Roivant to Sell Gut Disease Drug to Roche in Deal Over $7B

Approximately a year ago, pharmaceutical company Roivant Sciences established a new subsidiary centered around a potential treatment for inflammatory conditions, which it had recently acquired a partial license for from Pfizer.

On Monday, Roivant, a biotechnology firm founded 10 years ago by Vivek Ramaswamy, who is also a U.S. presidential candidate, announced its intention to sell this subsidiary to Roche for a considerable sum of roughly $7.1 billion.

This transaction, with its swift and impressive returns for Roivant, highlights the pharmaceutical industry’s fervent pursuit of more powerful medications to address conditions related to the immune system. It closely follows Sanofi’s partnership with Teva Pharmaceutical on a medication with similarities to Roivant’s, Merck & Co.’s substantial $10.8 billion purchase of Prometheus Biosciences, and Takeda’s $4 billion acquisition of a psoriasis treatment from Nimbus Therapeutics.

Through this transaction, Roche will buy the division known as Telavant, along with the rights to the drug within Japan and U.S. As part of the agreement, the Swiss pharmaceutical firm has committed to a milestone payment of $150 million in the near future.

Referred to as RVT-3101, Roivant’s therapeutic solution is currently under study for its potential in treating inflammatory bowel disease, a prevalent gastrointestinal ailment encompassing conditions like Crohn’s disease and ulcerative colitis. The mechanism of action involves the inhibition of a regulatory protein referred to as TL1A.

Results from mid-stage clinical trials conducted on patients with ulcerative colitis demonstrated that, after a 14-week period, Roivant’s treatment achieved remission of disease symptoms in approximately 30% of the individuals who received the intended dose for further study. Moreover, the drug also yielded enhancements in imaging assessments for nearly 35% of the trial participants.

The most recent data, which Roivant disclosed in June, demonstrated that these benefits not only persisted but also continued to strengthen over the course of one year. This development has heightened the anticipation among Wall Street analysts regarding the drug’s potential to become a blockbuster in the pharmaceutical market.

Roche CEO Thomas Schinecker remarked, “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.”

Roche is planning to swiftly progress the drug into a large-scale Phase 3 clinical trial focused on inflammatory bowel disease. The companies are aiming for the closure of their deal in a couple of months’ time.

It’s not uncommon for pharmaceutical medicines initially relinquished by one company to find their way into the hands of another. However, the remarkable speed at which RVT-3101 transitioned from Pfizer to Roivant and finally to Roche, while substantially increasing in value, is indeed noteworthy.

As part of the agreement, Roche will also have the option to engage in a collaborative effort with Pfizer to develop a next-gen iteration of the drug. This updated version will target both TL1A and another therapeutic component known as p40. Currently, this new treatment is in the Phase 1 testing phase.

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