Roivant Sciences (ROIV) risk factors, FY2025 10-K

Risks Related to Our Strategy and Financial Position

1. 01Our relatively limited operating history and the inherent uncertainties and risks involved in biopharmaceutical product development and commercialization may make it difficult for us to execute on our business model and for you to assess our future prospects
2. 02continue to meet the requirements of being a public company, including requirements under the Sarbanes-Oxley Act of 2002 (“SOX”) and continue to protect our business operations and systems from cybersecurity threats
3. 03We may not be successful in our efforts to acquire or in-license new product candidates, and newly acquired or in-licensed product candidates may not perform as expected in clinical trials or be successful in eventually achieving marketing approvals
4. 04We will likely incur significant operating losses for the foreseeable future and may never achieve sustained profitability
5. 05We face risks associated with the allocation of capital and personnel across our businesses
6. 06We face risks associated with the Vant structure
7. 07We face risks associated with potential future payments we may owe in connection with our product candidates
8. 08We face risks associated with acquisitions, divestitures and other strategic transactions
9. 09the loss of key employees and other uncertainties, including our ability to maintain key business relationships at the acquired entity, that may arise in connection with a given transaction
10. 10We face risks associated with the use of our cash, cash equivalents and marketable securities
11. 11We are exposed to risks related to our significant holdings of cash, cash equivalents and marketable securities
12. 12Our business strategy and potential for future growth relies on a number of assumptions, some or all of which may not be realized
13. 13Our drug discovery efforts may not be successful in identifying new product candidates
14. 14Unfavorable, uncertain and rapidly changing global and regional economic, political and health conditions could adversely affect our business, financial condition or results of operations
15. 15A portion of our or certain of our Vants’ manufacturing, laboratory research or clinical trial activities takes place in Asia. A significant disruption in that region, such as a trade war or political unrest, could materially adversely affect our business, financial condition and results of operations
16. 16Inadequate or uncertain funding levels for the FDA, USPTO, SEC or other government agencies could hinder, delay or result in the suspension of those agencies’ operations, which could harm our business

Risks Related to the Development of Our Product Candidates

1. 17Clinical trials and preclinical studies are very expensive, time-consuming, difficult to design and implement and involve uncertain outcomes. We may encounter substantial delays in clinical trials, or may not be able to conduct or complete clinical trials or preclinical studies on the expected timelines, if at all
2. 18other regulatory issues, including the receipt of any inspectional observations on FDA’s Form-483, Warning or Untitled Letters, clinical holds or complete response letters or similar communications/objections by other regulatory authorities
3. 19We may encounter difficulties enrolling and retaining patients in clinical trials, and clinical development activities could thereby be delayed or otherwise be adversely affected
4. 20the risk that patients enrolled in clinical trials will not complete such trials, for any reason, including the risk of higher drop-out rates if participants become infected with a virus or other infectious disease that impacts their participation in our trials
5. 21The results of our preclinical studies and clinical trials may not support our proposed claims for our product candidates or regulatory approvals on a timely basis or at all, and the results of earlier studies and trials may not be predictive of future trial results
6. 22From time to time, we may publicly disclose interim, preliminary or top-line data from our clinical trials, which are based on a preliminary analysis of then-available data. These results and related findings and conclusions are subject to change following a full analysis of all data related to the particular trial
7. 23Changes in methods of product manufacturing or formulation may result in additional costs or delays

Risks Related to Regulatory Approval and Commercialization of Our Product Candidates

1. 24the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations
2. 25Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of product candidates that we may identify and pursue for their intended uses, which would prevent, delay or limit the scope of regulatory approval and commercialization
3. 26Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, delay or prevent their regulatory approval, limit the scope of any approved label or market acceptance following regulatory approval or result in significant negative consequences
4. 27our reputation may suffer
5. 28FDA approval for a product candidate in the United States does not guarantee that we will be able to or that we will make efforts to obtain approval for or commercialize our product candidates in any other jurisdiction, which would limit our ability to realize the product candidate’s full market potential
6. 29Following regulatory approvals, our products will remain subject to extensive regulatory scrutiny
7. 30We may develop product candidates for the treatment of conditions for which there is little clinical experience and, in some cases, use new endpoints or methodologies, and the FDA or other regulatory authorities may not consider the endpoints of these clinical trials to provide clinically meaningful results
8. 31Our failure to maintain or continuously improve our quality management program could have an adverse effect upon our business, subject us to regulatory actions and cause patients to lose confidence in us or our product candidates, among other negative consequences
9. 32cultivating a proactive, preventative quality culture and employee and supplier training to ensure quality
10. 33Receipt of marketing approval for our product candidates does not guarantee that they will achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success
11. 34safety and the prevalence and severity of any side effects or adverse events
12. 35If approved, our product candidates regulated as biologics may face competition from biosimilars approved through an abbreviated regulatory pathway
13. 36Any future commercialization efforts will be dependent on sales, marketing and distribution capabilities, including agreements with third parties to sell, market and distribute our product candidates
14. 37unforeseen costs and expenses associated with creating an independent commercialization organization
15. 38Our current and future relationships with investigators, health care professionals, consultants, third-party payors, patient support, charitable organizations, customers, and others are subject to applicable healthcare regulatory laws, which could expose us to penalties and other risks
16. 39Healthcare legislative and regulatory measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations
17. 40the amount of taxes that we are required to pay
18. 41Coverage and adequate reimbursement may not be available for our product candidates following regulatory approval, which could make it difficult for us to profitably sell our product candidates
19. 42Recent federal legislation and actions by state and local governments may permit reimportation of drugs from foreign countries into the United States, including foreign countries where the drugs are sold at lower prices than in the United States, which could materially adversely affect our operating results

Risks Related to Our Reliance on Third Parties

1. 43We 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, it may harm our business
2. 44We do not have our own manufacturing capabilities and rely on third parties to produce clinical and commercial supplies of our product candidates
3. 45failure to deliver our product candidates under specified storage conditions and in a timely manner
4. 46If the contract manufacturing facilities on which we rely do not continue to meet regulatory requirements or are unable to meet our requirements, including providing an adequate supply, our business will be harmed
5. 47We may be dependent on one or a limited number of suppliers for certain components of our product candidates
6. 48Certain of our product candidates are novel, complex and difficult to manufacture. We could experience manufacturing problems that result in delays in our development or commercialization programs or otherwise harm our business
7. 49We are subject to operational risks associated with the physical and digital infrastructure at the manufacturing facilities that our external service providers utilize
8. 50We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
9. 51We will need to expand our organization and may experience difficulties in managing this growth, which could disrupt operations
10. 52Our international operations may expose us to business, legal, regulatory, political, operational, financial and economic risks associated with conducting business globally
11. 53Any of these risks, if encountered, could significantly harm our future international expansion and operations and, consequently, negatively impact our financial condition, results of operations and cash flows
12. 54Tyvaso (treprostinil), a prostacyclin mimetic, a potential competitor to mosliciguat
13. 55The markets in which our healthcare technology and computational drug discovery Vants participate are competitive, and if we do not compete effectively, our business and operating results could be adversely affected
14. 56We may not hold a controlling stake in certain of our Vant affiliates and thus may not be able to direct our business or the development of our product candidates
15. 57If product liability claims are brought against us, we may incur substantial liabilities, delay our planned or ongoing clinical trials and limit commercialization of our product candidates following regulatory approval
16. 58If we or any contract manufacturers or suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business
17. 59We or the third parties upon whom we depend may be adversely affected by earthquakes, hurricanes, fires, outbreak of disease or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
18. 60The increasing use of social media platforms presents new risks and challenges
19. 61The use of AI could expose us to liability or adversely affect our business

Risks Related to Our Intellectual Property

1. 62If we are unable to obtain and maintain patent and other intellectual property protection for our technology and product candidates, or if the scope of the intellectual property protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets
2. 63The length of our patent terms may be inadequate to protect the competitive position of our product candidates for an adequate amount of time
3. 64If we do not obtain protection under the Hatch-Waxman Amendments by extending the patent term, our business may be harmed
4. 65Obtaining 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 as a result of non-compliance with these requirements
5. 66the priority of invention of patented technology
6. 67Third-party claims or litigation alleging infringement, misappropriation or other violations of third-party patents or other proprietary rights or seeking to invalidate our patents or other proprietary rights, may delay or prevent the development and commercialization of our product candidates
7. 68We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might harm our ability to develop and, following regulatory approvals, market our product candidates
8. 69We may be involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful
9. 70Switzerland: filing a case, seeking a permanent injunction and monetary relief, which upon later choice of GSG and Arbutus can include surrender of profits, damages or a reasonable royalty, for infringement of EP 2 279 254
10. 71UPC: Case 10284/2025, seeking permanent and provisional injunctions, as well as monetary damages, which can include recovery of Moderna’s unfair profits, for infringement of EP 4 241 767
11. 72Changes 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 our product candidates
12. 73The validity, scope and enforceability of any patents listed in the Orange Book that cover our product candidates or patents that cover our biologic product candidates can be challenged by third parties
13. 74We may not be able to protect our intellectual property rights throughout the world
14. 75If we are unable to protect the confidentiality of any trade secrets, our business and competitive position would be harmed
15. 76Certain software utilized in our computational drug discovery efforts may include third-party open source software. Any failure to comply with the terms of one or more open source software licenses could adversely affect our business, subject us to litigation, or create potential liability
16. 77We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties
17. 78We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
18. 79Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities, and have a harmful effect on the success of our business
19. 80We may not be successful in obtaining necessary intellectual property rights to future product candidates through acquisitions and in-licenses
20. 81Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business
21. 82Intellectual property rights do not necessarily address all potential threats to our competitive advantage
22. 83The use of AI by us, our early-stage discovery Vants and our healthcare technology businesses may introduce intellectual property risks

Risks Related to Our Securities, Our Jurisdiction of Incorporation and Certain Tax Matters

1. 84If our performance does not meet market expectations, the price of our securities may decline
2. 85general economic and political conditions such as recessions, interest rates, tariffs and trade conditions in the global economy, commodity prices, international currency fluctuations and acts of war or terrorism
3. 86We have incurred and will continue to incur increased costs as a result of operating as a public company and our management has devoted and will continue to devote a substantial amount of time to new compliance initiatives
4. 87If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common shares may decline
5. 88Anti-takeover provisions in our memorandum of association and bye-laws, as well as provisions of Bermuda law, could delay or prevent a change in control, limit the price investors may be willing to pay in the future for our common shares and could entrench management
6. 89requiring advance notice for shareholder proposals and nominations and placing limitations on convening shareholder meetings
7. 90Our largest shareholders own a significant percentage of our common shares and are able to exert significant control over matters subject to shareholder approval
8. 91Future sales and issuances of our or the Vants’ equity securities or rights to purchase equity securities, including pursuant to our or the Vants’ equity incentive and other compensatory plans, will result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall
9. 92Future sales, or the perception of future sales, of our common shares by us or our existing shareholders could cause the market price for our common shares to decline and impact our ability to raise capital in the future
10. 93If securities analysts publish negative evaluations of our shares, the price of our common shares could decline
11. 94Because there are no plans to pay cash dividends on our common shares for the foreseeable future, you may not receive any return on investment unless you sell our common shares for a price greater than that which you paid for it
12. 95We are an exempted company limited by shares incorporated under the laws of Bermuda and it may be difficult for you to enforce judgments against us or our directors and executive officers
13. 96Bermuda law differs from the laws in effect in the U.S. and may afford less protection to our shareholders
14. 97There are regulatory limitations on the ownership and transfer of our common shares
15. 98We may become subject to unanticipated tax liabilities and higher effective tax rates
16. 99The intended tax effects of our corporate structure and intercompany arrangements depend on the application of the tax laws of various jurisdictions and on how we operate our business
17. 100Changes in our effective tax rate may reduce our net income in future periods
18. 101U.S. holders of our common shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company
19. 102Based on the foregoing, with respect to the taxable year that ended on March 31, 2025, we believe that we were not a PFIC based in part upon the fair market value of our assets, including any goodwill and intangible property and the nature and composition of our income and assets