Roivant Sciences Ltd.ROIV
Roivant Sciences Ltd. Fair Value Disclosure
Fair Value Measurements
Recurring Fair Value Measurements
The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and 2025, by level, within the fair value hierarchy (in thousands):
| As of March 31, 2026 | As of March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Balance as of March 31, 2026 | Level 1 | Level 2 | Level 3 | Balance as of March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | 1,374,706 | $ | — | $ | — | $ | 1,374,706 | $ | 2,621,457 | $ | — | $ | — | $ | 2,621,457 | |||||||||||||||||||||||||||||||
| Corporate bonds | — | 748,422 | — | 748,422 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | — | 2,124,179 | — | 2,124,179 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Investment in Datavant Class A units | — | — | 233,171 | 233,171 | — | — | 167,361 | 167,361 | |||||||||||||||||||||||||||||||||||||||
| Investment in Arbutus common shares | 174,814 | — | — | 174,814 | 135,578 | — | — | 135,578 | |||||||||||||||||||||||||||||||||||||||
| Total assets at fair value | $ | 1,549,520 | $ | 2,872,601 | $ | 233,171 | $ | 4,655,292 | $ | 2,757,035 | $ | — | $ | 167,361 | $ | 2,924,396 | |||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Liability instruments measured at fair value(1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 9,981 | $ | 9,981 | |||||||||||||||||||||||||||||||
| $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 9,981 | $ | 9,981 | ||||||||||||||||||||||||||||||||
(1)At March 31, 2025, Level 3 includes the fair value of the Earn-Out Shares of $10.0 million.
There were no transfers into or out of Level 3 during the years ended March 31, 2026 and 2025.
Level 3 Disclosures
The Company measures its Level 3 assets and liabilities at fair value based on significant inputs not observable in the market, which causes them to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the Level 3 assets and liabilities uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company evaluates these assumptions and estimates on an ongoing basis as additional data impacting the assumptions and estimates is obtained. Changes in the fair value related to updated assumptions and estimates are recorded within the consolidated statements of operations at the end of each reporting period.
The fair value of Level 3 assets and liabilities may change significantly as additional data is obtained, impacting the Company’s assumptions regarding probabilities of potential scenarios used to estimate fair value. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact the Company’s results of operations in future periods.
The changes in fair value of the Level 3 assets during the years ended March 31, 2026 and 2025 were as follows (in thousands):
| Balance at March 31, 2024 | $ | 147,526 | |||
| 19,835 | |||||
| Balance at March 31, 2025 | 167,361 | ||||
| 65,810 | |||||
| Balance at March 31, 2026 | $ | 233,171 | |||
The changes in fair value of the Level 3 liabilities during the years ended March 31, 2026 and 2025 were as follows (in thousands):
| Balance at March 31, 2024 | $ | 25,737 | |||
| (15,756) | |||||
| Balance at March 31, 2025 | 9,981 | ||||
| 47,704 | |||||
| Reclassification to additional paid-in capital upon vesting of Earn-Out Shares | (57,685) | ||||
| Balance at March 31, 2026 | $ | — | |||
Investment in Datavant
The Company elected the fair value option to account for its investment in Datavant. The estimate of fair value for this investment was determined using the income approach, market approach, and implementation of the option pricing method (“OPM”). The income approach is based on the future expected cash flows, which are derived from certain assumptions attributable to Datavant including estimates of revenue growth rate, earnings before interest, taxes, depreciation and amortization and terminal growth rate. These expected cash flows are then discounted to their present value using a discount rate that reflects the risk and time value of money. The market approach estimates value by using valuation multiples derived from the stock prices of comparable publicly traded companies to determine the company’s equity value. The OPM allows for the allocation of a company’s equity value among the various equity capital owners (preferred and common shareholders). The OPM uses the preferred shareholders’ liquidation preferences, participation rights, dividend policy, and conversion rights to determine how proceeds from a liquidity event shall be distributed among the various ownership classes at a future date. The fair value was calculated using significant unobservable inputs including the following:
| Point Estimate Used | ||||||||||||||
| Input | As of March 31, 2026 | As of March 31, 2025 | ||||||||||||
| Volatility | 90.0% | 110.0% | ||||||||||||
| Discount rate | 11.8% | 13.0% | ||||||||||||
Earn-Out Shares
Prior to vesting during the quarter ended December 31, 2025, the fair value of the Earn-Out Shares issued as part of the Business Combination was calculated using the Monte Carlo simulation method under the income approach. Refer to Note 13, “Earn-Out Shares, Public Warrants and Private Placement Warrants” for additional details. Significant unobservable inputs used to calculate the fair value of the Earn-Out Shares included the following:
| Point Estimate Used | ||||||||
| Input | As of March 31, 2025 | |||||||
| Volatility | 38.4% | |||||||
| Risk-free rate | 3.96% | |||||||
As of March 31, 2025, the Company began using a blend of its historical and implied volatility, rather than exclusively relying on historical volatility, to estimate the expected volatility assumption of various equity instruments issued by the Company. Due to changes in the Company’s capital position, the Company believes this methodology better reflects its expected future volatility.
As of March 31, 2025, the fair value of the Earn-Out Shares was $10.0 million, which was included in “Liability instruments measured at fair value” in the accompanying consolidated balance sheets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 20, 2026 | Showing above |
| 2025 | May 29, 2025 | |
| 2024 | May 30, 2024 | |
| 2023 | Jun 28, 2023 | |
| 2022 | Jun 28, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.