Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1—Description of Business and Liquidity
(A) Description of Business
Roivant Sciences Ltd. (inclusive of its consolidated subsidiaries, the “Company” or “RSL”) aims to improve the lives of patients by accelerating the development and commercialization of medicines that matter. The Company does this by creating nimble subsidiaries or “Vants” to develop and commercialize its medicines and technologies. Beyond therapeutics, the Company also incubates discovery-stage companies and health technology startups complementary to its biopharmaceutical business. The Company was founded on April 7, 2014 as a Bermuda exempted limited company.
The Company’s subsidiaries are wholly owned subsidiaries and majority-owned or controlled subsidiaries. Refer to Note 4, “Equity Method Investments” for further discussion of the Company’s investments in unconsolidated entities.
(B) Liquidity
The Company has incurred significant operating losses and negative cash flows from operations since its inception. As of June 30, 2026, the Company had cash, cash equivalents, and marketable securities of approximately $3.8 billion and its accumulated deficit was $900.4 million. For the three months ended June 30, 2026 and 2025, the Company incurred net losses of $290.6 million and $273.9 million, respectively. The Company has historically financed its operations primarily through the sale of equity securities, sale of subsidiary interests, debt financings and revenue generated from licensing and collaboration arrangements.
The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals to market its product candidates, dependence on key products, dependence on third-party service providers, such as contract research organizations, and protection of intellectual property rights. Management expects to incur additional losses in the future to fund its operations and conduct product research and development and may require additional capital to fully implement its business plan.
Note 2—Summary of Significant Accounting Policies
(A) Basis of Presentation and Principles of Consolidation
The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and follow the requirements of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended March 31, 2026 filed with the SEC. The unaudited condensed consolidated balance sheet at March 31, 2026 has been derived from the audited consolidated financial statements at that date. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, that are considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Operating results for the three months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2027, for any other interim period, or for any other future year.
Any references in these notes to applicable accounting guidance are meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The unaudited condensed consolidated financial statements include the accounts of RSL and the subsidiaries in which it has a controlling financial interest, most often through a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation.
For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to noncontrolling interests in its unaudited condensed consolidated statements of operations equal to the noncontrolling interest’s proportionate share of the respective operations. The Company presents noncontrolling interests as a component of shareholders’ equity on its unaudited condensed consolidated balance sheets.
The Company accounts for changes in its ownership interest in its subsidiaries while control is retained as equity transactions. The carrying amount of the noncontrolling interest is adjusted to reflect the change in the ownership interest in the subsidiary. Any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest is adjusted is recognized within shareholders’ equity attributable to RSL.
(B) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs, expenses, contingent liabilities, share-based compensation and research and development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
(C) Concentrations
Financial instruments that potentially subject the Company to credit risk concentration include cash, cash equivalents, and marketable securities. The Company maintains cash deposits, cash equivalents, and marketable securities in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company has established guidelines relative to diversification and maturities to maintain safety and liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe that it is exposed to any significant credit risk related to these instruments.
The Company has long-lived assets in different geographic locations. As of June 30, 2026 and March 31, 2026, a majority of the Company’s long-lived assets were located in the United States (“U.S.”).
(D) Segment Reporting
Operating segments are defined as components of an entity 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’s chief operating decision maker views the operations and manages the business in a single operating and reportable segment focused on the discovery, development and commercialization of medicines and technologies. The accounting policies of the segment are the same as those described in this Note 2, “Summary of Significant Accounting Policies.” See Note 13, “Segment Information” for further detail.
(E) Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash. The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash equivalents consist of amounts invested in money market funds.
Cash as reported in the accompanying condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as presented on the accompanying condensed consolidated balance sheets as follows (in thousands):
| | | | | | | | | | | |
| June 30, 2026 | | March 31, 2026 |
| Cash and cash equivalents | $ | 1,248,456 | | | $ | 1,419,232 | |
| Restricted cash (included in “Other current assets”) | 4,195 | | | 3,858 | |
| Restricted cash (included in “Other assets”) | 7,892 | | | 7,892 | |
| Cash, cash equivalents and restricted cash | $ | 1,260,543 | | | $ | 1,430,982 | |
(F) Marketable Securities
The Company considers all highly liquid investments in securities with original maturities of greater than three months at the time of purchase to be marketable securities. Marketable securities, including those that have maturity dates beyond one year from the balance sheet date, are included in current assets on the condensed consolidated balance sheets due to their availability for use in current operations. As of June 30, 2026, marketable securities consist of U.S. Treasury securities and corporate bonds. All of the Company’s marketable securities are classified as available-for-sale and are carried at fair value as of June 30, 2026. Unrealized holding gains and losses, net of income taxes, on available-for-sale debt securities are reported as a separate component of accumulated other comprehensive income in stockholders’ equity until realized. The cost of available-for-sale securities sold and the amount reclassified out of accumulated other comprehensive income into earnings is determined using the specific identification method. Prior to December 31, 2025, a portion of the Company’s marketable securities were classified as held-to-maturity and carried at amortized cost. Interest income is recorded as earned within “Interest income” in the condensed consolidated statements of operations.
(G) Contingencies
The Company may, from time to time, be a party to various disputes and claims arising from normal business activities. The Company continually assesses any litigation or other claims it may confront to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. The Company accrues for all contingencies at the earliest date at which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the contingent loss, including an estimable range, if possible.
(H) Investments
Investments in equity securities for which the Company does not have control or significant influence may be accounted for using (i) the fair value option, if elected, (ii) fair value through earnings, if fair value is readily determinable or (iii) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable. The election to use the measurement alternative is made for each eligible investment.
The Company has elected the fair value option to account for certain investments over which the Company has significant influence. The Company believes the fair value option best reflects the underlying economics of these investments. See Note 4, “Equity Method Investments.”
(I) Fair Value Measurements
The Company utilizes fair value measurement guidance prescribed by U.S. GAAP to value its financial instruments. The guidance establishes a fair value hierarchy for financial instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. Fair value is defined as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a three-tier fair value hierarchy that distinguishes among the following:
•Level 1-Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.
•Level 2-Valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.
•Level 3-Valuations are based on inputs that are unobservable (supported by little or no market activity) and significant to the overall fair value measurement.
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The Company’s financial instruments include shares of common stock of Arbutus Biopharma Corporation (“Arbutus”) and Class A units of Heracles Parent, L.L.C. (“Datavant”). The Company’s financial instruments also include cash; cash equivalents, consisting of money market funds; marketable securities, consisting of U.S. Treasury securities and corporate bonds; receivables; and accounts payable.
The shares of Arbutus common stock are classified as Level 1, and their fair value is determined based upon quoted market prices in active markets. The Class A units of Datavant and liability instruments issued are classified as Level 3 within the fair value hierarchy as the assumptions and estimates used in the valuations are unobservable in the market. Cash, receivables and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. Money market funds are included in Level 1 of the fair value hierarchy and are valued at the closing price reported by an actively traded exchange. Available-for-sale marketable securities, consisting of U.S. Treasury securities and corporate bonds, are included in Level 2 of the fair value hierarchy. These securities are valued using pricing valuation models that incorporate observable market inputs.
(J) Foreign Currency
The Company’s functional and reporting currency is the U.S. dollar. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in “Other expense, net” in the accompanying condensed consolidated statements of operations. For the three months ended June 30, 2026 and 2025, the Company had a foreign currency transaction gain of $0.8 million and a foreign currency transaction loss of $6.8 million, respectively.
(K) Significant Accounting Policies
There were no significant changes to the Company’s significant accounting policies from those disclosed in the Company’s Annual Report for the year ended March 31, 2026.
(L) Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of their specified effective dates.
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 disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. The amendments are effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. This ASU is applicable to the Company’s Annual Report for the fiscal year ended March 31, 2028, and subsequent interim periods, with early adoption permitted. The amendments can be adopted either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to any or all prior periods presented in the financial statements. The Company expects adoption of this ASU will result in additional disclosures in line with the requirements of ASU 2024-03.
Note 3—Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents and marketable securities consisted of the following (in thousands):
| | | | | | | | | | | |
| June 30, 2026 | | March 31, 2026 |
| Cash and cash equivalents | | | |
| Cash | $ | 77,088 | | | $ | 44,526 | |
| Money market funds | 1,171,368 | | | 1,374,706 | |
| Total cash and cash equivalents | $ | 1,248,456 | | | $ | 1,419,232 | |
| Marketable securities | | | |
| U.S. Treasury securities | $ | 1,888,731 | | | $ | 2,124,179 | |
| Corporate bonds | 704,895 | | | 748,422 | |
| Total marketable securities, available-for-sale | $ | 2,593,626 | | | $ | 2,872,601 | |
| | | |
| Total cash, cash equivalents and marketable securities | $ | 3,842,082 | | | $ | 4,291,833 | |
The following table summarizes the unrealized positions for the Company’s marketable securities (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| As of June 30, 2026 |
| Amortized Cost(1) | | Gross Unrealized
Gains | | Gross Unrealized
Losses | | Fair Value |
| U.S. Treasury securities | $ | 1,892,411 | | | $ | 25 | | | $ | (3,705) | | | $ | 1,888,731 | |
| Corporate bonds | 707,757 | | | — | | | (2,862) | | | 704,895 | |
| Total marketable securities, available-for-sale | $ | 2,600,168 | | | $ | 25 | | | $ | (6,567) | | | $ | 2,593,626 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| As of March 31, 2026 |
| Amortized Cost(1) | | Gross Unrealized
Gains | | Gross Unrealized
Losses | | Fair Value |
| U.S. Treasury securities | $ | 2,125,053 | | | $ | 538 | | | $ | (1,412) | | | $ | 2,124,179 | |
| Corporate bonds | 751,103 | | | — | | | (2,681) | | | 748,422 | |
| Total marketable securities, available-for-sale | $ | 2,876,156 | | | $ | 538 | | | $ | (4,093) | | | $ | 2,872,601 | |
(1)Excludes $21.6 million and $19.6 million of accrued interest receivable as of June 30, 2026 and March 31, 2026, respectively, which is included in “Other current assets” on the condensed consolidated balance sheets.
As of June 30, 2026, 125 available-for-sale marketable securities with a fair value of $2,279.3 million were in a gross unrealized loss position of $6.6 million. As of March 31, 2026, 129 available-for-sale marketable securities with a fair value of $1,999.6 million were in a gross unrealized loss position of $4.1 million. All marketable securities with unrealized losses had been in a loss position for less than twelve months as of June 30, 2026 and March 31, 2026. The Company does not intend to sell, and is not required to sell, these securities that are in an unrealized loss position before the recovery of their amortized cost basis.
The Company classified its marketable securities as Level 2 measurements within the fair value hierarchy. The estimated fair value of available-for-sale marketable securities by contractual maturity were as follows (in thousands): | | | | | | | | | | | |
| June 30, 2026 | | March 31, 2026 |
| Due within one year | $ | 1,644,641 | | | $ | 2,145,345 | |
| Due after one year but within five years | 948,985 | | | 727,256 | |
| Total estimated fair value of available-for-sale securities | $ | 2,593,626 | | | $ | 2,872,601 | |
Note 4—Equity Method Investments
The Company maintains equity method investments in certain entities. As of June 30, 2026 and March 31, 2026, the most significant of these were the Company’s investments in Arbutus and Datavant, which are accounted for using the fair value option.
The Company determined that it does not control these entities and as a result does not consolidate these entities. Due to the Company’s significant influence over operating and financial policies of these entities, the entities are considered related parties of the Company.
Investment in Arbutus
The Company holds an investment in Arbutus in the form of 38,847,462 common shares of Arbutus as of June 30, 2026, representing approximately 20% of the issued and outstanding shares of Arbutus.
At June 30, 2026 and March 31, 2026, the aggregate fair value of the Company’s investment in Arbutus was $186.5 million and $174.8 million, respectively. The Company recognized an unrealized gain of $11.7 million and unrealized loss of $15.5 million on its investment in Arbutus in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2026 and 2025, respectively. The fair value of the Company’s investment was determined using the closing price of Arbutus’s common stock on June 30, 2026 and March 31, 2026 of $4.80 and $4.50, respectively.
Investment in Datavant
The Company holds an investment in Class A units of Datavant. As of June 30, 2026, the Company’s minority equity interest represented approximately 9% of the outstanding Class A units in Datavant. Datavant’s capital structure includes preferred units that, among other features, have liquidation preferences and conversion rights. Upon conversion of such preferred units into Class A units, the Company’s ownership interest would be diluted.
As of June 30, 2026 and March 31, 2026, the fair value of the Company’s investment was $258.2 million and $233.2 million, respectively. The Company recognized an unrealized gain of $25.0 million and unrealized loss of $3.6 million on its investment in Datavant in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2026 and 2025, respectively.
The fair value of the Company’s investment was determined using valuation models that incorporate significant unobservable inputs and is classified as a Level 3 measurement within the fair value hierarchy. Refer to Note 11, “Fair Value Measurements” for more information.
Note 5—Recent Transactions and Developments
Global Settlement with Moderna
On March 3, 2026, the Company’s subsidiary, Genevant Sciences GmbH (“Genevant”), Arbutus (together with Genevant, “Genevant/Arbutus”), and, solely for certain purposes, Genevant’s parent Genevant Sciences Ltd. (“GSL”), and Moderna, Inc. and ModernaTx, Inc. (together, “Moderna”) entered into a settlement agreement (the “Settlement Agreement”) to resolve all patent infringement litigation between Genevant/Arbutus and Moderna pending in the U.S. and internationally relating to Moderna’s unauthorized use of Genevant/Arbutus’ lipid nanoparticle (“LNP”) delivery technology in its vaccines, including its Covid-19 vaccine SPIKEVAX.
Pursuant to the Settlement Agreement:
•Moderna made a non-contingent, non-creditable, and non-refundable payment to Genevant and Arbutus of $950 million on July 8, 2026 (the “Fixed Payment”).
•Moderna agreed to make up to an additional $1.3 billion contingent lump sum payment (the “Contingent Payment”) to Genevant and Arbutus if certain circumstances occur as more fully described below.
•Moderna consented to entry of a judgment of infringement and of a judgment of no invalidity of four Genevant/Arbutus patents.
•Genevant agreed to grant Moderna a global non-exclusive license to LNP delivery technology for infectious disease applications and a covenant not to sue for certain Genevant/Arbutus patents and Moderna products.
Payments by Moderna under the Settlement Agreement are made directly to Genevant and Arbutus consistent with the terms of a cross-license agreement (as amended, the “Cross-License Agreement”) entered between Genevant (as assignee of GSL) and Arbutus. Pursuant to the Cross-License Agreement, Arbutus granted Genevant, an indirect wholly-owned subsidiary of GSL, a license under certain patents and know-how relating to Arbutus’s LNP and GalNAc technologies for all applications other than hepatitis B virus and certain other excluded fields. As of June 30, 2026, RSL and Arbutus held 83% and 16%, respectively, of the issued and outstanding common shares of GSL.
Under the terms of the Cross-License Agreement, payments made by Moderna pursuant to the Settlement Agreement to Genevant/Arbutus are allocated, after reimbursement of the parties’ respective litigation costs, (i) 80% to Genevant and (ii) 20% to Arbutus.
Based on this allocation, Genevant received $771.6 million for its portion of the Fixed Payment on July 8, 2026. As Genevant’s portion of the Fixed Payment was received subsequent to quarter-end, the Company recognized a litigation settlement receivable of $771.6 million on the accompanying condensed consolidated balance sheet as of June 30, 2026. Included in the litigation settlement receivable was approximately $1.0 million that Genevant remitted to Arbutus pursuant to a separate agreement, which was recorded as a corresponding payable on the accompanying condensed consolidated balance sheet. The Company recognized a gain on litigation settlement of $0.4 million for the three months ended June 30, 2026 in the accompanying condensed consolidated statements of operations as a result of the final determination of actual litigation costs incurred.
Moderna will make the Contingent Payment to Genevant/Arbutus (i) if the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) (whether by the initial panel, upon panel rehearing or en banc) affirms, or if there is a final non-appealable judgment that affirms, the rejection of Moderna’s affirmative defense pursuant to 28 U.S.C. §1498 (“§ 1498”) by the U.S. District Court for the District of Delaware in its entirety or otherwise holds that § 1498 does not bar Genevant/Arbutus’ claim against Moderna as to either or both of direct infringement and indirect infringement with respect to all of the doses subject to Moderna’s appeal, or (ii) upon a voluntary dismissal of Moderna’s appeal (any of the foregoing under (i) or (ii), a “Genevant/Arbutus § 1498 Victory”). If the appellate court instead determines that § 1498 bars Genevant/Arbutus’ infringement claims as to some, but not all, of the doses subject to Moderna’s appeal, the Settlement Agreement provides that Moderna will pay Genevant/Arbutus a prorated amount of $1.3 billion, calculated based on the number of doses for which § 1498 bars Genevant/Arbutus’ infringement claims as clearly articulated by the Federal Circuit, or if not clearly articulated by the Federal Circuit, as mutually agreed by the parties or determined in an accelerated binding arbitration process.
Under certain circumstances, if the Genevant/Arbutus § 1498 Victory is subsequently overturned in Moderna’s favor in a final nonappealable decision, Genevant/Arbutus is required to return the Contingent Payment to Moderna, plus interest. If, following a Genevant/Arbutus § 1498 Victory, either (i) Moderna does not timely appeal such Genevant/Arbutus § 1498 Victory or (ii) such Genevant/Arbutus § 1498 Victory is subsequently affirmed in a final nonappealable decision, Moderna will have no further right to a potential repayment of the Contingent Payment.
The Contingent Payment is considered a gain contingency, and Genevant’s portion of such payment will be recognized when realized or realizable.
Note 6—Certain Balance Sheet Components
Accrued Expenses
Accrued expenses at June 30, 2026 and March 31, 2026 consisted of the following (in thousands):
| | | | | | | | | | | |
| June 30, 2026 | | March 31, 2026 |
| Research and development expenses | $ | 113,438 | | | $ | 92,749 | |
| Compensation-related expenses | 40,820 | | | 87,325 | |
| Other expenses | 14,482 | | | 25,749 | |
| Total accrued expenses | $ | 168,740 | | | $ | 205,823 | |
As of June 30, 2026 and March 31, 2026, accrued research and development expenses included an accrual of $42.5 million of non-cancelable contractual costs as a result of the discontinuation of batoclimab, which were recognized as research and development expenses in prior fiscal years.
As of June 30, 2026, accrued compensation-related expenses included $22.9 million in employee bonuses related to the global settlement reached with Moderna in March 2026, of which $18.8 million was recognized as general and administrative expense and $4.1 million was recognized as research and development expense during the three months ended June 30, 2026. Refer to Note 5, “Recent Transactions and Developments” for more information regarding the global settlement with Moderna.
Note 7—Shareholders’ Equity
(A) At-the-Market Equity Offering Program
On September 19, 2022, the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”) to sell its common shares having an aggregate offering price of up to $400.0 million from time to time through an “at-the-market” equity offering program under which Cowen acts as the Company’s agent (the “ATM Facility”).
As of June 30, 2026, the Company had $400.0 million of remaining capacity available under the ATM Facility.
(B) Share Repurchase Program
The Company’s board of directors has authorized various share repurchase programs, including a $1.5 billion (excluding fees and expenses) program that was completed in June 2025 and a subsequent program authorized in June 2025 and subsequently increased in March 2026, allowing for aggregate repurchases up to $1.0 billion (excluding fees and expenses). During the three months ended June 30, 2026, the Company repurchased 7,305,646 shares (including 413,183 common shares with trade dates in June 2026 that settled in July 2026) for an aggregate purchase price of approximately $208.7 million (including fees and expenses). Following these repurchases, approximately $681.7 million remains available for share repurchases. During the three months ended June 30, 2025, the Company repurchased 20,269,450 shares for an aggregate purchase price of approximately $208.3 million (including fees and expenses).
Note 8—Share-Based Compensation
(A) RSL Equity Incentive Plans
2021 Equity Incentive Plan
The 2021 Equity Incentive Plan (the “RSL 2021 EIP”) was approved and adopted in connection with the Business Combination and became effective immediately prior to closing. As of the effective date of the RSL 2021 EIP, no further stock awards have been or will be made under the Roivant Sciences Ltd. Amended and Restated 2015 Equity Incentive Plan (the “RSL 2015 EIP”). At June 30, 2026, a total of 59,105,412 common shares were available for future grants under the RSL 2021 EIP.
Stock Options
Activity for stock options under the Company’s equity incentive plans for the three months ended June 30, 2026 was as follows:
| | | | | |
| Number of Options |
| Options outstanding at March 31, 2026 | 76,091,993 |
| Granted | 1,390,434 |
| Exercised | (6,523,673) |
| Forfeited/Canceled | (7,017) |
| Options outstanding at June 30, 2026 | 70,951,737 |
| Options exercisable at June 30, 2026 | 65,519,693 |
Restricted Stock Units and Performance Restricted Stock Units
Activity for RSUs and PSUs under the Company’s equity incentive plans for the three months ended June 30, 2026 was as follows:
| | | | | | | | | | | |
| Number of RSUs | | Number of PSUs |
| Non-vested balance at March 31, 2026 | 12,606,011 | | 48,187,236 |
| Granted | 1,614,021 | | — |
| Vested | (1,857,812) | | — |
| Forfeited | (262,848) | | — |
| Non-vested balance at June 30, 2026 | 12,099,372 | | 48,187,236 |
During the three months ended June 30, 2026, the Company’s trailing 30-day volume-weighted average trading price per share exceeded $30.00, satisfying the share price hurdle for the sixth and final vesting tranche of PSUs granted in July 2024 and 2025 under multi-year incentive compensation arrangements for certain senior executives (the “Senior Executive Compensation Program”). As a result, the “Performance Condition” (as defined in the Senior Executive Compensation Program) was satisfied for 15,298,215 PSUs. As of June 30, 2026, all 43,350,000 PSUs granted under the Senior Executive Compensation Program have satisfied the Performance Condition.
The PSUs remain subject to the “Service Condition” (as defined in the Senior Executive Compensation Program), which will be deemed satisfied on the first anniversary of the date on which the Performance Condition is first satisfied with respect to such tranche, subject to the executive’s continuous service through such anniversary. Once both conditions are met and the PSUs are fully vested, the underlying common shares are subject to an additional two-year holding period before such common shares may be sold by the executive (subject to certain customary exceptions).
(B) Subsidiary Equity Incentive Plans
Certain subsidiaries of RSL adopt their own equity incentive plan (“EIP”). Each EIP is generally structured so that the applicable subsidiary and its affiliates’ employees, directors, officers, and consultants are eligible to receive non-qualified and incentive stock options, stock appreciation rights, restricted share awards, RSUs, and other share awards under their respective EIP. The Company recorded share-based compensation expense of $14.8 million and $19.3 million for the three months ended June 30, 2026 and 2025, respectively, related to subsidiary EIPs.
Note 9—Income Taxes
The Company’s effective tax rate for the three months ended June 30, 2026 and June 30, 2025 was 1.3% and (1.7)%, respectively. The effective tax rate for the three months ended June 30, 2026 and 2025 was driven by the Company’s earnings by jurisdiction and a valuation allowance that eliminates the Company’s global net deferred tax assets.
The Company assesses the realizability of its deferred tax assets at each balance sheet date based on available positive and negative evidence in order to determine the amount which is more likely than not to be realized and records a valuation allowance as necessary.
Note 10—Commitments and Contingencies
(A) Commitments
Lease Commitments
The Company has leases, consisting primarily of real estate leases. Refer to Note 11, “Leases” in the Company’s Annual Report for the year ended March 31, 2026 for further information regarding the Company’s lease commitments.
Other Commitments
The Company has entered into commitments under various asset acquisition and license agreements. Under these agreements, the Company is required to make milestone payments upon successful completion and achievement of certain development, regulatory and commercial milestones. The payment obligations under the asset acquisition and license agreements are contingent upon future events, such as the achievement of specified development, regulatory and commercial milestones, and the Company will be required to make milestone payments and royalty payments in connection with the sale of products developed under these agreements. Refer to Note 12, “Commitments and Contingencies” in the Company’s Annual Report for the year ended March 31, 2026 for further information regarding certain key asset acquisition and license agreements. There have been no material changes to the key asset acquisition and license agreements during the three months ended June 30, 2026. The Company has further commitments relating to other asset acquisition and license agreements that it has entered into and expects to enter into additional asset acquisition and license agreements in the future, which may require upfront payments and long-term commitments of capital resources.
Additionally, the Company enters into agreements with contract service providers to assist in the performance of its research and development activities. Expenditures to contract research organizations and contract manufacturing organizations represent significant costs in the clinical development of its product candidates. Subject to required notice periods and certain obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. The Company expects to enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.
As of June 30, 2026, the Company’s subsidiary, Immunovant, had an accrual of $42.5 million of non-cancelable contractual costs as a result of the discontinuation of batoclimab, which were recognized as research and development expenses in prior fiscal years.
In April 2026, Immunovant entered into an agreement that includes provisions for minimum obligations for the contract manufacturing of IMVT-1402 drug substance. As of June 30, 2026, the minimum commitment was approximately $22.8 million, of which $4.2 million and $18.6 million are expected to be paid during the fiscal years ending March 31, 2027 and 2028, respectively. The agreement includes a variable component whereby service prices may be adjusted based on related commitments for raw materials and other costs, and annual inflationary changes in an applicable price index.
(B) Loss Contingencies
The Company may, from time to time, be a party to various disputes and claims arising from normal business activities. The Company accrues for loss contingencies when available information indicates that it is probable that a liability has been incurred and the amount of such loss can be reasonably estimated, and if the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation or claim, including an estimable range, if possible.
(C) Indemnification Agreements
The Company is a party to a number of agreements entered into in the ordinary course of business that contain typical provisions that obligate the Company to indemnify the other parties to such agreements upon the occurrence of certain events. The aggregate maximum potential future liability of the Company under such indemnification provisions is uncertain. The Company also indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits. The maximum amount of potential future indemnification is unlimited; however, the Company currently maintains director and officer liability insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify its directors and officers. To date, the Company has not incurred any material costs related to these
indemnification obligations and has not accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements as of June 30, 2026 and March 31, 2026.
Note 11—Fair Value Measurements
Recurring Fair Value Measurements
The following table sets forth the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2026 and March 31, 2026, by level, within the fair value hierarchy (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As of June 30, 2026 | | As of March 31, 2026 |
| Level 1 | | Level 2 | | Level 3 | | Balance as of June 30,
2026 | | Level 1 | | Level 2 | | Level 3 | | Balance as
of March 31,
2026 |
| Assets: | | | | | | | | | | | | | | | |
| Money market funds | $ | 1,171,368 | | | $ | — | | | $ | — | | | $ | 1,171,368 | | | $ | 1,374,706 | | | $ | — | | | $ | — | | | $ | 1,374,706 | |
| U.S. Treasury securities | — | | | 1,888,731 | | | — | | | 1,888,731 | | | — | | | 2,124,179 | | | — | | | 2,124,179 | |
| Corporate bonds | — | | | 704,895 | | | — | | | 704,895 | | | — | | | 748,422 | | | — | | | 748,422 | |
| Investment in Datavant Class A units | — | | | — | | | 258,154 | | | 258,154 | | | — | | | — | | | 233,171 | | | 233,171 | |
| Investment in Arbutus common shares | 186,468 | | | — | | | — | | | 186,468 | | | 174,814 | | | — | | | — | | | 174,814 | |
| Total assets at fair value | $ | 1,357,836 | | | $ | 2,593,626 | | | $ | 258,154 | | | $ | 4,209,616 | | | $ | 1,549,520 | | | $ | 2,872,601 | | | $ | 233,171 | | | $ | 4,655,292 | |
There were no liabilities measured at fair value on a recurring basis as of June 30, 2026 and March 31, 2026, and there were no transfers into or out of Level 3 during the three months ended June 30, 2026.
Level 3 Disclosures
The Company measures its Level 3 assets and liabilities at fair value based on significant inputs not observable in the market, which causes them to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the Level 3 assets and liabilities uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company evaluates these assumptions and estimates on an ongoing basis as additional data impacting the assumptions and estimates is obtained. Changes in the fair value related to updated assumptions and estimates are recorded within the condensed consolidated statements of operations at the end of each reporting period.
The fair value of Level 3 assets and liabilities may change significantly as additional data is obtained, impacting the Company’s assumptions regarding probabilities of potential scenarios used to estimate fair value. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact the Company’s results of operations in future periods.
The changes in fair value of the Level 3 assets during the three months ended June 30, 2026 and 2025 were as follows (in thousands):
| | | | | |
| Balance at March 31, 2025 | $ | 167,361 | |
| Change in fair value of investment in Datavant, included in net loss | (3,586) | |
| Balance at June 30, 2025 | $ | 163,775 | |
| |
| Balance at March 31, 2026 | $ | 233,171 | |
| Change in fair value of investment in Datavant, included in net loss | 24,983 | |
| Balance at June 30, 2026 | $ | 258,154 | |
The change in fair value of the Level 3 liabilities during the three months ended June 30, 2025 was as follows (in thousands):
| | | | | |
| Balance at March 31, 2025 | $ | 9,981 | |
| Changes in fair value of liability instruments, included in net loss | 2,329 | |
| Balance at June 30, 2025 | $ | 12,310 | |
| |
| |
| |
| |
| |
Investment in Datavant
The Company elected the fair value option to account for its investment in Datavant. The estimate of fair value for this investment was determined using the income approach, market approach, and implementation of the option pricing method (“OPM”). The income approach is based on the future expected cash flows, which are derived from certain assumptions attributable to Datavant including estimates of revenue growth rate, earnings before interest, taxes, depreciation and amortization and terminal growth rate. These expected cash flows are then discounted to their present value using a discount rate that reflects the risk and time value of money. The market approach estimates value by using valuation multiples derived from the stock prices of comparable publicly traded companies to determine the company’s equity value. The OPM allows for the allocation of a company’s equity value among the various equity capital owners (preferred and common shareholders). The OPM uses the preferred shareholders’ liquidation preferences, participation rights, dividend policy, and conversion rights to determine how proceeds from a liquidity event shall be distributed among the various ownership classes at a future date. The fair value was calculated using significant unobservable inputs including the following:
| | | | | | | | | | | | | | |
| | Point Estimate Used |
| Input | | As of June 30, 2026 | | As of March 31, 2026 |
| Volatility | | 90.0% | | 90.0% |
| Discount rate | | 11.5% | | 11.8% |
Note 12—Net Loss per Common Share
Basic net loss per common share is computed by dividing net loss attributable to Roivant Sciences Ltd. by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss attributable to Roivant Sciences Ltd. by the diluted weighted-average number of common shares outstanding during the period.
For periods of net loss, diluted loss per share is calculated similar to basic loss per share as the effect of including all potentially dilutive common stock equivalents is anti-dilutive. For the three months ended June 30, 2026 and 2025, all outstanding common stock equivalents have been excluded from the computation of diluted loss per share because their effect was anti-dilutive due to the net loss.
As of June 30, 2026 and 2025, the following potentially dilutive common stock equivalents were excluded from the computation of diluted net loss per common share:
| | | | | | | | | | | |
| June 30, 2026 | | June 30, 2025 |
| Stock options and performance stock options | 70,951,737 | | | 135,593,216 | |
| Restricted stock units and performance restricted stock units (non-vested) | 60,286,608 | | | 53,111,118 | |
March 2020 CVARs | — | | | 17,548,368 | |
| Earn-Out Shares (non-vested) | — | | | 3,080,387 | |
| Other stock based awards and instruments issued | 415,929 | | | 4,485,265 | |
Note 13—Segment Information
The Company is operated and managed as a single operating and reportable segment which focuses on the discovery, development and commercialization of medicines and technologies. The Company’s Chief Operating Decision Maker (“CODM”) is its chief executive officer.
The CODM assesses performance for the Company based on net loss, which is reported on the condensed consolidated statements of operations and comprehensive loss as net loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.
The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seeks regulatory approval. As such, the CODM uses cash forecast models and budgeted versus actual results to assess performance, make operating decisions and allocate resources across the Company including to various Vants and research and development projects.
The Company’s significant segment expenses are as follows (in thousands):
| | | | | | | | | | | |
| Three Months Ended June 30, |
| 2026 | | 2025 |
| Revenue | $ | 1,442 | | | $ | 2,170 | |
| Less: | | | |
| Cost of revenues | 284 | | | 154 | |
| Program-specific research and development expenses: | | | |
| Anti-FcRn franchise—endocrine diseases | 42,885 | | | 19,329 | |
| Anti-FcRn franchise—neurological diseases | 25,455 | | | 20,937 | |
| Anti-FcRn franchise—rheumatology diseases | 22,340 | | | 8,209 | |
| Anti-FcRn franchise—dermatology diseases | 7,542 | | | 5,145 | |
| Anti-FcRn franchise—other clinical and nonclinical | 2,609 | | | 2,392 | |
| Brepocitinib | 14,092 | | | 15,020 | |
| Mosliciguat | 13,041 | | | 8,385 | |
| Other development and discovery programs | 11,118 | | | 10,236 | |
| Research and development share-based compensation | 8,721 | | | 11,099 | |
| Research and development personnel-related expenses | 46,354 | | | 42,530 | |
| Other research and development expenses | 7,859 | | | 9,637 | |
| General and administrative share-based compensation | 74,621 | | | 71,079 | |
| General and administrative personnel-related expenses | 56,200 | | | 30,110 | |
| Other general and administrative expenses | 34,706 | | | 32,830 | |
| Gain on litigation settlement | (392) | | | — | |
| Change in fair value of investments | (36,637) | | | 19,125 | |
| Change in fair value of liability instruments | — | | | 2,329 | |
| Interest income | (36,922) | | | (48,322) | |
| Other expense, net | 2,130 | | | 11,208 | |
| Income tax (benefit) expense | (3,958) | | | 4,649 | |
| Net loss | $ | (290,606) | | | $ | (273,911) | |
Note 14—Subsequent Events
Pursuant to the Settlement Agreement with Moderna as described in Note 5 above, Genevant received $771.6 million for its portion of the Fixed Payment on July 8, 2026. Genevant’s parent, GSL, expects to distribute up to $188 million of the Fixed Payment to non-RSL common shareholders of GSL, including Arbutus, and holders of equity awards granted under the GSL 2018 Equity Incentive Plan, through a combination of dividends and dividend equivalent rights payments. In addition, as described in Note 6 above, as of June 30, 2026, the Company accrued compensation-related expenses of $22.9 million for employee bonus arrangements expected to be paid in relation to the Settlement Agreement.