Roivant climbs 4% on brepocitinib data despite Q3 earnings miss
Phase 2 cutaneous sarcoidosis results show 21.6-point improvement versus placebo as NDA filed for dermatomyositis
Roivant Sciences shares climbed as much as 4% in Friday trading, defying a third-quarter earnings miss after the biotechnology company reported statistically significant Phase 2 results for its experimental drug brepocitinib in cutaneous sarcoidosis and confirmed submission of a new drug application for the treatment in dermatomyositis.
The London-based drugmaker reported a loss of 38 cents per share for the quarter ended December 31, missing analyst expectations of a 31-cent loss, while revenue of $2 million fell short of the $6.1 million consensus estimate. Despite the earnings shortfall, investors focused on the clinical pipeline, with Roivant's stock gaining ground throughout the session.
The Phase 2 trial of brepocitinib in cutaneous sarcoidosis demonstrated robust efficacy across multiple measures. Patients receiving the 45 mg dose achieved a mean improvement of 22.3 points on the Cutaneous Sarcoidosis Activity and Morphology Instrument (CSAMI-A) at week 16, compared to just 0.7 points for the placebo group—a difference of 21.6 points that was highly statistically significant (P<0.0001). According to the company's announcement, 100% of patients on the active treatment achieved at least a 10-point improvement versus 14% in the placebo arm.
Perhaps more striking was the functional remission rate: 62% of brepocitinib patients achieved CSAMI-A scores below 5, indicating functional remission, compared to zero patients in the placebo group. On the Investigator's Global Assessment, 69% of brepocitinib patients achieved a two-point improvement to clear or almost clear skin, while no placebo patients reached this benchmark.
"The separation from placebo was observed from week 4 onwards, and 100% of patients receiving the 45 mg dose reported improvement from baseline on the Patient's Global Impression of Change, compared to 29% of placebo patients," Roivant stated in its release.
The cutaneous sarcoidosis data builds on positive Phase 3 results from the VALOR study in dermatomyositis announced in September 2025, which showed a statistically significant and clinically meaningful improvement in Total Improvement Score at 52 weeks. Roivant confirmed it has submitted a New Drug Application for brepocitinib in dermatomyositis, with analysts anticipating a potential commercial launch in early 2027.
The company's financial position provides substantial runway for pipeline development. Roivant reported cash, cash equivalents, restricted cash, and marketable securities of approximately $4.5 billion as of December 31, 2025, giving it flexibility to advance multiple programs through clinical development.
Analysts have maintained a largely positive outlook on Roivant despite the earnings miss. Market data shows a consensus rating of "Moderate Buy" with an average price target of $27, representing roughly 27% upside from Thursday's closing price of $21.14. The stock has surged nearly 150% from its 52-week low of $8.73, reflecting growing investor enthusiasm for the immunology pipeline.
Analysts have described the dermatomyositis results as "best in class", with peak sales estimates for brepocitinib in that indication reaching $1.3 billion in the U.S. and Japan by 2033. The positive cutaneous sarcoidosis data represents additional upside optionality that may not yet be fully reflected in current valuation models.
Roivant's strategy of advancing multiple treatments through its subsidiary structure—Priovant Therapeutics for immunology, Pulmovant for respiratory diseases, and several other "vant" units—has drawn comparisons to a holding company approach to drug development. The company is gradually moving away from the multi-subsidiary model toward a more integrated structure as key programs approach regulatory and commercial milestones.
The stock's resilience Friday despite the earnings miss underscores how investors are increasingly valuing Roivant on its pipeline potential rather than near-term financial metrics. With a $15.1 billion market capitalization and substantial cash reserves, the company appears positioned to advance multiple late-stage programs through regulatory review toward potential commercialization over the next 18 to 24 months.