Sumitomo Dainippon Pharma, Roivant Sciences Announce Plans for $3-Billion Alliance

Sumitomo Dainippon Pharma, and Roivant Sciences, a New York-based healthcare company, have entered into a non-binding memorandum of understanding for a broad alliance to transfer ownership interests in five Roivant biopharmaceutical subsidiaries to Sumitomo with options to acquire up to six additional Roivant biopharmaceutical subsidiaries and technology platforms in a potential deal worth up to $3 billion.

Roivant Sciences consists of multiple wholly owned or majority-owned biopharmaceutical subsidiaries (so-called “Vants”), each focused on a different disease area. The company employs a “hub and spoke” model for research and development, whereby each biopharmaceutical subsidiary functions as an independent entity (“spoke”) using shared resources from the parent (“hub”). 

Under the memorandum of understanding, Roivant would transfer to Sumitomo Dainippon Pharma of Roivant’s ownership interests in five of its biopharmaceutical companies (“Vants”), with options to acquire up to six additional Vants, and access to Roivant’s proprietary technology platforms, DrugOme, used for pipeline acquisitions and clinical development, and Digital Innovation, used to improve business processes. In addition, Sumitomo Dainippon Pharma will take an equity stake of over 10% of shares outstanding in Roivant.

Under the memorandum of understanding, the Sumitomo Dainippon-Roivant Alliance will be a new entity wholly owned by Sumitomo. The alliance is expected to assume Roivant’s ownership interests in Myovant Sciences (women’s health and prostate cancer), Urovant Sciences (urinary diseases), Enzyvant Therapeutics (pediatric rare diseases), Altavant Sciences (respiratory rare diseases), and one additional company to be specified before the execution of the definitive agreement. In addition, Sumitomo will also gain options to acquire Roivant’s ownership interests in up to six additional biopharmaceutical vants. These 11 Vants collectively have more than 25 clinical programs, with multiple potential launches expected from 2020 to 2022.

In addition, Roivant will continue to use the technology platforms, DrugOme and Digital under a separate contract for other Vants as well as future business activities. Sumitomo expects to enter contract agreements with Roivant Health technology Vants, including Datavant and Alyvant.

Sumitomo Dainippon Pharma says it plans to support the Vants in the Alliance by leveraging the potential benefits of scale and other advantages associated with Sumitomo Dainippon Pharma’s global commercial infrastructure such as market access and drug distribution. Roivant also plans to continue to support the six Vants subject to the option. Sumitomo Dainippon and Roivant say that they will further collaborate with the goal of successfully progressing each of the Vants’ ongoing programs.

The companies say that they expect to sign a definitive agreement by the end of October 2019. Roivant would receive $3 billion from Sumitomo as an upfront payment to enter the alliance, which includes taking an equity ownership interest in Roivant (over 10% shares outstanding).

Source: Roivant Sciences, Sumitomo Dainippon Pharma

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