- Sumitomo Dainippon Pharma will pay Roivant Sciences $3 billion for its stake in five of the holding company's subsidiaries, and take a more than 10% stake in the parent company founded by unorthodox CEO Vivek Ramaswamy.
- Through the alliance, Sumitomo Dainippon additionally gains the option to acquire Roivant's stake in six more subsidiaries with up to 25 pipeline projects.
- The Japanese pharma is looking to replace lost revenue from the looming expiration of U.S. patent expiration on its biggest seller, the antidepressant Latuda, which had sales of more than $1.7 billion in the company's 2018 fiscal year.
Roivant's strategy of creating subsidiaries focused on a single therapeutic area gives it strategic flexibility, both in terms of raising money as well as partnerships or trade sales. Sumitomo Dainippon didn't want just one of Roivant's so-called vants, however. It wanted five.
As part of the $3 billion deal, Sumitomo Dainippon gets Roivant's ownership stake in women's health and prostate cancer project Myovant; urinary diseases subsidiary Urovant; pediatric rare diseases company Enzyvant; and respiratory rare diseases spin-off Altvant.
A fifth company will be named by the time the two sides sign the agreement, expected by the end of October. One of the Roivant assets is Axovant Gene Therapies, which is in a sought-after field, although Roivant owns a total of 16 companies.
The structure of the deal will likely disappoint investors of the Roivant companies in the deal that so far have become publicly traded entities. These include Myovant and Urovant, which have lost 38% and 22% of their value respectively since their public listings.
Those investors probably would have preferred a deal that included a complete asset sale, instead of just Roivant's ownership stake. Shares in Myovant fell 4% today and Urovant's rose 2% today.
The deal includes three advanced-stage products: Enzyvant's RVT-802 for pediatric congenital athymia, now before the Food and Drug Administration; Myovant's relugolix for uterine fibroids, and Urovant's vibegron for overactive bladder.
Only the first of these is a novel project, a tissue-based regenerative therapy aimed at restoring T cell function in children born without a thymus. Relugolix has been approved in Japan as Relumina for Takeda, while vibegron has been approved in Japan as Beova for Kyorin and Kissei. Merck & Co licensed Vibegron to Kyorin.
The deal includes a stake of more than 10% in Roivant, which is not publicly traded, as well as access to Roivant's drug discovery and digital technology platforms and options to buy the ownership stake in six more Roivant companies.