About a year ago, drugmaker Roivant Sciences set up a new subsidiary around a promising inflammatory disease treatment it had just partially licensed from Pfizer.
On Monday, Roivant, a biotechnology company founded a decade ago by U.S. presidential candidate Vivek Ramaswamy, said it will sell that subsidiary to Roche for approximately $7.1 billion.
The deal, and its quick and spectacular return for Roivant, spotlights a pharmaceutical industry gold rush for more effective drugs to treat immune system conditions. It follows Sanofi’s alliance with Teva Pharmaceutical on a medicine similar to Roivant’s, Merck & Co.’s $10.8 billion acquisition of Prometheus Biosciences and Takeda’s $4 billion purchase of a psoriasis medicine from Nimbus Therapeutics.
Through the deal, Roche will acquire the subsidiary, called Telavant, and gain rights to the drug in the U.S. and Japan. The Swiss pharmaceutical company is also promising a “near-term” milestone of $150 million.
Code-named RVT-3101, Roivant’s treatment is being studied for inflammatory bowel disease, a common gut ailment that encompasses ulcerative colitis and Crohn’s disease. It works by blocking a regulatory protein known as TL1A, the same target as Prometheus’ and Teva’s drugs.
Mid-stage trial results in ulcerative colitis showed that, after 14 weeks, Roivant’s treatment cleared up signs of disease in about 30% of patients treated with the dose intended for further study. The drug also led to improvements on imaging exams in slightly more than one-third of trial participants.
More recent data unveiled by Roivant in June proved those benefits endured and even grew through one year, raising expectations among Wall Street analysts of the drug’s blockbuster potential.
“We strongly believe this novel TL1A directed antibody has the transformational potential to make a significant difference for patients living with inflammatory bowel disease and potentially other diseases,” said Roche CEO Thomas Schinecker in a statement.
Roche plans to advance the drug into a global Phase 3 clinical trial in inflammatory bowel disease “as soon as possible.” The companies expect their deal to close in either the fourth quarter or the first quarter of next year.
It’s not unusual for drugs cast off by one pharma to later end up at another. But the speed by which RVT-3101 passed from Pfizer to Roivant and then to Roche, all while increasing dramatically in value, is.
Still, Pfizer retained 25% ownership in the subsidiary Roivant set up around the drug — a stake now worth about $1.7 billion — as well as the rights to sell it outside of the U.S. and Japan.
Under the deal, Roche will also hold an option to collaborate with Pfizer on a “next-generation” version of the drug, an antibody directed at both TL1A and another therapeutic target called p40. That treatment is now in Phase 1 testing.
For Roivant, the deal is a high-profile success for its business model, whereby it develops or licenses experimental medicines it then houses in subsidiaries, or “Vants,” that it can spin off or sell. One of these Vants, dubbed Dermavant, last year won U.S. approval for a plaque psoriasis cream, while another, Priovant, is developing a Pfizer drug for an inflammatory skin condition and for lupus.
A third, Immunovant, recently released promising trial data for an experimental autoimmune disease drug, results that may have helped catalyze Roivant’s deal with Roche.
Yet Roivant has hit setbacks, too. An early Vant called Axovant gained attention for licensing a shelved GSK drug for Alzheimer’s and raising hundreds of millions of dollars on its revitalized potential. But late-stage testing showed the drug didn’t work, causing Axovant to pivot, change its name and eventually shut down.
Ramaswamy, who has launched a long-shot campaign to win the Republican nomination for president in the 2024 election, resigned as chairman of Roivant’s board in February. He had stepped down as the company’s CEO in 2021, handing leadership over to current chief executive Matthew Gline.