necessity and reviewing the cost effectiveness of medical products therapies and services in addition to closely evaluating their safety and efficacy Obtaining reimbursement for our products may be particularly difficult given the potential cost sensitivities often associated with branded drugs and drugs administered under the supervision of a physician It is not clear that third party payors will accept the pharmacoeconomic benefits of products that we commercialize and we also may need to undertake detailed studies of any therapies that we commercialize in order to demonstrate their pharmacoeconomic benefits in addition to the costs required to obtain FDA approvals Our product candidates may not be considered medically necessary or cost effective for certain patients including depending on the nature of the FDA approvals that we may receive There is no assurance of coverage or adequate reimbursement for our products under either government programs or from commercial payors Further one payor s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product Adequate third party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development If reimbursement is not available or is available only at limited levels we may not be able to successfully commercialize any product candidate that we successfully develop
Different pricing and reimbursement schemes exist in other countries In the E U pricing and reimbursement schemes vary widely from country to country Some countries provide that products may be marketed only after a reimbursement price has been agreed Other countries may require the completion of additional studies that compare the cost effectiveness of a particular product candidate to currently available therapies so called health technology assessments in order to obtain reimbursement or pricing approval For example some E U Member States may approve a specific price for a product or they may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market Other E U Member States allow companies to fix their own prices for products but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions Recently many E U Member States have increased the amount of discounts that pharmaceutical companies are required to offer These efforts could continue as countries attempt to manage healthcare expenditures The downward pressure on healthcare costs in general particularly prescription products has become intense As a result increasingly high barriers are being erected to the entry of new products onto national markets Political economic and regulatory developments may further complicate pricing negotiations and pricing negotiations may continue after reimbursement has been obtained Reference pricing used by various E U Member States and parallel trade arbitrage between low priced and high priced member states can further reduce prices
In addition some EEA countries may require the completion of additional studies that compare the cost effectiveness of a particular medicinal product candidate to currently available therapies This Health Technology Assessment HTA process is the procedure according to which the assessment of the public health impact therapeutic impact and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual E U Member States In December 2021 the E U HTA Regulation was adopted The purpose of the Regulation is to introduce joint clinical assessments at E U level When it enters into application in 2025 the Regulation will be intended to harmonize the clinical benefit assessment of HTA across the European Union
The marketability of any product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third party payors fail to provide adequate coverage and reimbursement In addition emphasis on managed care the increasing influence of health maintenance organizations and additional legislative changes in the U S has increased and we expect will continue to increase the pressure on healthcare pricing The downward pressure on the rise in healthcare costs in general particularly prescription medicines medical devices and surgical procedures and other treatments has become a close focus of government and state regulators Coverage policies and third party reimbursement rates may change at any time Even if favorable coverage and reimbursement rates are attained for one or more products for which we receive regulatory approval less favorable coverage policies and reimbursement rates may be implemented in the future which could have a downward pressure on our commercialization efforts
In the U S and some foreign jurisdictions there have been and continue to be several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates restrict or regulate post approval activities and affect the ability to profitably sell product candidates for which marketing approval is obtained Among policy makers and payors in the U S and elsewhere there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs improving quality and or expanding access In the U S the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives
For example the Affordable Care Act has substantially changed healthcare financing and delivery by both governmental and private insurers The Affordable Care Act among other things increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs required collection of rebates for drugs paid by Medicaid managed care organizations required manufacturers to participate in a coverage gap discount program under which they must agree to offer point of sale discounts increased to 70 percent effective as of January 1 2019 off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer s outpatient drugs to be covered under Medicare Part D imposed a non deductible annual fee on pharmaceutical manufacturers or importers who sell certain branded prescription drugs to specified federal government programs implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled infused instilled implanted or injected expanded the types of entities eligible for the 340B drug discount program expanded eligibility criteria for Medicaid programs created a new Patient Centered Outcomes Research Institute to oversee identify priorities in and conduct comparative clinical effectiveness research along with funding for such research and established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending potentially including prescription drug spending
Since its enactment there have been amendments to and legal and political challenges to certain aspects of the Affordable Care Act For example on March 11 2021 the American Rescue Plan Act of 2021 was signed into law which eliminated the statutory Medicaid drug rebate cap previously set at 100 of a drug s average manufacturer price for single source and innovator multiple source drugs effective January 1 2024 On August 16 2022 the Inflation Reduction Act of 2022 IRA was signed into law which among other things extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025 The IRA also eliminates the donut hole under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out of pocket cost and creating a new manufacturer discount program In addition there may be other efforts to challenge repeal or replace the Affordable Care Act It is unclear how any future challenges and the healthcare reform measures of the second Trump administration will impact the Affordable Care Act The ultimate content timing or effect of any healthcare reform legislation on the U S healthcare industry is also unclear particularly given the recent change in administration
Further legislation or regulation could be passed that could harm our business financial condition and results of operations Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted For example in August 2011 the Budget Control Act of 2011 was signed into law which among other things included aggregate reductions to Medicare payments to providers of 2 per fiscal year which went into effect beginning on April 1 2013 and will stay in effect through 2032 unless additional Congressional action is taken
Additionally there has been increasing legislative and enforcement interest in the U S with respect to specialty drug pricing practices Specifically there have been several recent U S Congressional inquiries presidential executive orders and proposed and enacted federal legislation designed to among other things bring more transparency to drug pricing reduce the cost of prescription drugs under Medicare review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs The IRA among other things i directs HHS to negotiate the price of certain high expenditure single source biologics that have been on the market for at least 11 years covered under Medicare the Medicare Drug Price Negotiation Program and ii imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation These provisions began to take effect progressively starting in fiscal year 2023 On August 15 2024 HHS announced the agreed upon reimbursement prices for the first ten drugs that were subject to price negotiations although the Medicare Drug Price Negotiation Program is currently subject to legal challenges On January 17 2025 HHS selected 15 additional products covered under Part D for price negotiation in 2025 Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program On December 8 2023 the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march in rights While march in rights have not previously been exercised it is uncertain if that will continue under the new framework
Individual states in the U S have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing including price or patient reimbursement constraints discounts restrictions on certain product access and marketing cost disclosure and transparency measures and in some cases designed to encourage importation from other countries and bulk purchasing
We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement and in additional downward pressure on the price that we receive for any approved product Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue attain profitability or commercialize our products Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS the FDA CMS and related agencies These actions presently directed by executive orders or memoranda from the Office of Management and Budget may propose policy changes that create additional uncertainty for our business These actions include for example 1 directives to reduce agency workforce and cut programs 2 rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending 3 eliminating the Biden administration s executive order that directed HHS to establishing an AI task force and developing a strategic plan 4 directing HHS and other agencies to lower prescription drug costs through a variety of initiatives including by improving upon the Medicare Drug Price Negotiation Program and establishing Most Favored Nation pricing for pharmaceutical products and 5 directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans Additionally in its June 2024 decision in Loper Bright Enterprises v Raimondo the U S Supreme Court overturned the longstanding Chevron doctrine under which courts were required to give deference to regulatory agencies reasonable interpretations of ambiguous federal statutes The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations including those issued by the FDA Congress may introduce and ultimately pass health care related legislation that could among others impact the drug approval process and modify the Medicare Drug Price Negotiation Program expand the orphan drug exclusion in the IRA and reduce Medicaid enrollment and funding We expect additional health reform measures may be implemented in the future particularly given the recent change in administration
The U S Foreign Corrupt Practices Act FCPA prohibits any U S individual or business from paying offering or authorizing payment or offering of anything of value directly or indirectly to any foreign official political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business The FCPA also obligates companies whose securities are listed in the U S to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the corporation including international subsidiaries and to devise and maintain an adequate system of internal accounting controls for international operations
In addition to the foregoing state and federal laws regarding safe working conditions environmental protection and hazardous substances including the Occupational Safety and Health Act the Resource Conservancy and Recovery Act and the Toxic Substances Control Act affect our business These and other laws govern our use handling and disposal of various biological chemical and radioactive substances used in and wastes generated by our operations If our operations result in contamination of the environment or expose individuals to hazardous substances we could be liable for damages and governmental fines We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business We cannot predict however how changes in these laws may affect our future operations
We are also subject to numerous federal state and local laws relating to such matters as safe working conditions manufacturing practices environmental protection fire hazard control and disposal of hazardous or potentially hazardous substances We may incur significant costs to comply with such laws and regulations now or in the future
We are driven by our vision of enabling normal lives for patients with autoimmune diseases We champion an environment where all feel a sense of belonging by promoting a creative and collaborative workplace that leads to genuine connection and innovation As a diverse workforce we are committed to inclusion and equity across race gender age religion physical ability identity sexual orientation and experience Together our vision and strength as a team are driven by our values focused on accountability to patients constantly adapting to drive toward our vision and inviting all voices to bring powerful ideas to life We believe if our employees are well aligned with our values and culture they will be highly engaged which will support their performance and impact on the organization
As of March 31 2025 we had 362 full time permanent employees primarily in the U S Of these employees approximately 58 have advanced degrees including but not limited to Ph D M D and M B A and approximately 83 were engaged in research and development activities More than half of our workforce as well as our senior management team is comprised of women None of our employees are represented by a labor union or covered by collective bargaining agreements and we have not had any work stoppages We believe our relationship with our employees is good
As the clinical development of our product candidates progresses we also expect to experience moderate growth in the number of our employees particularly in the areas of clinical development quality regulatory affairs and if any of our product candidates receives marketing approval sales marketing reimbursement and distribution In addition we also expect to hire additional personnel in order to sustain operations as a public company
Our human capital resources objectives include as applicable identifying recruiting retaining incentivizing and integrating our existing and additional employees The principal purpose of our equity incentive plan is to attract retain and motivate our employees non employee directors and consultants through the granting of stock based compensation and performance cash awards Our cash bonus awards are based on Company and departmental progress toward key annual goals and employee performance
Our website is www immunovant com We are subject to the informational requirements of the Securities and Exchange Act of 1934 as amended the Exchange Act and file or furnish reports including our Annual Report on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and amendments to reports filed pursuant to Sections 13 a and 15 d of the Exchange Act proxy statements and other information with the U S Securities and Exchange Commission the SEC We make copies of these reports and other information available free of charge through our website as soon as reasonably practicable after we file or furnish them with the SEC The SEC maintains a website that contains reports proxy and information statements and other information regarding issuers that file electronically with the SEC at www sec gov The information contained on the websites referenced in this Annual Report is not incorporated by reference into this filing and the website addresses are provided only as inactive textual references
Our business involves a high degree of risk You should carefully consider the risks described below together with the other information contained in this Annual Report including our consolidated financial statements and the related notes appearing elsewhere in this Annual Report We cannot assure you that any of the events discussed in the risk factors below will not occur These risks could have a material and adverse impact on our business results of operations financial condition and cash flows and if so our future prospects would likely be materially and adversely affected If any of such events were to happen the trading price of shares of our common stock could decline and you could lose all or part of your investment
We currently have no products that are approved for commercial sale and may never be able to develop marketable products We expect that our primary efforts and expenditures over the next few years will be devoted to the advancement of our clinical programs Our business currently depends on the successful completion of our clinical trials for and subsequent regulatory approval and commercialization of our product candidates which is uncertain See Risks Related to Development Regulatory Approval and Commercialization Clinical trials are very expensive time consuming difficult to design and implement and involve uncertain outcomes
We cannot be certain that any of our product candidates will receive regulatory approval or be successfully commercialized even if we receive regulatory approval The research testing manufacturing labeling packaging approval sale marketing distribution import export adverse event reporting storage advertising promotion and recordkeeping of pharmaceutical products including antibody based products are and will remain subject to extensive regulation by the FDA and other regulatory authorities in the U S and other countries which may vary from one country to another We are not permitted to market our product candidates in the U S until we receive approval of a biologics license application BLA or in any foreign country until we receive the requisite approvals from the appropriate regulatory authorities in such countries for marketing authorization In addition we have not yet demonstrated our ability to complete later stage or pivotal clinical trials for our product candidates We have not submitted a BLA for any product candidate to the FDA or any comparable application to any other foreign regulatory authority Obtaining approval of a BLA or similar foreign regulatory approval is an extensive lengthy expensive and inherently uncertain process and the FDA or other foreign regulatory authorities may delay limit or deny approval for many reasons including
the FDA or other relevant foreign regulatory authorities may not find the data from nonclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of our product candidates outweigh their safety risks
the FDA or other relevant foreign regulatory authorities may disagree with our interpretation of data or significance of results from the nonclinical studies and clinical trials of our product candidates or may require additional studies
if our BLA or other foreign marketing authorization application is referred for review by an advisory committee the advisory committee may recommend against approval of our application or may recommend that the FDA or other relevant foreign regulatory authority as the case may be require as a condition of approval additional nonclinical studies or clinical trials limitations on approved labeling or distribution and use restrictions
the FDA or other relevant foreign regulatory authorities may require development of a Risk Evaluation and Mitigation Strategy REMS drug safety program or similar strategy imposed by foreign regulatory authorities as a condition of approval
In addition if our product candidates encounter safety or efficacy problems such as the observed lipid findings from our clinical trials of batoclimab developmental delays regulatory issues supply issues or other problems in one of our target indications our development plans for our product candidates could be significantly harmed in other indications which would have a material adverse effect on our business Further problems encountered by competitors who are developing product candidates in the autoimmune disease field including IgG mediated autoimmune indications or that target the same indications or use the same mechanism of action as our product candidates could suggest problems with our product candidates that would potentially harm our business Accordingly we cannot assure you that any of our product candidates will be successfully developed or commercialized
Our product candidates are still in clinical development and will require extensive clinical testing before we are prepared to submit a BLA or other similar application for regulatory approval For example we initiated potentially registrational trials for IMVT 1402 in Graves disease GD difficult to treat rheumatoid arthritis D2T RA myasthenia gravis MG and chronic inflammatory demyelinating polyneuropathy CIDP and a proof of concept trial in cutaneous lupus erythematosus CLE We also plan to initiate a potentially registrational trial evaluating IMVT 1402 in Sjögren s disease SjD and a second potentially registrational trial evaluating IMVT 1402 in GD The first top line data for any of the potentially registrational studies is not expected until sometime in calendar year 2027 assuming we can fully enroll and successfully complete the relevant trials according to our anticipated timelines We cannot provide any assurance that we any clinical trials will be conducted as planned or completed on scheduled if at all Clinical trials are very expensive and difficult to design and implement in part because they are subject to rigorous regulatory requirements The clinical trial process is also time consuming and costly and is dependent upon collaboration with many contract research organizations CROs and clinical trial sites
Failures can occur at any stage of clinical trials and we could encounter problems that cause us to abandon or repeat clinical trials In addition results from clinical trials may require further evaluation delaying the next stage of clinical development or submission of a BLA Further product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through nonclinical studies and initial clinical trials and such product candidates may exhibit negative safety signals in later stage clinical trials that they did not exhibit in nonclinical or earlier stage clinical trials A number of companies in the pharmaceutical industry including biotechnology and biopharmaceutical companies have suffered significant setbacks in or the discontinuation of clinical trials due to lack of efficacy or adverse safety profiles notwithstanding positive results in earlier trials Likewise the results of early nonclinical studies and clinical trials of our product candidates some of which were not conducted by us may not be predictive of the results of our current or planned development programs
inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites
imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons including after review of an investigational new drug application IND or amendment a clinical trial application CTA or amendment or equivalent application or amendment as a result of a new safety finding that presents unreasonable risk to clinical trial participants a negative finding from a GCP inspection of our clinical trial operations or trial sites developments in trials conducted by in class competitors that raise regulatory concerns about risk to patients of the class broadly or if the regulator finds that the investigational protocol or plan is clearly deficient to meet its stated objectives
an institutional review board IRB or ethics committee refusing to approve suspending or terminating the trial at an investigational site precluding enrollment of additional subjects or withdrawing their approval of the trial
Therefore we cannot predict with any certainty the schedule for commencement and completion of future clinical trials If we experience delays in the commencement enrollment or completion of our clinical trials or if we terminate a clinical trial prior to completion the commercial prospects of our product candidates could be harmed and our ability to generate product revenue from our product candidates if approved may be delayed In addition any delays in our clinical trials could increase our costs cause a decline in our share price slow down the approval process and jeopardize our ability to commence product sales and generate revenue
In addition many of the factors that cause or lead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates Any of these occurrences may harm our business financial condition and results of operations
Enrollment and retention of patients in clinical trials is an expensive and time consuming process and could be made more difficult or rendered impossible by multiple factors outside our control and we may not be able to enroll patients in our trials on our anticipated timelines
We may encounter delays or difficulties in enrolling or be unable to enroll a sufficient number of patients to complete any of our clinical trials on our current timelines or at all and even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials Enrollment in our clinical trials may be slower than we anticipate or be stopped leading to delays in our development timelines For example we may face difficulty enrolling or maintaining a sufficient number of patients in our clinical trials evaluating IMVT 1402 for MG CIDP and GD due to existing alternative treatments available including nipocalimab for the treatment of MG efgartigimod for the treatment of MG and CIDP IVIg plasma exchange and steroids for CIDP and anti thyroid drugs and ablative treatments for GD In addition patients may decline to enroll or decide to withdraw from our clinical trials due to protocol required washout periods or the risk of receiving placebo
Patient enrollment and retention in clinical trials depends on many factors including the size of the eligible patient population the nature of the trial protocol our ability to recruit clinical trial investigators with the appropriate competencies and experience limited trial site capacity and staffing as a result of healthcare worker shortages the existing body of safety and efficacy data with respect to the study drug or drug class the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same indication the proximity of patients to clinical sites the eligibility criteria for the trial and the proportion of patients screened that meets those criteria and our ability to obtain and maintain patient consents Our product candidates are focused in part on addressing rare autoimmune indications and we have focused our initial development efforts for batoclimab on the treatment of MG TED CIDP and GD with limited patient pools from which to draw in order to complete our clinical trials in a timely and cost effective manner We could be faced with similarly limited patient pools as we pursue certain of these and other indications for IMVT 1402 such as SjD D2T RA and CLE
Furthermore any negative results or new safety signals we may report in clinical trials of our product candidates may make it difficult or impossible to recruit and retain patients in other clinical trials we are conducting or to resume enrolling patients once a paused clinical trial has been resumed For example we previously voluntarily paused dosing in our clinical trials for batoclimab due to elevated total cholesterol and LDL levels observed in some patients treated with batoclimab Similarly negative results reported by our competitors about their drug candidates may negatively affect patient recruitment in our clinical trials Also marketing authorization of competitors in this same class of drugs may impair our ability to enroll patients into our clinical trials delaying or potentially preventing us from completing recruitment of one or more of our trials
Delays or failures in planned patient enrollment or retention may result in increased costs program delays or both which could have a harmful effect on our ability to develop our product candidates or could render further development impossible
The results of our nonclinical studies and clinical trials may not support our proposed claims for our product candidates or regulatory approval on a timely basis or at all and the results of earlier studies and trials may not be predictive of future trial results
Success in nonclinical testing and early clinical trials does not ensure that later clinical trials will be successful and we cannot be sure that the results of later clinical trials will replicate the results of prior nonclinical testing and clinical trials In addition preclinical testing may not adequately uncover drug side effects In particular we cannot assure you that the reductions in IgG antibodies that we have observed to date in our clinical trials of batoclimab or in the Phase 1 trial of IMVT 1402 will be observed in any future clinical trials or that such reductions in IgG antibodies will result in clinical benefit that is sufficient to demonstrate that the efficacy endpoints of the study are met Likewise positive results in interim analyses or other preliminary analyses do not ensure that the clinical trial as a whole will be successful and achieve statistical significance which further limits the reliability of such data A number of companies in the pharmaceutical industry including biotechnology companies have suffered significant setbacks in or the discontinuation of clinical trials even after positive results in earlier nonclinical studies or clinical trials These setbacks have been caused by among other things nonclinical findings observed while clinical trials were underway and safety or efficacy observations in ongoing clinical trials
Further product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through nonclinical and initial clinical trials A future failure of a clinical trial to meet its pre specified endpoints would likely cause us to abandon the indication Any delay in or termination of our clinical trials will delay the submission of a BLA to the FDA or other similar applications with other relevant foreign regulatory authorities and ultimately our ability to commercialize our product candidates if approved and generate product revenue Even if our clinical trials are completed as planned we cannot be certain that their results will support our expectations for differentiation or the effectiveness or safety of our product candidates The FDA has substantial discretion in the review and approval process and may disagree that our data support the differentiated claims we may propose In addition only a small percentage of biologics under development result in the submission of a BLA to the FDA or other similar applications with other relevant foreign regulatory authorities and even fewer are approved for commercialization
Interim top line or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
From time to time we may publicly disclose preliminary or top line data from our clinical trials which is based on a preliminary analysis of then available top line data and the results and related findings and conclusions are subject to change following a full analysis of all data related to the particular trial We also make assumptions estimations calculations and conclusions as part of our analyses of data and we may not have received or had the opportunity to fully and carefully evaluate all data As a result the top line results that we report may differ from future results of the same trials or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated Top line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published As a result top line data should be viewed with caution until the final data are available We may also disclose interim data from our clinical trials Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available Adverse differences between preliminary or interim data and final data could significantly harm our business prospects Further disclosure of preliminary or interim data by us or by our competitors could result in volatility in the price of shares of our common stock
Further others including regulatory authorities may not accept or agree with our assumptions estimates calculations conclusions or analyses or may interpret or weigh the importance of data differently which could impact the approvability or commercialization of the particular product candidate or product and our business in general In addition the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information and what we determine is the material or otherwise appropriate information to include in our disclosure is subject to interpretation and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions conclusions views activities or otherwise regarding a particular drug product candidate or our business If the top line data that we report differ from actual results or if others including regulatory authorities disagree with the conclusions reached our ability to obtain approval for and commercialize IMVT 1402 batoclimab or any future product candidate our business operating results prospects or financial condition may be harmed
Our product candidates may be associated with adverse events or cause undesirable side effects or have other properties that could delay or prevent their regulatory approval cause us to suspend or discontinue clinical trials abandon further development or limit the commercial viability of any approved label or market acceptance
Results of our trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics Adverse events reported in our clinical trials or undesirable side effects caused by our product candidates or others anti FcRn products or product candidates could cause us or regulatory authorities to interrupt delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA European Commission or other competent regulatory authorities
If an unacceptable frequency or severity of treatment related side effects or new safety signals are reported in our or others anti FcRn clinical trials or from post marketing safety surveillance of approved anti FcRn products our ability to obtain regulatory approval may be negatively impacted Treatment related side effects arising from or those potentially arising from our product candidates or those from other companies targeting similar autoimmune indications or using the same mechanism of action could affect the design of clinical studies target patient population enrollment and conduct of the studies patient recruitment or the ability of enrolled patients to complete our clinical trials eventual labeling and risk management or result in potential product liability claims
For example treatment related side effects associated with batoclimab in our clinical trials previously caused us to pause dosing in our clinical trials of batoclimab We voluntarily paused dosing in our early phase clinical studies of batoclimab to evaluate treatment induced elevations in total cholesterol and LDL levels observed in some trial subjects After evaluation of the available safety data and following discussions with multiple regulatory authorities we continued our clinical development of batoclimab While we do not expect that increases in LDL over a short term treatment duration would pose a safety concern for patients the risk benefit profile of long term administration of batoclimab at higher doses will need to incorporate any potential unfavorable effects on lipid profiles In addition protocols that contain long term treatment durations include frequent monitoring of plasma lipids and guidelines for the management of any observed lipid abnormalities These occurrences have harmed and any reoccurrences may continue to harm our business financial condition and prospects
Furthermore if our product candidates cause side effects that negatively affect the risk benefit profile it is possible we will not be able to agree upon sufficient risk mitigation with all regulatory authorities and that our development of our product candidates will not continue in certain countries or for certain indications Even if we are able to continue clinical development of our product candidates with such risk mitigations any future approval and marketing would suffer from the risks of potential adverse reactions or side effects and potential impact of mitigating measures including among others limited indication monitoring a boxed warning a REMS or similar strategy imposed by foreign regulatory authorities potential additional safety studies and other adverse labeling
regulatory authorities may withdraw suspend vary or limit their approval of the product or require a REMS or similar strategy imposed by foreign regulatory authorities to impose restrictions on the product s distribution or require other risk management measures
additional restrictions may be imposed on the distribution or marketing of the particular product or the manufacturing processes for the product or any component thereof including a black box warning or contraindication on the product label or communications containing warnings or other safety information about the product
regulatory authorities may require the addition of labeling statements such as warnings or contraindications require other labeling changes or require field alerts or other communications to physicians pharmacies or the public
we may be required to change the way the product is administered or distributed conduct additional clinical trials change the labeling of a product or be required to conduct additional post marketing studies or surveillance
Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate and could substantially increase the costs of commercializing such product candidate if approved
Our product candidates are antibody proteins that could cause an immune response in patients resulting in the creation of harmful or neutralizing antibodies against these therapeutic proteins preventing or limiting regulatory approval or our ability to commercialize our product candidates
In addition to the safety efficacy manufacturing and regulatory hurdles faced by our product candidates the administration of proteins such as monoclonal antibodies even those that are fully human in nature including our product candidate can cause an immune response resulting in the creation of antibodies directed against the therapeutic protein These anti drug antibodies can have no effect or can neutralize the effectiveness of the protein or require that higher doses be used to obtain a therapeutic effect Whether anti drug antibodies will be created and how they react can often not be predicted from nonclinical studies or clinical trials and their detection or appearance is often delayed As a result neutralizing antibodies may be detected at a later date or upon longer exposure periods such as following more chronic administration in longer lasting clinical trials In some cases detection of neutralizing antibodies can even occur after pivotal clinical trials have been completed Therefore there can be no assurance that neutralizing antibodies will not be detected in future clinical trials or at a later date upon longer exposure including after commercialization If anti drug antibodies reduce or neutralize the effectiveness of any of our product candidates the continued clinical development or receipt of marketing approval for such product candidate could be delayed or prevented and even if such product candidate is approved its commercial success could be limited any of which would impair our ability to generate revenue and continue operations
As product candidates proceed through nonclinical studies to late stage clinical trials towards potential approval and commercialization it is common that various aspects of the development program such as manufacturing methods and formulation are altered along the way in an effort to optimize processes and results Such changes carry the risk that they will not achieve these intended objectives Any of these changes could cause batoclimab or any future product candidate to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials Such changes may also require additional testing FDA notification or FDA approval or similar This could delay completion of clinical trials require the conduct of bridging clinical trials or the repetition of one or more clinical trials increase clinical trial costs delay approval of batoclimab IMVT 1402 or any future product candidate or jeopardize our ability to commence sales and generate revenue
If we are not able to obtain required regulatory approvals we will not be able to commercialize batoclimab IMVT 1402 or any future product candidate and our ability to generate product revenue will be impaired
Batoclimab IMVT 1402 and any future product candidate that we may develop as well as the activities associated with their development and commercialization including their design research testing manufacture safety efficacy recordkeeping labeling packaging storage approval advertising promotion sale and distribution are subject to comprehensive regulation by the FDA and other regulatory authorities in the U S and by similar regulatory authorities outside the U S Failure to obtain marketing approval for and thus commercialize any product candidate could negatively impact our ability to generate any revenue from product sales
We have not received approval from regulatory authorities to market any product candidate in any jurisdiction and it is possible that our product candidates will never obtain the appropriate regulatory approvals necessary for us to commence product sales Neither we nor any collaborator is permitted to market our product candidates in the U S or any other jurisdiction until we receive regulatory approval of a BLA from the FDA or similar approval from comparable regulatory authorities outside of the U S
The time required to obtain approval of a BLA by the FDA or similar approval from comparable regulatory authorities outside of the U S is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors including the discretion of the regulatory authority Prior to submitting a BLA to the FDA or any comparable application to any other foreign regulatory authorities for approval of any product candidate we will need to complete Phase 3 or other registrational clinical trials to adequately demonstrate favorable results with respect to safety tolerability and efficacy In addition approval policies regulations or the type and amount of clinical data necessary to obtain approval may change during the course of a product candidate s clinical development and may vary among jurisdictions
Securing marketing approvals requires the submission of extensive manufacturing nonclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the safety and efficacy of our product candidates for the specified indications We expect to rely on third party CROs consultants and our collaborators to assist us in filing and supporting the applications necessary to obtain marketing approvals Securing marketing approval also requires the submission of information about the product manufacturing process to and inspection of manufacturing facilities by the regulatory authorities Errors in the submission of applications for marketing approval or issues including those related to gathering the appropriate data and the inspection process may ultimately delay or affect our ability to obtain regulatory approval commercialize our product candidates and generate product revenue
We have in licensed the rights to IMVT 1402 and batoclimab in limited territories Any adverse developments that occur during any clinical trials or manufacturing conducted by third parties including HanAll in other jurisdictions may affect our ability to obtain regulatory approval or commercialize our product candidates
We have in licensed the right to develop manufacture and commercialize anti FcRn antibodies including IMVT 1402 and batoclimab in the Licensed Territory HanAll or any of its sublicensees or collaborators over which we have no control has the right to develop manufacture and commercialize these product candidates in geographies outside of our Licensed Territory If an impact to the characterization of the safety profile occurs in studies conducted by HanAll or third parties in other jurisdictions outside of our Licensed Territory the FDA or other foreign regulatory authorities may delay limit or deny approval of these product candidates or require us to conduct additional clinical trials as a condition to marketing approval which would increase our costs and time to market If we receive FDA or foreign regulatory authority approval for any of our product candidates and a new or serious safety issue is identified in connection with clinical trials conducted by third parties in other jurisdictions outside of our Licensed Territory the FDA or foreign regulatory authority may withdraw or vary their approval or restrict our ability to market and sell our products or may require additional testing or evaluation In addition treating physicians may be less willing to administer our product candidates due to concerns over such AEs which would limit our ability to successfully commercialize these product candidates In addition issues may arise in connection with the manufacturing process for our product candidates utilized by HanAll or any of its other licensees or collaborators which could affect our ability to obtain regulatory approval for or commercialize these product candidates
The markets for autoimmune disease therapies are competitive and are characterized by significant technological development and new product introduction For example there are several large and small pharmaceutical companies focused on delivering therapeutics for our targeted autoimmune disease indications including GD MG CIDP TED RA CLE and SjD We anticipate that if we obtain regulatory approval of any of our product candidates we will face significant competition from other approved therapies or drugs that become available in the future for the treatment of our target indications If approved our product candidates may also compete with unregulated unapproved and off label treatments Even if a biosimilar product is less effective than our product candidates a less effective biosimilar may be more quickly adopted by physicians and patients than our competing product candidates based upon healthcare cost or convenience Our product candidates if approved are expected to present a novel therapeutic approach for certain indications we are pursuing and will have to compete with existing therapies some of which are widely known and accepted by physicians and patients To compete successfully in this market we will have to demonstrate that the relative cost safety and efficacy of our product candidates if approved provide an attractive alternative to existing standard of care and other new therapies to gain a share of some patients discretionary budgets and to gain physicians attention and adoption within their clinical practices Some of the companies that may offer competing products also have a broad range of other product offerings large direct sales forces established patient support programs and long term customer relationships with our target physicians which could inhibit our market penetration efforts Such competition could lead to reduced market share for our product candidates and contribute to downward pressure on the pricing of our product candidates which could harm our business financial condition operating results and prospects
We expect to face intense competition from other biopharmaceutical companies who are developing agents for the treatment of autoimmune diseases including multiple agents in the same class as IMVT 1402 and batoclimab We are aware of several FcRn inhibitors that are in clinical development These include efgartigimod Argenx SE nipocalimab The Janssen Pharmaceutical Companies of Johnson Johnson and rozanolixizumab UCB In June 2023 the FDA approved VYVGART Hytrulo efgartigimod alfa and hyaluronidase qvfc for the treatment of generalized myasthenia gravis gMG in adults who test positive for the AChR antibody Previously the FDA approved VYVGART efgartigimod alfa fcab in the same patient population in December 2021 In June 2023 the FDA also approved RYSTIGGO rozanolixizumab noli for the treatment of gMG in adult patients who are AChR or anti muscle specific tyrosine kinase antibody positive In June 2024 the FDA expanded the label for VYVGART Hytrulo to include the treatment of CIDP In April 2025 the FDA approved the VYVGART Hytrulo prefilled syringe efgartigimod alfa and hyaluronidase qvfc for the treatment of adult patients with gMG who are AChR antibody positive and adult patients with CIDP In April 2025 IMAAVY
nipocalimab an anti FcRn monoclonal antibody was approved by the FDA for the treatment of MG in adult and pediatric patients aged 12 and older who are anti AChR and anti MuSK antibody positive Viridian Therapeutics is developing a portfolio of engineered FcRn inhibitors including VRDN 006 which is currently in Phase 1 development and VRDN 008 which is currently in preclinical development and have the potential to treat a broad array of autoimmune diseases
Our product candidates if approved may also face competition from agents with different mechanisms of action The most commonly prescribed first line agents for the treatment of MG are acetylcholinesterase inhibitors such as pyridostigmine which are marketed by several manufacturers of generic medicines IVIg is also routinely used for patients with MG SOLIRIS eculizumab marketed by AstraZeneca is an antibody inhibitor of the C5 protein approved in 2017 for the treatment of MG in patients who are positive for anti AChR antibodies Other C5 complement inhibitors approved in gMG include ULTOMIRIS ravulizumab cwvz which was approved in April 2022 and ZILBRYSQ zilucoplan approved in October 2023 In October 2024 Amgen announced positive data in patients who are positive for anti AChR antibodies for UPLIZNA inebilizumab a CD19 targeted humanized monoclonal antibody currently in Phase 3 development for the treatment of gMG
For CIDP our product candidates may also face competition from agents in Phase 3 with different mechanisms of action including C1 inhibitors riliprubart Sanofi DNTH103 Dianthus and C2 inhibitor empasiprubart Argenx SE
For GD we are aware of multiple agents with different mechanisms of action that are in early stage development including TSH antagonists being developed by Crinetics Pharmaceuticals and Lycia Therapeutics LCA 0321 and currently in IND enabling studies Biohaven s IgG degrader BHV 1300 in a Phase 1 study and Sanofi s BTK inhibitor rilzabrutinib in a Phase 2 study For patients with TED the first line of treatment is generally immunosuppressive therapy including high doses of corticosteroids Rituximab Roche a monoclonal antibody that binds to an antigen specific to antibody producing B cells and tocilizumab Roche an anti IL 6R monoclonal antibody may also be used as off label treatment options for TED and other IgG mediated autoimmune diseases In January 2020 the FDA approved Horizon Therapeutics TEPEZZA teprotumumab an anti insulin like growth factor 1 receptor IGF 1R antibody for the treatment of TED In September 2024 Viridian Therapeutics reported positive top line results for veligrotug VRDN 001 an IGF 1R antibody from a Phase 3 pivotal study in TED It is also advancing VRDN 003 a second anti IGF 1R therapy in Phase 3 development in TED
For RA which is the most common systemic autoimmune disease treatment options include a variety of conventional oral targeted synthetic and biologic DMARDs However for the subset of patients with D2T RA characterized by inadequate response to two or more biologic or targeted DMARDs no proven treatment options are available In November 2023 Janssen announced supportive data for nipocalimab from a Phase 2a study in patients with ACPA and or RF RA and who have had an inadequate response or intolerance to at least 1 prior anti TNF therapy
For CLE a dermatology focused therapeutic category with no treatment innovation for more than 50 years treatment options include prevention of exposure to sunlight with the utilization of both topical and systemic therapies such as antimalarials immunomodulators and immunosuppressives methotrexate mycophenolate With the significant unmet need and increasing demand for biologic therapies in dermatology and rheumatology the competitive landscape for SCLE and CCLE is a growing market for novel therapies and diagnostic tools in development Biogen is in Phase 2 3 with litifilimab BDCA2 and AstraZeneca is in Phase 3 anifrolumab IFNAR1 with many other early development programs
For SjD therapeutic approaches include a variety of local agents to address the associated dry eye and mouth and or immunosuppressive treatments to address the systemic manifestations of disease Although a variety of drug classes have been trialed to date there are no disease modifying therapies approved for the treatment of SjD Anti FcRns nipocalimab The Janssen Pharmaceutical Companies of Johnson Johnson and efgartigimod Argenx SE are currently in Phase 3 trials in SjD Our product may also face competition from other drug classes including TYK2 deucravacitinib CD40 dazodalibep BAFF ianalumab or BLyS APRIL telitacicept
Many of our existing or potential competitors have substantially greater financial technical and human resources than we do and significantly greater experience in the discovery and development of product candidates as well as in obtaining regulatory approvals of those product candidates in the U S and in foreign countries Many of our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a smaller number of our competitors In October 2023 Amgen completed its previously announced acquisition of Horizon Therapeutics for approximately 27 8 billion expanding its rare disease pipeline In February 2025 Alumic Inc and ACELYRIN INC who is advancing a subcutaneously delivered anti IGF 1R antibody for the treatment of TED announced they will merge in an all stock transaction Competition may reduce the number and types of patients available to us to participate in clinical trials because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors
Due to varying regulatory requirements in certain foreign countries there are many more products and procedures available for use to treat autoimmune diseases in some international markets than are approved for use in the U S In certain international markets there are also fewer limitations on the claims that our competitors can make about the effectiveness of their products and the manner in which they can market their products As a result we expect to face more competition in these markets than in the U S
obtain required regulatory approvals including approvals to market IMVT 1402 batoclimab or any future product candidate we develop in ways that are differentiated from existing and future products and treatments
The availability of our competitors products could limit the demand and the price we are able to charge for any product candidate we develop The inability to compete with existing or subsequently introduced treatments would have an adverse impact on our business financial condition and prospects
Additional time may be required to obtain marketing authorizations for pre filled syringe or autoinjector presentations of batoclimab or IMVT 1402 because it would be subject to regulation as a combination product
Combination products are therapeutic and diagnostic products that combine drugs devices and or biological products A pre filled syringe or autoinjector presentation of our product candidates would be considered a combination product that requires coordination within the FDA and in similar foreign regulatory authorities for review of its device and biologic components Although the FDA and similar foreign regulatory authorities have systems in place for the review and approval of combination products such as ours we may experience delays in the development and commercialization of these product candidates due to uncertainties in the product development and approval process
In the E U combination products are not subject to a single regulatory pathway Products combining a medical device and a medicinal product are either regulated as a medicinal product or a medical device depending on which product has the primary mode of action Alternatively they can be regulated by two separate procedures with elements regulated as a medicinal product and elements as a medical device Authorities involved in the regulatory assessment of combination products may include the EMA national competent authorities of E U Member States and Notified Bodies
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy time consuming and inherently unpredictable and even if we obtain approval for a product candidate in one country or jurisdiction we may never obtain approval for or commercialize it in any other jurisdiction which would limit our ability to realize our full market potential
Prior to obtaining approval to commercialize a product candidate in any jurisdiction we or our collaborators must demonstrate with substantial evidence from well controlled clinical trials and to the satisfaction of the FDA or comparable foreign regulatory authorities that such product candidate is safe and effective for its intended use Results from nonclinical studies and clinical trials can be interpreted in different ways Even if we believe the nonclinical or clinical data for a product candidate are positive such data may not be sufficient to support approval by the FDA and other regulatory authorities In order to market any products in any particular jurisdiction we must establish and comply with numerous and varying regulatory requirements on a country by country basis regarding safety and efficacy Approval by the FDA does not ensure approval by regulatory authorities in any other country or jurisdiction outside the U S In addition clinical trials conducted in one country may not be accepted by regulatory authorities in other countries and regulatory approval in one country does not guarantee regulatory approval in any other country Approval processes vary among countries and can involve additional product testing and validation as well as additional administrative review periods Seeking regulatory approval could result in difficulties and costs for us and require additional nonclinical studies or clinical trials which could be costly and time consuming We do not have any product candidates approved for sale in any jurisdiction including in international markets If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals or if regulatory approvals in international markets are delayed our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized
Even if we obtain regulatory approval for a product candidate we will still face extensive ongoing quality and regulatory compliance requirements and our product may face future development and quality or regulatory compliance difficulties
Any product candidate for which we obtain marketing approval will be subject to extensive and ongoing regulatory requirements including for the manufacturing processes labeling packaging distribution AE reporting storage recordkeeping conduct of potential post market studies and post market commitment and requirements export import and advertising and promotional activities for such product among other things by the FDA and other regulatory authorities These requirements include submissions of safety and other post marketing information and reports establishment of registration and drug listing requirements continued compliance with current good manufacturing practice cGMP requirements relating to manufacturing quality control quality assurance and corresponding maintenance of records and documents requirements regarding the distribution of drug product samples to physicians recordkeeping and GCP requirements for any clinical trials that we conduct post approval Even if marketing approval of a product candidate is granted the approval may be subject to limitations on the indicated uses for which the product may be marketed or to conditions of approval In addition the FDA or other foreign regulatory authorities may require that contraindications warnings or precautions including in some cases a boxed warning be included in the product labeling or a REMS program be established which could limit sales of the product Regulatory authorities closely regulate the post approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling Although the FDA and other foreign regulatory authorities do not regulate a physician s choice of drug treatment made in the physician s independent medical judgment regulatory authorities impose stringent restrictions on manufacturers communications regarding off label use and if we do not market our products for their approved indications we may be subject to enforcement action for off label marketing Violations of the Federal Food Drug and Cosmetic Act in the U S and other comparable regulations in foreign jurisdictions relating to the promotion of prescription drugs may lead to enforcement actions and investigations by the FDA U S Department of Justice State Attorneys General and other foreign regulatory authorities alleging violations of U S federal and state health care fraud and abuse laws as well as state consumer protection laws and comparable laws in foreign jurisdictions
In addition later discovery of previously unknown AEs caused by our product candidates or reported by anti FcRn product candidates developed by others or other problems with our product manufacturers or manufacturing processes or failure to comply with regulatory requirements may yield various results including
restrictions on the labeling or marketing of such product including a black box warning or contraindication on the product label or communications containing warnings or other safety information about the product
The FDA and other foreign regulatory authorities policies may change and additional government regulations may be enacted that could prevent limit or delay regulatory approval of batoclimab IMVT 1402 or any future product candidate For example on April 26 2023 the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation If adopted in the form proposed a number of changes to the regulatory framework governing medicinal products in the European Economic Area EEA may occur These include a possible decrease in data and market exclusivity for our product candidates in the EEA We cannot predict the likelihood nature or extent of government regulation that may arise from future legislation or administrative action either in the U S or abroad If we are slow or unable to adapt to changes in existing requirements or to the adoption of new requirements or policies or if we are not able to maintain regulatory compliance we may lose any marketing approval that we may have obtained
For example certain policies of the current U S administration may impact our business and industry It is difficult to predict how these policies will be implemented and the extent to which they will impact the FDA s ability to exercise its regulatory authority If these policies impose constraints on the FDA s ability to engage in oversight and implementation activities in the normal course our business may be negatively impacted
Non compliance by us or any future collaborator with regulatory requirements including safety monitoring or pharmacovigilance and with requirements related to the development of products for the pediatric population can also result in significant financial penalties
Even if we receive marketing approval for any product candidate it may fail to achieve market acceptance by physicians patients third party payors or others in the medical community necessary for commercial success
Even if we receive marketing approval for a product candidate it may nonetheless fail to gain sufficient market acceptance by physicians patients third party payors and others in the medical community If it does not achieve an adequate level of acceptance we may not generate significant product revenue or become profitable The degree of market acceptance of any product candidate if approved for commercial sale will depend on a number of factors including but not limited to
the safety efficacy risk benefit profile and potential advantages compared to alternative competing or existing treatments which physicians may perceive to be adequately effective for some or all patients
Market acceptance of new products for the treatment of the indications we pursue with our product candidates including MG CIDP GD TED RA SjD and CLE may also be affected by the perception that existing available treatments are sufficient to treat the majority of these patients In addition our product candidates if approved may compete with other approved FcRn inhibitors or other FcRn inhibitors under development that have demonstrated similar levels of IgG reductions and shown clinical benefit by meeting their efficacy endpoints in completed clinical trials to date In addition the potential patient population for certain autoimmune indications that we may target are relatively small This could affect the rate of adoption and as a result market acceptance of our product candidates if approved could be much slower than anticipated
We cannot assure you that batoclimab IMVT 1402 or any future product candidate if approved will achieve broad market acceptance among physicians patients and third party payors The failure of any such product candidate that receives regulatory approval or clearance to achieve market acceptance or commercial success would adversely affect our business and results of operations
We have limited financial and management resources As a result we may forego or delay pursuit of opportunities with other indications that later prove to have greater commercial potential Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities Our spending on current and future development programs for specific indications may not yield any commercially viable products Any such failures would adversely affect our business and results of operations
If we are unable to establish sales marketing and distribution capabilities either on our own or in collaboration with third parties we may not be successful in commercializing our product candidates if approved
We do not currently have our own sales or distribution capabilities and our marketing capabilities are limited The cost of establishing and maintaining such an organization may exceed the cost effectiveness of doing so In order to market any product that may be approved we must build our sales distribution marketing compliance managerial and other nontechnical capabilities or make arrangements with third parties to perform these services To achieve commercial success for any product for which we obtain marketing approval we will need a sales and marketing organization and a patient support services organization
We expect to build a focused sales distribution and marketing infrastructure to market our product candidates in the U S if approved There are significant expenses and risks involved with establishing our own sales marketing and distribution capabilities including our ability to hire retain and appropriately incentivize qualified individuals develop an appropriate compliance function provide adequate training to sales and marketing personnel and effectively manage geographically dispersed sales and marketing teams to generate sufficient demand Any failure or delay in the development of our internal sales marketing and distribution capabilities could delay any product launch which would adversely impact its commercialization If the commercial launch of our first product candidate if approved for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason we would have prematurely or unnecessarily incurred these commercialization expenses This may be costly and our investment would be lost if we cannot retain or reposition our sales and marketing personnel
If we are unable to build our own sales force or negotiate a collaborative relationship for the commercialization of any product candidate we may be forced to delay potential commercialization or reduce the scope of our sales or marketing activities If we elect to increase our expenditures to fund commercialization activities ourselves we will need to obtain additional capital which may not be available to us on acceptable terms or at all If we do not have sufficient funds we will not be able to bring any product candidate to market or generate product revenue We could enter into arrangements with collaborative partners at an earlier stage than otherwise would be ideal and we may be required to relinquish certain rights to any of our product candidates or otherwise agree to terms unfavorable to us any of which may have an adverse effect on our business operating results and prospects
If we are unable to establish adequate sales marketing and distribution capabilities either on our own or in collaboration with third parties we will not be successful in commercializing our product candidates and may not become profitable We may be competing with many companies that currently have extensive and well funded marketing and sales operations Without an internal team or the support of a third party to perform marketing and sales functions we may be unable to compete successfully against these more established companies
We have been granted orphan drug designation for batoclimab for the treatment of MG and may seek orphan drug designations for IMVT 1402 or other product candidates we develop but we may be unable to obtain such further designation or to maintain the benefits associated with orphan drug status even if that designation is granted
As part of our business strategy we have in the past and may in the future seek orphan drug designations for any product candidates we develop and we may be unsuccessful In July 2021 we were granted orphan drug designation in the U S by the FDA for batoclimab for the treatment of MG and in August 2022 we received orphan drug designation from the European Commission for batoclimab for the treatment of MG We may seek orphan drug designation from the FDA for our product candidates where there is a medically plausible basis for their use We may also seek orphan drug designations for our product candidates for the treatment of other indications in European countries where available
Although we may seek additional orphan drug designations for our product candidates where available from the FDA the European Commission and other regulatory authorities we may never receive such further designation Moreover obtaining orphan drug designation for batoclimab for the treatment of MG does not mean we will be able to obtain such designation for any other indications Even if we were to obtain orphan drug designation for IMVT 1402 from any regulatory authority we may not be the first to obtain marketing approval for the same drug for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products and thus approval of our product candidates could be blocked for years if another company obtains approval and orphan drug exclusivity for the same drug and same condition before us If we do obtain market exclusivity in the U S or in European countries it may be limited if we seek approval for an indication broader than the orphan designated indication and may be lost if the FDA or applicable regulatory authority later determines that the request for designation was materially defective or if we are unable to assure sufficient quantities of the product to meet the needs of the relevant patients Further exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition the same drugs can be approved for different indications and might then be used off label in our approved indication and different drugs for the same condition may already be approved and commercially available Orphan drug designation does not convey any automatic advantage in or shorten the duration of the development or FDA or foreign regulatory authority review and approval process
If our product candidates or any future product candidate is approved for commercialization outside of the U S we expect that we will be subject to additional risks related to entering into international business relationships including
any foreign partners or collaborators not fulfilling their respective regulatory reporting requirements and any foreign regulatory authorities taking actions with respect to such failures which would be reportable to the FDA
potential noncompliance with the Foreign Corrupt Practices Act of 1977 as amended the FCPA the United Kingdom Bribery Act 2010 the U K Bribery Act or similar antibribery and anticorruption laws in other jurisdictions
Our current and future relationships with investigators health care professionals consultants third party payors and customers are subject to applicable healthcare regulatory laws which could expose us to penalties
Our business operations and current and future arrangements with investigators healthcare professionals consultants third party payors patient support efforts charitable organizations and customers expose us to broadly applicable fraud and abuse and other healthcare laws and regulations These laws regulate the business or financial arrangements and relationships through which we conduct our operations including how we research market sell and distribute any product for which we obtain marketing approval Such laws include among others
the federal Anti Kickback Statute which broadly prohibits the exchange of any remuneration related to items or services for which payment may be made in whole or in part under a federal healthcare program such as Medicare and Medicaid Violations of the federal Anti Kickback Statute also may constitute a false or fraudulent claim for purposes of the False Claims Act FCA
the federal criminal and civil false claims laws including the FCA through civil whistleblower or qui tam actions and the Civil Monetary Penalties Law which impose criminal and civil penalties against individuals or entities for among other things causing false or fraudulent claims to be presented for payment to the federal government
the Health Insurance Portability and Accountability Act of 1996 HIPAA which imposes criminal and civil liability for among other things knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or making false or fraudulent statements relating to healthcare matters similar to the federal Anti Kickback Statute a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation
the federal Physician Payments Sunshine Act which requires certain manufacturers of drugs devices biologics and medical supplies for which payment is available under Medicare Medicaid or the Children s Health Insurance Program with certain exceptions to report annually to the Centers for Medicare Medicaid Services CMS information related to payments or other transfers of value made to physicians defined to include doctors dentists optometrists podiatrists and chiropractors other healthcare professionals such as physician assistants and nurse practitioners and teaching hospitals and requires applicable manufacturers and group purchasing organizations to report annually the ownership and investment interests held by such physicians and their immediate family members
state laws that require pharmaceutical companies to comply with the pharmaceutical industry s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers marketing expenditures or drug pricing and state and local laws that require the registration of pharmaceutical sales representatives
federal state and foreign laws governing the privacy and security of personal information including health information such as HIPAA as amended by the Health Information Technology for Economic and Clinical Health Act HITECH and their implementing regulations which may require us to among other data protection measures provide notices obtain individual consents to use and disclose information give individuals rights with respect to their information and keep the information secure Enforcement of such laws could result in civil and criminal penalties as well as in some circumstances damages and related costs in defending private actions including class actions
Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes regulations authority guidance or case law involving applicable healthcare laws If our operations are found to be in violation of any of these or any other health regulatory laws that may apply to us we may be subject to significant penalties including the imposition of significant civil criminal and administrative penalties damages monetary fines disgorgement imprisonment possible exclusion from participation in Medicare Medicaid and other federal healthcare programs or similar programs in other countries or jurisdictions contractual damages reputational harm diminished profits and future earnings additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement and curtailment or restructuring of our operations any of which could adversely affect our ability to operate our business and our results of operations The issuance of a subpoena or an investigation regardless of the merits may result in negative publicity a drop in our share price and other harm to our business financial condition and results of operations Defending against any such actions can be costly time consuming and may require significant financial and personnel resources Therefore even if we are successful in defending against any such actions that may be brought against us our business may be impaired
Changes in healthcare law and implementing regulations as well as changes in healthcare policy may impact our business in ways that we cannot currently predict and may have a significant adverse effect on our business and results of operations
There have been and continue to be numerous executive legislative and regulatory changes and proposed changes regarding the U S healthcare system that could prevent or delay marketing approval of product candidates restrict or regulate post approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval Among policy makers and payors in the U S there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs boosting pricing transparency improving quality and or expanding patient access and the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives
The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 and related legislation collectively the Affordable Care Act substantially changed the way healthcare is financed by both the government and private insurers and significantly impacts the U S pharmaceutical industry The Affordable Care Act among other things 1 introduced an average manufacturer price calculation for drugs and biologics that are inhaled infused instilled implanted or injected and that are not generally dispensed through retail community pharmacies 2 increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and expanded rebate liability from fee for service Medicaid utilization to include the utilization of Medicaid managed care organizations as well 3 established a branded prescription drug fee that pharmaceutical manufacturers of branded prescription drugs must pay to the federal government 4 expanded the list of covered entities eligible to participate in the 340B drug pricing program by adding new entities to the program 5 established a Medicare Part D coverage gap discount program in which manufacturers currently must now agree to offer 70 point of sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer s outpatient drugs to be covered under Medicare Part D 6 expanded eligibility criteria for Medicaid programs by among other things allowing states to offer Medicaid coverage to additional individuals including individuals with income at or below 133 of the federal poverty level thereby potentially increasing manufacturers Medicaid rebate liability 7 created a licensure framework for follow on biologic products and 8 established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending
There have been amendments to and executive judicial and Congressional challenges to certain aspects of the Affordable Care Act For example on March 11 2021 the American Rescue Plan Act of 2021 was signed into law which eliminated the statutory Medicaid drug rebate cap previously set at 100 of a drug s average manufacturer price for single source and innovator multiple source drugs effective January 1 2024 Further on August 16 2022 the Inflation Reduction Act of 2022 IRA was signed into law which among other things extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025 The IRA also eliminates the donut hole under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out of pocket cost and through a newly established manufacturer discount program It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future It is unclear how any such challenges and the healthcare reform measures of the second Trump administration will impact the Affordable Care Act and our business We are continuing to monitor any changes to the Affordable Care Act that in turn may potentially impact our business in the future
Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted These changes include aggregate reductions to Medicare payments to providers of 2 per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws which began in 2013 and will remain in effect through 2032 unless additional Congressional action is taken New laws may result in additional reductions in Medicare and other healthcare funding which may materially adversely affect customer demand and affordability for our products and accordingly the results of our financial operations
Also there has been heightened governmental scrutiny recently over the manner in which pharmaceutical companies set prices for their marketed products which have resulted in several Congressional inquiries and proposed federal legislation as well as state efforts designed to among other things bring more transparency to product pricing reduce the cost of prescription drugs under Medicare review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drug products For example the IRA among other things 1 directs the U S Department of Health and Human Services HHS to negotiate the price of certain high expenditure single source biologics that have been on the market for at least 11 years covered under Medicare the Medicare Drug Price Negotiation Program and 2 imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation The IRA permits HHS to implement many of these provisions through guidance as opposed to regulation for the initial years HHS has and will continue to issue and update guidance as these programs are implemented These provisions took effect progressively starting in fiscal year 2023 On August 15 2024 HHS announced the agreed upon reimbursement prices of the first ten drugs that were subject to price negotiations although the Medicare Drug Price Negotiation Program is currently subject to legal challenges On January 17 2025 HHS selected 15 additional products covered under Part D for price negotiation in 2025 Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program Further on December 8 2023 the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march in rights While march in rights have not previously been exercised it is uncertain if that will continue under the new framework
At the state level individual states in the U S are increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing including price or patient reimbursement constraints discounts restrictions on certain product access and marketing cost disclosure and transparency measures and in some cases designed to encourage importation from other countries and bulk purchasing
We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement and in additional downward pressure on the price that we receive for any approved product Any reduction in reimbursement from Medicare or other government funded programs may result in a similar reduction in payments from private payors The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue attain profitability or commercialize our drugs once marketing approval is obtained The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS the FDA CMS and related agencies These actions presently directed by executive orders or memoranda from the Office of Management and Budget may propose policy changes that create additional uncertainty for our business These actions include for example 1 directives to reduce agency workforce and program cuts 2 rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending 3 eliminating the Biden administration s executive order that directed HHS to establishing an Artificial Intelligence AI task force and developing a strategic plan 4 directing HHS and other agencies to lower prescription drug costs through a variety of initiatives including by improving upon the Medicare Drug Price Negotiation Program and establishing Most Favored Nation pricing for pharmaceutical products and 5 directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans Additionally in its June 2024 decision in Loper Bright Enterprises v Raimondo the U S Supreme Court overturned the longstanding Chevron doctrine under which courts were required to give deference to regulatory agencies reasonable interpretations of ambiguous federal statutes The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations including those issued by the FDA Congress may introduce and ultimately pass health care related legislation that could among others impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program expand the orphan drug exclusion in the IRA and reduce Medicaid enrollment and funding We expect additional health reform measures may be implemented in the future
Market acceptance and sales of any approved product that we develop will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from third party payors including government health administration authorities and private health insurers There is no assurance that our product candidates if approved would achieve adequate coverage and reimbursement levels
In the U S no uniform policy of coverage and reimbursement for products exists among third party payors Third party payors decide which drugs they will pay for and establish reimbursement levels Third party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies However decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidate that we develop through approval will be made on a plan by plan basis One payor s determination to provide coverage for a product does not assure that other payors will also provide coverage and adequate reimbursement for the product Additionally a third party payor s decision to provide coverage for a drug does not imply that an adequate reimbursement rate will be approved Each plan determines whether or not it will provide coverage for a drug what amount it will pay the manufacturer for the drug on what tier of its formulary the drug will be placed and whether to require step therapy The position of a drug on a formulary generally determines the co payment that a patient will need to make to obtain the drug and can strongly influence the adoption of a drug by patients and physicians Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third party payors to reimburse all or part of the associated healthcare costs Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products Further from time to time typically on an annual basis payment rates are updated and revised by third party payors Such updates could impact the demand for our products to the extent that patients who are prescribed our products if approved are not separately reimbursed for the cost of the product
The process for determining whether a third party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing the reimbursement rate that such a payor will pay for the product Even if we do obtain adequate levels of reimbursement third party payors such as government or private healthcare insurers carefully review and increasingly question the coverage of and challenge the prices charged for products Increasingly third party payors are requiring that pharmaceutical companies provide them with predetermined discounts from list prices and are challenging the prices charged for products We may also be required to conduct expensive pharmacoeconomic studies to justify the coverage and the amount of reimbursement for particular medications We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and if reimbursement is available what the level of reimbursement will be Inadequate coverage or reimbursement may impact the demand for or the price of any product for which we obtain marketing approval If coverage and adequate reimbursement are not available or are available only to limited levels we may not be able to successfully commercialize any product candidate that we develop Additionally there have been a number of legislative and regulatory proposals to change the healthcare system in the U S and in some foreign jurisdictions that could affect our ability to sell any future drugs profitably There can be no assurance that our product candidates if approved will be considered medically reasonable and necessary or cost effective by third party payors that coverage or an adequate level of reimbursement will be available or that reimbursement policies and practices in the U S and in foreign countries where our products are sold will not adversely affect our ability to sell our product candidates profitably if approved for sale
Many E U Member States periodically review their reimbursement procedures for medicinal products which could have an adverse impact on reimbursement status We expect that legislators policymakers and healthcare insurance funds in the E U Member States will continue to propose and implement cost containing measures such as lower maximum prices lower or lack of reimbursement coverage and incentives to use cheaper usually generic products as an alternative to branded products and or branded products available through parallel import to keep healthcare costs down Moreover in order to obtain reimbursement for our products in some European countries including some E U Member States we may be required to compile additional data comparing the cost effectiveness of our products to other available therapies Health Technology Assessment HTA of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some E U Member States including those representing the larger markets The HTA process which is currently governed by national laws in each E U Member State is the procedure to assess therapeutic economic and societal impact of a given medicinal product in the national healthcare systems of the individual country The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual E U Member States The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between E U Member States
In December 2021 Regulation No 2021 2282 on HTA amending Directive 2011 24 E U was adopted in the E U This Regulation which entered into force in January 2022 and will apply as of January 2025 is intended to boost cooperation among E U Member States in assessing health technologies including new medicinal products and providing the basis for cooperation at E U level for joint clinical assessments in these areas The regulation foresees a three year transitional period and will permit E U Member States to use common HTA tools methodologies and procedures across the E U working together in four main areas including joint clinical assessment of the innovative health technologies with the most potential impact for patients joint scientific consultations whereby developers can seek advice from HTA authorities identification of emerging health technologies to identify promising technologies early and continuing voluntary cooperation in other areas Individual E U Member States will continue to be responsible for assessing non clinical e g economic social ethical aspects of health technologies and making decisions on pricing and reimbursement If we are unable to maintain favorable pricing and reimbursement status in E U Member States for product candidates that we may successfully develop and for which we may obtain regulatory approval any anticipated revenue from and growth prospects for those products in the E U could be negatively affected
Legislators policymakers and healthcare insurance funds in the E U may continue to propose and implement cost containing measures to keep healthcare costs down These measures could include limitations on the prices we would be able to charge for product candidates that we may successfully develop and for which we may obtain regulatory approval or the level of reimbursement available for these products from governmental authorities or third party payors Further an increasing number of E U and other foreign countries use prices for medicinal products established in other countries as reference prices to help determine the price of the product in their own territory Consequently a downward trend in prices of medicinal products in some countries could contribute to similar downward trends elsewhere
Our business operations clinical development plans and timelines and supply chain could be adversely affected by the effects of health epidemics and pandemics on manufacturing clinical trials and other business activities performed by us or by third parties with whom we conduct business including our contract manufacturers CROs suppliers shippers and others
Our business could be adversely affected by health epidemics wherever we have clinical trial sites or other business operations In addition health epidemics could cause significant disruption in the operations of third party manufacturers CROs and other third parties upon whom we rely For example restrictions imposed by healthcare facilities during the COVID 19 pandemic impacted clinical site activation and patient enrollment due to limited access capacity and staffing shortages resulting in a backlog of patient enrollment and delayed site initiations across the industry Our inability to successfully recruit and retain patients and principal investigators and site staff could adversely impact our clinical trial operations
We are dependent on a worldwide supply chain for products to be used in our clinical trials and if approved by the regulatory authorities for commercialization Quarantines shelter in place and similar government orders or the expectation that such orders shutdowns or other restrictions could occur or re occur whether related to health epidemics pandemics or other infectious diseases could impact personnel at third party manufacturing facilities in the U S and other countries or the availability or cost of materials which could disrupt our supply chain For example any manufacturing supply interruption of batoclimab which is currently manufactured at facilities in the U S and in South Korea or IMVT 1402 or any future product candidates could adversely affect our ability to conduct clinical trials of batoclimab IMVT 1402 and any future product candidates In addition closures of transportation carriers and modal hubs could materially impact our clinical development and any future commercialization timelines
Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to obtain regulatory approval or fail to become commercially viable We have never generated any product revenue and we cannot estimate with precision the extent of our future losses We do not currently have any products that are available for commercial sale and we may never generate product revenue or achieve profitability Our net loss was 413 8 million and 259 3 million for the years ended March 31 2025 and 2024 respectively As of March 31 2025 we had an accumulated deficit of 1 239 5 million
We expect to continue to incur substantial and increasing losses through the commercialization of batoclimab IMVT 1402 or any future product candidate if approved and we currently have no products that are approved for commercial sale As a result we are uncertain when or if we will achieve profitability and if so whether we will be able to sustain it Our ability to generate product revenue and achieve profitability is dependent on our ability to complete the development of our product candidates obtain necessary regulatory approvals for such product candidate and manufacture and successfully commercialize such product candidate alone or in collaboration with others We cannot assure you that we will be able to achieve or maintain profitability even if we successfully commercialize batoclimab IMVT 1402 or any future product candidate If we do successfully obtain regulatory approval to market a product candidate our revenue will be dependent upon in part and among other things the size of the markets in the territories for which we obtain regulatory approval the number of competitors in such markets the accepted price for our product candidates the reimbursement environment for our product candidates and whether we own the commercial rights for those territories If the indication approved by regulatory authorities for batoclimab IMVT 1402 or any future product candidate is narrower than we expect or the treatment population is narrowed by competition physician choice or treatment guidelines we may not generate significant revenue from sales of such product candidate even if approved Failure to become and remain profitable may adversely affect the market price of shares of our common stock and our ability to raise capital and continue operations
We expect our research and development expenses in connection with our development programs for our product candidates to continue to be significant For example we expect our research and development expenses to significantly increase as we initiated potentially registrational trials for IMVT 1402 in GD D2T RA MG and CIDP and a proof of concept trial in CLE We also plan to initiate a potentially registrational trial evaluating IMVT 1402 in SjD and a second potentially registrational trial evaluating IMVT 1402 in GD In addition if we obtain regulatory approval for batoclimab or IMVT 1402 we expect to incur increased sales marketing and manufacturing expenses As a result we expect to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future These losses had and will continue to have an adverse effect on our results of operations financial position and working capital
We are a clinical stage biopharmaceutical company with a limited operating history We have not yet demonstrated an ability to successfully complete a large scale pivotal clinical trial obtain marketing approval manufacture a commercial scale product or arrange for a third party to do so on our behalf or conduct sales and marketing activities necessary for successful product commercialization Consequently we have no meaningful operations upon which to evaluate our business and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing manufacturing and commercializing pharmaceutical products including antibody based products
Our ability to generate product revenue and become profitable depends upon our ability to successfully complete the development of and obtain the necessary regulatory approvals for our product candidates we develop We have never been profitable have no products approved for commercial sale and have not generated any product revenue
initiate and continue relationships with third party suppliers and manufacturers and have commercial quantities of batoclimab IMVT 1402 or any future product candidate manufactured at acceptable cost and quality levels and in compliance with FDA and other foreign regulatory requirements
Because of the numerous risks and uncertainties associated with product development including delays in subject enrollment or interruptions in clinical trial supplies or investigational product we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability Our expenses could increase beyond expectations if we are required by the FDA or comparable foreign regulatory authorities to perform studies or clinical trials in addition to those that we currently anticipate Even if batoclimab IMVT 1402 or any future product candidate is approved for commercial sale we anticipate incurring significant costs associated with its commercial launch If we cannot successfully execute any one of the foregoing our business may not succeed and you may lose some or all of your investment
We may not be successful in our efforts to identify and acquire or in license additional product candidates or technologies or to enter into collaborations or strategic alliances for the development and commercialization of any such future product candidates
We may seek to identify and acquire or in license novel product candidates or technologies in the autoimmune disease field The process by which we identify product candidates and technologies may fail to yield product candidates for clinical development for a number of reasons including those discussed in these risk factors and also
the process by which we identify and decide to acquire product candidates or technologies including through the business development support we receive from RSL and its subsidiaries pursuant to the Services Agreements may not be successful
potential product candidates may upon further study be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance
the acquisition or in licensing transactions can entail numerous operational and functional risks including exposure to unknown liabilities disruption of our business incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs or higher than expected acquisition or integration costs
We may choose to focus our efforts and resources on a potential product candidate or technology that ultimately proves to be unsuccessful We also cannot be certain that following an acquisition or in licensing transaction we will achieve the revenue or specific net income that justifies such transaction Further time and resources spent identifying acquiring and developing potential product candidates or technologies may distract management s attention from our primary business or other development programs If we are unable to identify and acquire suitable product candidates for clinical development this could adversely impact our business strategy our financial position and share price
In the future we may also decide to collaborate with other pharmaceutical companies for the development and potential commercialization of our product candidates in the U S or other countries or territories We will likely face significant competition in seeking appropriate collaborators We may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy If and when we collaborate with a third party for development and commercialization of a product candidate we can expect to relinquish some or all of the control over the future success of that product candidate to the third party Our ability to reach a definitive agreement for a collaboration will depend upon among other things our assessment of the collaborator s resources and expertise the terms and conditions of the proposed collaboration and the proposed collaborator s evaluation of a number of factors
We expect to spend substantial capital to complete the development of seek regulatory approvals for and commercialize our product candidates For example we will require substantial capital to execute our plans as we initiated potentially registrational trials for IMVT 1402 in GD D2T RA MG and CIDP and a proof of concept trial in CLE We also plan to initiate a potentially registrational trial evaluating IMVT 1402 in SjD and a second potentially registrational trial evaluating IMVT 1402 in GD Our expenditures may also include costs associated with the HanAll Agreement including payments in connection with the achievement of certain regulatory milestones prior to generating any product sales significant further payments upon the achievement of certain sales milestones and tiered royalty payments in connection with the commercial sale of batoclimab or IMVT 1402 if approved
We will require additional capital to complete the development and potential commercialization of our product candidates Because the length of time and activities associated with successful development of our product candidates are highly uncertain we are unable to estimate with certainty the actual funds we will require for development and any approved marketing and commercialization activities Additional capital may not be available in sufficient amounts or on reasonable terms if at all and our ability to raise additional capital may be adversely impacted by global economic conditions including disruptions to and volatility in the credit and financial markets in the U S and worldwide geopolitical tensions including the ongoing military conflict between Russia and Ukraine and in the Middle East changes in inflation interest rates international trade policies and tariffs and other factors Our future funding requirements both near and long term will depend on many factors including but not limited to
the cost of establishing sales marketing and distribution capabilities for batoclimab IMVT 1402 or any future product candidate in regions where we choose to commercialize such product candidate if approved on our own and
We do not have any committed external source of funds If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us we may have to significantly delay scale back or discontinue the development or commercialization of batoclimab IMVT 1402 and any future product candidates or potentially discontinue operations altogether In addition attempting to secure additional capital may divert the time and attention of our management from day to day activities and harm our product candidate development efforts Because of the numerous risks and uncertainties associated with the development and potential commercialization of batoclimab or IMVT 1402 we are unable to estimate the associated amounts of increased capital outlays operating expenditures and capital requirements
Raising additional funds by issuing equity securities will cause dilution to existing stockholders Raising additional funds through debt financings may involve restrictive covenants and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights
We expect that significant additional capital will be needed in the future to continue our planned operations Until such time if ever that we can generate substantial product revenue we expect to finance our cash needs through a combination of equity offerings debt financings strategic alliances and license and development agreements or other collaborations To the extent that we raise additional capital by issuing equity securities our existing stockholders ownership may experience substantial dilution and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of a common stockholder Additionally any agreements for future debt or preferred equity financings if available may involve covenants limiting or restricting our ability to take specific actions such as incurring additional debt making capital expenditures or declaring dividends
If we raise additional funds through collaborations strategic alliances or marketing distribution or licensing arrangements with third parties we may have to relinquish valuable rights to our future revenue streams research programs or batoclimab IMVT 1402 or any future product candidate or grant licenses on terms that may not be favorable to us If we are unable to raise additional funds when needed we may be required to delay limit reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise develop and market ourselves
We rely on the HanAll Agreement to provide us rights to the core intellectual property relating to IMVT 1402 and batoclimab Any termination or loss of significant rights under the HanAll Agreement would adversely affect our development and commercialization of IMVT 1402 and batoclimab
We have licensed our core intellectual property relating to IMVT 1402 and batoclimab from HanAll under the HanAll Agreement If for any reason the HanAll Agreement is terminated or we otherwise lose those rights it would adversely affect our business The HanAll Agreement imposes on us obligations relating to exclusivity territorial rights development commercialization funding payment diligence sublicensing insurance intellectual property protection and other matters If we breach any material obligations or use the intellectual property licensed to us in an unauthorized manner under the HanAll Agreement we may be required to pay damages to our collaborators and they may have the right to terminate the applicable licenses which would result in us being unable to develop manufacture and sell batoclimab if approved
We will be responsible for future contingent payments and royalties under the HanAll Agreement including up to an aggregate of 420 0 million after an aggregate amount of 32 5 million paid for milestone events achieved as of December 31 2024 certain of which will occur prior to commercialization of batoclimab or IMVT 1402 Accordingly we will be required to make such payments prior to the time at which we are able to generate any revenue if any from commercial sales of batoclimab or IMVT 1402 Following commercialization we may be required to make significant further payments upon the achievement of sales milestones and make tiered royalty payments in connection with the commercial sale of batoclimab and or IMVT 1402 if approved There can be no assurance that we will have the funds necessary to make such payments or be able to raise such funds when needed on terms acceptable to us or at all As a result we may be required to delay limit reduce or terminate our product development or future commercialization efforts We may not be able to manage our business effectively if we are unable to attract and retain key personnel
We may not be able to attract or retain qualified management scientific clinical and commercial personnel due to the intense competition for qualified individuals among biotechnology pharmaceutical and other businesses If we are not able to recruit retain manage and motivate necessary personnel to accomplish our business objectives including our plan to focus on the execution of clinical trials of IMVT 1402 in the initial six indications we may experience constraints that will significantly impede the achievement of our development objectives our ability to raise additional capital and our ability to implement our business strategies
Many of the other pharmaceutical companies we compete with for qualified personnel have greater financial and other resources different risk profiles and a longer operating history in the industry than we do They also may provide more diverse opportunities and better chances for career advancement Some of these opportunities may be more appealing to high quality candidates than what we offer If we are unable to continue to attract and retain high quality personnel the rate and success at which we can develop IMVT 1402 and our business will be harmed
We are highly dependent on the skills and leadership of our senior management team and key employees Our senior management and key employees have previously and may terminate their positions with us at any time If we lose members of our senior management team or key employees our ability to successfully implement our business strategies could be adversely affected Replacing these individuals may be difficult cause disruption to our business and may take an extended period of time due to the limited number of individuals in our industry with the breadth of skills and experience required to develop manufacture obtain regulatory approval of and commercialize products successfully Competition to hire from this limited pool is intense and we may be unable to hire train retain or motivate additional key personnel We do not maintain key person insurance for any members of our senior management team or other employees
Our or our affiliates employees independent contractors principal investigators consultants commercial collaborators service providers and other vendors or potential collaborators may engage in misconduct or other improper activities including noncompliance with regulatory standards and requirements which could have an adverse effect on our results of operations
We are exposed to the risk that our or our affiliates employees and contractors including principal investigators CROs consultants commercial collaborators service providers and other vendors may engage in misconduct or other illegal activity Misconduct by these parties could include intentional reckless or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA or other similar regulatory authorities including those laws that require the reporting of true complete and accurate information to such regulatory authorities manufacturing and the GCP or cGMP standards federal state and foreign healthcare fraud and abuse laws and data privacy or laws that require the true complete and accurate reporting of financial information or data In particular sales marketing and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud kickbacks self dealing bribery corruption antitrust violations and other abusive practices These laws may restrict or prohibit a wide range of business activities including research manufacturing distribution pricing discounting marketing and promotion sales commission customer incentive programs and other business arrangements Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials creating fraudulent data in our nonclinical studies or clinical trials or illegal misappropriation of drug product which could result in regulatory sanctions and serious harm to our reputation It is not always possible to identify and deter employee or third party misconduct and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations
Additionally we are subject to the risk that a person including any person who may have engaged in any fraud or misconduct or government agency could allege such fraud or other misconduct even if none occurred Furthermore we rely on our CROs and clinical trial sites to adequately report data from our clinical trials For example any failure by such parties to adequately report safety signals to us in a timely manner from any such trials may also affect the approvability of our product candidates or cause delays and disruptions for the approval of our product candidate if at all If our or our affiliates employees independent contractors principal investigators consultants commercial collaborators service providers or other vendors are alleged or found to be in violation of any such regulatory standards or requirements or become subject to a corporate integrity agreement or similar agreement and curtailment of our operations it could have a significant impact on our business and financial results including the imposition of significant civil criminal and administrative penalties damages monetary fines suspension or delay in our clinical trials possible exclusion from participation in Medicare Medicaid and other federal and state healthcare programs or comparable foreign programs FDA debarment contractual damages reputational harm diminished profits and future earnings and additional reporting requirements and oversight any of which could adversely affect our ability to operate our business and our results of operations
Part of our business strategy involves potentially expanding internationally with third party collaborators to seek regulatory approval for batoclimab IMVT 1402 and any future product candidates outside the U S Doing business internationally involves a number of risks including but not limited to
multiple conflicting and changing laws and regulations such as tax laws export and import restrictions employment laws anti bribery and anti corruption laws regulatory requirements and other governmental approvals permits and licenses
natural disasters political and economic instability including wars terrorism and political unrest outbreak of disease including pandemics and related shelter in place orders travel social distancing and quarantine policies boycotts curtailment of trade and other business restrictions and
failure to comply with the FCPA including its books and records provisions and its anti bribery provisions the U K Bribery Act and similar antibribery and anticorruption laws in other jurisdictions for example by failing to maintain accurate information and control over sales or distributors activities
We and the third parties with whom we work are subject to stringent and changing privacy data protection and information security laws contractual obligations self regulatory schemes government regulation industry standards and other obligations related to data privacy and security The actual or perceived failure by us or the third parties with whom we work to comply with such obligations could result in harm to our reputation regulatory investigations or actions significant fines and liability disruption of our clinical trials or other material adverse effects on our business
We collect receive store process use generate transfer disclose make accessible protect and share personal information and other information including information we collect about patients and healthcare providers in connection with clinical trials in the U S and abroad Process or Processing necessary to operate our business and for legal marketing and other business related purposes
These activities subject us to numerous federal state local and foreign laws regulations and guidance regarding privacy data protection information security and Processing Data Protection Laws the number and scope of which is changing subject to differing applications and interpretations and which may be inconsistent among jurisdictions or in conflict with other rules laws or Data Protection Obligations as defined below
In the United States federal state and local governments have enacted numerous data privacy and security laws including data breach notification laws personal data privacy laws consumer protection laws e g Section 5 of the Federal Trade Commission Act and other similar laws e g wiretapping laws Numerous U S states have enacted comprehensive privacy laws that impose certain obligations on covered businesses including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data As applicable such rights may include the right to access correct or delete certain personal data and to opt out of certain data processing activities such as targeted advertising profiling and automated decision making The exercise of these rights may impact our business and ability to conduct our clinical trials and commercialize our product candidates if approved Certain states also impose stricter requirements for processing certain personal data including sensitive information such as conducting data privacy impact assessments These state laws allow for statutory fines for noncompliance For example the California Consumer Privacy Act of 2018 as amended by the California Privacy Rights Act of 2020 collectively CCPA applies to personal data of consumers business representatives and employees who are California residents and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights The CCPA provides for fines of up to 7 988 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages Similar laws are being considered in several other states as well as at the federal and local levels and we expect more states to pass similar laws in the future The CCPA and other comprehensive U S state privacy laws exempt some data processed in the context of clinical trials but these developments may further complicate compliance efforts and increase legal risk and compliance costs for us and the third parties with whom we work
We also expect that there will continue to be new or amended laws regulations and industry standards concerning privacy data protection and information security proposed and enacted in various foreign jurisdictions For example under the European Union s General Data Protection Regulation E U GDPR and the United Kingdom s GDPR U K GDPR companies can face private litigation related to processing of personal information brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests temporary or definitive bans on data processing and other corrective actions and fines of up to 20 million Euros under the E U GDPR 17 5 million pounds sterling under the U K GDPR or 4 of their worldwide annual revenue whichever is greater Our or our CROs or other third party vendors failure to comply with the GDPR could lead to significant fines imposed by regulators or restrictions on our ability to process personal information as needed to conduct clinical trials in the EEA and or the U K as applicable or commercialize our product candidates if approved We may also be obligated to assist our clinical trial sites CROs and vendors with their own compliance obligations under the GDPR which could require expenditure of significant resources Assisting our clinical trial sites CROs and vendors in complying with the GDPR or complying with the GDPR ourselves may cause us to incur substantial operational costs or require us to change our business practices
In the ordinary course of business we may transfer personal information from Europe and other jurisdictions to the United States or other countries Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal information to other countries In particular the European Economic Area EEA and the United Kingdom U K have significantly restricted the transfer of personal information to the United States and other countries whose privacy laws it generally believes are inadequate Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross border data transfer laws Although there are currently various mechanisms that may be used to transfer personal information from the EEA and U K to the United States in compliance with law such as the EEA and U K s standard contractual clauses the U K s International Data Transfer Agreement Addendum and the EU U S Data Privacy Framework which allows for transfers for relevant U S based organizations who self certify compliance and participate in the Framework these mechanisms are subject to legal challenges and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States If there is no lawful manner for us to transfer personal information from the EEA the U K or other jurisdictions to the United States or if the requirements for a legally compliant transfer are too onerous we could face significant adverse consequences including the interruption or degradation of our operations the need to relocate part of or all of our business or data processing activities to other jurisdictions such as Europe at significant expense increased exposure to regulatory actions substantial fines and penalties the inability to transfer data and work with partners vendors and other third parties and injunctions against our processing or transferring of personal information necessary to operate our business Additionally companies that transfer personal information out of the EEA and U K to other jurisdictions particularly to the United States are subject to increased scrutiny from regulators individual litigants and activist groups Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR s cross border data transfer limitations
Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross border data transfer laws For example regulators in the United States including the Department of Justice are increasingly scrutinizing certain personal data transfers and taking steps to enact certain data localization requirements such as the Department of Justice s recently finalized rule implementing the Biden Administration s executive order Preventing Access to Americans Bulk Sensitive Personal Data and United States Government Related Data by Countries of Concern
We are also subject to the terms of our external and internal privacy and security policies representations certifications standards publications and frameworks Privacy Policies and to contractual obligations to third parties related to privacy data protection information security and Processing Data Protection Obligations We may be contractually subject to industry standards adopted by industry groups and may become subject to additional such obligations in the future We are also bound by contractual obligations related to data privacy and security and our efforts to comply with such obligations may not be successful For example certain privacy laws such as the GDPR and the CCPA may require our vendors to impose specific contractual restrictions on their service providers We publish privacy policies marketing materials and other statements regarding our data privacy and security practices Regulators in the United States are increasingly scrutinizing such statements and if they are found to be deficient lacking in transparency deceptive unfair misleading or misrepresentative of our practices we may be subject to investigation enforcement actions by regulators or other adverse consequences
Data Protection Laws and data protection worldwide are and are likely to remain uncertain for the foreseeable future We strive to comply with applicable Data Protection Laws Privacy Policies and Data Protection Obligations but we may at times fail to do so or may be perceived to have failed to do so Moreover despite our efforts we may not be successful in achieving compliance if our personnel contractors or vendors do not comply with applicable Data Protection Laws Privacy Policies and Data Protection Obligations
If we or the third parties with whom we work fail or are perceived to have failed to address or comply with applicable Data Protection Laws Privacy Policies and Data Protection Obligations or if our Privacy Policies are in whole or part found to be inaccurate incomplete deceptive unfair or misrepresentative of our actual practices it could increase our compliance and operational costs expose us to regulatory scrutiny actions fines and penalties result in reputational harm interrupt or stop clinical trials result in litigation and liability result in an inability to process personal information or to operate in certain jurisdictions cause a material adverse effect on our business operations or financial results or otherwise result in a material adverse effect on our business In particular plaintiffs have become increasingly active in bringing privacy related claims against companies including class claims and mass arbitration demands Some of these claims allow for the recovery of statutory damages on a per violation basis and if viable carry the potential for monumental statutory damages depending on the volume of data and the number of violations
With applicable Data Protection Laws Privacy Policies and Data Protection Obligations imposing complex and burdensome obligations and with substantial uncertainty over the interpretation and application of these requirements we have faced and may face additional challenges in addressing and complying with these obligations and making necessary changes to our Privacy Policies and practices and may incur material costs and expenses in an effort to do so any of which could materially adversely affect our business operations and financial results and may limit the adoption and use of and reduce the overall demand for our products which could have an adverse impact on our business
We may in the future receive inquiries or be subject to investigations proceedings or actions by various government entities regarding our privacy and information security practices and Processing Regulatory Proceedings These Regulatory Proceedings could result in a material adverse effect on our reputation business or financial condition including without limitation interruptions or stoppages in our business operations including as relevant clinical trials the diversion of resources and the attention of management from our business to defend any claim or inquiry limited ability to commercialize our products discontinuance of necessary processing adverse publicity or substantial changes to our business model or operations
If our information technology systems or data or those of our affiliates service providers or other third parties with whom we work are or were compromised now or in the future this could result in a material adverse effect on our business including without limitation a material interruption to our operations harm to our reputation regulatory investigations or actions significant fines penalties and liability breach or triggering of Data Protection Laws Privacy Policies and Data Protection Obligations or material disruption of our clinical trials or other business activity
In the ordinary course of our business we Process proprietary confidential and sensitive information including personal information including health information intellectual property trade secrets and proprietary business information owned or controlled by ourselves or other parties Sensitive Information
We may use third party service providers and subprocessors to help us operate our business and engage in Processing on our behalf such as RSL and its affiliates our CROs and other contractors We may also share Sensitive Information with our affiliates or other third parties in conjunction with our business If we our service providers affiliates or other third parties with whom we work have experienced or in the future experience or are perceived to have experienced any security incident s that result in any accidental or unlawful data loss deletion or destruction unauthorized access to loss of unauthorized acquisition or disclosure of or inadvertent exposure or disclosure of Sensitive Information or compromise related to the security confidentiality integrity or availability of our or their information technology software services communications or data collectively a Security Breach it may result in a material adverse effect on our business including without limitation disruptions of our drug development programs delays in our regulatory approval efforts regulatory investigations or enforcement actions litigation indemnity obligations negative publicity and financial loss
Cyberattacks malicious internet based activity and online and offline fraud threaten the confidentiality integrity and availability of our sensitive information and information technology systems and those of the third parties upon which we rely Such threats are prevalent and continue to rise are increasingly difficult to detect and come from a variety of sources including traditional computer hackers threat actors hacktivists organized criminal threat actors personnel such as through theft or misuse sophisticated nation state and nation state supported actors Some actors now engage and are expected to continue to engage in attacks including without limitation nation state actors for geopolitical reasons and in conjunction with military conflicts and defense activities During times of war and other major conflicts we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks including retaliatory cyber attacks that could materially disrupt our systems and operations supply chain and ability to produce sell and distribute our goods and services
We and the third parties with whom we work including our CROs and trial sites are subject to a variety of evolving threats including but not limited to social engineering attacks including through deep fakes which may be increasingly more difficult to identify as fake and phishing attacks software bugs malicious code such as viruses and worms adware employee theft or misuse supply chain attacks denial of service attacks such as credential stuffing and ransomware attacks phishing attacks viruses malware installation including as a result of advanced persistent threat intrusions server malfunction software or hardware failures loss of data or other information technology assets telecommunications failures earthquakes fires floods attacks enhanced or facilitated by AI or other similar issues In particular severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations loss of sensitive data and income reputational harm and diversion of funds Extortion payments may alleviate the negative impact of a ransomware attack but we may be unwilling or unable to make such payments due to for example applicable laws or regulations prohibiting such payments
Remote work has increased risks to our information technology systems and data as more of our employees utilize network connections computers and devices outside our premises or network including working at home while in transit and in public locations Additionally future or past business transactions such as acquisitions or integrations could expose us to additional cybersecurity risks and vulnerabilities as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities systems and technologies Furthermore we may discover security issues that were not found during due diligence of such acquired or integrated entities and it may be difficult to integrate companies into our information technology environment and security program
We rely on third party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts including without limitation cloud based infrastructure clinical trial operations encryption and authentication technology employee email and other functions Our ability to monitor these third parties information security practices is limited and these third parties may not have adequate information security measures in place If our third party service providers experience a Security Breach or other interruption we could experience adverse consequences While we may be entitled to damages if our third party service providers fail to satisfy their privacy or security related obligations to us any award may be insufficient to cover our damages or we may be unable to recover such award
In addition supply chain attacks have increased in frequency and severity and we cannot guarantee that third parties infrastructure in our supply chain or our third party partners supply chains have not been compromised
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized unlawful or accidental acquisition modification destruction loss alteration encryption disclosure of or access to our sensitive information or our information technology systems or those of the third parties with whom we work For example we have been the target of unsuccessful phishing attempts in the past and expect such attempts will continue in the future A Security Breach or other interruption could disrupt our ability and that of third parties with whom we work to conduct our business operations We may be required to expend significant resources fundamentally change our business activities and practices or modify our operations including our clinical trial activities or information technology in an effort to protect against Security Breaches and to mitigate detect and remediate actual and potential vulnerabilities Applicable Data Protection Laws Privacy Policies and Data Protection Obligations also require us to implement and maintain specific security measures or use industry standard or reasonable security measures to protect our information technology systems and sensitive information While we have implemented security measures designed to protect against Security Breaches there can be no assurance that our security measures or those of our service providers partners and other third parties with whom we work will be effective in protecting against all Security Breaches and adverse effects on our business that may arise from such breaches The recovery systems security protocols network protection mechanisms and other security measures that we and our third parties have integrated into our platform systems networks and physical facilities which are designed to protect against detect and minimize Security Breaches may not be adequate to prevent or detect service interruption system failure or data loss
We have not always been able in the past and may be unable in the future to detect anticipate measure or prevent Security Breaches or threats or techniques used to detect or exploit vulnerabilities in our or our service providers partners or other relevant third parties information technology services communications or software because such threats and techniques change frequently and are often sophisticated in nature Such vulnerabilities could be exploited but may not be detected until after a Security Breach has occurred In addition security researchers and other individuals have and will continue to actively search for and exploit actual and potential vulnerabilities in our or our third parties information technology and communications These vulnerabilities pose material risks to our business We cannot be certain that we will be able to address any such vulnerabilities in whole or part and there may be delays in developing and deploying patches and other remedial measures to adequately address vulnerabilities Vulnerabilities could be exploited and result in a Security Breach
Applicable Data Protection Laws Privacy Policies and Data Protection Obligations may require us to notify relevant stakeholders of Security Breaches including affected individuals customers regulators and credit reporting agencies Such disclosures are costly and the disclosures or the failure to comply with such requirements could lead to adverse effects on our business including without limitation government enforcement actions for example investigations fines penalties audits and inspections additional reporting requirements and or oversight restrictions on processing sensitive information including personal data litigation including class claims indemnification obligations negative publicity reputational harm monetary fund diversions interruptions in our operations including availability of data financial loss and other similar harms
There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages if we fail to comply with applicable Data Protection Laws Privacy Policies or Data Protection Obligations related to information security or Security Breaches
Failures or significant downtime of our information technology or telecommunication systems or those used by our third party service providers could also cause significant interruptions in our operations and adversely impact the confidentiality integrity and availability of sensitive or confidential information including preventing us from conducting clinical trials tests or research and development activities and preventing us from managing the administrative aspects of our business
While we maintain general liability insurance coverage and coverage for errors or omissions we cannot assure that such coverage will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims costs expenses litigation fines penalties business loss data loss regulatory actions or adverse effects on our business arising out of our privacy and security practices Processing or Security Breaches or that such coverage will continue to be available on commercially reasonable terms or at all The successful assertion of one or more large claims against us that exceeds our available insurance coverage or results in changes to our insurance policies including premium increases or the imposition of large deductible or co insurance requirements could have an adverse effect on our business In addition we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim
In addition to experiencing a Security Breach third parties may gather collect or infer sensitive information about us from public sources data brokers or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position Additionally our sensitive information could be leaked disclosed or revealed as a result of or in connection with the use of generative AI technologies by our employees personnel or vendors even if such use is not authorized by us or permitted by our internal policies
The use of batoclimab IMVT 1402 and any future product candidate in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims Product liability claims might be brought against us by consumers health care providers other pharmaceutical companies government authorities or others taking or otherwise coming into contact with any approved products On occasion large monetary judgments have been awarded in class action lawsuits where drugs have had unanticipated adverse effects If we cannot successfully defend against product liability claims we could incur substantial liability and costs In addition regardless of merit or eventual outcome product liability claims may result in among other things
The product liability insurance we currently carry and any additional product liability insurance coverage we acquire in the future may not be sufficient to reimburse us for any expenses or losses we may suffer Moreover insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability If we obtain marketing approval for batoclimab IMVT 1402 or any future product candidate we intend to acquire insurance coverage to include the sale of commercial products however we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts A successful product liability claim or series of claims brought against us could cause our share price to decline and if judgments exceed our insurance coverage could adversely affect our results of operations and business including preventing or limiting the commercialization of any approved product
Disruptions at the FDA and other government authorities caused by funding shortages or global health concerns could hinder their ability to hire retain or deploy key leadership and other personnel or otherwise prevent new or modified products from being developed approved or commercialized in a timely manner or at all which could negatively impact our business
The ability of the FDA or comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors including government budget and funding levels statutory regulatory and policy changes the FDA s or comparable foreign regulatory authorities ability to hire and retain key personnel and accept the payment of user fees and other events that may otherwise affect the FDA s or comparable foreign regulatory authorities ability to perform routine functions as applicable Average review times at the FDA have fluctuated in recent years as a result In addition government funding of other government agencies that fund research and development activities is subject to the political process which is inherently fluid and unpredictable Disruptions at the FDA and other foreign regulatory authorities may also slow the time necessary for new drugs and biologics or modifications to approved drugs and biologics to be reviewed and or approved by necessary government authorities which would adversely affect our business For example over the last several years the U S government has shut down several times and certain regulatory authorities such as the FDA have had to furlough critical FDA employees and stop critical activities
Separately in response to the COVID 19 pandemic the FDA adopted a risk based approach to the inspection of foreign and domestic manufacturing facilities and similar restrictions The use of alternative regulatory tools may delay FDA or foreign regulatory authority actions If a prolonged government shutdown occurs or if global health concerns prevent the FDA or other foreign regulatory authorities from conducting their regular inspections reviews or other regulatory activities it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions which could have an adverse effect on our business
Our business could be adversely affected by economic downturns changes in inflation and interest rates changes in international trade policies and tariffs natural disasters political crises geopolitical events such as the crises in Ukraine and the Middle East or other macroeconomic conditions which may in the future negatively impact our business and financial performance
The global economy including credit and financial markets has experienced extreme volatility and disruptions including among other things severely diminished liquidity and credit availability declines in consumer confidence declines in economic growth supply chain shortages changes in inflation and interest rates and uncertainty about economic stability For example during 2022 and 2023 the Federal Reserve raised interest rates multiple times in response to concerns about inflation Higher interest rates coupled with reduced government spending and volatility in financial markets may increase economic uncertainty and affect consumer spending Trade policies and geopolitical disputes and conflicts can result in tariffs sanctions and other measures that restrict international trade and may adversely affect our costs of doing business particularly if these measures occur in regions where our suppliers source components or raw materials For example in April 2025 the U S and China implemented reciprocal tariffs on a variety of goods including pharmaceutical products Similarly the ongoing military conflict between Russia and Ukraine and the Israel Hamas conflict in the Middle East have created volatility in the global capital markets and are expected to have further global economic consequences including disruptions of the global supply chain and energy markets Any such volatility and disruptions may adversely affect our business or the third parties on whom we rely If the equity and credit markets deteriorate including as a result of political unrest or war it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms more costly or more dilutive Increased inflation rates can adversely affect us by increasing our costs including labor and employee benefit costs
We do not have our own manufacturing capabilities and rely on third parties to produce clinical supplies and commercial supplies of our product candidates The manufacture of biologics is complex and we or our third party manufacturers may encounter difficulties in production or our quality management program may fail to detect quality issues at our third party manufacturers which may delay or prevent our ability to obtain marketing approval or commercialize our product candidates if approved
We have no experience in biologic manufacturing and do not own or operate and we do not expect to own or operate facilities for product manufacturing storage and distribution or testing We rely on third parties to produce clinical supplies and commercial supplies of our product candidates For example in November 2021 we entered into an agreement with Samsung Biologics Co Ltd to manufacture and supply us with batoclimab drug substance for commercial sale and perform other manufacturing related services with respect to batoclimab Additional third party vendors may be difficult to identify for our product candidate process and formulation development and manufacturing due to special capabilities required and they may not be able to meet our quality standards Any significant delay in the supply of batoclimab IMVT 1402 or the raw material components thereof or in placebo controls for an ongoing clinical trial due to the need to replace a third party manufacturer could considerably delay completion of our clinical trials product testing and potential regulatory approval of batoclimab IMVT 1402 or any future product candidate If our manufacturers or we are unable to purchase these raw materials after regulatory approval has been obtained for batoclimab IMVT 1402 or any future product candidate the commercial launch of such product candidate would be delayed or there would be a shortage in supply which would impair our ability to generate revenue from the sale of such product candidate In addition our product candidates are biologics and require processing steps that are more difficult than those required for most chemical pharmaceuticals Accordingly multiple steps are needed to control the manufacturing processes Our future success depends on our ability to maintain and continuously improve our quality management program to monitor the manufacturing processes used by third party manufacturers and our reliance on third party manufacturers does not relieve us of our regulatory responsibilities Problems with these manufacturing processes even minor deviations from the normal process or from the materials used in the manufacturing process which may not be detectable by us in a timely manner could lead to product defects or manufacturing failures resulting in lot failures product recalls product liability claims and insufficient inventory A quality or safety issue emanating from manufacturing failures may result in adverse inspection reports warning letters monetary sanctions injunction to halt manufacture and distribution of drugs or drug products civil or criminal sanctions costly litigation refusal of a government to grant approvals and licenses restrictions on operations or withdrawal of existing approvals and licenses
The facilities used by our contract manufacturers to manufacture batoclimab IMVT 1402 or any future product candidate must be approved by the FDA and comparable foreign regulatory authorities pursuant to inspections that will be conducted after we submit our BLA to the FDA or comparable applications to foreign regulatory authorities We do not control the manufacturing process of and are completely dependent on our contract manufacturing partners for compliance with cGMP requirements for manufacture of drug products If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable foreign regulatory authorities we will not be able to secure or maintain regulatory approval for our product candidate In addition we have no control over the ability of our contract manufacturers to maintain adequate quality control quality assurance and qualified personnel If the FDA or comparable foreign regulatory authorities do not approve these facilities for the manufacture of our product candidates or if they withdraw any such approval in the future we may need to find alternative manufacturing facilities which could significantly impact our ability to develop obtain regulatory approval for or market batoclimab IMVT 1402 or any future product candidate if approved We our contract manufacturers any future collaborators and their contract manufacturers could be subject to periodic unannounced inspections by the FDA or other comparable foreign regulatory authorities to monitor and ensure compliance with cGMP Despite our efforts to audit and verify regulatory compliance one or more of our third party manufacturing vendors may be found on regulatory inspection by the FDA or other comparable foreign regulatory authorities to be noncompliant with cGMP regulations This may result in shutdown of the third party vendor or invalidation of drug product lots or processes In some cases a product recall may be warranted or required which would materially affect our ability to supply and market our drug products
reliance on a limited number of sources and in some cases single sources for product components such that if we are unable to secure a sufficient supply of these product components we will be unable to manufacture and sell any product candidate if approved in a timely fashion in sufficient quantities or under acceptable terms
operations of our third party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations including the bankruptcy of the manufacturer or supplier or other regulatory sanctions related to the manufacture of another company s products
Any of these events could lead to clinical trial delays cost overruns delay or failure to obtain regulatory approval or impact our ability to successfully commercialize our products as well as product recalls or product withdrawals Some of these events could be the basis for FDA or other foreign regulatory authority action including injunction recall seizure or total or partial suspension of production
A portion of our manufacturing clinical trial activities and laboratory research takes place in Asia A significant disruption in that region such as a trade war or political unrest or adverse legislation could materially adversely affect our business financial condition and results of operations
We currently and expect to continue to engage in contract manufacturing conduct clinical trials and perform laboratory research activities outside the U S including in Asia Any disruption in production or inability of our manufacturers in Asia to produce adequate quantities to meet our needs could impair our ability to operate our business on a day to day basis and to continue our development of our product candidates In particular trade tensions and conflict between the United States and China remain high and could result in changes to the laws rules regulations and policies of the governments of the United States or China that impact the ability of U S biotechnology companies to partner with entities in China For example in April 2025 the U S and China implemented reciprocal tariffs on a variety of goods including pharmaceutical products We also conduct certain laboratory research and expect to have clinical trial sites in Asia We are exposed to the possibility of product supply disruption clinical trial delays and increased costs in the event of changes in governmental policies political unrest or unstable economic conditions in Asia Any disruption of these activities could materially and adversely affect our business and results of operations
We rely on third parties to conduct supervise and monitor our clinical trials and if those third parties perform in an unsatisfactory manner or fail to comply with applicable requirements or our quality management program fails to detect such events in a timely manner it may harm our business
We currently do not have the ability to independently conduct nonclinical studies that comply with good laboratory practice GLP requirements We also do not currently have the ability to independently conduct any clinical trials We rely exclusively on CROs and clinical trial sites which need to comply with GCP to ensure the proper and timely conduct of our clinical trials and we have limited influence over their actual performance
We rely upon CROs to monitor and manage data for our clinical programs as well as for the execution of nonclinical studies We control only certain aspects of our CROs activities Nevertheless we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol legal regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities
We and our CROs are required to comply with GLP and GCP regulations and guidelines enforced by the FDA and equivalent foreign regulations and guidelines including the International Council for Harmonization guidelines enforced by foreign regulatory authorities for IMVT 1402 batoclimab or any of our future product candidates that are in nonclinical and clinical development The regulatory authorities enforce GCP regulations through periodic inspections of trial sponsors principal investigators and clinical trial sites Although we rely on CROs to conduct our GLP compliant nonclinical studies and GCP compliant clinical trials we remain responsible for ensuring that each of our nonclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations and our reliance on the CROs does not relieve us of our regulatory responsibilities Therefore the success of our clinical trials depends on our ability to maintain and continuously improve our quality management program to monitor our CROs compliance with applicable regulations If we or our CROs fail to comply with GCP requirements the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may reject our marketing applications or require us to perform additional clinical trials before approving our marketing applications Accordingly if we or our CROs fail to comply with these regulations or other applicable laws regulations or standards or fail to recruit a sufficient number of subjects we may be required to repeat clinical trials which would delay the relevant regulatory approval process Failure by our CROs to properly execute study protocols in accordance with applicable law could also create product liability and regulatory risks for us as sponsors of those studies Further our or our CROs inability to address a quality or safety issue may result in among others adverse inspection reports warning letters civil or criminal sanctions costly litigation refusal of a government to grant approvals and licenses restrictions on operations or withdrawal of existing approvals and licenses
While we will have agreements governing their activities our CROs are not our employees and we will not control whether or not they devote sufficient time and resources to our future clinical and nonclinical programs These CROs may also have relationships with other commercial entities including our competitors for whom they may also be conducting clinical trials or other drug development activities which could harm our competitive position We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs which may reduce our trade secret and intellectual property protection and allow our potential competitors to access and exploit our proprietary technology If our CROs do not successfully carry out their contractual duties or obligations fail to meet expected deadlines or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our or their own clinical protocols or regulatory requirements or for any other reasons our clinical trials may be extended delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize any product candidate that we develop As a result our financial results and the commercial prospects for any product candidate that we develop could be harmed our costs could increase and our ability to generate revenue could be delayed
If our relationships with these CROs terminate we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms or in a timely manner Switching or adding additional CROs involves substantial cost and requires management time and focus In addition there is a natural transition period when a new CRO commences work As a result delays occur which could adversely impact our ability to meet our desired clinical development timelines Though we carefully manage our relationships with our CROs there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have an adverse impact on our business financial condition and prospects
In the U S the Biologics Price Competition and Innovation Act BPCIA created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA licensed reference biological product New biologics such as IMVT 1402 or batoclimab may be entitled to regulatory exclusivity under the BPCIA The BPCIA grants new biologics 12 years of FDA granted exclusivity Further under the BPCIA an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA During the period of exclusivity however another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor s own clinical data from adequate and well controlled clinical trials to demonstrate the safety purity and potency of their product After the expiration of the exclusivity period the FDA can approve a biosimilar product through an abbreviated approval process The law is complex and is still being interpreted and implemented by the FDA As a result its ultimate impact implementation and meaning are subject to uncertainty
Our product candidates IMVT 1402 and batoclimab as biological products may qualify for the 12 year period of exclusivity However there is a risk that this exclusivity could be shortened due to congressional action or otherwise potentially creating the opportunity for generic competition sooner than anticipated Other aspects of the BPCIA some of which may impact the BPCIA exclusivity provisions have also been the subject of litigation Moreover the extent to which a biosimilar once approved will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non biological products is not yet clear and will depend on a number of marketplace and regulatory factors that are still developing
For biologics subject to approval by the FDA via a BLA such as IMVT 1402 or batoclimab the BPCIA provides a mechanism for one or more third parties to seek FDA approval to manufacture or sell a biosimilar or interchangeable versions of brand name biological products Due to the large size and complexity of biological products as compared to small molecules a biosimilar must be highly similar to the reference product with no clinically meaningful differences between the two The BPCIA requires a formal pre litigation process which includes the exchange of information between a biosimilar applicant and a reference biologic sponsor that includes the identification of relevant patents and each parties basis for infringement and invalidity After the exchange of this information we may then initiate a lawsuit within 30 days to defend the patents identified in the exchange If the biosimilar applicant successfully challenges the asserted patent claims it could result in the invalidation of or render unenforceable some or all of the relevant patent claims or result in a finding of non infringement Such litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature may be very expensive and time consuming may divert our management s attention from our core business and may result in unfavorable results that could limit our ability to prevent third parties from competing with IMVT 1402 batoclimab or any future product candidates
If we are unable to obtain and maintain patent protection for IMVT 1402 batoclimab or any future product candidates or if the scope of the patent protection obtained is not sufficiently broad we may not be able to compete effectively in our markets
We rely and will continue to rely upon a combination of patents trademarks trade secret protection and confidentiality agreements with employees consultants collaborators advisors and other third parties to protect the intellectual property related to our brand current and future drug development programs and product candidates Our success depends in large part on our ability to obtain and maintain patent protection in the U S and other countries with respect to IMVT 1402 batoclimab and any future product candidates and their uses We seek to protect our proprietary position by filing or collaborating with our licensor to file patent applications in the U S and abroad in the Licensed Territory related to our current and future drug development programs and product candidates The patent prosecution process is expensive and time consuming and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner
It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection We may choose not to seek patent protection for certain innovations or products and may choose not to pursue patent protection in certain jurisdictions and under the laws of certain jurisdictions patents or other intellectual property rights may be unavailable or limited in scope and in any event any patent protection we obtain may be limited We generally apply for patents in those countries in the Licensed Territory where we intend to make have made use offer for sale or sell products and where we assess the risk of infringement to justify the cost of seeking patent protection However we do not seek protection in all countries where we intend to sell products and we may not accurately predict all the countries where patent protection would ultimately be desirable If we fail to timely file a patent application in any such country or major market we may be precluded from doing so at a later date We may also make statements to regulatory authorities during the regulatory approval process that may be inconsistent with positions that have been taken during prosecution of our patents which may result in such patents being narrowed invalidated or held unenforceable or unpatentable
The patent applications that we in license in the U S or in other foreign countries may fail to result in issued patents with claims that protect our product candidates or result in patents that are narrowed invalidated or held unenforceable or unpatentable following challenge in certain jurisdictions We cannot guarantee any current or future patents will provide us with any meaningful protection or competitive advantage There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found which can prevent a patent from issuing from a pending patent application or be used to invalidate an issued patent The examination process may require us to narrow our claims which may limit the scope of any patent protection we obtain Even if patents do successfully issue based on our patent applications and even if such patents cover our product candidates uses of our product candidates or other aspects related to our product candidates third parties may challenge their patentability validity ownership enforceability or scope which may result in such patents being narrowed invalidated or held unenforceable or circumvented any of which could limit our ability to prevent competitors and other third parties from developing and marketing similar products or limit the length of terms of patent protection we may have for our product candidates if approved and technologies Other companies may also design around our patents The issuance of a patent does not give us the right to practice the patented invention Third parties may have blocking patents that could prevent us from marketing our product candidates if approved or practicing our own patented technology Further if we encounter delays in regulatory approvals the period of time during which we could market a product candidate while under patent protection could be reduced If any of our patents expire or are challenged invalidated circumvented or otherwise limited by third parties prior to the commercialization of our product candidates and if we do not own or have exclusive rights to other enforceable patents protecting our product candidates competitors and other third parties could market products that are substantially similar to ours and our business would suffer
If the patent applications we hold or have in licensed with respect to our development programs and our product candidates fail to issue if their patentability validity breadth or strength of protection is threatened or if they fail to provide meaningful exclusivity for our product candidates it could dissuade companies from collaborating with us to develop our product candidates and threaten our ability to commercialize future drugs Any such outcome could have an adverse effect on our business Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such application
The patent position of biotechnology and pharmaceutical companies is generally highly uncertain involves complex legal scientific and factual questions and has in recent years been the subject of much litigation The standards that the U S Patent and Trademark Office USPTO and its foreign counterparts use to grant patents are not always applied predictably or uniformly In addition the laws of foreign countries may not protect our rights to the same extent as the laws of the U S and many companies have encountered significant problems in protecting and defending such rights in foreign jurisdictions
Publications of discoveries in scientific literature often lag behind the actual discoveries and patent applications in the U S and other jurisdictions are typically not published until 18 months after filing or in some cases not until a patent issues Therefore we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications or that we were the first to file for patent protection of such inventions As a result the issuance scope validity enforceability and commercial value of our patent rights are highly uncertain Our pending and future patent applications may not result in patents being issued which protect IMVT 1402 batoclimab or any future product candidates in whole or in part or which effectively prevent others from commercializing competitive products Changes in either the patent laws or interpretation of the patent laws in the U S and other countries may diminish the value of our patents or narrow the scope of our patent protection
review post grant review or interference proceedings challenging our owned or licensed patent rights An adverse determination in any such submission proceeding or litigation could reduce the scope of or invalidate our patent rights allow third parties to commercialize IMVT 1402 batoclimab or any future product candidates and compete directly with us without payment to us or result in our inability to manufacture or commercialize products without infringing third party patent rights In addition if the breadth or strength of protection provided by our patents and patent applications is threatened it could dissuade companies from collaborating with us to license develop or commercialize IMVT 1402 batoclimab or any future product candidates
The issuance of a patent is not conclusive as to its inventorship ownership scope validity or enforceability and our owned and in licensed patents may be challenged in the courts or patent offices both in the U S and abroad Such challenges may result in loss of exclusivity or in patent claims being narrowed invalidated or held unenforceable in whole or in part which could limit our ability to stop others from using or commercializing similar or identical products or limit the duration of the patent protection of our products Moreover patents have a limited lifespan In the U S if all maintenance fees are timely paid the natural expiration of a patent is generally 20 years from its earliest U S non provisional filing date In certain instances the patent term may be adjusted to add additional days to compensate for delays incurred by the USPTO in issuing the patent Also the patent term may be extended for a period of time to compensate for at least a portion of the time a product candidate was undergoing FDA regulatory review However the life of a patent and the protection it affords is limited Without patent protection for IMVT 1402 batoclimab or any future product candidates we may be open to competition from generic versions of such products Given the amount of time required for the development testing and regulatory review of new product candidates patents protecting such candidates might expire before or shortly after such candidates are commercialized As a result our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours
Filing prosecuting and defending patents on IMVT 1402 batoclimab or any future product candidates in all countries throughout the world would be prohibitively expensive and even in countries where we have sought protection for our intellectual property such protection may be less extensive than that provided in the U S The requirements for patentability may differ in certain countries particularly developing countries and the breadth of patent claims allowed can be inconsistent In addition the laws of some foreign countries do not protect patent rights and other intellectual property rights to the same extent as federal laws and state laws in the U S Consequently we may not be able to prevent third parties from practicing our inventions in all countries outside the U S or from selling or importing products made using our inventions in certain jurisdictions Competitors may exploit our technology or inventions in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the U S These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing
We may decide to abandon national and regional patent applications while they are still pending The examination and issuance of each national or regional patent is an independent proceeding which may lead to situations in which applications may be rejected by a patent office in one jurisdiction while substantively similar applications are granted by patent offices in other jurisdictions For example relative to other countries India has a heightened requirement for patentability and specifically does not allow patenting of medical treatment methods It is also common that depending on the country the scope of patent protection may vary for the same product candidate or technology If we are unable obtain claims that we feel are commercially relevant in a particular jurisdiction we may abandon that patent application and forego obtaining patent protection for that product in the relevant jurisdiction which may allow competitors in that jurisdiction to develop their own products that may compete with our products without infringing our patent claims in that jurisdiction
We do not have patent rights in certain foreign countries in which a market may exist Moreover in foreign jurisdictions where we may obtain patent rights proceedings to enforce such rights could result in substantial costs and divert our efforts and attention from other aspects of our business could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing The legal systems of certain countries particularly certain developing countries do not favor the enforcement of patents trade secrets and other intellectual property protection particularly those relating to biotechnology products which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally Proceedings to enforce our patent rights in foreign jurisdictions whether or not successful could result in substantial costs and divert our efforts and attention from other aspects of our business could put our patents at risk of being invalidated or interpreted narrowly could put our patent applications at risk of not issuing and could provoke third parties to assert claims against us We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if any may not be commercially meaningful Thus we may not be able to stop a competitor from marketing and selling in foreign countries products and services that are the same as or similar to our products and services and our competitive position in the international market would be harmed
Many countries including certain countries in the European Union have compulsory licensing laws under which a patent owner may be compelled under specified circumstances to grant licenses to other parties In those countries we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party which could materially diminish the value of those patents This could limit our potential revenue opportunities Accordingly our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license
Patents have a limited lifespan In the U S if all maintenance fees are timely paid the statutory expiration of a patent is generally 20 years from its earliest U S non provisional filing date without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees In certain instances the patent term may be adjusted to add additional days to compensate for delays incurred by the USPTO in issuing the patent Also the patent term may be extended for a period of time to compensate for at least a portion of the time a product candidate was undergoing FDA regulatory review However the life of a patent and the protection it affords is limited Even if patents covering our product candidates are obtained once the patent has expired we may be open to competition from competitive products including generics or biosimilars The patent family directed to the composition of matter of batoclimab has a statutory projected expiration date in 2035 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to the composition of matter of IMVT 1402 and its use in treating autoimmune diseases has a statutory projected expiration date in 2043 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to methods of improving anti FcRn therapies which describes specific dosing regimens for IMVT 1402 including for the treatment of rheumatoid arthritis has a statutory projected expiration date in 2044 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to methods of treating skin diseases using anti FcRn antibodies including IMVT 1402 and batoclimab has a statutory projected expiration date in 2046 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to the formulation of batoclimab has a statutory projected expiration date in 2041 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to the use of batoclimab for treating TED has a statutory projected expiration date in 2039 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent families directed to the use of IMVT 1402 and batoclimab for treating GD and the use of IMVT 1402 and batoclimab for treating CIDP each have a statutory projected expiration date in 2043 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to the method of manufacturing of and formulations produced by such method covering manufacturing and formulations of batoclimab has a statutory projected expiration date in 2044 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees The patent family directed to formulations for anti FcRn antibodies has a statutory projected expiration date in 2045 in the U S and in foreign jurisdictions without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal annuity or other governmental fees Given the amount of time required for the development testing and regulatory review of any new product candidate patents protecting such candidates might expire before or shortly after such candidates are commercialized As a result our owned and in licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours
If we are not able to obtain patent term extension in the U S under the Hatch Waxman Act and in foreign countries under similar legislation thereby potentially extending the term of our marketing exclusivity for batoclimab IMVT 1402 or other product candidates that we may identify our business may be harmed
Our commercial success will largely depend on our ability to obtain and maintain patent and other intellectual property rights in the U S and other countries with respect to our proprietary technology product candidates and our target indications Given the amount of time required for the development testing and regulatory review of new product candidates patents protecting our product candidates might expire before or shortly after such candidates begin to be commercialized Depending upon the timing duration and specifics of FDA marketing approval of IMVT 1402 batoclimab or other product candidates that we may identify one of the U S patents covering each of such product candidates or the use thereof may be eligible for up to five years of patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 the Hatch Waxman Act The Hatch Waxman Act allows a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA premarket regulatory review process A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only claims covering such approved drug product a method for using it or a method for manufacturing it may be extended Patent term extension also may be available in certain foreign countries including the E U where it is known as a Supplementary Protection Certificate SPC upon regulatory approval of our product candidates based on similar legislation Nevertheless we may not be granted patent term extension either in the U S or in any foreign country because of for example failing to exercise due diligence during the testing phase or regulatory review process failing to apply within applicable deadlines failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements Moreover the term of extension as well as the scope of patent protection during any such extension afforded by the governmental authority could be less than we request
If we are unable to obtain patent term extension or the term of any such extension is less than we request the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval to market competing products sooner and our revenue could be reduced possibly materially
It is possible that we will not obtain patent term extension under the Hatch Waxman Act for a U S patent covering batoclimab IMVT 1402 or other product candidates that we may identify even where that patent is eligible for patent term extension or if we obtain such an extension it may be for a shorter period than we had sought Further for patents we may later in license or jointly own we may not have the right to control patent prosecution including filing with the USPTO a petition for patent term extension under the Hatch Waxman Act Thus if one of these patents was eligible for patent term extension under the Hatch Waxman Act we might not be able to control whether a petition to obtain a patent term extension would be filed or obtained from the USPTO
We do not have rights to develop manufacture use or commercialize IMVT 1402 batoclimab or other assets licensed from HanAll in jurisdictions outside the Licensed Territory One or more third parties may challenge patents corresponding to the patent portfolio licensed to us from HanAll in jurisdictions outside the Licensed Territory and HanAll may not reasonably cooperate in the defense and enforcement of such patents with us which could impair our ability to defend or enforce our rights to corresponding patents in jurisdictions within the Licensed Territory
If we fail to comply with our obligations under any license collaboration or other agreements including the HanAll Agreement we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our product candidates
We have licensed certain intellectual property rights including certain intellectual property rights covering our product candidates IMVT 1402 and batoclimab from HanAll We depend and will continue to depend on the HanAll Agreement for the development manufacture and commercialization of our product candidates If for any reason our licenses under the HanAll Agreement are terminated or we otherwise lose those rights it could adversely affect our business The HanAll Agreement imposes and any future collaboration agreements or license agreements we enter into are likely to impose various development commercialization funding milestone payment royalty diligence sublicensing insurance patent prosecution and enforcement or other obligations on us If we breach any material obligations or use the intellectual property licensed to us in an unauthorized manner we may be required to pay damages and HanAll as the licensor may have the right to terminate the license which could result in us being unable to develop manufacture and sell products that are covered by the licensed technology or having to negotiate new or reinstated licenses on less favorable terms or enable a competitor to gain access to the licensed technology
In addition licensing agreements including the agreement under which we currently license intellectual property or technology from HanAll are complex and certain provisions in the agreement may be susceptible to multiple interpretations The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or increase what we believe to be our financial or other obligations under the relevant agreement either of which could have an adverse effect on our business financial condition results of operations and business prospects Moreover if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms we may be unable to successfully develop and commercialize such affected product candidates which could have an adverse effect on our business financial conditions results of operations and business prospects
Obtaining and maintaining our patent protection depends on compliance with various procedural document submission fee payment and other requirements imposed by governmental patent agencies and our patent protection could be reduced or eliminated for noncompliance with these requirements
Periodic maintenance fees on any issued patent are due to be paid to the USPTO and other foreign patent agencies in several stages over the lifetime of the patent The USPTO and various foreign national or international patent agencies require compliance with a number of procedural documentary fee payment and other similar provisions during the patent application process and fee payment during the life of a patent While an inadvertent lapse in compliance with these provisions can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application resulting in partial or complete loss of patent rights in the relevant jurisdiction Noncompliance events that could result in abandonment or lapse of patent rights include but are not limited to failure to timely file national and regional stage patent applications based on our international patent application failure to respond to official actions within prescribed time limits underpayment or non payment of fees and failure to properly legalize and submit formal documents within the prescribed time limits If we or our licensors fail to maintain the patents and patent applications covering batoclimab IMVT 1402 or any of our future product candidates our competitors might be able to enter the market earlier than anticipated which would have an adverse effect on our business
We may seek to acquire or in license additional product candidates or technologies to grow our product offerings and intellectual property portfolio However we may be unable to acquire or in license intellectual property rights relating to or necessary for any such product candidates from third parties on commercially reasonable terms or at all In that event we may be unable to develop or commercialize such product candidates or technology We may also be unable to identify product candidates or technology that we believe are an appropriate strategic fit for our company and protect intellectual property relating to or necessary for such product candidates and technology
The in licensing and acquisition of third party intellectual property rights for product candidates is a competitive area and a number of more established companies are also pursuing strategies to in license or acquire third party intellectual property rights for products that we may consider attractive or necessary These established companies may have a competitive advantage over us due to their size cash resources and greater clinical development and commercialization capabilities Furthermore companies that perceive us to be a competitor may be unwilling to assign or license rights to us If we are unable to successfully obtain rights to additional technologies or products our business financial condition results of operations and prospects for growth could suffer
In addition we expect that competition for the in licensing or acquisition of third party intellectual property rights for product candidates and technologies that are attractive to us may increase in the future which may mean fewer suitable opportunities for us as well as higher acquisition or licensing costs We may be unable to in license or acquire the third party intellectual property rights for product candidates or technology on terms that would allow us to make an appropriate return on our investment
A third party may hold intellectual property including patent rights that are important or necessary to the development of any of our product candidates It may be necessary for us to use the patented or proprietary technology of third parties to commercialize batoclimab IMVT 1402 or any future product candidates in which case we would be required to obtain a license from these third parties on commercially reasonable terms Such a license may not be available or it may not be available on commercially reasonable terms Our business would be harmed if we are not able to obtain such a license on commercially reasonable terms or at all or if a non exclusive license is offered and our competitors gain access to the same technology If we are unable to obtain a license we may need to cease use of the compositions or methods covered by such third party intellectual property rights and may need to seek to develop alternative approaches that do not infringe on such intellectual property rights which may entail additional costs and development delays even if we were able to develop such alternatives which may not be feasible
The risks described in this Item pertaining to our intellectual property rights also apply to the intellectual property rights that we in license and any failure by us or our licensors to obtain maintain defend and enforce these rights could have an adverse effect on our business In some cases we may not have control over the prosecution maintenance or enforcement of the patents that we license and may not have sufficient ability to provide input into the patent prosecution maintenance and defense process with respect to such patents and our licensors may fail to take the steps that we believe are necessary or desirable in order to obtain maintain defend and enforce the licensed patents
Third party claims or litigation alleging infringement of patents or other proprietary rights or us seeking to invalidate patents or other proprietary rights may delay or prevent the development and commercialization of our product candidates
Our commercial success depends and will continue to depend in part on our ability to operate while avoiding infringement and other violations of the patents and proprietary rights of third parties However our research development and commercialization activities may be subject to claims that we infringe or otherwise violate patents or other intellectual property rights owned or controlled by third parties There is a substantial amount of litigation both within and outside the U S involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries including patent infringement lawsuits interferences derivation and administrative law proceedings
review and post grant review before the USPTO as well as oppositions and similar processes in foreign jurisdictions Our competitors in both the U S and abroad many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies may have applied for or obtained or may in the future apply for or obtain patents that will prevent limit or otherwise interfere with our ability to make use and sell if approved our product candidate Numerous U S and foreign issued patents and pending patent applications which are owned by third parties exist in the fields in which we and our collaborators are developing product candidates As the biotechnology and pharmaceutical industries expand and more patents are issued and as we gain greater visibility and market exposure as a public company the risk increases that our product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties Third parties may assert that we are infringing their patents or employing their proprietary technology without authorization
There may be third party patents or patent applications with claims to materials formulations methods of manufacture or methods for treatment related to the use or manufacture of our product candidates Because patent applications can take many years to issue there may be currently pending patent applications that may later result in issued patents that our product candidates may infringe In addition third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents If any third party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates any molecules formed during the manufacturing process or any final product itself the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents or until such patents expire or until such patent is found unpatentable invalid or unenforceable Similarly if any third party patent was to be held by a court of competent jurisdiction to cover aspects of our formulations processes for manufacture or methods of use including combination therapy the holders of any such patent may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires In either case such a license may not be available on commercially reasonable terms or at all In addition we may be subject to claims that we are infringing other intellectual property rights such as trademarks or copyrights or misappropriating the trade secrets of others and to the extent that our employees consultants or contractors use intellectual property or proprietary information owned by others in their work for us disputes may arise as to the rights in related or resulting know how and inventions
Parties making claims against us may obtain injunctive or other equitable relief which could effectively block our ability to further develop and commercialize our product candidates Defending these claims regardless of their merit would involve substantial litigation expense and would be a substantial diversion of employee resources from our business In the event of a successful infringement or other intellectual property claim against us we may have to pay substantial damages including treble damages and attorneys fees for willful infringement obtain one or more licenses from third parties pay royalties or redesign our affected products which may be impossible or require substantial time and monetary expenditure We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms Furthermore even in the absence of litigation we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms if at all In that event we would be unable to further develop and commercialize our product candidates which could harm our business significantly Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business
Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources In addition intellectual property litigation regardless of its outcome may cause negative publicity adversely impact prospective customers cause product shipment delays or prohibit us from manufacturing importing marketing or otherwise commercializing our product candidates or any future product candidates Any uncertainties resulting from the initiation and continuation of any litigation could have an adverse effect on our ability to raise additional funds or otherwise have an adverse effect on our business results of operation financial condition or cash flows
Furthermore because of the substantial amount of discovery required in connection with intellectual property litigation there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation There could also be public announcements of the results of hearings motions or other interim proceedings or developments which could have an adverse effect on the price of shares of our common stock If securities analysts or investors perceive these results to be negative it could have an adverse effect on the price of shares of our common stock The occurrence of any of these events may have an adverse effect on our business results of operation financial condition or cash flows
We cannot provide any assurances that third party patents do not exist which might be enforced against our product candidates or any future product candidates resulting in either an injunction prohibiting our manufacturing sales or with respect to our sales an obligation on our part to pay royalties or other forms of compensation to third parties
We may not identify relevant third party patents or may incorrectly interpret the relevance scope or expiration of a third party patent which might adversely affect our ability to develop and market our product candidates or any future product candidates
We cannot guarantee that any of our or our licensors patent searches or analyses including the identification of relevant patents the scope of patent claims or the expiration of relevant patents are complete or thorough nor can we be certain that we have identified each and every third party patent and pending application in the U S and abroad that is or may be relevant to or necessary for the commercialization of our product candidates or any future product candidates in any jurisdiction Patent applications in the U S and elsewhere are not published until approximately 18 months after the earliest filing for which priority is claimed with such earliest filing date being commonly referred to as the priority date Therefore patent applications covering our product candidates or any future product candidates could have been filed by others without our knowledge Additionally pending patent applications that have been published can subject to certain limitations be later amended in a manner that could cover our product candidates or any future product candidates including the use thereof provided such pending patent applications result in issued patents our ability to develop and market our product candidates or any future product candidates can be adversely affected in jurisdictions where such patents issue
The scope of a patent claim is determined by an interpretation of the law the written disclosure in a patent and the patent s prosecution history Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect which may negatively impact our ability to market our product candidate if approved We may incorrectly determine that our applicable product candidate is not covered by a third party patent or may incorrectly predict whether a third party s pending application will issue with claims of relevant scope Our determination of the expiration date of any patent in the U S or abroad that we consider relevant may be incorrect and our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates or any future product candidates if approved
If we fail to identify or correctly interpret relevant patents to which we do not have a license or we are unable to obtain a license we may be subject to infringement claims We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims If we fail in any such dispute in addition to being forced to pay damages we may be temporarily or permanently prohibited from commercializing any of our products that are held to be infringing We might if possible also be forced to redesign products so that we no longer infringe the third party intellectual property rights Any of these events even if we were ultimately to prevail could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business
Competitors may infringe or otherwise violate our patents the patents of our licensors or our other intellectual property rights To counter infringement or unauthorized use we may be required to file legal claims which can be expensive and time consuming In addition in an infringement proceeding a court may decide that a patent of ours or our licensors is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question The standards that courts use to interpret patents are not always applied predictably or uniformly and can change particularly as new technologies develop As a result we cannot predict with certainty how much protection if any will be given to our patents if we attempt to enforce them and they are challenged in court Further even if we prevail against an infringer in U S district court the infringer may file an appeal and the district court judgment may be overturned at the appeals court and or that an adverse decision will be issued by the appeals court relating to the validity or enforceability of our patents
An adverse result in any litigation or defense proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly in a manner insufficient to achieve our business objectives or could put our patent applications at risk of not issuing The initiation of a claim against a third party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable In patent litigation in the U S defendant counterclaims alleging invalidity or unenforceability are commonplace Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements including lack of novelty obviousness non enablement or lack of written description or statutory subject matter Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO or made a materially misleading statement during prosecution
review or post grant review or oppositions or similar proceedings outside the U S in parallel with litigation or even outside the context of litigation The outcome following legal assertions of unpatentability is unpredictable We cannot be certain that there is no prior art of which we and the patent examiner were unaware during prosecution and which renders the claims unpatentable or invalid For patents and patent applications that we may in license we may have a limited right or no right to participate in the defense of any licensed patents against challenge by a third party If a defendant were to prevail on a legal assertion of unpatentability invalidity or unenforceability we would lose at least part and perhaps all of any future patent protection on batoclimab IMVT 1402 or any future product candidates Such a loss of patent protection could harm our business
We may not be able to detect or prevent alone or with our licensors misappropriation of our intellectual property rights particularly in countries where the laws may not protect those rights as fully as in the U S Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms Any litigation or other proceedings to enforce our intellectual property rights may fail and even if successful may result in substantial costs and distract our management and other employees
Even if we establish a party has infringed our intellectual property rights the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages which may or may not be an adequate remedy Furthermore because of the substantial amount of discovery required in connection with intellectual property litigation there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation There could also be public announcements of the results of hearings motions or other interim proceedings or developments If securities analysts or investors perceive these results to be negative it could have an adverse effect on the price of shares of our common stock
Because of the expense and uncertainty of litigation we may conclude that even if a third party is infringing our issued patent or a patent that we in license any patents that may be issued as a result of our pending or future patent applications or other intellectual property rights the risk adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of our company or our stockholders In such cases we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non litigious action or solution
Changes in U S patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general thereby impairing our ability to protect batoclimab IMVT 1402 or any of our future product candidates
As is the case with other biopharmaceutical companies we depend and will continue to depend on intellectual property particularly patents relating to our product candidates IMVT 1402 and batoclimab and any future product candidates Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly time consuming and inherently uncertain Changes in either the patent laws or interpretation of the patent laws in the U S or USPTO rules and regulations could increase the uncertainties and costs
The U S Supreme Court and the U S Court of Appeals for the Federal Circuit have ruled on several patent cases in recent years either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations Depending on future actions by the U S Congress the U S courts the USPTO and the relevant law making bodies in other countries the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future
Similarly changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future We cannot predict future changes in the interpretation of patent laws or changes to patent laws that might be enacted into law by U S and foreign legislative bodies Those changes may materially affect our patents or patent applications and our ability to obtain additional patent protection in the future
If we are unable to protect the confidentiality of our trade secrets and other proprietary information including as a result of our reliance on third parties our business and competitive position could be harmed
In addition to seeking patents for our product candidate we also rely and will continue to rely on trade secrets including unpatented know how technology and other proprietary information to maintain our competitive position We seek to protect our proprietary technology and information in part by entering into confidentiality agreements and if applicable material transfer agreements consulting agreements or other similar agreements with our advisors employees third party contractors and consultants prior to beginning research or disclosing proprietary information Despite these efforts and the contractual provisions employed when working with third parties the need to share trade secrets and other confidential information due to our reliance on third parties increases the risk that such trade secrets become known by our competitors are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements Any disclosure either intentional or unintentional by our employees the employees of third parties with whom we share our facilities or third party consultants and vendors that we engage to perform research clinical trials or manufacturing activities or misappropriation by third parties such as through a cybersecurity breach of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements thus eroding our competitive position in our market and having an adverse effect on our business
Monitoring unauthorized uses and disclosures of our intellectual property is difficult and we do not know whether the steps we have taken to protect our intellectual property will be effective In addition we may not be able to obtain adequate remedies for any such breaches Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult expensive and time consuming and the outcome is unpredictable In addition some courts inside and outside the U S are less willing or unwilling to protect trade secrets The enforceability of confidentiality agreements may vary from jurisdiction to jurisdiction Further our key employees consultants suppliers or other individuals with access to our proprietary technology and know how may incorporate that technology and know how into projects and inventions developed independently or with third parties As a result disputes may arise regarding the ownership of the proprietary rights to such technology or know how and any such dispute may not be resolved in our favor If any of our trade secrets were to be lawfully obtained or independently developed by a competitor we would have no right to prevent them or those to whom they communicate it from using that technology or information to compete with us If any of our trade secrets or other proprietary information were to be disclosed to or independently developed by a competitor our competitive position could be harmed
We may be subject to claims that our licensors employees consultants independent contractors or we have wrongfully used or disclosed confidential information of their former employers or other third parties
We do and may employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies including our licensors competitors or potential competitors Although we seek to protect our ownership of intellectual property rights by ensuring that our agreements with our employees consultants collaborators independent contractors and other third parties with whom we do business include provisions requiring such parties to assign rights in inventions to us and to not use the know how or confidential information of their former employer or other third parties we may be subject to claims that we or our employees consultants collaborators or independent contractors have inadvertently or otherwise used or disclosed know how or confidential information of their former employers or other third parties Litigation may be necessary to defend against these claims There is no guarantee of success in defending these claims and if we fail in defending any such claims in addition to paying monetary damages we may lose valuable intellectual property rights or personnel which could result in customers seeking other sources for the technology or in ceasing from doing business with us Such intellectual property rights could be awarded to a third party and we could be required to obtain a license from such third party to commercialize our technology or our product candidate Such a license may not be available on commercially reasonable terms or at all Even if we are successful litigation could result in substantial cost and be a distraction to our management and other employees Moreover any such litigation or the threat thereof may adversely affect our reputation our ability to form strategic alliances or sublicense our rights to collaborators engage with scientific advisors or hire employees or consultants each of which would have an adverse effect on our business results of operations and financial condition
We or our licensors may be subject to claims that former employees consultants collaborators independent contractors or other third parties have an interest in our owned or in licensed patents trade secrets or other intellectual property as an inventor or co inventor For example we or our licensors may have inventorship disputes arise from conflicting obligations of employees consultants or others who are involved in developing our product candidate Litigation may be necessary to defend against these and other claims challenging inventorship or ownership of our owned or in licensed patents trade secrets or other intellectual property
In addition while it is our policy to require our employees consultants collaborators and independent contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own Our and their assignment agreements may not be self executing or may be breached and we may be forced to bring claims against third parties or defend claims they may bring against us to determine the ownership of what we regard as our intellectual property
If we or our licensors fail in defending any such claims in addition to paying monetary damages we may lose valuable personnel or intellectual property rights such as exclusive ownership of or right to use intellectual property that is important to our product candidate Even if we and our licensors are successful in prosecuting or defending against such claims litigation could result in substantial costs and be a distraction to management and other employees Any of the foregoing could have an adverse effect on our business financial condition results of operations and prospects
We expect to rely on trademarks and trade names as one means to distinguish any of our drug candidates that are approved for marketing from the products of our competitors Once we select new trademarks and apply to register them our trademark applications may not be approved We may not be able to protect our rights in these trademarks and trade names which we need in order to build name recognition with potential partners or customers in our markets of interest In addition third parties may have used trademarks similar and identical to our trademarks in certain jurisdictions and may have filed or may in the future file for registration of such trademarks Third parties may oppose or attempt to cancel our trademark applications or trademarks or otherwise challenge our use of the trademarks In the event that our trademarks are successfully challenged we may not be able to use these trademarks to market our products in those countries and could be forced to rebrand our drugs which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks If we attempt to enforce our trademarks and assert trademark infringement claims a court may determine that the marks we have asserted are invalid or unenforceable or that the party against whom we have asserted trademark infringement has superior rights to the marks in question In this case we could ultimately be forced to cease use of such trademarks In any case if we are unable to establish name recognition based on our trademarks and trade names then we may not be able to compete effectively and our business may be adversely affected
review nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant during which time third parties can raise objections against such granted patent In the course of such proceedings which may continue for a protracted period of time the patent owner may be compelled to limit the scope of the allowed or granted claims thus challenged or the allowed or granted claims may be finally determined to be unpatentable invalid or unenforceable
In addition the degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights afford only limited protection and may not adequately protect our business provide a barrier to entry against our competitors or potential competitors or permit us to maintain our competitive advantage Moreover if a third party has intellectual property rights that cover the practice of our technology we may not be able to fully exercise or extract value from our intellectual property rights The following examples are illustrative
others may be able to make formulations or compositions that are the same as or similar to batoclimab IMVT 1402 or future product candidates but that are not covered by the claims of the patents that we own or have licensed
we our licensor or any collaborators might not have been the first to make or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed
our competitors might conduct research and development activities in the U S and other countries that provide a safe harbor from patent infringement claims for certain research and development activities as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets
As of May 23 2025 RSL beneficially owned approximately 56 5 of the voting power of our outstanding shares of common stock Therefore we are controlled by RSL and RSL has the ability to substantially influence us and exert significant control through this ownership position It is possible RSL may be able to control elections of directors the issuance of equity including to our employees under equity incentive plans amendments of our organizational documents or approval of any merger amalgamation sale of assets or other major corporate transaction RSL is publicly traded and its interests may not always coincide with our corporate interests or the interests of other stockholders and it may exercise its voting and other rights in a manner with which you may not agree or that may not be in the best interests of our other stockholders There may be changes to the management or ownership of RSL or to RSL s business model that could impact RSL s interests in a way that may not coincide with our corporate interests or the interests of other stockholders Any such changes may diminish or eliminate entirely any benefits we expect to derive from our membership in the Roivant family of companies So long as RSL continues to own a significant amount of our equity it will continue to be able to strongly influence and effectively control our decisions
RSL has the right to elect a certain number of Series A preferred stock directors Series A Preferred Directors to our board of directors in accordance with our amended and restated certificate of incorporation our Certificate of Incorporation While the directors appointed by RSL are obligated to act in accordance with their applicable fiduciary duties they may have equity or other interests in RSL and accordingly their interests may be aligned with RSL s interests which may not always coincide with our corporate interests or the interests of our other stockholders Until such time as Roivant holds less than 50 of the voting power of our outstanding shares of capital stock entitled to vote generally at an election of directors the directors appointed by Roivant will be able to determine the outcome of all matters presented to the board of directors
Our organizational and ownership structure involves a number of relationships that may give rise to certain conflicts of interest between us and minority holders of shares of our common stock on the one hand and RSL on the other hand Certain of our directors and employees have equity interests in RSL and accordingly their interests may be aligned with RSL s interests which may not always coincide with our corporate interests or the interests of our other stockholders Further our other stockholders may not have visibility into the RSL ownership of any of our directors or officers which may change at any time through acquisition disposition dilution or otherwise Any change in our directors or officers RSL ownership could impact the interests of those holders
In addition we are party to certain related party agreements with RSL RSI and RSG These entities and their stockholders including certain of our directors and employees may have interests which differ from our interests or those of the minority holders of shares of our common stock Any material transaction between us and RSL RSI RSG or any other affiliate of RSL is subject to our related party transaction policy which requires prior approval of such transaction by our audit committee To the extent we fail to appropriately deal with any such conflicts of interests it could negatively impact our reputation and ability to raise additional funds and the willingness of counterparties to do business with us all of which could have an adverse effect on our business financial condition results of operations and cash flows
The market price of shares of our common stock has been and is likely to continue to be highly volatile and may be subject to wide fluctuations in response to a variety of factors including the following
any delay in filing a BLA or similar application for batoclimab IMVT 1402 or any future product candidate and any adverse development or perceived adverse development with respect to the FDA or other foreign regulatory authority s review of that BLA or similar application as the case may be
significant lawsuits including patent or stockholder litigation and disputes or other developments relating to our proprietary rights including patents litigation matters and our ability to obtain patent protection for our technologies
Certain shares of our common stock have rights subject to conditions to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders We have also registered or intend to register all shares of common stock that we may issue under our equity compensation plans or that are issuable upon exercise of outstanding options These shares can be freely sold in the public market upon issuance once vested subject to volume limitations applicable to affiliates In addition certain of our directors executive officers and certain affiliates have established or may establish programmed selling plans under Rule 10b5 1 of the Exchange Act for the purpose of effecting sales of our common stock If any of these events cause a large number of our shares to be sold in the public market or if it is perceived that a large number of our shares will be sold the market price of our common stock could decline
In addition in the past when the market price of a stock has been volatile holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock For example we previously had one such putative class action complaint brought against us We could incur substantial costs defending this or similar lawsuits as well as diversion of the time and attention of our management any or all of which could seriously harm our business Furthermore the stock markets have recently experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects These fluctuations have often been unrelated or disproportionate to the operating performance of those companies Broad market and industry factors including potentially worsening economic conditions increased inflation and other adverse effects or developments including political regulatory and other market conditions may negatively affect the market price of shares of our common stock regardless of our actual operating performance The market price of shares of our common stock may decline and you may lose some or all of your investment
The market price of our common stock has been and may continue to be volatile Companies that have experienced volatility in the market price of their common stock are often subject to securities class action litigation For example in February 2021 a securities class action complaint was filed against us certain of our officers and a board member of HSAC alleging violations of the Exchange Act In April 2024 the court overseeing the litigation entered judgment in favor of the defendants Plaintiffs did not appeal the court s judgment so the litigation is now concluded Any future securities litigation could result in substantial costs and diversion of management s attention and resources which could adversely impact our business Any adverse determination in litigation could also subject us to significant liabilities
We are a controlled company within the meaning of the applicable Nasdaq Global Select Market Nasdaq listing rules and as a result qualify for exemptions from certain corporate governance requirements If we rely on these exemptions you will not have the same protections afforded to stockholders of companies that are subject to such requirements
RSL controls a majority of the voting power of our outstanding shares of common stock As a result we are a controlled company within the meaning of applicable Nasdaq listing rules Under these rules a company of which more than 50 of the voting power for the election of directors is held by an individual group or another company is a controlled company In addition for so long as the RSL designated directors control all matters presented to our board of directors for a vote we will be a controlled company For so long as we remain a controlled company we may elect not to comply with certain corporate governance requirements including the requirements
We intend to use all or some of these exemptions As a result you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements
If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business our share price and trading volume could decline and has declined in the past upon downgrades of our common stock
The trading market for shares of our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business We do not have any control over these analysts If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade shares of our common stock or change their opinion of shares of our common stock our share price would likely decline as happened in August 2021 If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us we could lose visibility in the financial markets which could cause our share price or trading volume to decline
We have never declared or paid any cash dividends on shares of our common stock We currently anticipate that we will retain future earnings for the development operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future As a result capital appreciation if any of shares of our common stock would be your sole source of gain on an investment in shares of our common stock for the foreseeable future
We will continue to incur increased costs as a result of operating as a public company and our management will continue to devote substantial time to compliance with our public company responsibilities and corporate governance practices
As a public company we have incurred and will continue to incur significant legal accounting and other expenses The Sarbanes Oxley Act of 2002 the Sarbanes Oxley Act the Dodd Frank Wall Street Reform and Consumer Protection Act the listing requirements of Nasdaq and other applicable securities rules and regulations impose various requirements on public companies We also expect that compliance with the auditor attestation requirements of Section 404 b of the Sarbanes Oxley Act Section 404 and increased disclosure requirements will substantially increase our legal and financial compliance costs Our management and other personnel will need to continue to devote a substantial amount of time to comply with these requirements Moreover these rules and regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities more time consuming and costly If notwithstanding our efforts to comply with new or changing laws regulations and standards we fail to comply regulatory authorities may initiate legal proceedings against us and our business may be harmed Further failure to comply with these laws regulations and standards may make it more difficult and more expensive for us to obtain directors and officers liability insurance which could make it more difficult for us to attract and retain qualified members to serve on our board of directors or committees or as members of senior management These rules and regulations are often subject to varying interpretations in many cases due to their lack of specificity and as a result their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies This could result in future uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices
As a public company we are obligated to develop and maintain proper and effective internal controls over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and as a result the value of shares of our common stock
Pursuant to Section 404 we are required to furnish a report by our management on our internal control over financial reporting including an attestation report on our internal control over financial reporting issued by our independent registered public accounting firm To maintain compliance with Section 404 we engage in a process to document and evaluate our internal control over financial reporting which is both costly and challenging In this regard we will need to continue to dedicate internal resources engage outside consultants and refine and revise a detailed work plan to assess and document the adequacy of internal control over financial reporting continue steps to improve control processes as appropriate validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting Despite our efforts there is a risk that neither we nor our independent registered public accounting firm will be able to conclude that our internal control over financial reporting is effective as required by Section 404
If we are unable to conclude that our internal controls over financial reporting are effective or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal controls over financial reporting we could lose investor confidence in the accuracy and completeness of our financial reports the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq the SEC or other regulatory authorities Failure to remedy any material weakness in our internal controls over financial reporting or to implement or maintain other effective control systems required of public companies could also negatively impact our ability to access to the capital markets
In addition effective disclosure controls and procedures enable us to make timely and accurate disclosure of financial and non financial information that we are required to disclose As a public company if our disclosure controls and procedures are ineffective we may be unable to report our financial results or make other disclosures accurately on a timely basis which could cause our reported financial results or other disclosures to be materially misstated and result in the loss of investor confidence and cause the market price of shares of our common stock to decline
Our wholly owned subsidiary ISL is incorporated under the laws of Bermuda where it is not subject to any income or withholding taxes Further ISL is centrally managed and controlled in the U K and under current U K tax law a company which is centrally managed and controlled in the U K is regarded as resident in the U K for taxation purposes Accordingly we expect ISL to be subject to U K taxation on its income and gains and subject to the U K s controlled foreign company rules except where an exemption applies ISL may be treated as a dual resident company for U K tax purposes As a result ISL s right to claim certain reliefs from U K tax may be restricted and changes in law or practice in the U K could result in the imposition of further restrictions on ISL s right to claim U K tax reliefs ISL may also become subject to income withholding or other taxes in certain jurisdictions by reason of its activities and operations and it is also possible that taxing authorities in any such jurisdictions could assert that ISL is subject to greater taxation than we currently anticipate Any such additional tax liability could adversely affect our results of operations
Our wholly owned subsidiary ISL and our controlling stockholder RSL are incorporated under the laws of Bermuda and are tax residents of the U K Further we currently have other subsidiaries that are domiciled in the U K Switzerland and the U S If we succeed in growing our business we expect to conduct increased operations through our subsidiaries in various countries and tax jurisdictions in part through intercompany service agreements between us our parent company and our subsidiaries In that case our corporate structure and intercompany transactions including the manner in which we develop and use our intellectual property will be organized so that we can achieve our business objectives in a tax efficient manner and in compliance with applicable transfer pricing rules and regulations If two or more affiliated companies are located in different countries or tax jurisdictions the tax laws and regulations of each country generally will require that transfer prices be the same as those between unrelated companies dealing at arms length and that appropriate documentation be maintained to support the transfer prices While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so our transfer pricing procedures are not binding on applicable tax authorities If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arms length transactions they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices which could result in a higher tax liability to us In addition if the country from which the income is reallocated does not agree with the reallocation both countries could tax the same income potentially resulting in double taxation If tax authorities were to allocate income to a higher tax jurisdiction subject our income to double taxation or assess interest and penalties it would increase our consolidated tax liability which could adversely affect our financial condition results of operations and cash flows
Significant judgment is required in evaluating our tax positions and determining our provision for income taxes During the ordinary course of business there are many transactions and calculations for which the ultimate tax determination is uncertain For example our effective tax rates could be adversely affected by changes in foreign currency exchange rates or by changes in the relevant tax accounting and other laws regulations principles and interpretations As we intend to operate in numerous countries and taxing jurisdictions the application of tax laws can be subject to diverging and sometimes conflicting interpretations by tax authorities of these jurisdictions It is not uncommon for taxing authorities in different countries to have conflicting views for instance with respect to among other things the manner in which the arms length standard is applied for transfer pricing purposes or with respect to the valuation of intellectual property In addition tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied Moreover certain relevant tax accounting and other laws have special application with respect to affiliated combined or similar groups which may include RSL ISL and their respective subsidiaries and which may impact the tax liabilities of the companies We continue to assess the impact of such changes in tax laws on our business and may determine that changes to our structure practice or tax positions are necessary in light of such changes and developments in the tax laws of other jurisdictions in which we operate Such changes may nevertheless be ineffective in avoiding an increase in our consolidated tax liability which could harm our financial condition results of operations and cash flows
New income sales use excise or other tax laws statutes rules regulations or ordinances could be enacted at any time which could adversely affect us Further our tax position could be adversely impacted by changes in existing tax rates tax laws tax practice tax treaties or tax regulations or changes in the interpretation thereof by the tax authorities in Europe including the U K and Switzerland the U S Bermuda and other jurisdictions as well as being affected by certain international tax developments including certain changes currently proposed by the Organization for Economic Co operation and Development OECD and their action plan on Base Erosion and Profit Shifting BEPS as well as other initiatives led by the OECD and the European Commission For example the OECD continues to lead work on proposals commonly referred to as BEPS 2 0 which to the extent implemented would make important changes to the international tax system These proposals are based on two pillars involving the allocation of taxing rights in respect of certain multinational enterprises above a fixed profit margin to the jurisdictions in which they carry on business referred to as the Pillar One rules and imposing a minimum effective tax rate on certain multinational enterprises referred to as the Pillar Two rules A number of countries in which we have group entities or conduct business including the U K Switzerland and Bermuda have enacted or are in the process of enacting core elements of the Pillar Two rules Based on our current understanding of the minimum revenue thresholds we currently do not expect to be within the scope of the Pillar One rules but could fall within the scope of the Pillar Two rules in the future which could increase our tax obligations and require us to incur additional material costs to ensure compliance with any such rules in the countries where we do business or have group entities
Failure to manage the risks associated with international tax changes or misinterpretation of the laws providing such changes could result in costly audits interest penalties and reputational damage which could adversely affect our business results of our operations and our financial condition In addition changes to the U S Internal Revenue Code U S Treasury Regulations or other U S Internal Revenue Service guidance thereunder could adversely affect our effective tax rate For example the Inflation Reduction Act of 2022 includes provisions that impact the U S federal income taxation of corporations including imposing a minimum tax on the book income of certain large corporations and an excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock
Our actual effective tax rate may vary from our expectation and that variance may be material A number of factors may increase our future effective tax rates including the jurisdictions in which profits are determined to be earned and taxed the resolution of issues arising from any future tax audits with various tax authorities changes in the valuation of our deferred tax assets and liabilities increases in expenses not deductible for tax purposes including transaction costs and impairments of goodwill in connection with acquisitions changes in the taxation of stock based compensation changes in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles and challenges to the transfer pricing policies related to our structure
Under current U S federal income tax law U S federal net operating losses NOLs generated in taxable years beginning after December 31 2017 may be carried forward indefinitely but the deductibility of such U S federal NOLs is generally limited to 80 of taxable income In addition our research and development credit carryforwards in the U S will begin to expire in our fiscal year ending March 31 2039 It is uncertain if and to what extent various states will conform to the current U S federal income tax law
In addition under Sections 382 and 383 of the Internal Revenue Code of 1986 as amended and corresponding provisions of state law if a corporation undergoes an ownership change which is generally defined as a greater than 50 percentage point cumulative change by value in its equity ownership over a three year period the corporation s ability to use its pre change NOL carryforwards and other pre change tax attributes such as research tax credits to offset its post change income or taxes may be limited It is possible that we have experienced one or more ownership changes in the past In addition we may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership some of which may be outside of our control As a result our ability to use our pre ownership change NOL carryforwards to offset U S federal taxable income if we earned net taxable income and any other pre ownership change tax attributes may be subject to limitations which could potentially result in increased future tax liability to us In addition at the state level there may be periods during which the use of NOLs is suspended or otherwise limited which could accelerate or permanently increase state taxes owed
Anti takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
Provisions in our Certificate of Incorporation and amended and restated bylaws our Bylaws may have the effect of delaying or preventing a change of control or changes in our management Our Certificate of Incorporation and Bylaws include provisions that
authorize our board of directors to issue without further action by the stockholders shares of undesignated preferred stock with terms rights and preferences determined by our board of directors that may be senior to our common stock
require that from and after such time as we are no longer a controlled company within the meaning of Nasdaq rules any action to be taken by our holders of common stock be effected at a duly called annual or special meeting and not by written consent
require the approval of our board of directors or from and after such time as we are no longer a controlled company within the meaning of Nasdaq rules the holders of at least 66 2 3 of our outstanding shares of voting stock to amend our Bylaws and certain provisions of our Certificate of Incorporation
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors which is responsible for appointing the members of our management Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock and they could deter potential acquirers of our company thereby reducing the likelihood that you would receive a premium for your shares of our common stock in an acquisition
Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware and the federal district courts of the U S as the exclusive forums for substantially all disputes between us and our stockholders which will restrict our stockholders ability to choose the judicial forum for disputes with us or our directors officers or employees
Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law any derivative action or proceeding brought on our behalf any action asserting a breach of a fiduciary duty any action asserting a claim against us arising pursuant to the Delaware General Corporation Law the DGCL our Certificate of Incorporation or our Bylaws any action as to which DGCL confers jurisdiction to the Court of Chancery of the State of Delaware and any action asserting a claim against us that is governed by the internal affairs doctrine This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act Furthermore Section 22 of the Securities Act of 1933 as amended the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions Accordingly both state and federal courts have jurisdiction to entertain such claims To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts among other considerations our Certificate of Incorporation provides that the federal district courts of the U S will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act
These choice of forum provisions may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors officers or other employees which may discourage lawsuits against us and our directors officers and other employees While the Delaware courts have determined that such choice of forum provisions are facially valid a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions In such instance we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our Certificate of Incorporation This may require significant additional costs and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions If a court were to find the exclusive forum provision in our Certificate of Incorporation to be inapplicable or unenforceable in an action we may incur further significant additional costs associated with resolving the dispute in other jurisdictions all of which could seriously harm our business
We have established certain processes designed to assess identify and manage cybersecurity risks which are built into our information technology functions and are designed to help protect our information assets and operations from internal and external cyber threats Our cybersecurity risk management processes target integral areas such as data protection access control incident response and vulnerability management and are integrated into our overall enterprise risk management process As part of our overall enterprise risk management process our company s information technology functions including our Information Technology department leaders and third party service providers identify assess and evaluate cybersecurity risks impacting our operations across the Company
Depending on the information systems and environment our cybersecurity program includes various administrative physical and technical safeguards designed to manage and mitigate material risks from cybersecurity threats including for example an incident response plan incident detection and response disaster recovery plans risk assessments encryption of data network security controls data segregation access controls physical security systems monitoring a vendor risk management program penetration testing cybersecurity insurance dedicated cybersecurity staff and asset management tracking and disposal Additionally we provide all employees including part time and temporary employees with annual and ad hoc cybersecurity awareness training
Our information technology functions identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including internal and external audits penetration and vulnerability tests automated tools subscriptions to reports and services that identify cybersecurity threats analysis of reports of threats and actors use of external intelligence feeds evaluations of our and our industry s risk profile evaluation of threats reported to us threat assessments for internal and external threats scans of internal systems for threats and incident response simulations including third party conducted tabletop incident response exercises We engage certain external service providers including consultants independent privacy assessors and computer security firms as appropriate to assess test or otherwise assist with aspects of our security controls including cybersecurity incident containment and remediation efforts and enhance our cybersecurity oversight We also use third party service providers to assist us from time to time to identify assess and manage material risks from cybersecurity threats including for example penetration testing firms cybersecurity consultants forensic investigators cybersecurity software providers managed cybersecurity service providers and professional services firms including legal counsel
We use third party service providers to perform a variety of functions throughout our business such as application providers hosting companies contract research organizations contract manufacturing organizations distributors and supply chain resources With respect to our use and oversight of third party service providers we use a risk based approach to apply our cybersecurity processes according to the nature and sensitivity of the data accessed processed or stored by such third party service provider and perform additional risk screenings and procedures as appropriate We use a number of means to assess cyber risks related to our third party service providers including risk assessments for each vendor vendor security questionnaires and due diligence in connection with onboarding new vendors and ongoing reviews and due diligence with key or high risk third party vendors We also seek to collect and assess cybersecurity audit reports and other supporting documentation when available and include appropriate security terms in our contracts where applicable as part of our oversight of third party providers
For additional information regarding cybersecurity risks and their potential impacts on our company including our business strategy results of operations or financial condition please refer to Item 1A Risk Factors in this Annual Report including the risk factor captioned
We and the third parties with whom we work are subject to stringent and changing privacy data protection and information security laws contractual obligations self regulatory schemes government regulation industry standards and other obligations related to data privacy and security The actual or perceived failure by us or the third parties with whom we work to comply with such obligations could result in harm to our reputation regulatory investigations or actions significant fines and liability disruption of our clinical trials or other material adverse effects on our business
The Audit Committee of our Board of Directors oversees our cybersecurity and data privacy risk management activities and reports to the Board regarding such oversight as appropriate The Audit Committee receives updates from management regarding cybersecurity matters not less than twice per year and is notified between such updates regarding any significant new cybersecurity threats or incidents
Our Vice President of Information Technology and Facilities and our Head of Cybersecurity lead the operational oversight of company wide cybersecurity strategy policy standards and processes and work across relevant departments to assess and help prepare us and our employees to address cybersecurity risks The Vice President of Information Technology and Facilities has over 34 years of experience delivering systems across all functions of life science organizations including support of infrastructure security software as a service SaaS systems and data integrations along with ten years working with cybersecurity The Vice President of Information Technology and Facilities has also received Chief Information Security Officer C CISO certification The Head of Cybersecurity has approximately 15 years of cybersecurity expertise and has received Certified Information Security Manager CISM and Certified Information Systems Security Professional CISSP certifications
In the event of a cybersecurity incident we maintain a cybersecurity incident response plan designed to govern the actions required for responding to and reporting security incidents involving our information assets including by escalating certain incidents to members of management including the Vice President of Information Technology and Facilities and the Head of Cybersecurity Pursuant to the plan and its escalation protocols and depending on the nature severity and other circumstances of each potential cybersecurity incident designated personnel may be responsible for assessing the severity of an incident and associated threat containing the threat remediating the threat including recovery of data and access to systems analyzing any reporting obligations associated with the incident and performing post incident analysis
We conduct business operations at 320 West 37th Street 6th Floor New York New York 10018 and at 1000 Park Forty Plaza Suite 210 Durham North Carolina 27713 ISL s registered office is located at Clarendon House 2 Church Street Hamilton HM11 Bermuda and ISL s principal office is located at 7th Floor 50 Broadway London SW1H 0DB ISG conducts business operations at Viaduktstrasse 8 4051 Basel Switzerland
We could add new facilities or expand our existing facilities as we add employees and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations
From time to time we have been and may become involved in legal or regulatory proceedings arising in the ordinary course of our business We do not currently however expect such legal proceedings to have a material adverse effect on our business operating results or financial condition However depending on the nature and timing of a given dispute an unfavorable resolution could materially affect our current or future results of operations or cash flows
Continental Stock Transfer Trust Company is the transfer agent and registrar for our common stock As of the close of business on May 23 2025 we had three holders of record of our common stock The actual number of stockholders is greater than this number of record holders and includes shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees This number of holders of record also does not include shareholders whose shares may be held in trust by other entities
We have never declared or paid any dividends on shares of our common stock We anticipate that we will retain all of our future earnings if any for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future Any decision to declare and pay dividends in the future will be made at the sole discretion of our board of directors and will depend on among other things our results of operations cash requirements financial condition contractual restrictions and other factors that our board of directors may deem relevant
This performance graph shall not be deemed soliciting material or to be filed with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any of our filings under the Exchange Act or the Securities Act
The following graph shows a comparison from March 31 2020 through March 31 2025 of the cumulative total return for an investment of 100 in our common stock the Nasdaq Biotechnology Index and the Nasdaq Composite Index and assumes the reinvestment of dividends The returns shown are based on historical results and are not intended to suggest future performance
You should read the following discussion and analysis of our financial condition results of operations and cash flows together with the audited consolidated financial statements and the related notes thereto included elsewhere in this Annual Report Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report including information with respect to our plans and strategy for our business includes forward looking statements that involve risks and uncertainties You should review the Cautionary Note Regarding Forward Looking Statements and Item 1A Risk Factors for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward looking statements contained in the following discussion and analysis Our fiscal year ends on March 31
Immunovant is a clinical stage immunology company dedicated to enabling normal lives for people with autoimmune diseases Our focus is on developing IMVT 1402 a potentially best in class inhibitor of the neonatal fragment crystallizable receptor FcRn to address autoimmune diseases driven by high levels of pathogenic immunoglobulin G IgG antibodies FcRn is involved in preventing the degradation of IgG antibodies and inhibition of FcRn has been shown to reduce levels of total IgG and pathogenic IgG antibodies
We believe that FcRn inhibition has broad therapeutic and commercial potential to address IgG mediated autoimmune diseases in several therapeutic areas including but not limited to endocrinology neurology rheumatology and dermatology Third party estimates suggest over four million patients in the United States and Europe could benefit from anti FcRn treatments across more than 20 indications currently being evaluated in clinical trials by multiple companies with two indications that are already approved and launched quickly reaching billions of dollars in sales
In a Phase 1 clinical trial healthy adults dosed with IMVT 1402 showed deep dose dependent IgG reductions We expect to be able to reach approximately 80 IgG reductions with continued weekly dosing of 600 mg of IMVT 1402 offering deeper IgG reductions than observed with other competitor anti FcRn programs There has been consistent evidence observed across the class in eight indications in Phase 2 and 3 trials with FcRn inhibitors that deeper IgG reductions correlate with meaningful improvements in clinical outcomes This has also been validated with Immunovant s own Phase 2 and 3 studies evaluating its first generation anti FcRn antibody batoclimab formerly referred to as IMVT 1401 in Graves disease GD myasthenia gravis MG and chronic inflammatory demyelinating polyneuropathy CIDP which showed that IgG reductions of greater than or equal to 70 led to meaningfully better outcomes compared to reductions below 70 across a range of clinical measures
In the Phase 1 clinical trial across all evaluated doses IMVT 1402 demonstrated no or minimal reductions in albumin and no or minimal increases in LDL cholesterol levels which are off target effects observed in some anti FcRn antibodies including batoclimab We are pursuing the rapid development of IMVT 1402 because of its best in class potential with the 600 mg dose expected to reach approximately 80 IgG reduction We believe IMVT 1402 s profile has the potential to offer best in class efficacy in addition to its potentially favorable safety profile and convenient administration with a simple self administered auto injector expected at launch As previously disclosed we will make a final decision about future development and regulatory submissions for batoclimab in the future based on the aggregate information available at the time
We are currently progressing a broad set of programs for IMVT 1402 Over the last fiscal year we announced the clearance of six investigational new drug IND applications to support clinical trials to evaluate IMVT 1402 We have initiated studies in five indications including potentially registrational trials in GD difficult to treat rheumatoid arthritis D2T RA MG and CIDP and a proof of concept trial in cutaneous lupus erythematosus CLE We also plan to initiate a potentially registrational trial evaluating IMVT 1402 in Sjögren s disease SjD and a second potentially registrational trial in GD in the summer of 2025 Our primary focus is to execute these six indications first with plans to assess new indications in the future All studies evaluating IMVT 1402 are being conducted using the intended commercial drug formulation and delivery device the YpsoMate autoinjector developed by Ypsomed AG which is utilized for multiple approved products
Data and insights from batoclimab including our operational trial experience relationships with investigators and prior results are being leveraged to inform and potentially accelerate our development programs for IMVT 1402 In March 2025 we announced top line results of our Phase 3 study of batoclimab in MG which met its primary endpoint of change in the Myasthenia Gravis Activities of Daily Living MG ADL score from baseline in acetylcholine receptor antibody positive AChR patients The 680 mg dose set a new benchmark for magnitude of benefit with a 5 6 point mean improvement and 93 MG ADL response rate Batoclimab demonstrated strong durability of Minimal Symptom Expression MG ADL 0 or 1 MSE with 75 of patients who achieved MSE on 680 mg dose by week 6 maintaining MSE status for 6 weeks On the same day we also announced the initial results from period 1 of the Phase 2b study of batoclimab in CIDP following standard of care washout which demonstrated a mean improvement in the adjusted inflammatory neuropathy cause and treatment aINCAT disability score of 1 8 across batoclimab arms and an 84 responder rate in those patients who achieved an IgG lowering greater than or equal to 70 In both batoclimab studies deeper IgG reductions correlated with better clinical outcomes across a range of assessments and timepoints IMVT 1402 600 mg dosing was observed in its Phase 1 trial to have similarly deep IgG reductions to batoclimab 680 mg dosing supporting IMVT 1402 development in these indications without the albumin and LDL side effects observed with batoclimab To add to the strong data sets we have previously reported with batoclimab in GD and TED we expect to report six month remission data in GD this summer and Phase 3 TED data in the second half of calendar year 2025
IMVT 1402 and batoclimab are fully human monoclonal antibodies that target the neonatal fragment crystallizable receptor FcRn These antibodies are the result of a multi step multi year research program conducted in collaboration with HanAll Biopharma Co Ltd HanAll to design highly potent anti FcRn antibodies that may be optimized as a simple subcutaneous injection with dosing that has been shown to deliver better efficacy at the high dose and similar efficacy at the low dose compared to standard FcRn inhibition by competitors
In December 2023 and September 2024 we announced results from a proof of concept Phase 2 clinical trial NCT05907668 of batoclimab for the treatment of uncontrolled GD which enrolled subjects who were hyperthyroid despite ATD therapy This study represents the first evaluation of an FcRn inhibitor as a potential treatment for GD
Participants in the trial received 12 weeks of high dose batoclimab 680 mg weekly by subcutaneous injection SC followed by 12 weeks of lower dose batoclimab 340 mg weekly SC At the end of the first 12 weeks a mean IgG reduction of 77 and a 76 response rate defined as T3 and T4 falling below the upper limit of normal ULN without increasing the ATD dose were observed Also 56 of subjects treated with higher dose batoclimab achieved an ATD Free Response defined as T3 and T4 falling below the ULN and the patient simultaneously tapering completely off their ATD at the end of the first 12 weeks During weeks 13 to 24 lower 340 mg dose batoclimab resulted in mean IgG reduction of 65 with a correspondingly lower responder rate of 68 and a lower ATD Free Response rate of 36 at the end of the second 12 weeks Patients who achieved at least a 70 IgG reduction at the end of the evaluation period had nearly a threefold higher ATD Free Response rate than those who did not 60 vs 23 Additional data for certain thyroidal and extrathyroidal manifestations of GD showed a 60 response rate achieved by week 2 demonstrating the rapidity of response to weekly higher dose batoclimab Improvements in proptosis and lid aperture were also observed at both week 12 and week 24 Batoclimab was generally well tolerated with no new safety signals observed This clinical trial is ongoing with additional data expected in the summer of calendar year 2025 including remission data from the 24 week post treatment follow up period
We initiated a potentially registrational trial evaluating IMVT 1402 in adults with GD in December 2024 This Phase 2b study NCT06727604 is a randomized placebo controlled 52 week trial in Graves patients who are hyperthyroid despite treatment with an ATD for 12 or more weeks prior to beginning the study The study is expected to enroll approximately 240 participants randomized 1 1 1 to one of two blinded treatment groups each receiving IMVT 1402 600 mg weekly SC or a matched placebo group Participants will be evaluated over two consecutive 26 week blinded treatment periods Over the course of the treatment periods background ATD treatment will be titrated to the lowest effective dose including elimination of ATD treatment to maintain normal thyroid lab values Following the initial 26 week period participants in the IMVT 1402 treatment group 2 will be assigned to either continued treatment with IMVT 1402 at the same dose or matching placebo for the second 26 week study period based on the participant s thyroid stimulating hormone receptor autoantibodies TRAb value and euthyroid status determined at week 26 The study s primary endpoint is the proportion of participants who are euthyroid and off ATD at study week 26 A key secondary endpoint will measure the proportion of participants who become euthyroid and stop ATD treatment at week 52 We expect to report top line results from this trial in 2027
In the summer of 2025 we plan to initiate a second potentially registrational trial evaluating IMVT 1402 in adults with GD This study is a randomized placebo controlled 26 week trial in Graves patients who are hyperthyroid despite treatment with an ATD for 12 or more weeks prior to beginning the study The study is expected to enroll approximately 210 participants randomized 1 1 1 to one of three blinded treatment groups receiving IMVT 1402 600 mg weekly SC IMVT 1402 300 mg weekly SC or matched placebo group Over the course of the treatment periods background ATD treatment will be titrated to the lowest effective dose including elimination of ATD treatment to maintain normal thyroid lab values The study s primary endpoint is the proportion of participants in the 600 mg weekly SC dose group who are euthyroid and are off ATD versus placebo at study week 26 A key secondary endpoint will measure the proportion of participants in the 600 mg weekly SC dose group who have T3 Total T3 or FT3 and FT4 ULN and are off ATD versus placebo
In the quarter ended December 31 2022 we initiated our Phase 3 clinical program to evaluate batoclimab as a treatment for active moderate to severe TED We plan to report top line results from this clinical trial in the second half of calendar year 2025
In March 2025 we announced top line results from a randomized quadruple blind placebo controlled Phase 3 trial NCT05403541 to assess the efficacy and safety of batoclimab in adults with MG Following screening participants with moderate to severe MG were randomized into Period 1 where they received high dose batoclimab 680 mg or low dose batoclimab 340 mg or placebo weekly SC for 12 weeks Responders to batoclimab in Period 1 defined in the protocol as 2 point improvement in the MG ADL score from baseline were re randomized 1 1 1 to batoclimab 340 mg SC weekly or 340 mg SC every other week or placebo weekly SC for 12 weeks Period 2 The primary endpoint of the study was mean change from baseline in MG ADL in AChR participants at week 12 end of Period 1
Batoclimab met its primary endpoint of mean change from baseline in MG ADL in AChR participants Among the AChR population participants randomized to 680 mg of batoclimab administered weekly SC QW achieved a 5 6 point mean improvement in MG ADL at week 12 n 57 p 0 001 while those randomized to 340 mg of batoclimab QW achieved a 4 7 point mean improvement n 52 p 0 05 and those randomized to placebo demonstrated a 3 6 point mean improvement n 55 p 0 05 93 of AChR participants receiving batoclimab 680 mg QW achieved an MG ADL response at week 12 Subjects in the 680 mg batoclimab treatment arm showed a mean reduction in IgG levels of 74 vs 64 in the 340 mg batoclimab arm 42 of the AChR subjects treated with batoclimab 680 mg QW achieved MSE defined as having an MG ADL score of 0 or 1 at week 12 Of those subjects that achieved MSE prior to or by week 6 75 maintained their MSE status for 6 weeks Safety and tolerability were observed to be consistent with prior batoclimab studies
We are planning to leverage the data and learnings from the batoclimab MG study including our operational trial experience relationships with investigators and prior results to inform and accelerate our program with IMVT 1402
We initiated a potentially registrational trial evaluating IMVT 1402 in adults with MG in March 2025 This Phase 3 trial is a randomized placebo controlled 26 week trial This study is expected to enroll approximately 230 participants randomized 1 1 1 to one of three blinded treatment groups receiving IMVT 1402 600 mg weekly SC IMVT 1402 300 mg weekly SC or matched placebo group for the 12 week induction period Participants on treatment will continue to be on the same treatment for the 14 week maintenance period while patients on placebo will receive IMVT 1402 600 mg weekly SC The study s primary endpoint is the change in MG ADL from baseline at week 12 We expect to report top line results from this trial in 2027
In March 2025 we announced initial results from Period 1 of the randomized quadruple blind placebo controlled Phase 2b trial designed to assess the efficacy and safety of batoclimab in adult patients with active CIDP NCT05581199 To ensure the enrollment of patients with active CIDP the trial design incorporates inclusion criteria tied to active disease and a formal adjudication committee as well as a washout phase during which participants must worsen by at least 1 point on the aINCAT disability scale to remain in the trial Period 1 was a non placebo controlled 12 week run in period during which participants whose disease had worsened during standard of care washout then received either 340 mg or 680 mg batoclimab QW SC
Combined data for 73 patients both dose cohorts of Period 1 demonstrated a 1 8 point improvement in aINCAT disability score compared to Period 1 baseline at week 12 An 84 responder rate with response defined as an aINCAT score improvement 1 was observed among all patients whose level of IgG was reduced by 70 as compared to 44 among patients with 70 IgG reductions Other CIDP scales also demonstrated meaningful improvements for the pooled dose cohorts at week 12 The study remains blinded and is ongoing No new safety signals were observed
We are planning to leverage the data and learnings from the batoclimab CIDP study including our operational trial experience relationships with investigators and prior results to inform and accelerate our program with IMVT 1402
We initiated a potentially registrational trial evaluating IMVT 1402 in adults with CIDP in March 2025 This Phase 2b trial is a randomized placebo controlled 24 week trial in CIDP patients The study is expected to enroll approximately 162 participants randomized 2 1 to one either receiving IMVT 1402 600 mg weekly SC or matched placebo for the 24 week treatment period The study s primary endpoint will evaluate the proportion of participants remaining relapse free aINCAT at week 24 We expect to report top line results from this trial in 2028
We initiated a potentially registrational trial evaluating IMVT 1402 in ACPA positive D2T RA in December 2024 This trial NCT06754462 is expected to enroll approximately 120 participants into an initial 16 week open label active treatment period To ensure the enrollment of patients with active D2T RA the trial inclusion criteria require elevated ACPA levels and prior inadequate response to two or three but no more than three classes of biologics or targeted synthetic DMARDs The study will evaluate IMVT 1402 s 600 mg weekly SC during the open label induction phase of the trial with the intent of maximizing reduction in ACPA levels Participants achieving a response at weeks 14 and 16 per the American College of Rheumatology response criteria 20 ACR20 will be randomized in a 1 1 1 ratio to receive blinded treatment with either IMVT 1402 600 mg IMVT 1402 300 mg or placebo weekly SC for 12 weeks The primary endpoint will assess the proportion of such participants who maintain the ACR20 response at week 28 Eligible participants who complete week 28 will have the option to receive IMVT 1402 for an additional period of 48 weeks as part of a long term extension period We expect to report initial results from the period 1 open label portion of this trial in 2026
We plan to initiate a potentially registrational trial evaluating IMVT 1402 in SjD in the summer of 2025 This trial NCT06979531 is a randomized double blind placebo controlled parallel group study to assess the efficacy safety and tolerability of IMVT 1402 in adult participants with moderate to severe systemic primary SjD The trial is anticipated to enroll approximately 180 participants randomized in a 1 1 1 ratio to receive IMVT 1402 600 mg IMVT 1402 300 mg or placebo weekly SC for two 24 week blinded treatment periods The primary endpoint will assess the efficacy of IMVT 1402 compared to placebo as assessed by ClinESSDAI score at week 24 Participants assessed as responders at week 24 defined as participants that show an improvement of 4 points from baseline ClinESSDAI score will continue on treatment for a second 24 week period A key secondary endpoint will assess change from baseline in ClinESSDAI score at week 48 We expect to report top line results from this trial in 2028
We initiated a proof of concept trial of IMVT 1402 in CLE in February 2025 This Phase 2b trial NCT06980805 is a randomized double blind placebo controlled trial to assess the safety tolerability and efficacy of IMVT 1402 in participants with active SCLE and or CCLE with or without systemic manifestations This trial is anticipated to enroll approximately 56 participants randomized 1 1 to IMVT 1402 600 mg QW SC or placebo QW SC for 12 weeks during Period 1 Participants who complete Period 1 will enter Period 2 during which all participants will receive IMVT 1402 600 mg QW SC for 14 weeks After completion of Period 2 participants will be rerandomized 1 1 to blinded IMVT 1402 300 mg or 600 mg SC QW for 26 weeks The primary endpoint will evaluate the efficacy of IMVT 1402 compared to placebo based on percent change from Period 1 baseline in CLASI A score at week 12 We expect to report top line results from this trial in 2026
Unfavorable conditions in the economy in the U S Canada and abroad may negatively affect the growth of our business and our results of operations For example macroeconomic events including changes in inflation and interest rates changes in international trade policies and tariffs and geopolitical tensions such as the Russia Ukraine war and conflict in the Middle East have led to economic uncertainty globally The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods If however economic uncertainty increases or the global economy worsens our business financial condition and results of operations may be harmed
For a description of our transactions under the Product Service Agreement and Master Services Agreement with Samsung Biologics Co Ltd Samsung refer to Part II Item 8 Financial Statements and Supplementary Data Note 3 Material Agreements and Note 10 Commitments and Contingencies
We have not generated any revenue and have incurred significant operating losses since inception and we do not expect to generate any revenue from the sale of any products unless or until we obtain regulatory approval of and commercialize IMVT 1402 batoclimab or any future product candidates Our ability to generate revenue sufficient to achieve profitability will depend completely on the successful development and eventual commercialization of IMVT 1402 batoclimab and any future product candidates
We have been primarily engaged in preparing for and conducting clinical trials Research and development expenses include therapeutic area specific costs as well as unallocated costs and are net of costs reimbursable to the Company pursuant to cost sharing arrangements with third parties
Therapeutic area specific costs include direct third party costs which include expenses incurred under agreements with contract research organizations and the cost of consultants who assist with the development of our product candidates with respect to a specific therapeutic area investigator grants sponsored research and any other third party expenses directly attributable to the development of the product candidates Therapeutic area specific costs also include contract manufacturing costs in connection with producing materials for use in conducting nonclinical and clinical studies including under our agreements with Samsung to the extent they can be allocated to a specific therapeutic area
Research and development activities will continue to be central to our business model We expect to incur research and development expenses as we continue our Phase 3 clinical program to evaluate batoclimab for the treatment of TED and a proof of concept Phase 2 clinical trial of batoclimab as a treatment for GD With respect to our IMVT 1402 development activities our Phase 1 clinical trial of IMVT 1402 in New Zealand remains open and we initiated potentially registrational trials for IMVT 1402 in GD D2T RA MG and CIDP and a proof of concept trial in CLE We also plan to initiate a potentially registrational trial evaluating IMVT 1402 in SjD and a second potentially registrational trial evaluating IMVT 1402 in GD Our research and development expenses are also expected to continue to increase over the next several years as we execute IMVT 1402 trials increase manufacturing of IMVT 1402 hire personnel and prepare to seek regulatory approval It is not possible to determine with certainty the duration and completion costs of any clinical trial we may conduct
the potential impact of macroeconomic events including changes in inflation interest rates and international trade policies and tariffs and geopolitical tensions such as the Russia Ukraine war and the conflict in the Middle East
In addition the probability of success for our product candidates will depend on numerous factors including our product s efficacy safety ease of use competition manufacturing capability and commercial viability
General and administrative expenses consist primarily of employee salaries and related benefits stock based compensation for general and administrative personnel legal and accounting fees consulting services costs allocated under the Services Agreements and other operating costs relating to corporate matters and daily operations
We anticipate that our general and administrative expenses will continue to support our ongoing research and development activities These expenses will likely include patent related costs including legal and professional fees for filing prosecution and maintenance of patents and patent applications claiming our product candidates costs related to the hiring of additional personnel and fees to outside consultants for professional services In addition if either IMVT 1402 or batoclimab obtains regulatory approval we expect that we would incur significant additional expenses associated with market research activities and building commercial teams
For the year ended March 31 2025 therapeutic area specific research and development costs including contract manufacturing costs increased 91 1 million as compared with the prior year Research and development costs related to endocrine diseases which include GD and TED increased 29 9 million This increase was primarily due to preparation and initiation of our potentially registrational trial of IMVT 1402 in endocrine diseases and higher overall clinical trial costs related to our batoclimab Phase 3 clinical program Research and development costs related to neurological diseases which include MG and CIDP increased 52 2 million This increase was primarily due to preparation for our potentially registrational clinical trials of IMVT 1402 in neurological diseases and higher overall clinical trial costs related to our batoclimab Phase 3 and Phase 2b clinical trials Research and development costs related to rheumatology diseases of 23 9 million in the current year reflected the initiation of our potentially registrational trial of IMVT 1402 in RA as well as preparation for our potentially registrational trial of IMVT 1402 in SjD Research and development costs related to dermatology diseases of 15 6 million in the current year reflected the initiation of our proof of concept trial in CLE Research and development costs related to other clinical and nonclinical activities decreased 30 5 million reflecting the current year transition to clinical activities targeting specific therapeutic areas as well as lower overall costs related to our IMVT 1402 Phase 1 trial and nonclinical studies
For the year ended March 31 2025 unallocated research and development costs increased 56 9 million as compared with the prior year This increase reflected higher personnel related expenses of 37 2 million driven by higher headcount and enhancement of our capabilities to support our strategic objectives as we progress our clinical activities In addition other expenses increased 19 7 million primarily reflecting higher costs to support our research and development activities to advance the clinical development of IMVT 1402 that are not related to a specific therapeutic area
For the year ended March 31 2024 therapeutic area specific research and development costs including contract manufacturing costs for drug substance process performance qualification activities increased 30 0 million as compared with the prior year Research and development costs related to endocrine diseases which include TED and GD increased 6 8 million primarily reflecting higher clinical trial costs due in part to the initiation of our batoclimab proof of concept Phase 2 clinical trial Research and development costs related to neurological diseases which include MG and CIDP decreased 11 0 million primarily reflecting higher overall batoclimab clinical trial costs in the prior year that included upfront and start up costs for our Phase 3 and Phase 2b clinical trials Research and development costs related to other clinical and nonclinical activities increased 34 3 million primarily reflecting higher IMVT 1402 contract manufacturing costs and costs related to our IMVT 1402 Phase 1 clinical trial and pre clinical study
For the year ended March 31 2024 unallocated research and development costs increased 22 6 million as compared with the prior year This increase reflected higher personnel related expenses of 24 5 million primarily reflecting higher headcount and enhancement of our capabilities to support our strategic objectives to progress our clinical activities in existing and new indications Partially offsetting this increase were lower costs related to cross indication research and development activities supporting IMVT 1402 and batoclimab programs of 1 9 million primarily reflecting our shift to project related activities to advance the clinical development of batoclimab including our clinical trials in MG TED CIDP and GD and IMVT 1402
There were no acquired in process research and development expenses for the year ended March 31 2025 During the years ended March 31 2024 and 2023 acquired in process research and development expenses were 12 5 million and 10 0 million respectively related to the achievement of development and regulatory milestones for batoclimab under the terms of the HanAll Agreement
For the year ended March 31 2025 general and administrative expenses increased 20 0 million from the year ended March 31 2024 primarily reflecting higher personnel related expenses professional fees information technology costs and market research costs For the year ended March 31 2024 general and administrative expenses increased 9 3 million from the year ended March 31 2023 primarily reflecting higher personnel related expenses market research costs legal and other professional fees and information technology costs
For the year ended March 31 2025 interest income decreased 0 2 million as compared with the year ended March 31 2024 primarily reflecting lower average money market balances throughout the year mostly offset by interest earned on money market fund balances as a result of the proceeds from our January 2025 private placement For the year ended March 31 2024 interest income increased 17 4 million as compared with the year ended March 31 2023 primarily reflecting interest earned on higher money market fund balances as a result of proceeds from our October 2023 underwritten public offering and concurrent private placement
We had cash and cash equivalents of 714 0 million and 635 4 million as of March 31 2025 and 2024 respectively For the years ended March 31 2025 2024 and 2023 we had net losses of 413 8 million 259 3 million and 211 0 million respectively We expect to continue to incur significant expenses and increasing operating losses at least for the next several years We have never generated any revenue and we do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for IMVT 1402 batoclimab or any future product candidate
To date we have financed our operations primarily from equity offerings Until such time if ever as we can generate substantial product revenue from sales of IMVT 1402 batoclimab or any future product candidate we expect to finance our cash needs through a combination of equity offerings debt financings and potential collaboration license or development agreements Our ability to raise additional capital may be adversely impacted by worsening global economic conditions and the continuing disruptions to and volatility in the credit and financial markets in the U S and worldwide disruptions resulting from geopolitical tensions including the ongoing military conflict between Russia and Ukraine and in the Middle East and changes in inflation interest rates and international trade policies and tariffs
We do not currently have any committed external source of funds Debt financing and preferred equity financing if available may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt making capital expenditures or declaring dividends
We have a sales agreement with Leerink Partners LLC Leerink Partners as sales agent pursuant to which we may offer and sell from time to time shares of our common stock the ATM Shares subject to certain conditions as specified in the sales agreement We agreed to pay Leerink Partners up to 3 of the gross proceeds from each sale of ATM Shares sold through the sales agreement The ATM Shares would be sold at prevailing market prices at the time of the sale and as a result prices may vary The ATM Shares to be sold under the sales agreement if any would be issued and sold pursuant to an automatic shelf registration statement on Form S 3 which we filed with the SEC on November 9 2023 along with a prospectus supplement relating to the offer and sale of up to 150 0 million of ATM Shares pursuant to the sales agreement We have not issued or sold any ATM Shares pursuant to the ATM offering program
In January 2025 we entered into a share purchase agreement pursuant to which we issued 22 500 000 shares of our common stock par value 0 0001 per share to certain institutional accredited investors including 16 845 010 shares of common stock to RSL at a price of 20 00 per share in a private placement exempt from the registration requirements of the Securities Act The gross proceeds to us were approximately 450 0 million Pursuant to a registration rights agreement with certain of the investors we subsequently filed with the SEC a prospectus supplement to the registration statement on Form S 3 File No 333 275419 which automatically became effective upon its filing on November 9 2023 covering the resale of 5 654 990 shares of common stock issued in the private placement We have agreed to use reasonable best efforts to keep such registration statement effective until the date the shares described above have been sold or may be resold pursuant to Rule 144 under the Securities Act without restriction
If we raise additional funds through collaborations strategic alliances or marketing distribution or licensing arrangements with third parties we may be required to relinquish valuable rights to future revenue streams research programs or product candidates or to grant licenses on terms that may not be favorable to us Adequate additional funding may not be available to us on acceptable terms or at all If we are unable to raise capital in sufficient amounts or on terms acceptable to us we may be required to delay limit reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves or potentially discontinue operations
For the year ended March 31 2025 375 9 million of cash was used in operating activities primarily reflecting a net loss from operations for the year of 413 8 million and a net change in operating assets and liabilities of 12 1 million partially offset by non cash charges of 50 0 million The non cash charges consisted mainly of stock based compensation of 49 5 million reflecting the higher headcount and incentive equity awards as compared with the prior year The change in operating assets and liabilities reflected higher prepaid expenses and other current assets of 27 0 million driven primarily by the timing of payments and services performed related to our ongoing and planned clinical trials as well as an increase in other assets of 7 7 million as a result of prepaid expenses related to planned contract manufacturing activities These changes were partially offset by an increase in accounts payable of 10 7 million primarily related to clinical trial costs Accrued expenses increased 8 9 million primarily reflecting the timing of payments and services related to our ongoing clinical trials and contract manufacturing In addition accounts receivable decreased 3 2 million reflecting the collection of amounts owed to us under research and development cost sharing arrangements with a third party
For the year ended March 31 2024 214 2 million of cash was used in operating activities primarily reflecting a net loss from operations for the year of 259 3 million partially offset by non cash charges of 42 5 million and a net change in operating assets and liabilities of 2 6 million The non cash charges consisted mainly of stock based compensation of 41 1 million reflecting the higher headcount and incentive equity awards as compared with the prior year The change in operating assets and liabilities reflected an increase in accounts payable and accrued expenses of 7 1 million primarily reflecting the timing and level of payments for contract manufacturing and other research and development costs and lower prepaid expenses and other current assets of 1 6 million driven primarily by the timing of payments and services performed related to our ongoing clinical trials These changes were partially offset by an increase in accounts receivable of 4 6 million reflecting amounts owed to us under a research and development cost sharing arrangement with a third party
For the year ended March 31 2023 188 2 million of cash was used in operating activities primarily reflecting a net loss from operations of 211 0 million and a net change in operating assets and liabilities of 10 8 million partially offset by non cash charges of 33 6 million The non cash charges consisted mainly of stock based compensation of 32 3 million The change in our operating assets and liabilities was primarily due to a decrease of 17 1 million in accounts payable driven by the timing of payments related to contract manufacturing costs The change in operating assets and liabilities also reflected 20 1 million of higher prepaid expenses and other current assets driven by payments related to clinical research and contract manufacturing activities These changes were partially offset by an increase in accrued expenses of 15 6 million primarily related to contract manufacturing costs and a decrease in accounts receivable of 11 8 million reflecting the collection of amounts owed to us under research and development cost sharing arrangements with third parties
For the year ended March 31 2025 454 5 million of cash provided by financing activities primarily consisted of proceeds from our January 2025 private placement of 450 0 million Cash provided by financing activities also reflected 4 8 million of proceeds from the exercise of stock options
For the year ended March 31 2024 472 4 million of cash provided by financing activities primarily consisted of proceeds from our October 2023 underwritten public offering and concurrent private placement of 466 7 million combined after deducting underwriting discounts and commissions placement agent fees and offering expenses Cash provided by financing activities also reflected 5 7 million of proceeds from the exercise of stock options
For the year ended March 31 2023 70 9 million of cash provided by financing activities primarily consisted of proceeds from our October 2022 underwritten offering of approximately 70 2 million after deducting underwriting discounts and commissions and offering expenses Cash provided by financing activities also reflected 0 7 million of proceeds from the exercise of stock options
Our primary uses of capital have been and we expect will continue to be for advancing our clinical and nonclinical development programs We have based our estimates on assumptions that may prove to be wrong and we may use our available capital resources sooner than we currently expect Our net losses and operating cash flows may fluctuate significantly from quarter to quarter and year to year depending on the timing of our planned clinical trials timing of IMVT 1402 or batoclimab manufacturing HanAll milestone payments and our expenditures on other research and development activities
Because of the numerous risks and uncertainties associated with the development and commercialization of product candidates we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the development of product candidates
primarily consisted of those related to our clinical trials and clinical development activities which we expect to fund primarily with our existing cash balance Our most significant cash requirements are described below
During the year ended March 31 2022 we entered into an agreement with Samsung to manufacture a certain quantity of batoclimab drug substance for among other things commercial sale if approved As of March 31 2025 in connection with this agreement we have a remaining minimum obligation to Samsung of approximately 43 6 million of
Potential future payments due under the HanAll Agreement are contingent upon future events As of March 31 2025 the aggregate maximum amount of milestone payments we could be required to make under the HanAll Agreement is 420 0 million after an aggregate amount of 32 5 million paid for milestone events achieved as of March 31 2025 upon the achievement of certain regulatory and sales milestone events During the quarter ended June 30 2023 we achieved our third and fourth development and regulatory milestone events under the HanAll Agreement and made a 12 5 million milestone payment in the quarter ended September 30 2023 in accordance with the terms of the agreement During the quarter ended December 31 2022 we achieved our second development and regulatory milestone event under the HanAll Agreement and made a 10 0 million milestone payment in the quarter ended March 31 2023 in accordance with the terms of the agreement
We currently expect our existing cash and cash equivalents as of March 31 2025 of 714 0 million will be sufficient to fund our operating expenses and capital expenditure requirements for announced indications to date through our GD readout expected in 2027
Except as discussed above we did not have any other ongoing material contractual obligations for which cash flows were fixed and determinable We expect to enter into other commitments as the business further develops In the normal course of business we enter into agreements with CROs for clinical trials and with vendors for nonclinical studies manufacturing and other services and products for operating purposes which agreements are generally cancellable by us at any time subject to payment of remaining obligations under binding purchase orders and in certain cases nominal early termination fees These commitments are not deemed significant There are certain contracts wherein we have a minimum purchase commitment however most of it is due and payable within one year
ultimately establish a sales marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates for which we may obtain regulatory approval and
Our primary use of cash is to fund our clinical trials clinical development and manufacturing activities Our current funds will not be sufficient to enable us to complete all necessary development and if approved commercially launch IMVT 1402 or batoclimab We anticipate that we will continue to incur net losses for the foreseeable future
Our management s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with U S GAAP The preparation of these consolidated financial statements requires us to make estimates judgments and assumptions that affect the reported amounts of assets and liabilities disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of expenses during the reporting period In accordance with U S GAAP we evaluate our estimates and judgments on an ongoing basis We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources Actual results may differ from these estimates under different assumptions or conditions
We define our critical accounting estimates as those under U S GAAP that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles While our significant accounting policies are more fully described in Note 2 Summary of Significant Accounting Policies to our consolidated financial statements in Part II Item 8 of this Annual Report we believe the following critical accounting estimate used in the preparation of our consolidated financial statements requires significant estimates and judgments We did not make any material changes to these assumptions for the year ended March 31 2025 We do not expect any material changes in the near term to the underlying assumptions during the year ended March 31 2025
Research and development costs with no alternative future use are expensed as incurred We accrue costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by contract research organizations In making these estimates we consider various factors including status and timing of services performed the number of patients enrolled and the rate of patient enrollment Research and development costs are charged to expense when incurred and primarily consist of employee compensation and expenses from third parties who conduct research and development activities including manufacturing on our behalf
As of March 31 2025 we had cash and cash equivalents of 714 0 million all of which are maintained in accredited financial institutions Our cash equivalents consist of money market funds invested in high quality short term securities that are issued and guaranteed by the U S government Our primary exposure to market risk is interest income volatility which is sensitive to changes in the general level of interest rates however due to the nature of our account portfolio an immediate hypothetical 10 change in interest rates would not have a material effect on our liquidity
Our employees and our operations are currently primarily located in the United States and our expenses are generally denominated in U S dollars We therefore are not currently exposed to significant market risk related to changes in foreign currency exchange rates However we are exposed to fluctuations in foreign currency exchange rate risk as a result of entering into transactions denominated in currencies other than U S dollars as we have contracted with and may continue to contract with foreign vendors We believe an immediate hypothetical 10 change in exchange rates during any of the periods presented would not have a material effect on our liquidity or our consolidated financial statements
Inflation generally affects us by increasing our research and development and contract manufacturing costs We do not believe that inflation had a material effect on our business financial condition or results of operations as of March 31 2025
We have audited the accompanying consolidated balance sheets of Immunovant Inc the Company as of March 31 2025 and 2024 the related consolidated statements of operations comprehensive loss stockholders
equity and cash flows for each of the three years in the period ended March 31 2025 and the related notes collectively referred to as the consolidated financial statements In our opinion the consolidated financial statements present fairly in all material respects the financial position of the Company at March 31 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended March 31 2025 in conformity with U S generally accepted accounting principles
s internal control over financial reporting as of March 31 2025 based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework and our report dated May 29 2025 expressed an unqualified opinion thereon
s management Our responsibility is to express an opinion on the Company s financial statements based on our audits We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud Our audits included performing procedures to assess the risks of material misstatement of the financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statements We believe that our audits provide a reasonable basis for our opinion
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the financial statements and 2 involved our especially challenging subjective or complex judgments The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates
As discussed in Note 2 to the consolidated financial statements the Company accrues costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by contract research organizations In making these estimates the Company considers various factors including status and timing of services performed the number of patients enrolled and the rate of patient enrollment
Auditing the Company s accrual for clinical trial costs is complex due to the fact that information necessary to estimate the accruals is accumulated from clinical research organizations and the Company s assessment of that information is subject to variability and uncertainty In addition in certain circumstances the determination of the nature and amount of services that have been received during the reporting period requires judgment because the timing and pattern of vendor invoicing does not correspond to the level of services provided and there may be delays in invoicing from clinical study sites and other vendors
We obtained an understanding evaluated the design and tested the operating effectiveness of internal controls that addressed the identified risks related to the information used in the Company s process for recording clinical trial accruals For example we tested controls over management s review of clinical trial progress in comparison to information and invoices received from third parties and over the completeness and accuracy of data used to calculate the accrual
To test the clinical trial accrual our audit procedures included among others reading a sample of the Company s agreements with the service providers to understand key financial and contractual terms and testing the accuracy and completeness of the underlying data used in the accrual computations We also evaluated management s estimates of the vendor s progress for a sample of clinical trials by making direct inquiries of the Company s operations personnel overseeing the clinical trials and obtaining information directly from certain service providers about the service providers estimate of costs that had been incurred through March 31 2025 To evaluate the completeness of the accruals we also examined subsequent invoices from the service providers and cash disbursements to the service providers to the extent such invoices were received or payments were made prior to the date that the consolidated financial statements were issued
Common stock par value 0 0001 per share 500 000 000 shares authorized 170 111 593 shares issued and outstanding at March 31 2025 and 500 000 000 shares authorized 145 582 999 shares issued and outstanding at March 31 2024
Immunovant Inc together with its wholly owned subsidiaries the Company or Immunovant is a clinical stage immunology company dedicated to enabling normal lives for people with autoimmune diseases The Company s innovative product pipeline includes its product candidates IMVT 1402 and batoclimab formerly referred to as IMVT 1401 both of which are novel fully human monoclonal antibodies that target the neonatal fragment crystallizable receptor FcRn Designed to be optimized as simple subcutaneous injections IMVT 1402 and batoclimab have been observed to reduce immunoglobulin G IgG antibody levels which has provided evidence supporting the use of an anti FcRn antibody in disease areas associated with high levels of pathogenic IgG antibodies
Immunovant Inc s wholly owned subsidiaries include Immunovant Treasury Inc a Delaware corporation based in the United States U S and Immunovant Sciences Ltd ISL a Bermuda exempted limited company Incorporated by ISL are its wholly owned subsidiaries Immunovant Sciences Holdings Ltd ISHL a private limited company incorporated in the United Kingdom under the laws of England and Wales IMVT Corporation a Delaware corporation based in the U S and Immunovant Sciences GmbH ISG a limited liability company formed under the laws of Switzerland ISG holds all of the Company s intellectual property rights
The Company has not generated any revenues to date and does not anticipate generating any revenues unless and until it successfully completes development and obtains regulatory approval for IMVT 1402 batoclimab or any future product candidate Management expects to incur additional losses in the future to fund its operations and conduct product research and development and recognizes the need to raise additional capital to fully implement its business plan
The Company intends to raise such additional capital through the issuance of equity securities debt financings or other sources in order to further implement its business plan However if such financing is not available at adequate levels the Company will need to reevaluate its operating plan and may be required to delay the development of its product candidates
The Company s fiscal year ends on March 31 and its first three fiscal quarters end on June 30 September 30 and December 31 The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States U S GAAP Any reference in these notes to applicable guidance is 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 accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries The Company has no unconsolidated subsidiaries All intercompany balances and transactions have been eliminated in consolidation
The preparation of consolidated financial statements in conformity with U S GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes The Company regularly evaluates estimates and assumptions related to assets liabilities stock based compensation litigation accruals clinical trial accruals operating leases research and development costs and income taxes The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources Actual results could differ from those estimates
Additionally the Company assessed the impact of macroeconomic and geopolitical factors on its operations and financial results as of March 31 2025 and through the issuance of this report The Company s analysis was informed by the facts and circumstances as they were known to the Company This assessment considered the impact that these uncertainties may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and expenses
The Company is subject to risks common to early stage companies in the biopharmaceutical industry including but not limited to uncertainties related to clinical effectiveness of products commercialization of products regulatory approvals dependence on key products key personnel and third party service providers such as contract research organizations CROs protection of intellectual property rights the need and ability to obtain additional financing and the ability to make milestone royalty or other payments due under any license collaboration or supply agreements
Financial instruments that potentially subject the Company to concentration of credit risk include cash and cash equivalents As of March 31 2025 the cash and cash equivalents balance is kept in banking institutions that the Company believes are of high credit quality and are in excess of federally insured levels The Company maintains its cash and cash equivalents with accredited financial institutions and accordingly such funds are subject to minimal credit risk The Company has not experienced any losses on its cash and cash equivalents
The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents At March 31 2025 and 2024 cash and cash equivalents included 687 6 million and
million respectively of money market funds invested in high quality short term securities that are issued and guaranteed by the U S government and its agencies that are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices
Property and equipment consisting of computers is recorded at cost Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred Depreciation is recorded using the straight line method over the estimated useful life of three years Upon disposal retirement or sale the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations
Long lived assets such as right of use assets due to operating leases property and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable If circumstances require a long lived asset to be tested for possible impairment the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset If the carrying value of the long lived asset is not recoverable on an undiscounted cash flow basis impairment is recognized to the extent that the carrying value exceeds its fair value Fair value is determined through various valuation techniques including discounted cash flow models quoted market values and third party independent appraisals as considered necessary
The Company from time to time has been and may be a party to various disputes and claims arising from normal business activities The Company continually assesses litigation 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 Legal defense costs associated with loss contingencies are expensed in the period incurred Additionally the Company records a receivable for rights to insurance recoveries limited to the extent of incurred or probable losses when such recoveries have been agreed to with third party insurers and when receipt is deemed probable This includes instances when the third party insurers have agreed to pay on the Company s behalf certain legal defense costs and settlement amounts directly to applicable law firms and settlement funds
Research and development costs with no alternative future use are expensed as incurred Research and development expenses primarily consist of employee related costs and expenses from third parties who conduct research and development activities including manufacturing on behalf of the Company The Company accrues costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by CROs In making these estimates the Company considers various factors including status and timing of services performed the number of patients enrolled and the rate of patient enrollment The Company accrues costs for non clinical studies and contract manufacturing activities over the service periods specified in the contracts and are adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred The estimate of the work completed is developed through discussions with internal personnel and external services providers as to the progress toward completion of the services and the agreed upon fee to be paid for such services As actual costs become known the accrued estimates are adjusted Such estimates are not expected to be materially different from amounts actually incurred
The Company participates in cost sharing arrangements with third parties whereby the third parties have agreed to share a portion of the costs incurred by the Company related to batoclimab drug manufacturing and clinical trials The Company records the third parties share of the costs as a reduction of research and development expenses and an increase to accounts receivable in the accompanying consolidated financial statements based on actual amounts incurred by the Company and billable to the third parties These cost sharing arrangements do not contemplate any future revenue generating activity or global commercialization efforts of batoclimab benefiting any of the parties
The Company evaluates in licensed agreements for IPR D projects to determine if any such in licensed agreement 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 have no alternative future use the Company expenses payments made under such license agreements as acquired in process research and development expenses in its 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 will be capitalized and amortized to cost of product sales over the remaining useful life of the asset
Operating lease right of use ROU assets represent the Company s right to use an underlying asset during the lease term and operating lease liabilities represent the Company s obligation to make lease payments arising from the lease Operating lease ROU assets and lease liabilities are initially recognized based on the present value of the future fixed lease payments over the expected lease term at commencement date calculated using the Company s incremental borrowing rate applicable to the lease asset unless the implicit rate is readily determinable Operating lease ROU assets also include any lease payments made at or before lease commencement adjusted by any initial direct costs and exclude any lease incentives received The Company determines the lease term as the non cancelable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option Leases with a term of 12 months or less are not recognized on the consolidated balance sheets Lease expense for minimum lease payments is recognized on a straight line basis over the lease term Variable lease costs such as common area costs and other operating costs are expensed as incurred
The Company accounts for income taxes under the asset and liability method Under this method deferred tax assets and liabilities are determined on the basis of the differences between amounts in the consolidated financial statements and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax benefit expense in the accompanying consolidated statements of operations in the period that includes the enactment date
The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized In making such a determination the Company considers all available positive and negative evidence including future reversals of existing taxable temporary differences projected future taxable income tax planning strategies and results of recent operations If the Company determines that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount the Company would make an adjustment to the deferred tax asset valuation allowance which would reduce the provision for income taxes
When uncertain tax positions exist the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances The Company s policy is to recognize interest and or penalties related to income tax matters in provision for income taxes
Stock based awards to employees and directors are valued at fair value on the date of the grant and that fair value is recognized as stock based compensation expense over the requisite service period The grant date fair value of the stock based awards with graded vesting is recognized on a straight line basis over the requisite service period which is generally the vesting period of the respective awards The Company values its stock options that only have service vesting requirements using the Black Scholes option pricing model Stock based compensation related to restricted stock awards is based on the fair value of the Company s common stock on the grant date When determining the grant date fair value of stock based awards management further considers whether an adjustment is required to the observable market price or volatility of the Company s common stock that is used in the valuation as a result of material non public information if that information is expected to result in a material increase in share price
Certain assumptions need to be made with respect to utilizing the Black Scholes option pricing model including the expected life of the award volatility of the underlying shares the risk free interest rate expected dividend yield and the fair value of the Company s common stock Since the Company has limited option exercise history it has generally elected to estimate the expected life of an award based upon the simplified method with the continued use of this method extended until such time as the Company has sufficient exercise history In prior fiscal years because the Company did not have sufficient trading history to rely on the volatility of its common stock volatility was estimated by taking the average historical price volatility for comparable publicly traded peer companies Beginning on April 1 2024 the Company determined that its common stock had sufficient trading activity to utilize company specific trading data within the assumption of volatility of the underlying shares The expected share price volatility for the Company s common stock is estimated using a weighted blend of the Company s historical price volatility and
the average historical price volatility for comparable publicly traded peer companies The risk free interest rate is based on the rates paid on securities issued by the U S Treasury with a term approximating the expected life of the equity award
As the Company has never paid and does not anticipate paying cash dividends on its common stock the expected dividend yield is assumed to be zero The Company accounts for pre vesting award forfeitures when they occur
The Company applies a fair value framework in order to measure and disclose its financial assets and liabilities Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability an exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date The fair value hierarchy requires an entity to maximize the use of observable inputs where available and minimize the use of unobservable inputs when measuring fair value There are three levels of inputs that may be used to measure fair value
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Fair values are determined by utilizing quoted prices for similar assets and liabilities in active markets or other market observable inputs such as interest rates and yield curves
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 gr
RSL These financial instruments are stated at their respective historical carrying amounts which approximate fair value due to their short term nature There were no Level 2 or Level 3 financial instruments as of March 31 2025 or 2024
The Company has operations in the U S the United Kingdom Bermuda and Switzerland The results of its non U S dollar based functional currency operations are translated to U S dollars at the average exchange rates during the period The Company s assets and liabilities are translated using the current exchange rate as of the consolidated balance sheet date and equity is translated using historical rates Adjustments resulting from the translation of the consolidated financial statements of the Company s foreign functional currency subsidiaries into U S dollars are excluded from the determination of net loss and are recognized in accumulated other comprehensive income loss Foreign exchange transaction gains and losses are included in other expense income net in the consolidated statements of operations
Basic net loss per common share is computed by dividing net loss applicable to common stockholders 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 applicable to common stockholders by the diluted weighted average number of common stock outstanding during the period In periods in which the Company reports a net loss all common stock equivalents are deemed anti dilutive such that basic net loss per common share and diluted net loss per common share are equivalent Potentially dilutive common stock has been excluded from the diluted net loss per common share computations in all periods presented because such securities have an anti dilutive effect on net loss per common share due to the Company s net loss There are no reconciling items used to calculate the weighted average number of total common stock outstanding for basic and diluted net loss per common share data
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and in assessing performance The Company operates in a single operating segment and ha
reportable segment which includes all activities related to the research development and manufacturing of its product candidates The accounting policies of the segment are the same as those described in the summary of significant accounting policies See Note 9 Segment Information for additional details
In November 2023 the FASB issued ASU 2023 07 Segment Reporting Topic 280 Improvements to Reportable Segment Disclosures which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses The amendments are effective for fiscal years beginning after December 15 2023 and for interim periods within fiscal years beginning after December 15 2024 with early adoption permitted The Company retrospectively adopted this guidance for its fiscal year ended March 31 2025
In December 2023 the FASB issued ASU 2023 09 Income Taxes Topic 740 Improvements to Income Tax Disclosures which requires disaggregated information on the effective rate reconciliation as well as information on income taxes paid by jurisdiction The amendments are effective for fiscal years beginning after December 15 2024 for public entities with early adoption permitted and will be applicable to the Company s Annual Report on Form 10 K for the fiscal year ending March 31 2026 The amendments will be applied prospectively with the option to apply them retrospectively The Company expects adoption of this ASU will result in additional disclosures in line with the requirements of ASU 2023 09
In November 2024 the FASB issued ASU 2024 03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures Subtopic 220 40 Disaggregation of Income Statement Expenses which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses The amendments are effective for public entities for fiscal years beginning after December 15 2026 and will be applicable for the Company s Annual Report on Form 10 K for the fiscal year ending March 31 2028 and subsequent interim periods Early adoption is permitted The guidance is to be applied prospectively with the option for retrospective application The Company expects adoption of this ASU will result in additional disclosures in line with the requirements of ASU 2024 03
Other recent authoritative guidance issued by the FASB including technical corrections to the ASC the American Institute of Certified Public Accountants and the Securities and Exchange Commission SEC did not or are not expected to have a material impact on the Company s consolidated financial statements and related disclosures
On December 19 2017 Roivant Sciences GmbH RSG a wholly owned subsidiary of RSL entered into a license agreement the HanAll Agreement with HanAll Biopharma Co Ltd HanAll Under the HanAll Agreement RSG received 1 the non exclusive right to manufacture and 2 the exclusive royalty bearing right to develop import use and commercialize the antibody referred to as batoclimab and certain back up and next generation antibodies including IMVT 1402 and products containing such antibodies in the U S Canada Mexico the European Union the United Kingdom Switzerland the Middle East North Africa and Latin America the Licensed Territory
Tiered royalties ranging from the mid single digits to mid teens percentage of net sales of licensed products subject to standard offsets and reduction on a product by product and country by country basis until the later of 1 expiration of patent and regulatory exclusivity or 2 the 11th anniversary of the first commercial sale of such product in such country
On August 18 2018 RSG entered into a sublicense agreement the Sublicense Agreement with ISG to sublicense this technology as well as RSG s know how and patents necessary for the development manufacture or commercialization of any compound or product that pertains to immunology On December 7 2018 RSG issued a notice to terminate the Sublicense Agreement with ISG and entered into an assignment and assumption agreement to assign to ISG all of the rights title interest and future obligations under the HanAll Agreement from RSG including all rights to IMVT 1402 and batoclimab in the Licensed Territory for an aggregate purchase price of 37 8 million Each party to the HanAll Agreement has agreed that neither it nor certain of its affiliates will clinically develop or commercialize certain competitive products in the Licensed Territory
During the quarter ended June 30 2023 the Company achieved its third and fourth development and regulatory milestone events under the HanAll Agreement of 12 5 million combined which was paid in the quarter ended
March 31 2024 During the quarter ended December 31 2022 the Company achieved its second development and regulatory milestone event under the HanAll Agreement of 10 0 million which was paid in the quarter ended March 31 2023 and recorded as acquired in process research and development expenses in the accompanying consolidated statement of operations for the year ended March 31 2023
On November 17 2021 ISG entered into a Product Service Agreement PSA with Samsung Biologics Co Ltd Samsung pursuant to which Samsung will manufacture and supply the Company with batoclimab drug substance for commercial sale if approved and perform other manufacturing related services with respect to batoclimab The Company previously entered in a Master Services Agreement MSA with Samsung dated April 30 2021 which governs certain terms of the Company s relationship with Samsung Upon execution of the PSA the Company committed to purchase process performance qualification batches of batoclimab and pre approval inspecti
on batches of batoclimab which may be used for regulatory submissions and pending regulatory approval commercial sale In addition the Company has a minimum obligation to purchase additional batches of batoclimab in the four year period of 2026 through 2029
The PSA will continue until the later of December 31 2029 or the completion of the services thereunder unless the PSA is terminated earlier Either party may terminate the PSA on account of 1 the other party s material breach of the PSA that is not cured within a specified period after the termination notice 2 the other party s insolvency or bankruptcy or 3 certain force majeure events As of
In August 2018 the Company entered into amended and restated services agreements the Services Agreements with RSI and RSG under which RSI and RSG agreed to provide services related to development administrative and financial activities to the Company Under each Services Agreement the Company will pay or reimburse RSI or RSG as applicable for any expenses it or third parties acting on its behalf incurs for the Company For any general and administrative and research and development activities performed by RSI or RSG employees RSI or RSG as applicable will charge back the employee compensation expense plus a pre determined mark up Employee compensation expense inclusive of base salary and fringe benefits is determined based upon the relative percentage of time utilized on Company matters All other costs will be billed back at cost The term of the Services Agreements will continue until terminated by the Company RSI or RSG as applicable upon 90 days written notice
For the years ended March 31 2025 2024 and 2023 the Company incurred 0 8 million 0 6 million and 0 4 million respectively under the Services Agreements which are included in the accompanying consolidated statements of operations
In December 2018 the Company entered into an amended and restated information sharing and cooperation agreement the Cooperation Agreement with RSL The Cooperation Agreement among other things 1 obligates the Company to deliver to RSL periodic financial statements and other information upon reasonable request and to comply with other specified financial reporting requirements 2 requires the Company to supply certain material information to RSL to assist it in preparing any future SEC filings and 3 requires the Company to implement and observe certain policies and procedures related to applicable laws and regulations The Company has agreed to indemnify RSL and its affiliates and their respective officers employees and directors against all losses arising out of due to or in connection with RSL s status as a stockholder under the Cooperation Agreement and the operations of or services provided by RSL or its affiliates or their respective officers employees or directors to the Company or any of its subsidiaries subject to certain limitations set forth in the Cooperation Agreement No amounts have been paid or received under this agreement
Subject to specified exceptions the Cooperation Agreement will terminate upon the earlier of 1 the mutual written consent of the parties or 2 the later of when RSL no longer a is required by U S GAAP to consolidate the Company s results of operations and financial position account for its investment in the Company under the equity method of accounting or by any rule of the SEC include the Company s separate financial statements in any filings it may make with the SEC and b has the right to elect directors constituting a majority of the Company s board of directors
In June 2020 the Company entered into two sublease agreements with RSI for two floors of office space in New York which expired on February 27 2024 and April 29 2024 respectively During the year ended March 31 2025 rent expense under these operating leases was de minimis Du
See Note 7 Stockholders Equity for a discussion of the RSL share purchases as part of the Company s private placement in January 2025 underwritten offering and private placement in October 2023 and underwritten offering in October 2022
A reconciliation of the provision for income taxes computed at the U S statutory rate of 21 for the years ended March 31 2025 2024 and 2023 to the provision for income taxes reflected in the consolidated statements of operations is as follows in thousands
The Company s effective tax rate was 0 22 0 22 and 0 for the years ended March 31 2025 2024 and 2023 respectively primarily driven by the Company s jurisdictional earnings by location certain non deductible expenditures research and development credits and a valuation allowance that eliminates the Company s global net deferred tax assets
Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes Significant components of the deferred tax assets liabilities at March 31 2025 and 2024 are as follows in thousands
As of March 31 2025 the Company has gross net operating loss carryforwards in the following jurisdictions Switzerland of approximately 1 094 6 million which will begin to expire as of March 31 2027 the United Kingdom of approximately 0 9 million which can be carried forward indefinitely with an annual usage limitation and the U S of approximately 48 7 million which can be carried forward indefinitely with utilization limited to 80 of future taxable income for tax years beginning on or after January 1 2021 The Company has research and development and orphan drug credit carryforwards in the U S of approximately 39 2 million which begin to expire as of March 31 2039
The Company assesses the realizability of its net 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 record a valuation allowance as necessary Due to the Company s cumulative loss position which provides significant negative evidence difficult to overcome the Company has recorded a valuation allowance of 218 8 million and 141 5 million for the years ended March 31 2025 and 2024 respectively representing the portion of the net deferred tax assets that is not expected to be realized The amount of the net deferred tax assets considered realizable could be adjusted for future factors that would impact the assessment of the objective and subjective evidence of the Company The Company will continue to assess the realizability of net deferred tax assets at each balance sheet date in order to determine the proper amount if any required for a valuation allowance
As of March 31 2025 the Company does not have undistributed earnings from foreign subsidiaries The Company regularly evaluates whether foreign earnings are expected to be indefinitely reinvested This evaluation requires judgment about the future operating and liquidity needs of the Company Changes in economic and business conditions foreign or U S tax laws or the Company s financial situation could result in a change to the Company s position
The Company is subject to tax and files income tax returns in the United Kingdom Switzerland and U S federal state and local jurisdictions The Company s tax periods for the fiscal years ended March 31 2019 through March 31 2025 remain open for tax examinations in most applicable income tax jurisdictions Tax audits and examinations can involve complex issues interpretations and judgments The resolution of matters may span multiple years particularly if subject to litigation or negotiation The Company believes it has appropriately recorded its tax position using reasonable estimates and assumptions however the potential tax benefits may impact the consolidated results of operations or cash flows in the period of resolution settlement or when the statutes of limitations expire The Company s unrecognized tax benefit activity during the years ended March 31 2025 and 2024 and related liabilities were not material to the Company s consolidated financial statements as of March 31 2025 and 2024 The Company does not expect the amount of unrecognized tax benefits to significantly increase or decrease within the next 12 months
The holder s of the Series A preferred stock are entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A preferred stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter and do not have cumulative voting rights
The holder s of a majority of outstanding shares of Series A preferred stock exclusively and as a separate class are entitled to elect i four Series A preferred directors as long as the holder s of Series A preferred stock hold 50 or more of the voting power of all then outstanding shares of capital stock entitled to vote generally at an election of directors ii three Series A preferred directors as long as the holder s of Series A preferred stock hold 40 or more but less than 50 of the voting power of all then outstanding shares of capital stock entitled to vote generally at an election of directors and iii two Series A preferred directors as long as the holder s of Series A preferred stock hold 25 or more but less than 40 of the voting power of all then outstanding shares of capital stock entitled to vote generally at an election of directors Any Series A preferred director so elected may be removed without cause by and only by the affirmative vote of the holder s of Series A preferred stock given either at a special meeting of the holder s of Series A preferred stock duly called for that purpose or pursuant to a written consent of the holder s of Series A preferred stock
Each share of Series A preferred stock is convertible at any time at the option of the holder into one share of common stock On any transfer of shares of Series A preferred stock whether or not for value each such transferred share will automatically convert into one share of common stock except for certain transfers described in the amended and restated certificate of incorporation
Each share of Series A preferred stock will automatically convert into one share of common stock at such time as the holder s of Series A preferred stock hold less than 25 of the total voting power of the Company s outstanding shares
The Company shall not without the consent of the holder s of at least a majority of Series A preferred stock alter or repeal any provisions of the Company s amended and restated certificate of incorporation or bylaws that adversely affect the powers preferences or rights of the Series A preferred stock
In the event of the Company s liquidation dissolution or winding up the holder s of the Series A preferred stock will receive first an amount per share equal to 0 01 and then will be entitled to share ratably in the assets legally available for distribution to all stockholders
As of March 31 2025 the Company has authorized 10 010 000 shares of preferred stock par value 0 0001 per share The board of directors has the authority without further action by the stockholders to issue such shares of preferred stock in one or more series to establish from time to time the number of shares to be included in each such series and to fix the dividend voting and other rights preferences and privileges of the shares Other than the 10 000 shares of preferred stock designated as Series A preferred stock there were no issued and outstanding shares of preferred stock as of March 31 2025
Each share of common stock has the right to one vote The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends No dividends have been declared by the board of directors since the Company s inception
In January 2025 the Company entered into a share purchase agreement pursuant to which the Company issued 22 500 000 shares of the Company s common stock par value 0 0001 per share to certain institutional accredited investors including 16 845 010 shares of common stock to RSL at a price of 20 00 per share in a private placement exempt from the registration requirements of the Securities Act of 1933 as amended the Securities Act The gross proceeds to the Company were approximately 450 0 million Pursuant to a registration rights agreement with certain of the investors the Company subsequently filed with the SEC a prospectus supplement to its registration statement on Form S 3 File No 333 275419 which automatically became effective upon its filing on November 9 2023 covering the resale of 5 654 990 shares of common stock issued in the private placement The Company has agreed to use reasonable best efforts to keep such registration statement effective until the date the shares described above have been sold or may be resold pursuant to Rule 144 under the Securities Act without restriction
In November 2023 the Company entered into a sales agreement with Leerink Partners LLC Leerink Partners as sales agent pursuant to which the Company may offer and sell from time to time shares of its common stock the ATM Shares subject to certain conditions as specified in the sales agreement The Company agreed to pay Leerink Partners up to 3 of the gross proceeds from each sale of ATM Shares sold through the sale agreement The ATM Shares would be sold at prevailing market prices at the time of the sale and as a result prices may vary The ATM Shares to be sold under the sales agreement if any would be issued and sold pursuant to an automatic shelf registration statement on Form S 3 which the Company filed with the SEC in November 2023 along with a prospectus supplement relating to the offer and sale of up to 150 0 million of ATM Shares pursuant to the sales agreement The Company has not issued or sold any ATM Shares pursuant to the ATM offering program
In October 2023 the Company completed an underwritten public offering of 8 475 500 shares of its common stock including 1 526 316 shares of common stock purchased by RSL on the same terms as other investors in the offering and the full exercise of the underwriters option to purchase 1 105 500 additional shares of common stock at a price to the public of 38 00 per share Concurrent with the public offering RSL purchased 4 473 684 shares of the Company s common stock in a private placement exempt from the registration requirements of the Securities Act at the same price per share as investors in the public offering The net proceeds to the Company were 466 7 million after deducting underwriting discounts and commissions placement agent fees and offering expenses
In October 2022 the Company completed an underwritten offering of 12 500 000 shares of its common stock including 416 667 shares of common stock purchased by RSL at an offering price of 6 00 per share for net proceeds to the Company of approximately 70 2 million after deducting underwriting discounts and commissions and offering expenses
shares of common stock outstanding which include the above share issuances during the year and the issuance of shares of common stock from the exercise of stock options and vesting of restricted stock units See Note 8 Stock Based Compensation for additional details about stock options and restricted stock units
The reserved shares underlying restricted stock units above include 803 773 restricted stock units that vested but were not settled as of March 31 2025 In addition the Company has reserved 5 000 000 shares of its common stock that may be issued under its 2023 Inducement Plan as of March 31 2025 See Note 8 Stock Based Compensation for further details
In December 2019 the Company s stockholders approved the 2019 Equity Incentive Plan the 2019 Plan and reserved 5 500 000 shares of common stock for issuance thereunder The number of shares of common stock reserved for issuance under t
he 2019 Plan will automatically increase on April 1 of each year continuing through April 1 2029 by 4 0 of the total number of shares of common stock outstanding on the last day of the preceding month or a lesser number of shares as may be determined by the board of directors The maximum number of shares of common stock that may be issued pursuant to the exercise of incentive stock options under the 2019 Plan is 16 500 000 The Company s employees directors and consultants are eligible to receive non qualified and incentive stock options stock appreciation rights restricted stock awards restricted stock unit awards other stock awards and performance awards under the plan Generally each option will have an exercise price equal to the fair market value of the Company s common stock on the date of grant and a ten year contractual term For grants of incentive stock options if the grantee owns or is deemed to own 10 or more of the total voting power of the Company then the exercise price shall be 110 of the fair market value of the Company s common stock on the date of grant and the option will have a five year contractual term Stock options that are forfeited cancelled or have expired are available for future grants
As of the effective date of the 2019 Plan no further stock awards have been or will be made under the 2018 Equity Incentive Plan the 2018 Plan As of March 31 2025 options to purchase 2 606 773 shares of common stock were outstanding under the 2018 Plan
On February 1 2023 the Company s board of directors approved the adoption of the 2023 Inducement Plan the Inducement Plan which is to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company or following a bona fide period of non employment as a material inducement to such individuals entry into employment with the Company pursuant to Nasdaq Listing Rule 5635 c 4 The Company has reserved 5 000 000 shares of its common stock that may be issued under the Inducement Plan The terms and conditions of the Inducement Plan are substantially similar to those of the 2019 Plan As of March 31 2025 no awards were granted or outstanding under the Inducement Plan
The aggregate intrinsic value is calculated as the difference between the exercise price of all outstanding and exercisable stock options and the fair value of the Company s common stock at March 31 2025 The intrinsic value of stock options exercised during the years ended March 31 2025 2024 and 2023 was 12 2 million 22 1 million and 0 5 million respectively The stock options granted during the years ended March 31 2025 2024 and 2023 had a weighted average fair value of 21 51 per share 14 10 per share and 5 39 per share respectively at the grant date The total grant date fair value of stock options vested during the years ended March 31 2025 2024 and 2023 was 24 9 million 21 6 million and 17 3 million respectively The Company estimated the fair value of each option on the date of grant using the Black Scholes option pricing model applying the weighted average assumptions in the following table
The RSUs granted during the years ended March 31 2025 2024 and 2023 had a weighted average fair value of 28 97 per share 17 15 per share and 6 79 per share respectively at the grant date The total grant date fair value of RSUs vested during the years ended March 31 2025 2024 and 2023 was 19 5 million 13 5 million and 12 9 million respectively
In relation to the RSL common share awards and options issued by RSL to employees of Roivant and the Company the Company did not have any stock based compensation expense for the years ended March 31 2025 and 2024 and recorded 0 1 million of stock based compensation expense for the year ended March 31 2023 in the accompanying consolidated statement of operations
The RSL common share awards are valued at fair value on the date of grant and stock based compensation expense is recognized and allocated to the Company over the required service period The allocation of stock based compensation for Roivant employees is based upon the relative percentage of time utilized by Roivant employees on Company matters
The Company s former Chief Executive Officer was granted 73 155 RSUs of RSL in January 2021 which vested over a period of four years For the year ended March 31 2025 stock based compensation expense recorded by the Company related to these RSUs was de minimis For the years ended March 31 2024 and 2023 the Company recorded
The Company operates in a single operating segment and has one reportable segment which includes all activities related to the discovery development and manufacturing of its product candidates The determination of a single segment is consistent with the consolidated financial information regularly provided to the Company s chief operating decision maker CODM The Company s CODM is its chief executive officer T
he CODM in alignment with the Company s strategic goals uses consolidated net loss to monitor budget to actual results and cash forecast models for assessing performance and making operating decisions The measurement of segment assets is reported on the consolidated balance sheet as total assets
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 holds director and officer liability insurance
The Company may be subject to various lawsuits claims and other legal matters from time to time that arise in the ordinary course of conducting business The Company records a liability when a particular contingency is probable and estimable As of March 31 2025 the Company was not party to any material legal proceedings and thus no contingent liabilities were recorded
ISG entered into the PSA with Samsung to manufacture a certain quantity of batoclimab drug substance for among other things commercial sale if approved As of March 31 2025 in connection with this agreement the Company has a remaining minimum obligation to Samsung of approximately 43 6 million of which 5 5 million 10 1 million 14 0 million and
As of March 31 2025 the Company did not have any other ongoing material contractual obligations for which cash flows were fixed and determinable In the normal course of business the Company enters into agreements with CROs for clinical trials and with vendors for nonclinical studies manufacturing and other services and products for operating purposes which agreements are generally cancellable by the Company at any time subject to payment of remaining obligations under binding purchase orders and in certain cases nominal early termination fees These commitments are not deemed significant There are certain contracts wherein the Company has a minimum purchase commitment however most of it is due and payable within one year
The extent of the impact of geopolitical tensions changes in inflation and interest rates changes in international trade policies and tariffs and any resulting economic slowdown or recession on the Company s future operational and financial performance will depend on certain developments including the potential impact on the Company s clinical trial plans and timelines such as the enrollment activation and initiation of additional clinical trial sites and the results of the Company s clinical trials all of which are uncertain and cannot be predicted At this point the extent to which these events may impact the Company s future financial condition or results of operations is uncertain
We maintain disclosure controls and procedures as defined in Rules 13a 15 e and 15d 15 e under the Securities Exchange Act of 1934 as amended the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded processed summarized and reported within the time periods specified in the SEC s rules and forms
Disclosure controls and procedures include without limitation controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management including our Chief Executive Officer and Chief Financial Officer as appropriate to allow for timely decisions regarding required disclosure
Our management with the participation of our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of March 31 2025 the end of the period covered by this Annual Report Based on this evaluation our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31 2025 at the reasonable assurance level
Our management under the supervision of and with the participation of our Chief Executive Officer and our Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Rule 13a 15 f of the Exchange Act Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U S generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
Our management has assessed the effectiveness of our internal control over financial reporting as of March 31 2025 In making this assessment management used the criteria set forth in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework Management s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting Based on management s assessment management has concluded that as of March 31 2025 our internal control over financial reporting was effective based on those criteria
The effectiveness of our internal control over financial reporting as of March 31 2025 has been audited by Ernst Young LLP an independent registered public accounting firm as stated in their report which is included herein
There was no change in our internal control over financial reporting as defined in Rules 13a 15 f and 15d 15 f under the Exchange Act that occurred during the fiscal quarter ended March 31 2025 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting
We have audited Immunovant Inc s internal control over financial reporting as of March 31 2025 based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework the COSO criteria In our opinion Immunovant Inc the Company maintained in all material respects effective internal control over financial reporting as of March 31 2025 based on the COSO criteria
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the consolidated balance sheets of the Company as of March 31 2025 and 2024 the related consolidated statements of operations comprehensive loss stockholders equity and cash flows for each of the three years in the period ended March 31 2025 and the related notes and our report dated May 29 2025 expressed an unqualified opinion thereon
The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control over Financial Reporting Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects
Our audit included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
On February 14 2025 Douglas Hughes a member of our Board of Directors adopted a trading plan for the sale of a maximum of 15 000 shares of our common stock the Trading Plan for the purpose of satisfying applicable tax obligations arising in connection with the vesting and settlement of restricted stock units The Trading Plan is intended to satisfy the affirmative defense conditions of Rule 10b5 1 c under the Exchange Act and is expected to remain in effect until December 15 2025 or upon the earlier completion of all authorized transactions thereunder
None of our other directors or Section 16 reporting officers adopted modified or terminated any Rule 10b5 1 trading arrangement or non Rule 10b5 1 trading arrangement as such terms are defined in Item 408 of the SEC s Regulation S K during the three months ended March 31 2025
We will file a definitive proxy statement for our 2025 Annual Meeting of Stockholders 2025 Proxy Statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of our fiscal year or March 31 2025 Accordingly certain information required by Part III has been omitted under General Instruction G 3 to Form 10 K Only those sections of the 2025 Proxy Statement that specifically address the items set forth herein are incorporated by reference
The information required by this item will be contained in our 2025 Proxy Statement under the captions Information Regarding the Board of Directors and Corporate Governance Meetings of the Board and its Committees and Executive Officers and is incorporated herein by reference
Our board of directors has adopted a Code of Business Conduct and Ethics the Code of Conduct that is applicable to all of our employees executive officers and directors The Code of Conduct is available on our website at www immunovant com If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to the principal executive officer principal financial officer and principal accounting officer or controller or persons performing similar functions we will promptly disclose the nature of the amendment or waiver on our website Information contained on or that can be accessed through our website is not incorporated by reference into this Annual Report on Form 10 K and you should not consider information on our website to be part of this Annual Report on Form 10 K
The information required by this item will be contained in our 2025 Proxy Statement under the captions Information Regarding the Board of Directors and Corporate Governance Executive Compensation and Director Compensation and is incorporated herein by reference
The information required by this item will be contained in our 2025 Proxy Statement under the captions Security Ownership of Certain Beneficial Owners and Management and Equity Compensation Plans at March 31 2025 and is incorporated herein by reference
The information required by this item will be contained in our 2025 Proxy Statement under the captions Certain Relationships and Related Party Transactions and Information Regarding the Board of Directors and Corporate Governance and is incorporated herein by reference
The information required by this item will be contained in our 2025 Proxy Statement under the caption Ratification of Selection of Independent Registered Public Accounting Firm and is incorporated herein by reference
All financial schedules have been omitted because the required information is either presented in the consolidated financial statements filed as part of this Annual Report or the notes thereto or is not applicable or required
Assignment and Assumption Agreement dated as of December 7 2018 by and between Immunovant Sciences GmbH and Roivant Sciences GmbH relating to the License Agreement by and between Roivant Sciences GmbH and HanAll BioPharma Co Ltd
In accordance with Item 601 b 32 ii of Regulation S K and SEC Release Nos 33 8238 and 34 47986 Final Rule Management s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports the certifications furnished in Exhibits 32 1 and 32 2 hereto are deemed to accompany this Annual Report and will not be deemed filed for purpose of Section 18 of the Exchange Act Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Eric Venker M D Pharm D and Tiago Girao and each one of them as his or her true and lawful attorneys in fact and agents with full power of substitution and resubstitution for him or her and in their name place and stead in any and all capacities to sign any and all amendments to this Annual Report on Form 10 K and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys in fact and agents and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys in fact and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated

Company Name	Immunovant, Inc. Vist SEC web-site
Category	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES)
Trading Symbol	IMVT