With a $3-billion strategic alliance with Sumitomo Dainippon Pharma in the offing, Vivek Ramaswamy, CEO and founder of Roivant Sciences, is looking to take its “hub and spoke” business model for drug development to the next level.

Inside Roivant Sciences

Last month (September 2019), Roivant Sciences, a New York-based healthcare company, and Osaka, Japan-based Sumitomo Dainippon Pharma entered into a memorandum of understanding for a strategic 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 deal worth up to $3 billion. At the time of the companies’ announcement in September, they said that they expect to sign a definitive agreement for the alliance by the end of this month (October 2019). If the deal proceeds, Roivant would receive $3 billion from Sumitomo as an upfront payment to enter the alliance, which includes Sumitomo taking an equity ownership interest in Roivant (over 10% shares outstanding).

The deal, if it proceeds, would represent another watershed moment for Vivek Ramaswamy, CEO and founder of Roivant Sciences, who has earned a reputation in the industry for bringing forth high-profile deals. Cited by Forbes in 2016 as one of the leading entrepreneurs under forty, in Roivant Sciences, Ramaswamy is leading a family of companies that include multiple wholly owned or majority-owned subsidiaries (so-called “Vants”), each focused on a different disease area or technology that supports the process of developing and commercializing medicines. 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”) and the technology-based subsidiaries focused on different aspects of data science.

Roivant has 14 biopharmaceutical subsidiaries or “Vant” companies: Altavant (rare respiratory diseases); Arbutus Biopharma (hepatitis B); Aruvant Sciences (gene therapies for hematological diseases); Axovant (neurology); Cytovant Sciences (cellular therapies in Asia); Dermavant (dermatology); Enzyvant (pediatric rare diseases); Genevant (RNA therapies); Immunovant (immunology); Metavant (cardiometabolic disease); Myovant (women’s health and endocrine disease); Respivant (respiratory disease); Sinovant (innovator drugs for the Chinese drug market) and Urovant (urology). It also has two data-based subsidiaries: Datavant (real-world healthcare data) and Alyvant (customer relationship management).

Vivek Ramaswamy CEO Roivant Sciences

The formation of some of these “Vants” has led to several noteworthy deals, both in terms of money raised and drug-development partners. Ramaswamy was behind the largest biotechnology initial public offering (IPO) of 2016, Myovant Sciences, which raised $218 million, and was behind the largest IPO in US biotech history at that time in 2015 with an IPO that raised $315 million for Axovant, a company focused on neurological and neuromuscular diseases. The key asset for Axovant at the time was intepirdine, an oral, once-daily, investigational drug for treating mild to moderate Alzheimer’s disease and dementia with Lewy bodies that the company had acquired from GlaxoSmithKline in 2014, which has been since dropped from development.  Following disappointing clinical results for intepirdine in 2017 for treating Alzheimer’s disease and in 2018 for treating dementia with Lewy bodies, the drug was dropped from development. Following that setback, Ramaswamy followed up in 2017 with another high-profile deal: a $1.1-billion investment from the Softbank Vision Fund, the technology investment arm of SoftBank, a Tokyo-based multinational conglomerate, representing at the time one of the largest single investments of private financing for a healthcare company. Part of the proceeds of that investment was used to launch Roivant’s first “Vant” outside of a disease-focused biopharmaceutical subsidiary with the launch of its first technology/data-based “Vant,” Datavant, a South San Francisco, California-based company focused on employing artificial intelligence to improve the clinical trial process and to faciliate data owners in managing the privacy, security, compliance, and trust required to enable safe data sharing.

Roivant’s approach to drug development

For any pharmaceutical company, particularly emerging pharma companies, the challenge is how to navigate the risks and rewards of drug development. For Roivant, Ramaswamy’s approach is to have its “Vants” operate as independent entities to retain the agility, innovation, and entrepreneurship associated with start-up companies while sharing resources from the parent company and data-driven “Vants” to support the drug-development and commercialization process to create what the company characterizes as a “novel form of industrial organization in R&D.” To run these disease-focused “Vants,” Ramaswamy has brought in talent from larger pharmaceutical companies to leverage those executives’ scientific, clinical and management expertise with a strategy in part to partner with and or/acquire from larger pharmaceutical companies select drug candidates that have been deprioritized from larger companies and that are already in development in an effort to mitigate some of the risks and reduce the timelines in drug development. Its development partners have included: Takeda (Myovant), Merck & Co, (Urovant), GlaxoSmithKline (Dermavant), AstraZeneca (undisclosed candidate), Eisai (Dermavent), and Daiichi Sankyo (multiple drug candidates). 

Some key leaders from its Vants are: Bo Rode Hansen, President and CEO, Genevant, and formerly Global Head of RNA Therapeutics at Roche Pharma Research and Early Development and General Manager of the Roche Innovation Center in Copenhagen; William Collier, President and CEO, Artbus Biopharma, and formerly President and General Manager, North America, ViiV Healthcare, a joint venture company of GlaxoSmithKline, Pfizer and Shionogi focused on HIV treatments; Lynn Seely, CEO and President, Myovant, and formerly Chief Medical Officer of Medivation, which Pfizer acquired for $14 billion in 2016; Rachelle Jacques, CEO, Enzyvant, formerly Senior Vice President and Global Franchise Head of Complement at Alexion Pharmaceuticals; and Keith Katkin, President and CEO, Urovant Sciences and formerly President and CEO, Avanir Pharmaceuticals, which was acquired by Otsuka Pharmaceutical in 2015 for $3.5 billion. 

To date, 95% of Roivant’s drug candidates are new molecular entities that span small-molecules, which is its largest focus, biologics as well as cell and gene therapies. Overall, as of June 2019, the company has 41 investigational drugs (32 drug candidates in Phase II or Phase III) in 14 therapeutic areas across its family of companies. On a molecule/therapy basis, the breakdown of its pipeline includes: 12 oral small-molecule therapeutics; eight gene therapies; six RNA therapeutics; four each of topicals, biologics, and cellular therapeutics; one regenerative medicine; one drug–device combination; and one synthetic peptide. On a therapeutic basis, rare diseases represent its largest concentration of drug candidates with seven drug candidates followed by oncology (six drug candidates), infectious disease and medical dermatology (each with five candidates) and respiratory and neurology (each with four drug candidates).

At the company’s annual pipeline day held earlier this year (June 2019), Ramaswamy put forth the near- and long-term strategy of the company with a plan to move the company from a development-stage company to a commercial company over the next five years. In mapping out the company’s growth plan, the company is aiming to see product launches in the 2020–2025 timeline; fortify its position as a technology-driven pharma company and as well as realize a meaningful portion of it sales outside of pharma in the 2025–2030 time frame; and position itself as a global healthcare company, not only a pharmaceutical company, with data-driven proprietary platforms in the 2030–2035 time frame.

Looking ahead

In the near-term, Roivant is looking to finalize its $3-billion strategic alliance with Sumitomo Dainippon Pharma, which at the time of the company’s announcement of a memorandum of understanding last month (September 2019), is expected to be completed later this month (October 2019).

Under the memorandum of understanding, Roivant would transfer to Sumitomo Dainippon Pharma its ownership interests in five of its Vant biopharmaceutical companies 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. 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 Innovation 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.