Myovant Sciences, a drugmaker focused on prostate cancer and women’s health, has agreed to be fully bought by its majority owner in a deal that values the Switzerland-based company at $2.9 billion.
The acquisition would have Sumitomo Pharma, a Japanese firm that already holds a 52% stake in Myovant, pay $27 in cash for each share it doesn’t already own. The deal itself is expected to total $1.7 billion and close sometime between January and March next year, according to the companies.
In 2019, Sumitomo dropped $3 billion to take controlling stakes in Myovant as well as four other companies established by Roivant Sciences, which was formed five years earlier by the prominent life sciences investor Vivek Ramaswamy. Unlike most other biotechnology startups, Roivant employs a hub-and-spoke model that revolves around a series of subsidiaries which each have narrowly-defined research targets.
Roivant has created more than a dozen of these subsidiaries, which have attracted attention from public investors and large pharmaceutical companies alike. Pfizer, for instance, has partnered with Myovant on the development and commercialization of a medicine called relugolix, which is approved in the U.S. as a treatment for advanced prostate cancer and, in combination with other drugs, for symptoms of uterine fibroids and endometriosis.
Like Pfizer, Sumitomo sees value in relugolix, which is sold under the brand names Orgovyx and Myfembree depending on the indication. Hiroshi Nomura, the company’s CEO, said in an Oct. 23 statement that those two products “have substantial potential,” and that taking full control of Myovant will allow Sumitomo to keep growing by making “full use” of the cash flow they generate.
In Myovant’s last fiscal year, which ended March 31, 2022, the company recorded $94 million in net product revenue. It also ended the period with $407 million in cash and cash equivalents.
Sumitomo previously offered to buy all the Myovant shares it didn’t already own for $22.75 apiece — a 27% premium to the target company’s closing share price on Sept. 30. But Myovant leadership, following an appraisal from a special committee of independent directors, quickly declined that proposal, concluding that its $2.4 billion valuation of the company was too low.
Sumitomo’s revised offer is significantly higher, reflecting around a 50% premium to the Sept. 30 closing price.
"After careful consideration and consultation with our legal and financial advisors, the Special Committee believes that this transaction provides immediate and compelling value to Myovant's minority shareholders, as well as positioning the company for continued growth, and is in the best interest of Myovant and its shareholders," said Mark Guinan, Chairman of the Special Committee, in the statement.
Sumitomo said that its board has approved the acquisition. In 2020, the company took full ownership over another Roivant subsidiary, Urovant, that specializes in urinary disease research and has a marketed medicine for overactive bladder.