Roivant Sciences is a multinational healthcare company that builds subsidiary life sciences and health technology companies.
Roivant’s underlying business model has been described as pioneering in the life sciences sector. Can you describe your hub-and-spoke approach?
I think of Roivant as one of those paintings made of tiny triangles that reveal different images depending on the angle from which you view it. From one angle, we are straightforward: we develop and deliver drugs to patient populations in need, primarily through clinical research.
But from another angle, our model is unique. Roivant operates as a "hub" with a small central organization of about 200 employees, while our "spokes" are the Vants—partially independent subsidiaries we own and control. This setup allows us to attract top talent. For example, someone who, rather than being a VP at a mid-sized biotech, gets the chance to run their own venture. Our structure gives us flexibility for deals and allows us to maintain the culture of a startup while achieving the scale of a larger organization.
What is the creation process behind each Vant?
It always starts with an idea. This could be a biological hypothesis, a promising drug, or spotting an opportunity as a big pharma company changes strategy. For example, we partnered with Bayer on a respiratory drug after they exited that space. Turning these ideas into reality involves exhaustive work, sometimes over several years, especially in building relationships with big pharma partners.
In biotech, most ideas sound great but fail in execution. Our job is to discharge as much risk as possible before making big financial commitments. Take brepocitinib, our dual TYK2/JAK1 inhibitor. By 2021, industry interest in JAK inhibitors plummeted due to associated heart risks. We saw a way to de-risk the drug by targeting orphan diseases like dermatomyositis and non-infectious uveitis, where no alternatives exist and the patient need outweighs the risk. Once we settle on a strategy, we build a Vant, recruit its leadership, and gradually transition responsibilities to its team until it is fully independent.
The rate of success is low amongst biotech startups, with some 60% failing in the first five years, and 90% failing eventually. What challenges do small players face in the current landscape?
Biotech is a business of compounding risks, from basic scientific questions to regulatory hurdles. The scientific risks are numerous: Does the biology work? Can the drug be manufactured safely? Are there unanticipated side effects? These issues are addressed during clinical trials, which are both expensive and operationally complex. On top of that, companies need funding, talent retention, and the ability to navigate a global regulatory environment that is particularly intricate in the U.S.
Even after success in clinical trials, the challenges do not end. Selling into the U.S. healthcare system introduces another layer of complexity, with broken incentives among insurers, pharmacy benefit managers, and other stakeholders. Add to this a public relations environment often hostile to the biopharma industry, and it becomes clear why so many companies struggle to survive.
With that in mind, how does Roivant vet potential investments?
Most of our investments team previously worked as biotech investors, either in venture capital or public markets, rather than as drug developers. While this sometimes results in ideas that seasoned insiders might immediately dismiss, it also allows us to think outside the box and pursue concepts that traditional industry experts might overlook.
This insider-outsider dynamic has been a defining part of our culture, enabling us to execute counterintuitive strategies that have proven successful. That said, we have also learned through trial and error why certain unconventional approaches do not work. These experiences have shaped our approach to risk and innovation.
How much competition does Roivant face in acquiring these innovative projects?
The scenarios where we excel are often not competitive, and this is by design. Our strategy is to seek out undervalued opportunities—diamonds in the rough—that others may overlook. Additionally, there are areas where we are uniquely positioned. For instance, we are exceptionally well-capitalized, with $5.5 billion on our balance sheet, and we have a track record of running large-scale clinical trials, including 10 successful Phase III studies.
Our ability to manage these trials, partner effectively with big pharma, and bring value to their projects gives us an edge. While other companies have pursued similar strategies, such as MoonLake’s creation around a specific drug partnership, Roivant is one of the few that has systematized this approach.
Roivant’s subsidiary Dermavant was just bought by Organon after successfully commercializing its VTAMA psoriasis cream. What made this a success story?
The primary factor behind VTAMA’s success was the drug itself—it works. We acquired it from GSK and assembled an outstanding clinical development team at Dermavant, among the best in medical dermatology. They conducted excellent studies that demonstrated clinical benefits in a field that had seen little innovation in topical therapies for psoriasis and dermatitis.
What did you learn from the 2017 collapse of Roivant’s Alzheimer’s drug developer Axovant?
Biotech is inherently humbling. It is like trying to decipher and reprogram an alien-built supercomputer—you are wrong a lot. Most life sciences companies ultimately fail because biology is unpredictable. With Axovant, we ran a well-executed study, but the mechanism did not deliver the results we needed.
What is crucial is to avoid framing failures as "bad beat stories" where outcomes are chalked up to bad luck without introspection. In our industry, failure offers a chance to learn about trial design, patient selection, and incentive structures. If you just shrug and blame science, you miss critical opportunities for improvement.
What objectives would you like Roivant to achieve in the coming year?
The next 18 months will be critical for us. By the end of this year, we expect results from a high-risk but promising trial in sarcoidosis. In 2025, we will have pivotal data from our anti-FcRn franchise, targeting conditions like myasthenia gravis, CIDP, and thyroid eye disease.
A registrational study for brepocitinib in dermatomyositis is also reading out mid-year, and we will be navigating ongoing litigation with Moderna and Pfizer over our technology’s use in COVID-19 vaccines, which goes to trial next September. In addition, we will continue acquiring new programs and expanding our pipeline.
