tags:

• thesis/value
• analyst/greenlight-capital
• sector/pharma ...

We
established a small long position in Roivant Sciences (ROIV). ROIV is
a biotech company focused primarily on inflammation and immunology
therapies. In addition to an exciting pipeline, ROIV has a strong
track record of positive trial results and successful monetization
of pharmaceutical assets. The market currently believes core ROIV is
effectively worthless, as the company has a market capitalization of about
$9 billion, but holds over $6 billion of net cash and a $2.6 billion stake
in its publicly traded subsidiary, Immunovant (IMVT). We believe there are
several valuable assets inside the company, notably a broad patent estate
around lipid nanoparticles used in COVID vaccines for which Moderna and
Pfizer may owe ROIV several billion dollars in royalties, a potential
multi-billion-dollar specialty autoimmune disease drug that recently
passed its 7th successful Phase 2 trial and a novel topical agent to treat
skin conditions such as psoriasis and atopic dermatitis. Additionally,
we believe there are several other promising earlier stage assets inside
ROIV. Lastly, the management team continues to find new opportunities to
in-license from larger pharmaceutical companies. ROIV recently announced
a $1.5 billion share repurchase program. We acquired our shares at an
average price of $10.96. ROIV ended the quarter at $10.54.

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