By Mackenzie Tatananni

A clinical breakthrough trumped fiscal pain for Roivant Sciences and its subsidiary Immunovant on Wednesday as investors traded weak quarterly results for compelling study data.

For Roivant's March quarter, revenue came in at $2.52, short of Wall Street's $3.56 million consensus. Immunovant's earnings told a similar story: The company posted a loss of $147.9 million, or 73 cents a share, in its latest quarter. Analysts had anticipated a per-share loss of 59 cents.

But analysts brushed these results aside to focus on fresh trial data for Immunovant's lead pipeline candidate, IMVT-1402. Researchers are testing the drug's efficacy in patients with difficult-to-treat rheumatoid arthritis known as D2T RA; the treatment is delivered as a subcutaneous injection once a week.

IMVT-1402 belongs to a class of targeted therapeutics that includes approved drugs from Johnson & Johnson and Dutch biotech Argenx. Although the class could yield up to $78 billion in peak annual sales over time, "this potential is not reflected in market expectations," Goldman Sachs analyst Corinne Johnson wrote last month.

Enter Immunovant. The clinical-stage biotech has yet to commercialize a single drug. However, IMVT-1402 is seen as a cornerstone of its portfolio, and is being developed as a next-generation treatment across multiple autoimmune disorders.

The latest trial centered on patients with D2T RA who failed to see improvement in their symptoms after trying at least two advanced therapies. Of the 170 patients who began the study, 165 were fully evaluated.

A 600-milligram dose of IMVT-1402 yielded "clinically meaningful response rates" after 16 weeks of treatment, Immunovant said. Nearly 73% of patients achieved at least a 20% improvement in tender and swollen joints, more than half saw a 50% improvement, and 36% saw a 70% improvement.

Immunovant expects to provide further updates in the second half of the year. The biotech noted that its other clinical trials remain on track as it looks to expand the treatment into other indications. Perhaps most important for investors, Immunovant says its cash position provides sufficient runway to launch IMVT-1402 in Graves' disease.

Immunovant stock surged 31% on Wednesday, heading for the largest single-day percent increase since September 2023. It wasn't the only stock on the rise: Roivant shares jumped 14% to $32.11, putting them on pace for a record close.

What's good for Immunovant is invariably good for its parent company. Leerink Partners analyst David Risinger highlighted this lockstep relationship on Wednesday, as he reiterated an Outperform rating on Roivant stock with no rating on Immunovant.

The latest data were "highly compelling," Risinger wrote. In his view, IMVT-1402 could corner the market for D2T RA, given the drug's "differentiated mechanism and compelling efficacy in people who have failed multiple prior therapies."

Goldman's Johnson is just as bullish. She has said that Roivant, Immunovant, and Argenx are "best-positioned" as the potential of this drug class comes to fruition in the near-to-immediate term.

Johnson & Johnson is also a key beneficiary in this space, the analyst noted last month, citing its leadership in hematology and head start in potential markets like Sjogren's disease and systemic lupus erythematosus.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 20, 2026 11:38 ET (15:38 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.