Discontinued Operations

3 Months Ended

Jun. 30, 2025

Note 6—Discontinued Operations

On October 28, 2024, the Company completed the sale of its entire equity interest in its majority-owned subsidiary, Dermavant, to Organon. The Dermavant Transaction was made pursuant to the Merger Agreement between Dermavant, Organon, Merger Sub, and the Company. Pursuant to the Merger Agreement, Organon agreed to acquire Dermavant for cash consideration comprising an upfront payment, regulatory and sales milestones, and royalties. Refer to Note 6, “Discontinued Operations” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025 for further information regarding the Dermavant Transaction.

The Company concluded that Dermavant met the discontinued operations accounting criteria in the second fiscal quarter of 2024. As the Dermavant Transaction closed in October 2024, no Dermavant assets or liabilities were recognized on the balance sheet as of March 31, 2025 or June 30, 2025. Financial results of Dermavant are presented as “Income from discontinued operations, net of tax” in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2024.

The following table presents components of discontinued operations included in “Income from discontinued operations, net of tax” (in thousands):

	June 30, 2024
Product revenue, net	$	18,367
License, milestone and other revenue		28,775
Revenue, net		47,142
Operating expenses:
Cost of revenues		3,765
Research and development		12,701
Selling, general and administrative		48,626
Total operating expenses		65,092
Loss from operations		(17,950	)
Change in fair value of debt		(119,352	)
Interest expense⁽¹⁾		13,399
Other income, net		(1,782	)
Income from discontinued operations before income taxes		89,785
Income tax expense		692
Income from discontinued operations, net of tax	$	89,093

Loss from discontinued operations before income taxes attributable to noncontrolling interests	$	(155	)
Income from discontinued operations before income taxes attributable to Roivant Sciences Ltd.		89,940
Income from discontinued operations before income taxes	$	89,785

⁽¹⁾ Interest expense consists of interest payments related to outstanding debt held by Dermavant as well as the associated non-cash amortization of debt discounts and issuance costs.

In the accompanying condensed consolidated statements of cash flows, the cash flows from discontinued operations are not separately classified. The following table summarizes significant non-cash operating and investing items from discontinued operations for the three months ended June 30, 2024 (in thousands):

	June 30, 2024
Share-based compensation	$	2,780
Change in fair value of debt	$	(119,352	)
Depreciation and amortization	$	2,834