myov-20220630
0001679082false3/312023Q100016790822022-04-012022-06-3000016790822022-07-25xbrli:shares00016790822022-06-30iso4217:USD00016790822022-03-31iso4217:USDxbrli:shares0001679082us-gaap:ProductMember2022-04-012022-06-300001679082us-gaap:ProductMember2021-04-012021-06-300001679082myov:CollaborationRevenueMember2022-04-012022-06-300001679082myov:CollaborationRevenueMember2021-04-012021-06-300001679082us-gaap:LicenseMember2022-04-012022-06-300001679082us-gaap:LicenseMember2021-04-012021-06-3000016790822021-04-012021-06-300001679082myov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Memberus-gaap:SecuredDebtMembermyov:SumitomoPharmaCoLtdMember2022-04-012022-06-300001679082myov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Memberus-gaap:SecuredDebtMembermyov:SumitomoPharmaCoLtdMember2021-04-012021-06-300001679082us-gaap:CommonStockMember2022-03-310001679082us-gaap:AdditionalPaidInCapitalMember2022-03-310001679082us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001679082us-gaap:RetainedEarningsMember2022-03-310001679082us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001679082us-gaap:CommonStockMember2022-04-012022-06-300001679082us-gaap:RetainedEarningsMember2022-04-012022-06-300001679082us-gaap:CommonStockMember2022-06-300001679082us-gaap:AdditionalPaidInCapitalMember2022-06-300001679082us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001679082us-gaap:RetainedEarningsMember2022-06-300001679082us-gaap:CommonStockMember2021-03-310001679082us-gaap:AdditionalPaidInCapitalMember2021-03-310001679082us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001679082us-gaap:RetainedEarningsMember2021-03-3100016790822021-03-310001679082us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001679082us-gaap:CommonStockMember2021-04-012021-06-300001679082us-gaap:RetainedEarningsMember2021-04-012021-06-300001679082us-gaap:CommonStockMember2021-06-300001679082us-gaap:AdditionalPaidInCapitalMember2021-06-300001679082us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001679082us-gaap:RetainedEarningsMember2021-06-3000016790822021-06-30myov:trial0001679082us-gaap:MajorityShareholderMembermyov:SumitomoPharmaCoLtdMember2022-06-30xbrli:puremyov:segment0001679082us-gaap:MajorityShareholderMembermyov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Memberus-gaap:SecuredDebtMembermyov:SumitomoPharmaCoLtdMember2022-06-300001679082myov:PfizerMember2022-06-300001679082myov:RichterMember2022-06-300001679082us-gaap:LicenseMembermyov:AccordHealthcareLtdMember2022-06-300001679082us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001679082us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001679082myov:RestrictedStockUnitsAndPerformanceStockUnitsMember2022-04-012022-06-300001679082myov:RestrictedStockUnitsAndPerformanceStockUnitsMember2021-04-012021-06-300001679082us-gaap:WarrantMember2022-04-012022-06-300001679082us-gaap:WarrantMember2021-04-012021-06-300001679082myov:ORGOVYXMember2022-04-012022-06-300001679082myov:ORGOVYXMember2021-04-012021-06-300001679082myov:MYFEMBREEMember2022-04-012022-06-300001679082myov:MYFEMBREEMember2021-04-012021-06-300001679082myov:RichterProductSupplyAndRoyaltiesMember2022-04-012022-06-300001679082myov:RichterProductSupplyAndRoyaltiesMember2021-04-012021-06-300001679082myov:AmortizationOfUpfrontPaymentMember2022-04-012022-06-300001679082myov:AmortizationOfUpfrontPaymentMember2021-04-012021-06-300001679082myov:AmortizationOfRegulatoryMilestoneMember2022-04-012022-06-300001679082myov:AmortizationOfRegulatoryMilestoneMember2021-04-012021-06-300001679082myov:RichterMembermyov:RichterProductSupplyAndRoyaltiesMember2022-04-012022-06-300001679082srt:MaximumMembermyov:RYEQOMembermyov:RichterMember2022-04-012022-06-300001679082myov:RichterMembermyov:RichterProductSupplyAndRoyaltiesMember2021-04-012021-06-300001679082srt:MaximumMembermyov:RYEQOMembermyov:RichterMember2021-04-012021-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesGovernmentAndOtherIncentivesMember2022-03-310001679082myov:SECSchedule1209ValuationAllowancesAndReservesChargebacksAndAdministrativeFeesMember2022-03-310001679082myov:SECSchedule1209ValuationAllowancesAndReservesReturnsMember2022-03-310001679082myov:SECSchedule1209ValuationAllowancesAndReservesSalesDiscountsMember2022-03-310001679082myov:SECSchedule1209ValuationAllowancesAndReservesGovernmentAndOtherIncentivesMember2022-04-012022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesChargebacksAndAdministrativeFeesMember2022-04-012022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesReturnsMember2022-04-012022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesSalesDiscountsMember2022-04-012022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesGovernmentAndOtherIncentivesMember2022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesChargebacksAndAdministrativeFeesMember2022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesReturnsMember2022-06-300001679082myov:SECSchedule1209ValuationAllowancesAndReservesSalesDiscountsMember2022-06-300001679082us-gaap:AccountsReceivableMember2022-06-300001679082us-gaap:AccountsReceivableMember2022-03-310001679082myov:AccruedExpensesAndOtherCurrentLiabilitiesMember2022-06-300001679082myov:AccruedExpensesAndOtherCurrentLiabilitiesMember2022-03-310001679082myov:SunovionPharmaceuticalsIncMember2022-06-300001679082myov:SunovionPharmaceuticalsIncMember2021-06-300001679082us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-06-300001679082us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-06-300001679082us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-06-300001679082us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-06-300001679082us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-06-300001679082us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-06-300001679082us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-06-300001679082us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-06-300001679082us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueMeasurementsRecurringMember2022-06-300001679082us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-03-310001679082us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-03-310001679082us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-03-310001679082us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-03-310001679082us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-03-310001679082us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-03-310001679082us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-03-310001679082us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-03-310001679082us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001679082us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001679082us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001679082us-gaap:FairValueMeasurementsRecurringMember2022-03-310001679082us-gaap:FairValueMeasurementsNonrecurringMember2022-06-300001679082us-gaap:FairValueMeasurementsNonrecurringMember2022-03-310001679082us-gaap:MajorityShareholderMembermyov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Memberus-gaap:SecuredDebtMembermyov:SumitomoPharmaCoLtdMember2019-12-270001679082us-gaap:MajorityShareholderMembermyov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Memberus-gaap:SecuredDebtMembermyov:SumitomoPharmaCoLtdMember2019-12-272019-12-27myov:day0001679082us-gaap:MajorityShareholderMembermyov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Memberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:SecuredDebtMembermyov:SumitomoPharmaCoLtdMember2019-12-272019-12-270001679082us-gaap:MajorityShareholderMembermyov:LetterAgreementwithSumitomoDainipponPharmaCo.Ltd.Membermyov:SumitomoDainipponPharmaCo.Ltd.Memberus-gaap:SecuredDebtMember2019-12-272019-12-270001679082us-gaap:MajorityShareholderMembermyov:SumitomoPharmaCoLtdMember2019-12-27myov:director0001679082myov:ServicesInformationSharingAgreementMembermyov:SumitovantBiopharmaIncMember2022-04-012022-06-300001679082us-gaap:MajorityShareholderMembermyov:SunovionPharmaceuticalsIncMarketAccessServicesAgreementMembermyov:MSGMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-08-012020-08-310001679082us-gaap:MajorityShareholderMembermyov:SunovionPharmaceuticalsIncMarketAccessServicesAgreementMember2022-04-012022-06-300001679082us-gaap:MajorityShareholderMembermyov:SunovionPharmaceuticalsIncMarketAccessServicesAgreementMember2021-04-012021-06-300001679082us-gaap:MajorityShareholderMembermyov:SunovionPharmaceuticalsIncMarketAccessServicesAgreementMembermyov:SumitomoDainipponPharmaCo.Ltd.Member2020-08-012020-08-01myov:plan0001679082myov:A2016EquityIncentivePlanMember2022-06-300001679082myov:A2020InducementEquityAwardPlanMember2022-06-300001679082myov:RestrictedStockAndPerformanceShareUnitsMember2022-03-310001679082myov:RestrictedStockAndPerformanceShareUnitsMember2022-04-012022-06-300001679082myov:RestrictedStockAndPerformanceShareUnitsMember2022-06-300001679082us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-300001679082us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-012021-06-300001679082us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001679082us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-300001679082us-gaap:CostOfSalesMember2022-04-012022-06-300001679082us-gaap:CostOfSalesMember2021-04-012021-06-300001679082myov:RichterMember2020-03-312020-03-310001679082myov:RichterMember2020-03-300001679082myov:RichterMember2020-03-302020-03-300001679082myov:PfizerMember2020-12-260001679082myov:PfizerMember2020-12-012020-12-310001679082myov:PfizerMember2021-12-31myov:milestone0001679082myov:PfizerMember2021-07-310001679082myov:PfizerMember2021-01-012021-12-310001679082srt:ScenarioForecastMembermyov:PfizerMember2022-01-012022-12-310001679082myov:PfizerMember2020-12-262020-12-2600016790822020-12-262020-12-260001679082myov:PfizerMember2022-04-012022-06-300001679082myov:PfizerMember2022-03-310001679082myov:PfizerMember2021-04-012022-03-310001679082myov:AccordHealthcareLtdMember2022-04-012022-06-300001679082myov:CollaborationAgreementMember2022-03-310001679082myov:CollaborationAgreementMember2022-04-012022-06-300001679082myov:CollaborationAgreementMember2022-06-300001679082us-gaap:ResearchAndDevelopmentExpenseMembermyov:PfizerMember2022-04-012022-06-300001679082us-gaap:SellingGeneralAndAdministrativeExpensesMembermyov:PfizerMember2022-04-012022-06-300001679082myov:TakedaLicenseAgreementMember2022-04-012022-06-300001679082myov:TakedaLicenseAgreementMember2021-04-012021-06-300001679082myov:TakedaLicenseAgreementMember2022-06-300001679082myov:TakedaLicenseAgreementMember2022-03-310001679082myov:CommercialManufacturingandSupplyAgreementMember2022-04-012022-06-300001679082myov:CommercialManufacturingandSupplyAgreementMember2018-05-302018-05-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
or
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______    
Commission file number 001-37929
Myovant Sciences Ltd.
(Exact name of registrant as specified in its charter)
Bermuda 98-1343578
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
Suite 1, 3rd Floor 
11-12 St. James’s Square
London
SW1Y 4LB
United KingdomNot Applicable
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: +44 (207) 400 3351
Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading SymbolName of each exchange on which registered
Common Shares, $0.000017727 par value per shareMYOVNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The number of shares outstanding of the Registrant’s common shares, $0.000017727 par value per share, on July 25, 2022 was 95,928,219.


Table of Contents
MYOVANT SCIENCES LTD.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2022
TABLE OF CONTENTS
 Page
 
2

Table of Contents
In this Quarterly Report on Form 10-Q (“Quarterly Report”), references to “Myovant,” “the Company,” “we,” “us” and “our” refer to Myovant Sciences Ltd. and its wholly-owned subsidiaries on a consolidated basis, unless the context otherwise provides.
All brand names or trademarks appearing in this Quarterly Report are the property of their respective owners. This Quarterly Report may contain references to our proprietary intellectual property, including among others, trademarks for our products, ORGOVYX® and MYFEMBREE®. These trademarks and trade names are the property of Myovant or the property of our wholly-owned subsidiaries and are protected under applicable intellectual property laws. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report may appear without the ® or other symbols, but such references are not intended to indicate in any way that the Company will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names.
Risk Factor Summary
Below is a summary of the material factors that make an investment in our common shares speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found under the heading “Risk Factors” in Item 1A of Part II of this Quarterly Report. The below summary is qualified in its entirety by that more complete discussion of such risks and uncertainties. You should consider carefully the risks and uncertainties described under “Risk Factors” in Item 1A of Part II of this Quarterly Report as part of your evaluation of an investment in our common shares.
Risks Related to Commercialization of Our Drug Products
Our success depends in part on the successful commercialization of our drug products. To the extent our drug products are not commercially successful, our business, financial condition and results of operations will be materially harmed.
Our drug products may fail to achieve the degree of market acceptance by physicians, patients, third-party payers or others in the medical community necessary for commercial success, which would negatively impact our business.
If we and our collaboration or commercialization partners are unable to effectively market and sell our drug products, the commercialization of our drug products will not be successful and our business will be harmed.
Failure to successfully obtain coverage and reimbursement for ORGOVYX and MYFEMBREE in the United States, or the availability of coverage only at limited levels, would diminish our ability to generate net product revenue.
We face substantial competition in the commercialization of our approved drug products and our operating results will suffer if we fail to compete effectively.
If we or our collaboration or commercialization partners are found to have improperly promoted unapproved uses of our drug products, we may be subject to restrictions on the sale or marketing of our drug products and significant fines, penalties, sanctions and product liability claims, and our image and reputation within the industry and marketplace could be harmed.
Risks Related to Our Financial Position and Capital Requirements
If we do not have adequate funds to cover our development and commercialization activities, we may have to raise additional capital or curtail or cease operations. We may not be able to obtain funding through public or private offerings of our capital shares, debt financings, collaboration or licensing arrangements, or other sources.
We may never achieve or maintain profitability.
Risks Related to Our Business Operations
The terms of the Sumitomo Pharma Loan Agreement place restrictions on our operating and financial flexibility.
We do not have our own manufacturing capabilities and rely on third parties to produce clinical and commercial supplies of drug substance and drug product. If these third parties do not perform as we expect, do not maintain their regulatory approvals, or become subject to other negative circumstances, it may result in a delay in our ability to develop and commercialize our products.
3

Table of Contents
Risks Related to Clinical Development and Regulatory Approval
Clinical studies are very expensive, time consuming, difficult to design and implement, and involve uncertain outcomes. Clinical study failures can occur at any stage of clinical studies, and we could encounter problems that cause us to suspend, abandon or repeat clinical studies. We cannot predict with any certainty the timing for commencement or completion of current or future clinical studies.
The results of our clinical studies may not support our proposed claims for our product candidates. The results of previous clinical studies may not be predictive of future results, and interim or top-line data may be subject to change or qualification based on the complete analysis of data.
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable. If we are not able to obtain required regulatory approvals for our product candidates, our ability to generate net product revenue will be materially impaired.
Adverse events associated with our product candidates could cause us, regulatory authorities, other reviewing entities or clinical study sites to interrupt, delay, request modification of, or halt clinical studies and could result in the denial of regulatory approval.
Risks Related to Our Dependence on Third Parties
We are dependent upon our relationships with collaboration and commercialization partners to further develop, fund, manufacture, and commercialize our drug products and our product candidates. If such relationships are unsuccessful, or if a collaboration or commercialization partner terminates its collaboration or commercialization agreement with us, it could negatively impact our ability to conduct our business and generate net product revenue. Failure by a collaboration or commercialization partner to perform its duties under its collaboration or commercialization agreement with us (e.g. financial reporting or internal control compliance) may negatively affect us.
We are reliant on third parties to conduct, manage, and monitor our clinical studies, and if those third parties perform in an unsatisfactory manner, it may harm our business.
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our product candidates.
Risks Related to Our Being a Controlled Company
We have agreements with Sumitovant, our majority shareholder, and with Sumitovant’s parent, Sumitomo Pharma, and their affiliates, including Sunovion, that may be perceived to create conflicts of interest which, if other investors perceive that Sumitovant or Sumitomo Pharma will not act in the best interests of all of our shareholders, may affect the price of our common shares and have other effects on our company.
4

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MYOVANT SCIENCES LTD.
Condensed Consolidated Balance Sheets
(unaudited; in thousands, except share and per share data)
June 30, 2022March 31, 2022
Assets  
Current assets:  
Cash and cash equivalents$325,535 $406,704 
Accounts receivable, net29,648 23,296 
Marketable securities31,216 27,483 
Inventories21,222 7,584 
Prepaid expenses and other current assets18,750 22,498 
Amount due from related party458 580 
Total current assets426,829 488,145 
Property and equipment, net2,681 2,944 
Operating lease right-of-use asset7,501 7,961 
Marketable securities, non-current1,938  
Other assets21,181 20,961 
Total assets$460,130 $520,011 
Liabilities and shareholders’ deficit  
Current liabilities:  
Accounts payable$9,552 $12,250 
Accrued expenses and other current liabilities65,688 68,594 
Deferred revenue100,564 100,564 
Amounts due to Pfizer39,244 32,563 
Cost share advance from Pfizer8,555 33,818 
Operating lease liability2,256 2,148 
Amounts due to related parties382 393 
Total current liabilities226,241 250,330 
Deferred revenue, non-current350,565 375,706 
Long-term operating lease liability6,431 7,041 
Long-term debt, less current maturities (related party)358,700 358,700 
Other liabilities1,717 1,711 
Total liabilities943,654 993,488 
Commitments and contingencies (Note 9)
Shareholders’ deficit:  
Common shares, par value $0.000017727 per share, 564,111,242 shares authorized; 95,657,032 and 94,858,446 issued and outstanding at June 30, 2022 and March 31, 2022, respectively
2 2 
Additional paid-in capital807,127 795,935 
Accumulated other comprehensive loss(17,285)(17,285)
Accumulated deficit(1,273,368)(1,252,129)
Total shareholders’ deficit (483,524)(473,477)
Total liabilities and shareholders’ deficit$460,130 $520,011 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

Table of Contents
MYOVANT SCIENCES LTD.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited; in thousands, except share and per share data)
Three Months Ended June 30,
 20222021
Revenues:
Product revenue, net$41,351 $11,554 
Pfizer collaboration revenue25,141 29,509 
Accord license revenue50,000  
Total revenues116,492 41,063 
Operating costs and expenses:
Cost of product revenue4,915 1,032 
Collaboration expense to Pfizer18,016 5,261 
Selling, general and administrative (1)
79,032 61,212 
Research and development23,890 30,880 
Total operating costs and expenses125,853 98,385 
Loss from operations(9,361)(57,322)
Interest expense (2)
4,200 3,505 
Interest income(486)(78)
Loss before income taxes(13,075)(60,749)
Income tax expense 8,164 911 
Net loss and comprehensive loss$(21,239)$(61,660)
Net loss per common share — basic and diluted$(0.22)$(0.67)
Weighted average common shares outstanding — basic and diluted95,388,294 91,637,151 
(1) Includes $1,163 and $1,323 of related party expense (inclusive of third-party pass-through costs) for the three months ended June 30, 2022 and 2021, respectively (see Note 5).
(2) Includes $3,632 and $2,904 of interest expense under the Sumitomo Pharma Loan Agreement for the three months ended June 30, 2022 and 2021, respectively (see Note 5).
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

Table of Contents
MYOVANT SCIENCES LTD.
Condensed Consolidated Statements of Shareholders’ Deficit
(unaudited; in thousands, except share data)

Common SharesAdditional
Paid-in Capital
Accumulated
Other Comprehensive
Loss
Accumulated DeficitTotal Shareholders’
 Deficit
SharesAmount
Balance at March 31, 2022
94,858,446 $2 $795,935 $(17,285)$(1,252,129)$(473,477)
Share-based compensation — — 10,001 — — 10,001 
Issuance of shares upon exercise of stock options and release of share awards798,586 — 1,191 — — 1,191 
Net loss— — — — (21,239)(21,239)
Balance at June 30, 2022
95,657,032 $2 $807,127 $(17,285)$(1,273,368)$(483,524)

Common SharesAdditional
Paid-in Capital
Accumulated
Other Comprehensive
Loss
Accumulated DeficitTotal Shareholders’
 Deficit
SharesAmount
Balance at March 31, 2021
91,000,869 $2 $709,466 $(17,285)$(1,046,148)$(353,965)
Share-based compensation11,262 11,262 
Share-based compensation liabilities reclassified to equity upon settlement of awards1,862 1,862 
Share-based compensation reclassified to current liabilities(1,377)(1,377)
Issuance of shares upon exercise of stock options and release of share awards941,7744,252 4,252 
Net loss— (61,660)(61,660)
Balance at June 30, 2021
91,942,643 $2 $725,465 $(17,285)$(1,107,808)$(399,626)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

Table of Contents
MYOVANT SCIENCES LTD.
Condensed Consolidated Statements of Cash Flows
(unaudited; in thousands)
Three Months Ended June 30,
20222021
Cash flows from operating activities: 
Net loss$(21,239)$(61,660)
Adjustments to reconcile net loss to net cash used in operating activities: 
Share-based compensation9,706 11,262 
Depreciation335 321 
Non-cash interest expense568 601 
Amortization of operating lease right-of-use assets460 403 
Changes in operating assets and liabilities: 
Accounts receivable(6,352)(7,038)
Inventories(13,343)(1,561)
Milestone receivable from Pfizer (100,000)
Prepaid expenses and other current assets3,748 (3,916)
Amount due from related party122  
Other assets392 112 
Accounts payable(2,698)(8,676)
Accrued expenses and other current liabilities(2,906)(1,674)
Deferred revenue(25,141)70,491 
Amounts due to Pfizer6,681 9,071 
Cost share advance from Pfizer(25,831)(18,285)
Operating lease liabilities(502)(425)
Amounts due to related parties(11)(504)
Other liabilities6 (1,699)
Net cash used in operating activities(76,005)(113,177)
Cash flows from investing activities: 
Purchases of marketable securities(10,171)(78,426)
Maturities of marketable securities4,500 4,035 
Purchases of property and equipment(72) 
Net cash used in investing activities(5,743)(74,391)
Cash flows from financing activities: 
Proceeds from stock option exercises1,191 4,135 
Net cash provided by financing activities1,191 4,135 
Net change in cash, cash equivalents and restricted cash(80,557)(183,433)
Cash, cash equivalents and restricted cash, beginning of period416,804 677,480 
Cash, cash equivalents and restricted cash, end of period$336,247 $494,047 
Supplemental Disclosures of Non-Cash Financing Information:
Change in fair value of share-based awards recorded to additional paid-in capital$ $1,377 
Reclassification of share-based compensation liabilities to additional paid-in capital upon settlement of awards$ $1,862 
Stock options exercised receivable, included in prepaid expenses and other current assets$ $117 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8

Table of Contents
MYOVANT SCIENCES LTD.
Notes to Condensed Consolidated Financial Statements (unaudited)
Note 1—Organization and Summary of Significant Accounting Policies
Description of Business
Myovant Sciences Ltd. (together with its wholly-owned subsidiaries, the “Company”) is a biopharmaceutical company that aspires to redefine care for women and for men through purpose-driven science, empowering medicines, and transformative advocacy. Founded in 2016, the Company has executed five successful Phase 3 clinical trials across oncology and women’s health leading to two regulatory approvals by the United States (“U.S.”) Food and Drug Administration (“FDA”): (1) ORGOVYX® (relugolix 120 mg), which was approved in the U.S. in December 2020 as the first and only oral gonadotropin-releasing hormone (“GnRH”) receptor antagonist for the treatment of adult patients with advanced prostate cancer; and (2) MYFEMBREE® (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg), which was approved in the U.S. in May 2021 as the first and only once-daily oral GnRH treatment for the management of heavy menstrual bleeding associated with uterine fibroids. In July 2021, the European Commission (“EC”), and in August 2021, the United Kingdom (“U.K.”) Medicines and Healthcare products Regulatory Agency (“MHRA”), approved RYEQO® (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) as the first and only long-term, once-daily oral treatment in the European Union (“EU”) and U.K., respectively, for moderate to severe symptoms of uterine fibroids in adult women of reproductive age. In April 2022, the EC, and in June 2022, the MHRA, approved ORGOVYX (relugolix 120 mg) as the first and only oral androgen deprivation therapy for advanced hormone-sensitive prostate cancer in the EU and U.K., respectively.
In September 2021, the FDA accepted for review the Company’s supplemental New Drug Application (“sNDA”) for MYFEMBREE for the management of moderate to severe pain associated with endometriosis. On May 6, 2022, the Company and Pfizer announced that the FDA extended the Prescription Drug User Fee Act (“PDUFA”) goal date for this sNDA to August 6, 2022. In June 2022, the FDA accepted for review the Company’s sNDA that proposes updates to the U.S. Prescribing Information based on the safety and efficacy data from the Phase 3 LIBERTY randomized withdrawal study (“RWS”) of MYFEMBREE in premenopausal women with heavy menstrual bleeding due to uterine fibroids for up to two years. The FDA set a PDUFA goal date of January 29, 2023 for this sNDA. MYFEMBREE is also being evaluated for contraceptive efficacy in women with heavy menstrual bleeding associated with uterine fibroids or endometriosis-associated pain who are 18 to 50 years of age and at risk for pregnancy. The Company is also developing MVT-602, an investigational oligopeptide kisspeptin-1 receptor agonist, which has completed a Phase 2a study for the treatment of female infertility as a part of assisted reproduction.
Since its inception, the Company has funded its operations primarily from the issuance and sale of its common shares, from debt financing arrangements, and more recently from the upfront and milestone payments it has received from its collaboration and commercialization partners, as well as net revenues generated from sales of ORGOVYX and MYFEMBREE in the U.S.
The Company’s majority shareholder is Sumitovant Biopharma Ltd. (“Sumitovant”), a wholly-owned subsidiary of Sumitomo Pharma Co., Ltd. (“Sumitomo Pharma”), the name of which prior to April 1, 2022 was Sumitomo Dainippon Pharma Co., Ltd. As of June 30, 2022, Sumitovant directly, and Sumitomo Pharma indirectly, own 50,041,181, or approximately 52.3%, of the Company’s outstanding common shares.
Basis of Presentation and Principles of Consolidation
The Company’s fiscal year ends on March 31, and its first three fiscal quarters end on June 30, September 30 and December 31. The Company has determined that it has one operating and reporting segment as it allocates resources and assesses financial performance on a consolidated basis.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements.
9

Table of Contents
In the opinion of management, the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (“Quarterly Report”) reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company’s condensed consolidated balance sheets as of June 30, 2022 and March 31, 2022, and its condensed consolidated statements of operations and comprehensive loss, cash flows, and shareholders’ deficit for the three months ended June 30, 2022 and 2021. The March 31, 2022 condensed consolidated balance sheet was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. The results for interim periods are not necessarily indicative of results for the entire fiscal year or any other interim period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended March 31, 2022, filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 11, 2022.

Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP included in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”), issued by the Financial Accounting Standards Board (“FASB”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Dollar amounts reported in millions within this Quarterly Report are computed based on the amounts in thousands, and therefore, the sum of components may not equal the total amount reported in millions due to rounding.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates.
On an ongoing basis, the Company’s management evaluates its estimates, including those related to valuation of inventories, impairment testing for long-lived-assets, variables used in calculating the fair value of the Company’s equity awards, expected achievement of performance-based vesting criteria for equity awards, variable consideration and other relevant inputs impacting the gross and net revenue recognition, contingent liabilities, recoverability of deferred tax assets, determination of lease term, research and development (“R&D”) expenses and accruals, and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period, that are not readily apparent from other sources. Estimates and assumptions are periodically reviewed considering changes in circumstances, facts, or experience. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows.
Summary of Significant Accounting Policies
The accounting policies used by the Company in its presentation of interim financial results are consistent with those described in Note 2 to the Company’s audited consolidated financial statements included in its Annual Report for the fiscal year ended March 31, 2022, filed with the SEC on May 11, 2022. There have been no significant changes in the Company’s significant accounting policies from those disclosed in its Annual Report for the fiscal year ended March 31, 2022.
Reclassification
Certain reclassification has been made to the unaudited condensed consolidated statements of cash flows for the three months ended June 30, 2021 to place them on a comparable basis with the three months ended June 30, 2022, regarding the presentation of amortization of operating lease right-of-use assets of $0.4 million. The reclassification had no effect on the previously reported results of operations. The reclassification had no effect on previously reported cash flows from operating activities in the unaudited condensed consolidated statements of cash flows.
Liquidity and Capital Resources
As of June 30, 2022, the Company had approximately $358.7 million in cash, cash equivalents, and marketable securities. The Company believes that its existing cash, cash equivalents, and marketable securities will be sufficient to fund its anticipated operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of this Quarterly Report.
10

Table of Contents
In future periods, if the Company’s cash, cash equivalents, marketable securities, and amounts that it expects to generate from product sales and/or third-party collaboration payments are not sufficient to enable the Company to fund its operations, the Company may need to raise additional funds in the form of equity, debt, or from other sources. There can be no assurances that such funding sources will be available at terms acceptable to the Company, or at all. If the Company has insufficient funding to meet its working capital needs, it could be required to delay, limit, reduce, or terminate its drug development programs, commercialization efforts, and/or limit or cease operations.
As of June 30, 2022, the Company had approximately $41.3 million of borrowing capacity available to it under the Sumitomo Pharma Loan Agreement (see Note 5(A)). As of June 30, 2022, the Company is also eligible to earn up to $3.6 billion, $122.5 million, and $90.5 million of additional milestone payments from Pfizer Inc. (“Pfizer”), Gedeon Richter Plc. (“Richter”), and Accord Healthcare, Ltd. (“Accord”), respectively, as well as potential royalty payments from Richter and Accord. See Note 8 for additional information about the Pfizer Collaboration and License Agreement, the Richter Development and Commercialization Agreement, and the Accord License Agreement.
Net Loss per Common Share
Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of common shares and potentially dilutive shares of common stock outstanding during the period. Potential dilutive securities outstanding include stock options, restricted stock units, performance stock units, and warrants. During all periods presented, the Company incurred net losses. Accordingly, the effect of any common share equivalents would have been anti-dilutive during those periods and are not included in the calculation of diluted weighted-average number of common shares outstanding.
The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per common share for the periods indicated because their inclusion would have been anti-dilutive:
June 30,
20222021
Stock options5,921,227 8,613,006 
Restricted stock units and performance stock units (unvested)8,329,253 5,170,442 
Warrants73,710 73,710 
Total14,324,190 13,857,158 
Recently Issued Accounting Standards Not Yet Adopted
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. These amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective prospectively for all entities as of March 12, 2020 through December 31, 2022. The Company’s outstanding debt with Sumitomo Pharma bears a variable interest rate that is indexed off of 3-month LIBOR, for which publication is expected to be discontinued on June 30, 2023. In the event that 3-month LIBOR becomes unavailable, the Company and Sumitomo Pharma will negotiate in good faith to select an alternative interest rate in accordance with the Sumitomo Pharma Loan Agreement. The Company has not yet adopted this guidance and is currently evaluating the potential impact the adoption of this standard will have on its consolidated financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses on available-for-sale debt securities to be recorded through an allowance for credit losses instead of as a reduction in the amortized cost basis of the securities. ASU 2016-13 was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption was permitted, including adoption in any interim period. In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases
11

Table of Contents
(Topic 842), which amended the effective date of the original pronouncement for smaller reporting companies. ASC 2016-13 and its amendments will be effective for annual and interim periods beginning after December 15, 2022 for smaller reporting companies. The Company is currently assessing the impact the adoption of this new standard will have on its consolidated financial statements and related disclosures.
Note 2—Revenue Components
The following table provides information about the Company’s revenues (in thousands):
Three Months Ended June 30,
20222021
Revenues:
Product revenue, net:
ORGOVYX$36,034 $10,479 
MYFEMBREE3,999 1,075 
Richter product supply and royalties1,318  
Total product revenue, net41,351 11,554 
Pfizer collaboration revenue:
Amortization of upfront payment20,974 20,974 
Amortization of regulatory milestone4,167 8,535 
Total Pfizer collaboration revenue25,141 29,509 
Accord license revenue50,000  
Total revenues$116,492 $41,063 
Product Revenue, net
The Company began generating product revenue from sales of ORGOVYX and MYFEMBREE in the U.S. in January 2021 and June 2021, respectively. The Company records product revenue net of estimated discounts, chargebacks, rebates, product returns, and other gross-to-net revenue deductions.
For the three months ended June 30, 2022, product revenue, net also includes revenues related to product supply to Richter to support their European launches of RYEQO of $1.1 million, as well as royalties on net sales of RYEQO in Richter’s Territory of $0.2 million. There were no such revenues recorded in the three months ended June 30, 2021.
The activities and ending balances for each significant category of discounts and allowances (which constitutes variable consideration) for the three months ended June 30, 2022 were as follows (in thousands):
Reserve -government and other incentivesChargebacks and administrative feesReturnsSales DiscountsTotal
Balance as of March 31, 2022
$13,734 $2,628 $3,028 $486 $19,876 
Provision related to sales in the current year23,742 6,469 815 1,146 32,172 
Adjustments related to prior year sales1,785 (389)  1,396 
Credits and payments made during the current year(21,185)(5,335)(2)(1,074)(27,596)
Balance as of June 30, 2022
$18,076 $3,373 $3,841 $558 $25,848 
The total reserves described above are summarized as components of the Company’s unaudited condensed consolidated balance sheets as follows (in thousands):
12

Table of Contents
June 30, 2022March 31, 2022
Reduction of accounts receivable, net$558 $486 
Component of accrued expenses and other current liabilities25,290 19,390 
Total revenue-related reserves$25,848 $19,876 
Pfizer Collaboration Revenue
Pfizer collaboration revenue for the three months ended June 30, 2022 and 2021 consists of the partial recognition of the upfront payment the Company received from Pfizer upon entering into the Pfizer Collaboration and License Agreement in December 2020 and of the regulatory milestone payment from Pfizer that was triggered upon the FDA approval of MYFEMBREE for the management of heavy menstrual bleeding associated with uterine fibroids on May 26, 2021. See Note 8 for additional information regarding the Pfizer Collaboration and License Agreement.
Accord License Revenue
Accord license revenue for the three months ended June 30, 2022 consists of the recognition of the upfront payment the Company received from Accord in May 2022 pursuant to the Accord License Agreement. There was no Accord license revenue for the three months ended June 30, 2021. See Note 8 for additional information regarding the Accord License Agreement.
Note 3—Certain Balance Sheet Components
Cash, Cash Equivalents and Restricted Cash
The following represents a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash in the unaudited condensed consolidated statements of cash flows (in thousands):
June 30,
20222021
Cash and cash equivalents$325,535 $484,960 
Restricted cash (included in other assets)10,712 9,087 
Total cash, cash equivalents and restricted cash$336,247 $494,047 
Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash (maturity of three months or less at the time of purchase). Restricted cash consists of funds held or designated to satisfy the requirements of certain agreements that are restricted in their use. As of June 30, 2022 and 2021, restricted cash includes approximately $7.1 million, that is held in an escrow fund for use by Sunovion Pharmaceuticals Inc. (“Sunovion”), a subsidiary of Sumitomo Pharma, to manage payments for rebates, chargebacks, and similar fees pursuant to the Market Access Services Agreement (see Note 5(D)).
Inventories
Inventories consisted of the following (in thousands):
June 30, 2022March 31, 2022
Raw materials$12,928 $663 
Work in process6,340 3,737 
Finished goods1,954 3,184 
Total inventories$21,222 $7,584 
13

Table of Contents
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
June 30, 2022March 31, 2022
Accrued sales discounts, rebates, and allowances$25,290 $19,390 
Accrued compensation-related expenses13,094 26,389 
Accrued income tax payable8,784 720 
Accrued R&D expenses6,029 6,955 
Accrued commercial expenses5,099 7,196 
Accrued other expenses3,192 3,309 
Accrued royalties payable to Takeda3,082 2,470 
Accrued professional fees1,118 1,340 
Deferred product revenue 825 
Total accrued expenses and other current liabilities$65,688 $68,594 
Note 4—Fair Value Measurements
The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires certain assets and liabilities to be reflected at their fair value. 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 on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed into one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable. These levels are as follows:
Level 1—inputs, which include unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;
Level 2—inputs, which include observable inputs other than Level 1 inputs, such as 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, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and
Level 3—inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgement or estimation.
For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of the Company’s financial instruments, see Note 2, “Summary of Significant Accounting Policies,” and Note 4, “Fair Value Measurements,” to the Company’s audited consolidated financial statements included in its Annual Report for the fiscal year ended March 31, 2022, filed with the SEC on May 11, 2022.
14

Table of Contents
Financial Instruments Measured at Fair Value on a Recurring Basis
The following table summarizes the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):
Fair Value Measurement Using:
 Level 1Level 2Level 3Total
As of June 30, 2022
Assets:
Money market funds (1)
$48 $ $ $48 
Commercial paper (2)
 218,302  218,302 
U.S. treasury securities (3)
1,938   1,938 
Total assets$1,986 $218,302 $ $220,288 
Fair Value Measurement Using:
 Level 1Level 2Level 3Total
As of March 31, 2022
 
Assets:
Money market funds (1)
$69 $ $ $69 
Commercial paper (2)
 219,772  219,772 
Total assets$69 $219,772 $ $219,841 
(1) Included in cash and cash equivalents.
(2) Includes $187.1 million in cash and cash equivalents and $31.2 million in marketable securities as of June 30, 2022. Includes $192.3 million in cash and cash equivalents and $27.5 million in marketable securities as of March 31, 2022.
(3) Included in marketable securities, non-current.
There were no liabilities measured at fair value on a recurring basis as of June 30, 2022 or March 31, 2022.
Financial Instruments Not Measured at Fair Value on a Recurring Basis
The Company recorded the cost share advance from Pfizer, which is included in Level 2 of the fair value hierarchy, at its estimated fair value as of the transaction date. As discussed in Note 8(B), on the transaction date, the cost share advance from Pfizer was discounted to fair value using the Company’s estimated incremental borrowing rate over the period in which the cost share advance is expected to be utilized. The recorded amount has been and will continue to be reduced each reporting period by the amount of Allowable Expenses applied to the cost share advance. There were no non-recurring fair value assets as of June 30, 2022 and March 31, 2022.
Note 5—Related Party Transactions
As of June 30, 2022, Sumitovant directly, and Sumitomo Pharma indirectly, own 50,041,181, or approximately 52.3%, of the Company’s outstanding common shares. The Company has agreements with Sumitovant, Sumitomo Pharma, and their affiliates, including Sunovion, a subsidiary of Sumitomo Pharma. Certain of these agreements are described below.
(A) Sumitomo Pharma Loan Agreement
On December 27, 2019, the Company and one of its subsidiaries, Myovant Sciences GmbH (“MSG”), entered into a Loan Agreement with Sumitomo Pharma (the “Sumitomo Pharma Loan Agreement”). Pursuant to the Sumitomo Pharma Loan Agreement, Sumitomo Pharma agreed to make revolving loans to the Company in an aggregate principal amount of up to $400.0 million. Funds may be drawn down by the Company once per calendar quarter, subject to certain terms and conditions, including consent of the Company’s board of directors. The maturity date of the loans under the Sumitomo Pharma Loan Agreement is December 27, 2024 or the date the outstanding principal of the loans is declared due and payable due to an event of default pursuant to the terms of the Sumitomo Pharma Loan Agreement. In addition, if Sumitomo Pharma fails to own at least a majority of the Company’s outstanding common shares, it may become unlawful under Japanese law for Sumitomo Pharma to fund loans to the Company, and in which case the Company would not be able to continue to borrow under the Sumitomo Pharma Loan Agreement. Interest is due and payable quarterly, and the outstanding principal amounts are due and
15

Table of Contents
payable in full on the five-year anniversary of the closing date of the Sumitomo Pharma Loan Agreement. Loans under the Sumitomo Pharma Loan Agreement are prepayable at any time without premium or penalty upon 10 business days’ prior written notice.
Loans under the Sumitomo Pharma Loan Agreement bear interest at a variable rate per annum equal to 3-month LIBOR plus a margin of 3% payable on the last day of each calendar quarter. Publication of 3-month LIBOR is currently expected to be discontinued on June 30, 2023. In the event that 3-month LIBOR becomes unavailable, the Company and Sumitomo Pharma will negotiate in good faith to select an alternative interest rate and, if applicable as a result of such alternative interest rate, margin adjustment that is consistent with industry accepted successor rates for determining a LIBOR replacement. The Company’s obligations under the Sumitomo Pharma Loan Agreement are fully and unconditionally guaranteed by the Company and its subsidiaries. The loans and other obligations are senior unsecured obligations of the Company, MSG, and subsidiary guarantors. The Sumitomo Pharma Loan Agreement includes customary representations and warranties and affirmative and negative covenants.
The Sumitomo Pharma Loan Agreement also includes customary events of default, including payment defaults, breaches of representations and warranties, breaches of covenants following any applicable cure period, cross acceleration to certain other debt, failure to pay certain final judgments, certain events relating to bankruptcy or insolvency, failure of material provisions of the loan documents to remain in full force and effect or any contest thereto by the Company or any of its subsidiaries and certain breaches by the Company under the Investor Rights Agreement. Upon the occurrence of an event of default, a default interest rate of an additional 5.0% will apply to the outstanding principal amount of the loans, Sumitomo Pharma may terminate its obligations to make loans to the Company and declare the principal amount of loans to become immediately due and payable, and Sumitomo Pharma may take such other actions as set forth in the Sumitomo Pharma Loan Agreement. Upon the occurrence of certain bankruptcy and insolvency events, the obligations of Sumitomo Pharma to make loans to the Company would automatically terminate and the principal amount of the loans would automatically become due and payable. In addition, if it becomes unlawful for Sumitomo Pharma to maintain the loans under the Sumitomo Pharma Loan Agreement or within 30 days of a change of control with respect to the Company, the Company would be required to repay the outstanding principal amount of the Loans.
As of June 30, 2022, approximately $41.3 million of borrowing capacity remains available to the Company, subject to the terms of the Sumitomo Pharma Loan Agreement and the outstanding loan balance of $358.7 million is classified as a long-term liability on the unaudited condensed consolidated balance sheet under the caption long-term debt, less current maturities (related party). Interest expense under the Sumitomo Pharma Loan Agreement was $3.6 million and $2.9 million for the three months ended June 30, 2022 and 2021, respectively, and is included in interest expense in the unaudited condensed consolidated statements of operations and comprehensive loss.
(B) Investor Rights Agreement
On December 27, 2019, the Company entered into an Investor Rights Agreement with Sumitomo Pharma and Sumitovant (the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement, among other things, the Company agreed, at the request of Sumitovant, to register for sale, under the Securities Act of 1933, common shares beneficially owned by Sumitovant, subject to specified conditions and limitations. In addition, the Company agreed to periodically provide Sumitovant (i) certain financial statements, projections, capitalization summaries and other information and (ii) access to the Company’s books, records, facilities and employees during the Company’s normal business hours as Sumitovant may reasonably request, subject to specified limitations.
The Investor Rights Agreement also contains certain protections for the Company’s minority shareholders for so long as Sumitomo Pharma or certain of its affiliates beneficially owns more than 50% of the Company’s common shares. These protections include: (i) a requirement that Sumitovant vote its shares for the election of independent directors in accordance with the recommendation of the Company’s board of directors (the “board”) or in the same proportion as the shareholders not affiliated with Sumitovant vote their shares; (ii) a requirement that the audit committee of the Company’s board be composed solely of three independent directors; (iii) a requirement that any transaction proposed by Sumitomo Pharma or certain of its affiliates that would increase Sumitomo Pharma’s beneficial ownership to over 60% of the outstanding voting power of the Company must be approved by the Company’s audit committee (if occurring prior to December 27, 2022), and be conditioned on the approval of shareholders not affiliated with Sumitovant approving the transaction by a majority of the common shares held by such shareholders; and a requirement that any related person transactions between Sumitomo Pharma or certain of its affiliates and the Company must be approved by the Company’s audit committee.
Pursuant to the Investor Rights Agreement, the Company also agreed that at all times that Sumitomo Pharma beneficially owns more than 50% of the Company’s common shares, Sumitomo Pharma, by purchasing common shares in the open market or from the Company in certain specified circumstances, will have the right to maintain its percentage ownership in the
16

Table of Contents
Company’s common shares in the event of a financing event or acquisition event conducted by the Company, or specified other events, subject to specific conditions.
(C) Services and Information Sharing Agreement
In February 2022, the Company and two of its subsidiaries, MSG and Myovant Sciences, Inc. (“MSI”), entered into a services and information sharing agreement with Sumitovant Biopharma, Inc., a wholly-owned subsidiary of Sumitovant. Under the agreement, for so long as Sumitovant is a majority owner of the Company, the Company agrees to (1) subject to Sumitovant’s reasonable request and on a timeline to be reasonably agreed by the parties, supply certain information summarizing material aspects of the Company’s business to Sumitovant, and with reasonable advanced notice, give Sumitovant and its representatives the reasonable opportunity to discuss such information with the Company’s senior management; and (2) subject to the oversight of the chairperson of the Company’s Audit Committee, provide certain additional, more detailed information on business-essential matters in order to collaborate with Sumitovant or to enable the Company to leverage Sumitovant’s expertise.
Under the agreement, Sumitovant also agrees to provide, upon the Company’s election, various administrative and general business support services as well as research and development services to the Company and its subsidiaries, and the Company agrees to reimburse Sumitovant for expenses it, or third parties acting on its behalf, incurs for the Company. For any general and administrative and research and development activities performed by employees of Sumitovant, the agreement provides for Sumitovant to charge the Company based upon the relative percentage of time utilized on matters related to the Company by the respective employee and a mutually agreed upon mark-up on such expenses. Under the agreement, all other third-party pass-through costs are billed to the Company at cost. For the three months ended June 30, 2022, the Company incurred less than $0.1 million under this agreement.
(D) Market Access Services Agreement
On August 1, 2020, one of the Company’s subsidiaries, MSG, entered into a Market Access Services Agreement, as amended (“Market Access Services Agreement”), with Sunovion. Pursuant to the Market Access Services Agreement, among other things, Sunovion agreed to provide to MSG certain market access services with respect to the distribution and sale of ORGOVYX (“Prostate Cancer Product”) and MYFEMBREE (“Women’s Health Product,” and collectively with Prostate Cancer Product, the “Products”, and each a “Product”), including, among other things: (i) adding the Products to Sunovion’s agreements with its third party logistics providers; (ii) adding the Women’s Health Product to certain of Sunovion’s contracts with wholesalers, group purchasing organizations and integrated delivery networks and negotiating rates for the Products with certain market access customers; (iii) providing order-to-cash services; (iv) providing certain employees to provide market access account director services; (v) performing activities required in connection with supporting and maintaining contracts between the Company and market access customers for the coverage, purchase, or dispensing of the Products; (vi) managing the validation, processing and payment of rebates, chargebacks, and certain administrative, distribution and service fees related to the Products; (vii) providing MSG with price reporting metrics and other information required to allow the Company to comply with applicable government price reporting requirements; (viii) coordinating with MSG and any applicable wholesalers and distributors to address any recalls, investigations, or product holds; (ix) configuring, or causing to be configured, the appropriate software systems to enable Sunovion to perform its obligations under the Market Access Services Agreement; and (x) providing training and certain other ancillary support services to facilitate the foregoing. Pursuant to this agreement, Sunovion will also provide certain services to the Company to enable the Company to comply with its obligations under the State Transparency Laws.
MSG, in turn, appointed Sunovion as the exclusive distributor of the Women’s Health Product and a non-exclusive distributor of the Prostate Cancer Product, each in the U.S., including all of its territories and possessions.
In order to facilitate Sunovion’s provision of these services, MSG agreed, among other things, to: (i) grant Sunovion a non-exclusive license under all intellectual property owned or controlled by MSG, solely for Sunovion’s use in connection with its performance of the contemplated services; (ii) provide Sunovion periodic reports of sales projections and estimated volume requirements, as well as such other information as Sunovion reasonably requests or may need to perform the services; (iii) comply with the provisions of any agreements between Sunovion and third parties pursuant to which the Products will be distributed or sold; (iv) cooperate with certain investigations related to orders and audits of MSG’s quality systems solely related, as reasonably determined by Myovant, to Sunovion’s performance of certain regulatory services, at Sunovion’s costs; and (v) promptly notify Sunovion in the event relugolix is recalled.
As consideration for the services, MSG has paid and will continue to pay Sunovion an agreed-upon monthly service charge for each of the first two years of the Market Access Services Agreement term and any agreed regulatory and training service charges. After the second year of the Market Access Services Agreement term, the monthly service charges will be determined by the parties. In addition, MSG also agreed to (x) reimburse Sunovion for any pass-through expenses it incurs while providing the services, and (y) establish an escrow fund for use by Sunovion to manage payments for rebates, chargebacks and similar
17

Table of Contents
fees. For the three months ended June 30, 2022 and 2021, the Company incurred $1.1 million and $1.3 million, respectively, under this agreement (inclusive of third-party pass-through costs billed to the Company) which are included in SG&A expenses, in the accompanying consolidated statements of operations and comprehensive loss.
The Market Access Services Agreement also contains customary representations and warranties by the parties and customary provisions related to confidentiality, indemnification and insurance. The initial term of the Market Access Services Agreement is three years. Thereafter, the term will be automatically extended for one-year periods, unless either party provides notice of its intent not to renew the Market Access Services Agreement at least nine (9) months prior to the expiration of the applicable term. Either party may also terminate the Market Access Services Agreement prior to the end of its term in the event of an uncured material breach by the other party, if there are certain changes of law, or if such other party becomes insolvent or undergoes a change of control. MSG may also terminate the Market Access Services Agreement with respect to one or both Products if Sunovion fails to satisfy certain market access milestones or for convenience upon payment of a break-up fee.
Note 6—Income Taxes

The Company is not subject to taxation under the laws of Bermuda since it is organized as a Bermuda Exempted Limited Company, for which there is no current tax regime. It is subject to taxation under the laws of the United Kingdom by virtue of location of central management and control. The income tax expense of the Company and its affiliates currently is primarily attributable to U.S. federal, state and local taxes. The Company’s effective tax rate for the three months ended June 30, 2022 and 2021 was (62.44)% and (1.50)%, respectively. Key determinative factors of the Company’s effective tax rate include the allocation of its earnings by jurisdiction and a valuation allowance that currently eliminates all of the Company’s net deferred tax assets, including in respect of the R&D matter referred to below.

Effective for tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act 2017 (“TCJA”) amendments to Internal Revenue Code Section 174 will no longer permit an immediate deduction for R&D expenditures in the tax year that such costs are incurred. For expenses that are incurred for R&D in the U.S., such amounts will be amortized over 5 years (this is currently approximately 90% of the Company’s relevant spend), and expenses that are incurred for R&D expenditures outside the U.S. will be amortized over 15 years. The Company’s effective tax rate for the three months ended June 30, 2022 was impacted accordingly. Although it is understood that Congress is considering legislation that would extend the TCJA relief by one or more years, the possibility that this will happen is uncertain and the Company is required to calculate its income tax liabilities based on the provisions of current law.
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. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. Future factors may arise at subsequent balance sheet dates that would impact the assessment of the objective and subjective evidence of the Company. Any adjustment to the deferred tax asset valuation allowance would be recorded in the consolidated statement of operations and comprehensive loss for the period that the adjustment is determined to be required.
In response to the COVID-19 pandemic, many governments enacted measures to provide aid and economic stimulus. These measures included deferring the due dates of tax payments and other changes to income and non-income-based-tax laws as well as providing direct government assistance through grants and forgivable loans. On March 27, 2020, the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic and the negative impacts that it had on the global economy and U.S. companies. The CARES Act includes measures to assist companies, including temporary changes to income and non-income-based tax laws. The Company implemented certain provisions of the CARES Act, such as deferring employer payroll taxes through the end of calendar year 2020. As of June 30, 2022, the Company has $0.9 million of employer payroll taxes deferred under the CARES Act, which is included in accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheet.
Note 7—Share-Based Compensation
The Company has two share-based compensation plans, the Myovant Sciences Ltd. 2016 Equity Incentive Plan (“Equity Incentive Plan”) and the Myovant Sciences Ltd. 2020 Inducement Plan (“Inducement Plan”) (collectively, the “Equity Plans”). As of June 30, 2022, there were approximately 2.2 million and 0.8 million common shares available for future issuance under the Equity Incentive Plan and the Inducement Plan, respectively. For additional information about the Company’s Equity Plans, see Note 10, “Share-Based Compensation,” to the Company’s audited consolidated financial statements included in its Annual Report for the fiscal year ended March 31, 2022, filed with the SEC on May 11, 2022.
18

Table of Contents
(A) Stock Options
Activity for stock options for the three months ended June 30, 2022 is included in the following table:
Number of Options
Options outstanding at March 31, 2022
6,130,680 
Granted
204,808 
Exercised
(164,226)
Forfeited
(250,035)
Options outstanding at June 30, 2022
5,921,227 
Options vested and expected to vest at June 30, 2022
5,921,227 
Options exercisable at June 30, 2022
3,993,191 
(B) Restricted Stock and Performance Stock Units
Activity for restricted stock units and performance share units for the three months ended June 30, 2022 is included in the following table:
Number of Shares
Unvested balance at March 31, 2022
4,532,619 
Granted5,057,731 
Vested(634,360)
Forfeited(626,737)
Unvested balance at June 30, 2022
8,329,253 
(C) Share-Based Compensation
Share-based compensation during the three months ended June 30, 2022 and 2021 was as follows (in thousands):
Three Months Ended June 30,
20222021
Share-based compensation recognized as:
SG&A expense$5,972 $7,155 
R&D expense3,666 3,957 
Cost of product revenue (1)
68 3 
Share-based compensation expense$9,706 $11,115 
Share-based compensation capitalized into inventory$363 $150 
(1) Share-based compensation capitalized into inventory is recognized as cost of product revenue when the related product is sold.
Share-based compensation included in SG&A expense for the three months ended June 30, 2021 includes $1.4 million related to the settlement and remeasurement of the Company’s former Principal Executive Officer’s equity awards. There was no such expense during the three months ended June 30, 2022. Additional information about the Company’s Separation and General Release Agreement with its former Principal Executive Officer is included in Note 10, “Share-Based Compensation,” to the Company’s audited consolidated financial statements included in its Annual Report for the fiscal year ended March 31, 2022, filed with the SEC on May 11, 2022.
Total unrecognized share-based compensation was approximately $112.1 million as of June 30, 2022 and is expected to be recognized over a weighted-average period of approximately 3.1 years.
19

Table of Contents
Note 8—Collaboration and License Agreements
(A) Richter Development and Commercialization Agreement
On March 30, 2020, one of the Company’s subsidiaries, MSG, entered into an exclusive license agreement with Richter for Richter to commercialize relugolix combination tablet for uterine fibroids and endometriosis in Europe, the Commonwealth of Independent States including Russia, Latin America, Australia, and New Zealand (the “Richter Development and Commercialization Agreement”). Under the terms of the Richter Development and Commercialization Agreement, the Company received an upfront payment of $40.0 million on March 31, 2020, is eligible to receive up to $40.0 million in regulatory milestone payments (of which $25.0 million has been received), $107.5 million in sales-related milestones, and tiered royalties on net sales following regulatory approval.
Under the terms of the Richter Development and Commercialization Agreement, the Company continues to lead global development of relugolix combination tablet. The Company also agreed to assist Richter in transferring manufacturing technology from the Company’s CMOs to Richter to enable Richter to manufacture relugolix combination tablet. The Company agreed to supply Richter with quantities of relugolix combination tablet for its territories pursuant to the Company’s agreements with its CMOs. Richter is responsible for local clinical development, manufacturing, and all commercialization activities for its territories. The Company has also granted Richter an option to collaborate with the Company on relugolix combination tablet for future indications in women’s health other than fertility.
The term of the Richter Development and Commercialization Agreement shall expire on a country-by-country basis upon expiry of the Royalty Term (as defined in the Richter Development and Commercialization Agreement) for the respective product in a country in Richter’s Territory. The Richter Development and Commercialization Agreement may be terminated in its entirety or on a country-by-country basis by mutual consent of the parties, or by either party for the uncured material breach of the other party, for bankruptcy of the other party, and for certain other reasons in accordance with the terms of the Richter Development and Commercialization Agreement.
(B) Pfizer Collaboration and License Agreement
On December 26, 2020, one of the Company’s subsidiaries, MSG, and Pfizer, entered into a collaboration and license agreement (the “Pfizer Collaboration and License Agreement”), pursuant to which the Company and Pfizer collaborate to jointly develop and commercialize relugolix in oncology and women’s health in the U.S. and Canada (the “Co-Promotion Territory”). In addition, Pfizer also received an option to acquire exclusive commercialization and development rights to relugolix in oncology outside the Co-Promotion Territory, excluding certain Asian countries (the “Pfizer Territory”). Pfizer notified the Company on October 22, 2021 of its decision to decline this option.
In the Co-Promotion Territory, the Company and Pfizer equally share profits and certain expenses, including certain pre-launch inventory costs incurred by the Company prior to the effective date of the Pfizer Collaboration and License Agreement (the “Allowable Expenses”). The Company remains responsible for regulatory interactions and drug supply and continues to lead clinical development for MYFEMBREE in the women’s health indications, while development for ORGOVYX is shared equally among the parties.
In the U.S., the Company is the principal on all sales transactions with third parties and recognizes 100% of product sales to third parties as revenue from contracts with customers. The Company concluded that based on the principal versus agent guidance in ASC 606, Revenue from Contracts with Customers, it has primary responsibility for fulfilling customer orders, controls inventory before it is sold to third party customers, assumes the risk of inventory loss, and maintains discretion in establishing product price.
Pursuant to the terms of the Pfizer Collaboration and License Agreement, the Company received an upfront payment of $650.0 million in December 2020, and is eligible to receive up to $3.8 billion of milestone payments, including two regulatory milestones of $100.0 million upon each FDA approval for MYFEMBREE in uterine fibroids and endometriosis ($200.0 million in the aggregate), and tiered sales milestones of up to $3.5 billion upon reaching certain thresholds of annual net sales for oncology and the combined women’s health indications in the Co-Promotion Territory. In July 2021, the Company received a $100.0 million regulatory milestone payment from Pfizer that was triggered upon the FDA approval of MYFEMBREE for the management of heavy menstrual bleeding associated with uterine fibroids on May 26, 2021.
Pursuant to the terms of the Pfizer Collaboration and License Agreement, the Company has and will continue to bear Pfizer’s share of Allowable Expenses, up to a maximum of $100.0 million for calendar year 2021 and up to a maximum of $50.0 million for calendar year 2022. Any unused portion will carry over into the subsequent calendar years until the Company has assumed in aggregate $150.0 million of Pfizer’s share of the Allowable Expenses.
20

Table of Contents
The term of the Pfizer Collaboration and License Agreement continues until no products are sold and all development activities have terminated in the Co-Promotion Territory. The Pfizer Collaboration and License Agreement may be terminated early by either party for the uncured material breach of the other party or for bankruptcy or other insolvency proceeding of the other party. In addition, Pfizer has certain other termination rights and may terminate the Pfizer Collaboration and License Agreement early upon providing written notice to the Company pursuant to the terms of the Pfizer Collaboration and License Agreement.
The Company assessed the Pfizer Collaboration and License Agreement and determined that it meets both criteria to be considered a collaborative agreement within the scope of ASC 808, Collaborative Arrangements: active participation by both parties and exposures to significant risks and rewards dependent on the commercial success of the activities. Although the Company is lead party and will perform many activities, both development and commercialization responsibilities are assigned between parties and both parties participate on joint steering and other committees overseeing the collaboration activities. Both parties are exposed to significant risks and rewards based on the economic outcomes of the collaboration through cost sharing and profit (loss) sharing provisions. Net payments to/from Pfizer for Pfizer’s share of the net profits and Allowable Expenses will be disaggregated and presented in the Company’s consolidated statements of operations and comprehensive loss according to the nature of the expense (e.g., collaboration expense, R&D expenses, or SG&A expenses).
As discussed above, the Company received a $650.0 million upfront payment from Pfizer in December 2020, of which $150.0 million is Pfizer’s advanced reimbursement for Pfizer’s share of Allowable Expenses (up to $100.0 million for calendar year 2021 and up to $50.0 million for calendar year 2022). The Company concluded that the prepayment by Pfizer of its share of Allowable Expenses represents a significant financing component since the Company received the cash flows at the outset of the arrangement, rather than over a two-year period. Accordingly, the Company reduced the amount of the advanced reimbursement by approximately $3.6 million, representing the implied financing costs based on the Company’s incremental borrowing rate that was derived based on the Sumitomo Pharma Loan Agreement, and recorded the discounted value of $146.4 million on the consolidated balance sheet as a deposit liability (cost share advance from Pfizer) as of the transaction date, split between a current and a non-current portion, based on the expected timing of Allowable Expenses subject to cost share. The financing component has been and will continue to be accreted to interest expense utilizing a method that approximates the effective yield method over the period in which the cost share advance is expected to be used. The remainder of the upfront payment was recorded as deferred revenue and has been and will continue to be recognized as Pfizer collaboration revenue on a straight-line basis over the estimated term of the agreement of six years, which was estimated by the Company based upon the terms of the Pfizer Collaboration and License Agreement, including the termination provisions contained therein. The Company determined straight-line amortization to be appropriate because the upfront payment represents payment for Pfizer’s right to participate in the collaboration activities, including both commercialization and development activities, which are expected to be realized evenly over this period.
The achievement of regulatory milestones is outside of the Company’s control and therefore was not deemed probable at contract inception. Amounts associated with the regulatory milestones were not initially recognized. Upon achievement of the related regulatory milestones, cumulative catch-up revenue will be recorded as Pfizer collaboration revenue in the period in which the respective regulatory milestone is achieved, and the remainder will be recognized over the remaining contract term. The Company determined that, conceptually, the regulatory milestone payments represent payment for development activities that will continue to benefit the collaboration as the products move toward commercialization. Accordingly, the recognition of revenue associated with the regulatory milestones follows the same amortization model as the upfront payment described above.
Similar to the regulatory milestones, sales-based milestone payments will not initially be recognized due to the uncertainty associated with the future commercial outcomes of ORGOVYX and MYFEMBREE. Upon achievement, the sales-based milestones will be recognized as revenue immediately in the period when the annual sales thresholds are met as the payments represent consideration for past activities that are completed and culminated in the annual sales thresholds being met.
The amount due to Pfizer as of June 30, 2022, was approximately $39.2 million and consisted of $18.0 million payable to Pfizer for Pfizer’s 50% share of net profits on sales of ORGOVYX and MYFEMBREE in the U.S. and approximately $21.2 million for 50% of Pfizer’s reimbursement of Allowable Expenses. 100% of all expenses related to Pfizer under the Pfizer Collaboration and License Agreement are initially expensed and then the full pool of expenses incurred by both the Company and Pfizer are reduced through application of the cost sharing allowance. The amount due to Pfizer as of March 31, 2022 was approximately $32.6 million and consisted of $14.1 million payable to Pfizer for Pfizer’s 50% share of net profits on sales of ORGOVYX and MYFEMBREE in the U.S. and approximately $18.5 million for 50% of Pfizer’s reimbursement of Allowable Expenses.
21

Table of Contents
(C) Accord License Agreement
On May 5, 2022, one of the Company’s subsidiaries, MSG, entered into an exclusive license agreement (the “Accord License Agreement”) with Accord and Intas Pharmaceuticals, Ltd., parent entity of Accord, for Accord to commercialize relugolix for the treatment of advanced hormone-sensitive prostate cancer under the trade name ORGOVYX® (relugolix 120 mg) in the European Economic Area, U.K., Switzerland, and Turkey (“Accord’s Territories”), with the right of first negotiation if the Company decides to enter into licensing arrangements in countries in the Middle East, Africa, and India. Under the terms of the Accord License Agreement, the Company received an upfront payment of $50.0 million in the three months ended June 30, 2022. The Company is also eligible to receive up to $90.5 million in commercial launch, sales-based, and other milestone payments, as well as tiered royalties from the high-teens to mid-twenties on net sales of ORGOVYX in Accord’s Territories.
Under the terms of the Accord License Agreement, the Company retains all rights to relugolix in the U.S. with its collaboration partner, Pfizer, as well as rights to relugolix in other therapeutic areas outside of prostate cancer, uterine fibroids, and endometriosis in Europe. The Company will continue to lead the global development of relugolix and may provide initial product supply to Accord, subject to the parties entering into a separate supply agreement. Accord will be responsible for certain local clinical development and all commercialization for its territories and has the option to manufacture relugolix in the future. In the event that Accord elects to exercise this option, the Company has agreed to assist Accord in transferring manufacturing technology from the Company’s CMOs to Accord to enable Accord to manufacture its own product supply.
The term of the Accord License Agreement shall expire on a country-by-country basis upon expiry of the Royalty Term (as defined in the Accord License Agreement). The Accord License Agreement may be terminated in its entirety or on a country-by-country basis by either party for the uncured material breach or bankruptcy of the other party, and for certain other reasons in accordance with the terms of the Accord License Agreement.
The Company concluded that Accord represents a customer and evaluated the Accord License Agreement under ASC 606. Based on that evaluation, the Company identified a single performance obligation under the Accord License Agreement, consisting of the Company’s promise to grant Accord a license to certain of the Company’s intellectual property. The Company determined that the initial transaction price consisted solely of the non-refundable upfront payment of $50.0 million, which was recognized as revenue upon delivery of the license to Accord during the three months ended June 30, 2022.
The remaining forms of consideration are variable because they are dependent on the achievement of sales-based or other milestones. The Company evaluated the constraint on variable consideration and concluded that the milestone payments are dependent on regulatory approvals and actions of third parties, and thus are highly susceptible to factors outside the Company’s influence. Therefore, at contract inception, the milestones are not included in the transaction price as it is not probable that a significant reversal of revenue would not occur. Furthermore, the sales-based milestones will be recognized as revenue immediately in the period when the related sales threshold is met. All other milestones will be recognized as revenue immediately in the period the underlying milestone is achieved. Any consideration related to sales-based royalties will be recognized when the related sales occur.
(D) Contract Balances
The following table presents changes in the Company’s contract liabilities during the three months ended June 30, 2022 (in thousands):
Balance at March 31, 2022
AdditionsImputed InterestDeductions
Balance at
June 30, 2022
Contract liabilities:
Deferred revenue (1)
$476,270 $ $ $(25,141)$451,129 
Cost share advance from Pfizer (2)
$33,818 $ $568 $(25,831)$8,555 
22

Table of Contents

(1) Includes $100.6 million and $350.6 million presented as current and non-current, respectively, on the unaudited condensed consolidated balance sheet as of June 30, 2022. Includes $100.6 million and $375.7 million presented as current and non-current, respectively, on the unaudited condensed consolidated balance sheet as of March 31, 2022.
(2) Includes $8.6 million presented as current on the unaudited condensed consolidated balance sheet as of June 30, 2022. Includes $33.8 million presented as current on the unaudited condensed consolidated balance sheet as of March 31, 2022.
During the three months ended June 30, 2022, deferred revenue decreased by $25.1 million, as a result of the recognition of Pfizer collaboration revenue.
During the three months ended June 30, 2022, cost share advance from Pfizer decreased by $25.3 million. The decrease was the net result of the application of 100% of shared Allowable Expenses incurred by the Company and 50% of reimbursement of Allowable Expenses incurred by Pfizer of approximately $25.8 million (consisting of $8.5 million and $17.3 million in reductions to R&D expenses and SG&A expenses, respectively), partially offset by accretion of the implied financing component of $0.6 million.
Note 9—Commitments and Contingencies
(A) Legal Contingencies
The Company may be, from time to time, 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 liability can be reasonably estimated. For cases in which the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the loss contingency, including an estimable range, if possible. The Company is currently not involved in any material legal proceedings.
(B) Contract Service Providers
In the normal course of business, the Company enters into agreements with contract service providers to assist in the performance of its R&D and clinical and commercial manufacturing activities. Subject to required notice periods and the Company’s 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, clinical and commercial manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.
(C) Indemnification Agreements
The Company has agreed to indemnify its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification liability is unlimited; however, the Company holds directors’ and officers’ liability insurance which limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. In the normal course of business, the Company also enters into contracts and agreements with service providers and other parties with which it conducts business that contain indemnification provisions pursuant to which the Company has agreed to indemnify the party against certain types of third-party claims. The Company has agreed to indemnify Sumitomo Pharma against certain losses, claims, liabilities and related expenses incurred by Sumitomo Pharma, subject to the terms of the Sumitomo Pharma Loan Agreement and the Investor Rights Agreement. The Company has also agreed to indemnify Sunovion against certain losses, claims, liabilities and related expenses incurred by Sunovion, subject to the terms of the Market Access Services Agreement, as amended. The Company has not experienced any material losses related to these indemnification obligations, and no material claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related accruals have been established.
23

Table of Contents
(D) Takeda Agreements
On April 29, 2016, Takeda Pharmaceuticals International AG (“Takeda”), a subsidiary of Takeda Pharmaceutical Company Limited, the originator of relugolix, granted the Company a worldwide license to develop and commercialize relugolix (excluding Japan and certain other Asian countries) and an exclusive right to develop and commercialize MVT-602 in all countries worldwide. Pursuant to the license agreement (the “Takeda License Agreement”), Takeda granted to the Company an exclusive, royalty-bearing license under certain patents and other intellectual property controlled by Takeda to develop and commercialize relugolix and MVT-602, and products containing these compounds for all human diseases and conditions. Under the Takeda License Agreement, the Company will pay Takeda a fixed, high single-digit royalty on net sales of certain relugolix products, a low single-digit royalty on net sales of certain other relugolix products, and a high single-digit royalty on net sales of MVT-602 products in the Company’s territory, all subject to certain agreed reductions. For the three months ended June 30, 2022 and 2021, the Company recorded royalty expense to Takeda of $3.1 million and $0.9 million, respectively, which is included in cost of product revenue on the unaudited condensed consolidated statements of operations and comprehensive loss. As of June 30, 2022 and March 31, 2022, the Company recorded royalties payable to Takeda of $3.1 million and $2.5 million, respectively, which are included in accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets. Takeda will pay the Company a high single-digit royalty on net sales of relugolix products for prostate cancer in the Takeda Territory, subject to certain agreed reductions. Royalties are required to be paid, on a product-by-product and country-by-country basis, until the latest to occur of the expiration of the last to expire valid claim of a licensed patent covering such product in such country, the expiration of regulatory exclusivity for such product in such country, or 10 years after the first commercial sale of such product in such country. Under the Takeda License Agreement, there was no upfront payment and there are no payments upon the achievement of clinical development or marketing approval milestones.
If the Takeda License Agreement is terminated in its entirety or with respect to relugolix for prostate cancer, other than for safety reasons or by the Company for Takeda’s uncured material breach, prior to receipt of the first regulatory approval of relugolix for prostate cancer in Japan, then the Company must either reimburse Takeda for its out of pocket costs and expenses directly incurred in connection with Takeda’s completion of the relugolix development for prostate cancer, up to an agreed upon cap, or complete by itself the conduct of any clinical studies of relugolix for prostate cancer that are ongoing as of the effective date of such termination, at its cost and expense.
In May 2018, the Company entered into a Commercial Manufacturing and Supply Agreement with Takeda (the “Takeda Commercial Supply Agreement”) pursuant to which Takeda agreed to supply the Company and the Company agreed to obtain from Takeda certain quantities of relugolix drug substance according to agreed-upon quality specifications. The initial term of the Takeda Commercial Supply Agreement began on May 30, 2018 and will continue for five years. At the end of the initial term, the Takeda Commercial Supply Agreement will automatically renew for successive one-year terms, unless either party gives notice of termination to the other at least 12 months prior to the end of the then-current term. The Takeda Commercial Supply Agreement may be terminated by either party upon 90 days’ notice of an uncured material breach of its terms by the other party, or immediately upon notice to the other party of a party’s bankruptcy. Each party will also have the right to terminate the Takeda Commercial Supply Agreement, in whole or in part, for any reason upon 180 days’ prior written notice to the other party, provided that any then-open purchase orders will remain in effect and be binding on both parties. The Takeda Commercial Supply Agreement, including any then-open purchase orders thereunder, will terminate immediately upon the termination of the Takeda License Agreement in accordance with its terms.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Objective
The purpose of the following discussion and analysis is to provide material information relevant to an assessment of our financial condition and results of operations from management’s perspective, including to describe and explain key trends, events, and other factors that impacted our reported results for the periods presented and that are reasonably likely to impact our future performance.
The discussion and analysis below is organized as follows:
executive summary, including a description of our business and recent events that are important to understand our results of operations and financial condition;
a description of the components of our results of operations and a discussion of our results of operations, including an explanation of significant changes between the periods presented in the specific line items of our condensed consolidated statements of operations and comprehensive loss;
24

Table of Contents
financial condition addressing our liquidity position, sources and uses of cash, capital resources and requirements, and commitments; and
critical accounting policies and significant judgments and use of estimates which are most important to our financial condition and results of operations.
As you read this discussion and analysis, refer to our unaudited condensed consolidated financial statements and footnotes included in Part 1. Item 1. of this Quarterly Report on Form 10-Q (“Quarterly Report”). Also refer to our Annual Report on Form 10-K (“Annual Report”) for the year ended March 31, 2022, filed with the United States Securities and Exchange Commission (“SEC”) on May 11, 2022, which is available free of charge on the SEC’s website at www.sec.gov and our investor relations website at investors.myovant.com. This discussion and analysis contains forward looking statements and should also be read in conjunction with the cautionary statement set forth in the section below titled, “Information Relating to Forward-Looking Statements.”
Dollar amounts reported in millions within this Quarterly Report are computed based on the amounts in thousands, and therefore, the sum of components may not equal the total amount reported in millions due to rounding.
Information Relating to Forward-Looking Statements
This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). These statements are often identified by the use of words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “to be,” “will,” “would,” or the negative or plural of these words, or similar expressions or variations, although not all forward-looking statements contain these words. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur and actual results could differ materially from those expressed or implied by these forward-looking statements.
The forward-looking statements appearing in a number of places throughout this Quarterly Report include, but are not limited to, statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things:
our and our collaboration and commercialization partners’ ability to successfully plan for and commercialize ORGOVYX®, MYFEMBREE®, and RYEQO®, as well as any product candidates, if approved;
the success and anticipated timing of our clinical studies for our product candidates;
the anticipated start dates, durations and completion dates of our ongoing and future nonclinical and clinical studies;
the anticipated designs of our future clinical studies;
the anticipated future regulatory submissions and the timing of, and our ability to, obtain and maintain, regulatory approvals for our product candidates, including any decision the FDA may make regarding our supplemental New Drug Application (“sNDA”) for MYFEMBREE for the management of moderate to severe pain associated with endometriosis and our sNDA that proposes updates to MYFEMBREE’s United States Prescribing Information (“USPI”) based on safety and efficacy data from the Phase 3 LIBERTY randomized withdrawal study of MYFEMBREE in premenopausal women with heavy menstrual bleeding associated with uterine fibroids for up to two years;
our ability to procure sufficient quantities of commercial relugolix drug substance and drug product from approved third party commercial manufacturing organizations (“CMOs”);
our ability to achieve commercial sales of any approved products, whether alone or in collaboration with others;
our ability to obtain and maintain reimbursement and coverage from government and private payers for our products if commercialized;
the rate and degree of market acceptance and clinical utility of any approved products;
our ability to initiate and continue relationships with third-party clinical research organizations and manufacturers and third-party logistics providers;
our ability to quickly and efficiently identify and develop new product candidates;
25

Table of Contents
the impact of pandemics, epidemics or outbreaks of infectious diseases, including the effect that the COVID-19 pandemic and related public health measures will have on our business operations, financial condition and results of operations;
the impact of various social, political, economic, industry, inflationary, global supply chain, or other market conditions in the U.S. and around the world (including wars and other forms of conflict such as the conflict in Ukraine);
our ability to hire and retain our management and other key personnel;
our ability to obtain, maintain and enforce intellectual property rights for our products and product candidates;
our estimates regarding our results of operations, financial condition, liquidity, capital requirements, access to capital, prospects, growth and strategies;
our ability to continue to fund our operations with the cash, cash equivalents, and marketable securities currently on hand, including our expectations for how long these capital resources will enable us to fund our operations;
our expectations regarding potential future payments that we are eligible to receive from Pfizer Inc. (“Pfizer”) under the Pfizer Collaboration and License Agreement, Gedeon Richter Plc. (“Richter”) under the Richter Development and Commercialization Agreement, and Accord Healthcare, Ltd. (“Accord”) under the Accord License Agreement;
our ability to borrow under the Sumitomo Pharma Co., Ltd. (“Sumitomo Pharma”) Loan Agreement;
third party collaboration or commercialization partners’ abilities to perform their obligations under our agreements with them;
our ability to raise additional capital if needed, on acceptable terms to us;
industry trends;
developments and projections relating to our competitors or our industry; and
the success of competing drugs that are or may become available.
Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors known and unknown that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, particularly in the section titled “Risk Factors” set forth in Part II. Item 1A. of this Quarterly Report, and in our other filings with the SEC. These risks are not exhaustive. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Business Overview
We are a biopharmaceutical company that aspires to redefine care for women and for men through purpose-driven science, empowering medicines, and transformative advocacy. Founded in 2016, we have executed five successful Phase 3 clinical trials across oncology and women’s health leading to two regulatory approvals by the United States (“U.S.”) Food and Drug Administration (“FDA”): (1) ORGOVYX® (relugolix 120 mg), which was approved in the U.S. in December 2020 as the first and only oral gonadotropin-releasing hormone (“GnRH”) receptor antagonist for the treatment of adult patients with advanced prostate cancer; and (2) MYFEMBREE® (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg), which was approved in the U.S. in May 2021 as the first and only once-daily oral GnRH treatment for the management of heavy menstrual bleeding associated with uterine fibroids. In July 2021, the European Commission (“EC”), and in August 2021, the United Kingdom (“U.K.”) Medicines and Healthcare products Regulatory Agency (“MHRA”), approved RYEQO® (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) as the first and only long-term, once-daily oral treatment in the European Union (“EU”) and U.K., respectively, for moderate to severe symptoms of uterine fibroids in adult women of reproductive age.
26

Table of Contents
In April 2022, the EC, and in June 2022, the MHRA, approved ORGOVYX (relugolix 120 mg) as the first and only oral androgen deprivation therapy for advanced hormone-sensitive prostate cancer in the EU and U.K., respectively.
In September 2021, the FDA accepted for review our supplemental New Drug Application (“sNDA”) for MYFEMBREE for the management of moderate to severe pain associated with endometriosis. On May 6, 2022, we and Pfizer announced that the FDA extended the Prescription Drug User Fee Act (“PDUFA”) goal date for this sNDA to August 6, 2022. In June 2022, the FDA accepted for review our sNDA that proposes updates to the USPI based on safety and efficacy data from the Phase 3 LIBERTY randomized withdrawal study of MYFEMBREE in premenopausal women with heavy menstrual bleeding due to uterine fibroids for up to two years. The FDA set a PDUFA goal date of January 29, 2023 for this sNDA. MYFEMBREE is also being evaluated for contraceptive efficacy in women with heavy menstrual bleeding associated with uterine fibroids or endometriosis-associated pain who are 18 to 50 years of age and at risk for pregnancy. We are also developing MVT-602, an investigational oligopeptide kisspeptin-1 receptor agonist, which has completed a Phase 2a study for the treatment of female infertility as a part of assisted reproduction.
Since our inception, we have funded our operations primarily from the issuance and sale of our common shares, from debt financing arrangements, and more recently from the upfront and milestone payments we have received from our collaboration and commercialization partners, as well as net revenues generated from sales of ORGOVYX and MYFEMBREE in the U.S.
Our majority shareholder is Sumitovant Biopharma Ltd. (“Sumitovant”), a wholly-owned subsidiary of Sumitomo Pharma, the name of which prior to April 1, 2022 was Sumitomo Dainippon Pharma Co., Ltd. As of June 30, 2022, Sumitovant directly, and Sumitomo Pharma indirectly, own 50,041,181, or approximately 52.3%, of our outstanding common shares.
First Fiscal Quarter Ended June 30, 2022 Financial Highlights and Recent Business Updates
In this section, we summarize certain of our first fiscal quarter ended June 30, 2022 financial highlights and recent regulatory, clinical and business updates. Additional information about our business, our approved products, and our product candidates is included in Part I, Item 1., “Business,” of our Annual Report, filed with the SEC on May 11, 2022.
Financial Highlights
Total revenues for the three months ended June 30, 2022 were $116.5 million compared to $41.1 million for the three months ended June 30, 2021.
Product revenue, net for the three months ended June 30, 2022, was $41.4 million, compared to $11.6 million for the three months ended June 30, 2021. Net revenue from sales of ORGOVYX and MYFEMBREE were $36.0 million and $4.0 million, respectively, for the three months ended June 30, 2022.
Accord license revenue for the three months ended June 30, 2022, was $50.0 million and consists of the recognition of the upfront payment we received from Accord in May 2022 pursuant to the Accord License Agreement (see Note 8(C) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
Selling, general, and administrative (“SG&A”) expenses for the three months ended June 30, 2022, were $79.0 million, compared to $61.2 million for the three months ended June 30, 2021.
Research and development (“R&D”) expenses for the three months ended June 30, 2022, were $23.9 million, compared to $30.9 million for the three months ended June 30, 2021.
Net loss for the three months ended June 30, 2022, was $21.2 million, or $0.22 per common share, compared to a net loss of $61.7 million, or $0.67 per common share, for the three months ended June 30, 2021.
Cash, cash equivalents, and marketable securities were $358.7 million at June 30, 2022, compared to $434.2 million at March 31, 2022.
See “Results of Operations” below for a discussion of our results of operations for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021.
Recent Business Updates
Regulatory
In June 2022, the FDA accepted for review a sNDA that proposes updates to MYFEMBREE’s USPI based on 2-year safety and efficacy data from the Phase 3 LIBERTY randomized withdrawal study of MYFEMBREE in
27

Table of Contents
premenopausal women with heavy menstrual bleeding associated with uterine fibroids. The FDA set a target action date of January 29, 2023 for this sNDA.
FDA provided labeling comments with respect to the MYFEMBREE sNDA for the management of moderate to severe pain associated with endometriosis. FDA decision is expected by the extended PDUFA goal date of August 6, 2022. Approval would trigger a $100.0 million milestone payment from Pfizer. If approved by the PDUFA goal date, we and Pfizer expect to launch MYFEMBREE in the U.S. for this indication in August 2022.
On April 29, 2022, the EC, and on June 17, 2022, the MHRA, approved ORGOVYX as the first and only oral androgen deprivation therapy for advanced hormone-sensitive prostate cancer in the EU and U.K., respectively. We expect our commercialization partner, Accord, to commence the launch of ORGOVYX for the treatment of advanced hormone-sensitive prostate cancer in Europe in the second half of calendar year 2022.
Clinical
In June 2022, we and Pfizer announced that the results of the Phase 3 SPIRIT 1 and SPIRIT 2 studies of once-daily relugolix combination therapy (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) in women with endometriosis-associated pain were published in The Lancet.
Additional data from the SPIRIT 2-year extension study in women with endometriosis were presented at the European Society of Human Reproduction and Embryology (ESHRE) 2022 Annual Meeting in July 2022. The Society recognized the presentation as the best oral presentation of a clinical topic at the ESHRE 2022 Annual Meeting.
Business Development
We received a $50.0 million upfront payment from Accord pursuant to the exclusive license agreement that we entered into with Accord in May 2022 to commercialize ORGOVYX for the treatment of advanced hormone-sensitive prostate cancer in Europe. Additional information about the Accord License Agreement is included in Note 8(C) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Expected Upcoming Milestones
The following is a summary of certain of our expected upcoming milestones.
We expect the FDA decision for the MYFEMBREE sNDA seeking approval for the management of moderate to severe pain associated with endometriosis by its extended PDUFA goal date of August 6, 2022. Approval would trigger a $100.0 million milestone payment from Pfizer. If approved by the PDUFA goal date, we and Pfizer expect to launch MYFEMBREE in the U.S. for this indication in August 2022.
We expect the European Medicines Agency regulatory submission for RYEQO for the treatment of women with endometriosis-associated pain in the second half of calendar year 2022. Richter will be the sponsor.
We expect to submit New Drug Submissions to Health Canada seeking marketing approval for ORGOVYX for advanced prostate cancer, MYFEMBREE for heavy menstrual bleeding associated with uterine fibroids, and MYFEMBREE for the treatment of endometriosis-associated pain, in Canada in the second half of calendar year 2022.
We expect our commercialization partner, Accord, to commence the launch of ORGOVYX for the treatment of advanced hormone-sensitive prostate cancer in Europe in the second half of calendar year 2022.
We expect the FDA decision for the MYFEMBREE sNDA proposing updates to MYFEMBREE’s USPI based on the safety and efficacy data from the Phase 3 LIBERTY RWS of MYFEMBREE in premenopausal women with heavy menstrual bleeding associated with uterine fibroids for up to two years by the January 29, 2023 PDUFA goal date.






28

Table of Contents
Effects of the COVID-19 Pandemic on our Business
We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business. Our priorities during the COVID-19 pandemic have been to protect the health and safety of our employees, patients and healthcare providers while continuing our mission to redefine care through differentiated solutions in high unmet need areas within women’s health and hormone-sensitive oncology. We believe the safety measures we have taken in response to the COVID-19 pandemic meet or exceed the guidelines established by government and public health officials. Most of our employees worked remotely during much of 2020 and 2021, and many of our employees continue to do so on a part-time or full-time basis, which required us to implement new ways of working and collaborating, including adopting remote working tools to minimize the disruption to our business activities. In April 2022, we reopened our offices, and our employees began to return to work onsite on a voluntary basis with specific safety protocols, including requiring vaccination as a condition of employment, subject to medical and religious exemptions, or as required by law. We have a distributed workforce, and our employees have become accustomed to working remotely and working with others who are working remotely for the past two years. However, as we reopen our offices, we may face operational or other challenges as we and our partners, customers, suppliers, vendors and other parties with whom we do business continue to adjust to a hybrid model of remote and onsite work. These challenges may result in operational inefficiencies, employee dissatisfaction, and distractions to management related to such transition, any of which could harm our business.
As of the date of this Quarterly Report, we do not believe that the COVID-19 pandemic has disproportionately impacted us relative to other companies in which we compete on our ability to advance our clinical studies, our regulatory activities, and our U.S. commercialization activities for ORGOVYX and MYFEMBREE. We and our collaboration partner, Pfizer, commercially launched ORGOVYX and MYFEMBREE in the U.S. in January 2021 and June 2021, respectively. To date, our partner, Richter, has launched RYEQO in a number of countries in Europe.
We believe that the COVID-19 pandemic continues to have an impact on our commercialization activities that is consistent with other companies in our industry. As a result of the COVID-19 pandemic, there have been changes in the practice of medical care and medical education. For example, many healthcare providers initially expanded their utilization of telemedicine to conduct patient visits, and in many regions of the U.S., the ability of commercial and medical affairs field teams to call on healthcare providers was restricted or converted to virtual access. Our oncology sales and medical affairs field teams resumed in-person interactions with healthcare providers in January 2021 and our women’s health sales and medical affairs field teams began in-person interactions with healthcare providers in June 2021. Despite this, some physician’s offices and many hospitals continue to have limited on-site access for pharmaceutical representatives in order to reduce exposure risk for their patients or staff. Conducting these interactions virtually could reduce the number of medical professionals we are able to engage with, limit our ability to engage with important staff members and virtual meetings have been shown to be less impactful than in-person meetings. The cancellation, postponement or virtual formats for medical conferences also limit access to physicians and reduce awareness of information shared at conferences (medical and promotional). In response to the COVID-19 pandemic, healthcare professionals may also reduce staffing and reduce or postpone appointments with patients, or patients may delay, cancel or miss appointments, resulting in fewer prescriptions. Reduced access to healthcare providers may impact or require adjustments to our planned commercialization activities, including the manner in which our field teams engage with healthcare providers and facilities and supplementing field activities with additional marketing spend.
The COVID-19 pandemic has also resulted in fewer opportunities for our medical affairs team to present scientific data as multiple medical conferences were canceled, postponed, or moved to virtual formats during 2020 and 2021, and for our regional medical advisors to engage potential prescribers in scientific exchange. Many conferences are planning to conduct in-person meetings in 2022, while continuing to offer virtual participation as an option. To date, we have not experienced supply constraints, and we believe we have procured sufficient quantities of relugolix drug substance to meet our U.S. ORGOVYX and MYFEMBREE commercialization plans.
Future developments regarding COVID-19 remain uncertain and the extent to which the COVID-19 pandemic ultimately impacts our business, financial condition or results of operations will depend on numerous factors, including the magnitude and duration of the pandemic, the distribution, acceptance and effectiveness of COVID-19 vaccines and treatments, the impact of new and potentially more virulent or transmissible variants of the coronavirus (e.g., the Delta and Omicron variants, respectively), the duration of governmental measures to mitigate the pandemic and how quickly and to what extent normal economic and operating conditions can resume, all of which remain uncertain and difficult to predict. Additionally, even after normalcy resumes, there will likely be some permanent changes to how healthcare is provided, how healthcare providers engage with our industry and perhaps how conferences are conducted. None of these changes can be anticipated at this point, nor can the potential impact on our business. As such, it is uncertain as to the full magnitude that the COVID-19 pandemic will have on our financial condition, liquidity, and future results of operations.
29

Table of Contents
Refer to the risk factor titled “Business interruptions resulting from effects of pandemics or epidemics, such as the COVID-19 pandemic, may materially and adversely affect our business and financial condition,” as well as other risk factors included in the section titled “Risk Factors” set forth in Part II. Item 1A of this Quarterly Report.
Effects of the Russian Federation-Ukraine Conflict on our Business
The uncertain nature, magnitude, and duration of hostilities stemming from the conflict in Ukraine, including the potential effects of sanctions, retaliatory cyber-attacks on the world economy and markets, and potential shipping delays, have contributed to increased market volatility and uncertainty, which could have an adverse impact on macroeconomic factors that affect our business. As a result of the conflict in Ukraine, the U.S., U.K., and the EU governments, among others, have developed and coordinated economic and financial sanctions. As the conflict in Ukraine continues, there is no certainty regarding whether such governments or other governments will impose additional sanctions, or other economic or military measures against the Russian Federation.

The impact of the conflict in Ukraine, including economic sanctions or additional war or military conflict, as well as potential responses to them by the Russian Federation, is currently unknown and they could adversely affect our business, supply chain, clinical studies, suppliers or customers. In addition, the continuation of the conflict in Ukraine by the Russian Federation could lead to other disruptions, instability and volatility in global markets and industries that could negatively impact our operations. It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, the availability and cost of raw materials and fuel, supplies, freight and labor, inflation, and fluctuations in currency exchange rates, all of which could impact our business, financial condition and results of operations.

Refer to the risk factor titled “The conflict between the Russian Federation and Ukraine and other government policies and actions could negatively affect our clinical trial sites in Ukraine. We and/or our collaboration or commercialization partners may not be able to launch our commercial products in the Russian Federation, Ukraine or other regions which may negatively affect our financial results. The uncertain nature, magnitude, and duration of hostilities stemming from such conflict may result in changes in the world’s macroeconomic conditions which negatively affect our business operations.”
Certain Components of our Results of Operations
Revenues
We have two FDA-approved products that generate product revenue in the U.S: ORGOVYX and MYFEMBREE. We record product revenue net of estimated discounts, chargebacks, rebates, product returns, and other gross-to-net revenue deductions. For the three months ended June 30, 2022, the gross-to-net deduction for ORGOVYX was approximately 44.5%, and we expect it to be in the low-to-mid 40%’s for the remainder of fiscal year 2022. Product revenue, net also includes revenues related to product supply to Richter as well as royalties on net sales of RYEQO in Richter’s Territory.
Our Pfizer collaboration revenue consists of the partial recognition of the upfront payment we received from Pfizer upon entering into the Pfizer Collaboration and License Agreement in December 2020 and of the regulatory milestone payment from Pfizer that was triggered upon the FDA approval of MYFEMBREE for the management of heavy menstrual bleeding associated with uterine fibroids on May 26, 2021.
Our Accord license revenue consists of the recognition of the upfront payment we received from Accord in May 2022 pursuant to the Accord License Agreement. We recognized the upfront payment as revenue upon delivery of the license to Accord during the three months ended June 30, 2022.
See Note 8 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding the Pfizer Collaboration and License Agreement and the Accord License Agreement.
Cost of Product Revenue
Our cost of product revenue is composed of the cost of goods sold and royalty expense payable to Takeda. Our cost of goods sold consists of raw materials, third-party manufacturing costs to manufacture the raw materials into finished product, freight, and indirect overhead costs associated with sales of ORGOVYX and MYFEMBREE in the U.S. and sales of product supply to Richter. The cost of inventories written down as a result of excess, obsolescence, or other reasons is also charged to cost of goods sold. Our royalty expense consists of royalties on net sales of relugolix payable to Takeda pursuant to the terms of the Takeda License Agreement (see Note 9(D) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
30

Table of Contents
Collaboration Expense to Pfizer
Our collaboration expense to Pfizer consists of Pfizer’s 50% share of net profits from sales of ORGOVYX and MYFEMBREE in the U.S. (see Note 8(B) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
Selling, General and Administrative Expenses
SG&A expenses consist primarily of personnel costs, including salaries, sales incentive compensation, bonuses, fringe benefits, and share-based compensation for our executive, finance, human resources, legal, information technology, commercial operations, marketing, market access, sales, and other administrative functions. Our SG&A expenses also include marketing programs, patient assistance and support programs for qualified uninsured and underinsured patients, promotion and advertising, conferences, congresses, travel expenses, professional fees for legal, business development, accounting, auditing and tax services, and costs related to rent and facilities, insurance, information technology, commercial operations, and general overhead. Our SG&A expenses also include related party expenses pursuant to our agreements with Sunovion and Sumitovant (see Note 5 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
SG&A expenses in future quarters of fiscal year 2022 are expected to be higher than the first quarter of fiscal year 2022 driven largely by marketing and promotional expenses to support the ongoing commercialization of ORGOVYX and MYFEMBREE in the U.S., including annualization of the MYFEMBREE marketing and promotional spend and targeted patient activation primarily for MYFEMBREE. The timing and magnitude of our SG&A expenses are primarily dependent on our commercial success and sales growth of ORGOVYX and MYFEMBREE, as well as the timing of any new indications or product launches and other potential business and operational activities. We expect that certain SG&A expenses will be shared equally with Pfizer pursuant to the Pfizer Collaboration and License Agreement (see Note 8(B) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
Research and Development Expenses
R&D activities have been, and will continue to be, central to our business model. Our R&D expenses to date have been primarily attributable to the clinical development of our product candidates including the conduct of multiple Phase 3 and earlier clinical studies, the expansion of our team, and the initiation of activities in preparation for our anticipated commercial launches such as the establishment of our medical affairs function, as well as regulatory and certain manufacturing activities. Our R&D expenses include program-specific costs, as well as costs that are not allocated to a specific program.
Our program-specific costs primarily include third-party costs, which include expenses incurred under agreements with CROs and CMOs, the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, manufacturing costs in connection with producing materials for use in conducting nonclinical and clinical studies, as well as costs related to pre-commercial manufacturing activities and regulatory submissions, and other third-party expenses directly attributable to the development of our product candidates.
Our unallocated R&D costs primarily include employee-related expenses, such as salaries, share-based compensation, fringe benefits and travel for employees engaged in R&D activities including clinical operations, biostatistics, regulatory, and medical affairs, and the cost of contractors and consultants who assist with R&D activities not specific to a program, and costs associated with nonclinical studies.

The duration, costs and timing of clinical studies and development of our product candidates will depend on a variety of factors that include, but are not limited to: the number of studies required for approval; the per patient study costs; the number of patients who participate in the studies; the number of sites included in the studies; the countries in which the studies are conducted; the length of time required to recruit and enroll eligible patients; the number of patients who fail to meet the study’s inclusion and exclusion criteria; the number of study drug doses that patients receive; the drop-out or discontinuation rates of patients; the potential additional safety monitoring or other studies requested by regulatory agencies; the duration of patient follow-up; the timing and receipt of regulatory approvals; the costs of clinical study materials; and the efficacy and safety profile of the product candidate.

In addition, the probability of commercial success for ORGOVYX, MYFEMBREE or for any of our current or potential future product candidates, if approved, will depend on numerous factors, including competition, manufacturing capability and commercial viability. Our R&D activities may be subject to change from time to time as we evaluate our priorities and available resources.

We expect our R&D expenses in the future quarters of fiscal year 2022 to be higher than the first quarter of fiscal year 2022, driven largely by spending on relugolix lifecycle opportunities, such as the Phase 3 SERENE study, as well as on post-
31

Table of Contents
marketing requirements as agreed upon with the FDA. We expect that certain R&D expenses will be shared equally with Pfizer pursuant to the Pfizer Collaboration and License Agreement (see Note 8(B) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
Interest Expense
Our interest expense consists of related party interest expense pursuant to the Sumitomo Pharma Loan Agreement, which bears interest at a variable rate per annum equal to 3-month London Interbank Offered Rate (“LIBOR”) plus a margin of 3% payable on the last day of each calendar quarter (see Note 5 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report), and the accretion of the financing component of the cost share advance from Pfizer (see Note 8(B) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report). Fluctuations in 3-month LIBOR could negatively impact our financial results.
Interest Income
Our interest income consists primarily of interest earned and the accretion of discounts to maturity for cash equivalents and marketable securities.
Income Tax Expense
Our income tax expense currently is primarily attributable to U.S. federal, state and local taxes. For the three months ended June 30, 2022, our income tax expense reflects the changed requirement under Internal Revenue Code Section 174 to capitalize and subsequently amortize over 5 years R&D expenditures, pursuant to changes made to Internal Revenue Code Section 174 effective for years beginning after December 31, 2021, under the Tax Cuts and Jobs Act 2017 (“TCJA”). Previously, section 174 allowed for immediate expensing for accounting periods beginning before December 31, 2021. Although it is understood that Congress is considering legislation that would extend the TCJA relief by one or more years, the possibility that this will happen is uncertain and we are required to calculate our income tax liabilities based on the provisions of current law. We expect our total tax expense for fiscal 2022 to be approximately $23.0 million to $25.0 million.
Results of Operations
The following table summarizes our results of operations for the three months ended June 30, 2022 and 2021 (in thousands):
Three Months Ended June 30,
 20222021
Revenues:
Product revenue, net$41,351 $11,554 
Pfizer collaboration revenue25,141 29,509 
Accord license revenue50,000 — 
Total revenues116,492 41,063 
Operating costs and expenses:
Cost of product revenue4,915 1,032 
Collaboration expense to Pfizer18,016 5,261 
Selling, general and administrative79,032 61,212 
Research and development23,890 30,880 
Total operating costs and expenses125,853 98,385 
Loss from operations(9,361)(57,322)
Interest expense4,200 3,505 
Interest income(486)(78)
Loss before income taxes(13,075)(60,749)
Income tax expense 8,164 911 
Net loss$(21,239)$(61,660)
32

Table of Contents
Revenues
The following table provides information about our revenues for the three months ended June 30, 2022 and 2021 (in thousands):
Three Months Ended June 30,
20222021
Revenues:
Product revenue, net:
ORGOVYX$36,034 $10,479 
MYFEMBREE3,999 1,075 
Richter product supply and royalties1,318 — 
Total product revenue, net41,351 11,554 
Pfizer collaboration revenue:
Amortization of upfront payment20,974 20,974 
Amortization of regulatory milestone4,167 8,535 
Total Pfizer collaboration revenue25,141 29,509 
Accord license revenue50,000 — 
Total revenues$116,492 $41,063 
Product Revenue, net
We began generating product revenue from sales of ORGOVYX and MYFEMBREE in the U.S. in January 2021 and June 2021, respectively. We record product revenue net of estimated discounts, chargebacks, rebates, product returns, and other gross-to-net revenue deductions.
For the three months ended June 30, 2022, product revenue, net also includes revenues related to product supply to Richter to support their European launches of RYEQO of $1.1 million, as well as royalties on net sales of RYEQO in Richter’s Territory of $0.2 million. There were no such revenues recorded in the three months ended June 30, 2021.
For the three months ended June 30, 2022, compared to the year ago period, product revenue, net increased by $29.8 million primarily as a result of higher sales of ORGOVYX and MYFEMBREE in the U.S.
Pfizer Collaboration Revenue
Pfizer collaboration revenue for the three months ended June 30, 2022 and 2021 consists of the partial recognition of the upfront payment we received from Pfizer upon entering into the Pfizer Collaboration and License Agreement in December 2020 and of the regulatory milestone payment from Pfizer that was triggered upon the FDA approval of MYFEMBREE for the management of heavy menstrual bleeding associated with uterine fibroids on May 26, 2021.
Accord License Revenue
Accord license revenue for the three months ended June 30, 2022 consists of the recognition of the upfront payment we received from Accord in May 2022 pursuant to the Accord License Agreement. There was no Accord license revenue for the three months ended June 30, 2021.
Cost of Product Revenue
For the three months ended June 30, 2022, our cost of product revenue was $4.9 million, consisting of $1.8 million of cost of goods sold and $3.1 million of royalty expense to Takeda. The $3.9 million increase in our cost of product revenue for the three months ended June 30, 2022, compared to the year ago period, was due to increases in cost of goods sold and royalty expense to Takeda as a result of higher sales of ORGOVYX and MYFEMBREE in the U.S. during the three months ended June 30, 2022, and sales of product supply to Richter, for which there were no such sales in the year ago period.
Collaboration Expense to Pfizer
For the three months ended June 30, 2022, and 2021, our collaboration expense to Pfizer was $18.0 million and $5.3 million, respectively, and represents Pfizer’s 50% share of net profits from the sales of ORGOVYX and MYFEMBREE in the U.S. Collaboration expense to Pfizer increased by approximately $12.7 million for the three months ended June 30, 2022, compared
33

Table of Contents
to the year ago period, primarily due to an increase in net profits generated from sales of ORGOVYX and MYFEMBREE in the U.S.
Selling, General and Administrative Expenses
SG&A expenses increased by $17.8 million, to $79.0 million, in the three months ended June 30, 2022 compared to $61.2 million in the year ago period. SG&A expenses are presented net of cost sharing with Pfizer pursuant to the terms of the Pfizer Collaboration and License Agreement.
The most significant components of the $17.8 million net increase in SG&A expenses include the following:
$8.0 million increase in commercialization expenses, net of cost sharing with Pfizer, to support our U.S. commercialization activities for ORGOVYX and MYFEMBREE;
$6.4 million increase in personnel expenses, including personnel expenses related to our oncology and women’s health sales forces;
$3.7 million increase in general overhead, administrative, information technology, and other expenses to support our organizational growth, as well as a banker fee associated with the Accord License Agreement;
$1.2 million decrease in share-based compensation, as the three months ended June 30, 2021 included approximately $1.4 million related to the settlement and remeasurement of our former Principal Executive Officer’s equity awards (see Note 7(C) to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
Research and Development Expenses
For the three months ended June 30, 2022 and 2021, our R&D expenses consisted of the following (in thousands):
Three Months Ended June 30,
20222021Change
Program-specific costs:
Relugolix$843 $7,191 $(6,348)
MVT-60225 63 (38)
Unallocated costs:
Personnel expense16,650 14,764 1,886 
Share-based compensation3,666 3,957 (291)
Other expense2,706 4,905 (2,199)
Total R&D expenses$23,890 $30,880 $(6,990)
R&D expenses decreased by $7.0 million, to $23.9 million, in the three months ended June 30, 2022, compared to $30.9 million in the three months ended June 30, 2021. The decrease primarily reflects a reduction in clinical study costs due to the completion and wind down of our Phase 3 LIBERTY, HERO, and SPIRIT studies.
Interest Expense
Interest expense was $4.2 million and $3.5 million for the three months ended June 30, 2022, and 2021, respectively, and consists of interest expense associated with the Sumitomo Pharma Loan Agreement and accretion of the financing component of the cost share advance from Pfizer. Interest expense associated with the Sumitomo Pharma Loan Agreement increased $0.7 million to $3.6 million in the three months ended June 30, 2022 compared to $2.9 million in the year ago period, as a result of an increase in 3-month LIBOR as compared to the year ago period. Accretion of the financing component of the cost share advance from Pfizer was $0.6 million for both the three months ended June 30, 2022 and 2021.
34

Table of Contents
Interest Income
Interest income was $0.5 million and $0.1 million for the three months ended June 30, 2022, and 2021, respectively, derived from our investments in marketable securities and cash equivalents.
Income Tax Expense
Our income tax expense was $8.2 million and $0.9 million for the three months ended June 30, 2022, and 2021, respectively. Our effective tax rate for the three months ended June 30, 2022, and 2021 was (62.44)% and (1.50)%, respectively. Key determinative factors of our effective tax rate include the allocation of our earnings by jurisdiction and a valuation allowance that currently eliminates all of our net deferred tax assets.
The change in our effective tax rate for the three months ended June 30, 2022, compared to the corresponding prior year period was driven primarily by the changed requirement under Internal Revenue Code Section 174 to capitalize and subsequently amortize over 5 years R&D expenditures, pursuant to changes made to Internal Revenue Code Section 174 effective for years beginning after December 31, 2021, under the Tax Cuts and Jobs Act 2017, in combination with our current policy to make a full valuation allowance for our deferred tax assets (see Note 6 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report).
Liquidity and Capital Resources
We have incurred losses since our inception and have an accumulated deficit of $1.27 billion as of June 30, 2022, compared to $1.25 billion as of March 31, 2022.
Sources of Liquidity
Since our inception, we have funded our operations primarily from the issuance and sale of our common shares, from debt financing arrangements, and more recently from upfront and milestone payments we have received from our collaboration and commercialization partners, as well as net revenues generated from sales of ORGOVYX and MYFEMBREE in the U.S.
As of June 30, 2022, we had cash, cash equivalents, marketable securities, and amounts available to us under the Sumitomo Pharma Loan Agreement of $400.0 million, consisting of $358.7 million of cash, cash equivalents, and marketable securities and $41.3 million of borrowing capacity available to us under the Sumitomo Pharma Loan Agreement. Cash, cash equivalents, marketable securities, and amounts available to us under the Sumitomo Pharma Loan Agreement as of March 31, 2022 was $475.5 million, consisting of $434.2 million of cash, cash equivalents, and marketable securities and $41.3 million of borrowing capacity available to us under the Sumitomo Pharma Loan Agreement. Additional funds under the Sumitomo Pharma Loan Agreement may be drawn down by us no more than once per calendar quarter, subject to certain terms and conditions, including consent of our board of directors.
We are eligible to earn additional payments from our collaboration and commercialization partners, including:
up to $3.6 billion of milestone payments from Pfizer, including a regulatory milestone of $100.0 million upon the FDA approval of MYFEMBREE for endometriosis, and tiered sales milestones of up to $3.5 billion upon reaching certain thresholds of annual net sales for oncology and the combined women’s health indications in the Co-Promotion Territory. We and Pfizer equally share profits and certain expenses in the Co-Promotion Territory;
up to $122.5 million of milestone payments, including regulatory milestones of up to $15.0 million and tiered sales milestones of up to $107.5 million upon reaching certain thresholds of annual net sales in Richter’s Territory, and tiered royalties on net sales in Richter’s Territory; and
up to $90.5 million of commercial launch, sales-based, and other milestones and tiered royalties from the high-teens to mid-twenties on net sales of ORGOVYX in Accord’s territories.
Funding Requirements
We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our anticipated operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of this Quarterly Report. This estimate is based on our current assumptions, including assumptions related to our ability to manage our spend, that might prove to be wrong, and we could use our available capital resources sooner than we currently expect. In future periods, if our cash, cash equivalents, marketable securities, and amounts that we expect to generate from product sales and/or third-party collaboration payments, are not sufficient to enable us to fund our operations, we may need to raise additional funds in the form of equity, debt, or from other sources. In addition, we may choose to raise additional funds in the form of equity,
35

Table of Contents