Roivant, Sumitomo Dainippon Pharma Form $3-Bn Alliance

By Emily Forster -

October 31, 2019

Roivant Sciences, a New York-based healthcare company, and Sumitomo Dainippon Pharma, have signed a definitive agreement for the creation of a broad strategic alliance and to form a new company owned and supported by Sumitomo Dainippon Pharma, in a deal valued at $3 billion. The companies had previously signed a memorandum of understanding for the deal last month (September 2019).  

Roivant consists of 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.

Under the agreement, Roivant will receive $3 billion from Sumitomo Dainippon Pharma as a payment to enter the alliance. The alliance will include the transfer of Roivant’s ownership interests in five of its biopharmaceutical companies (Vants): Myovant (women’s health and endocrine disease); Urovant (urology); Enzyvant (pediatric rare diseases); Altavant (rare respiratory diseases) and Spirovant (gene therapies for cystic fibrosis.). The alliance also provides Sumitomo access to Roivant’s proprietary technology platforms, DrugOme, a platform for asset selection and clinical development through computational techniques, and Digital Innovation, a platform for applying technology to business problems. In addition, Sumitomo Dainippon Pharma will take an equity stake of over 10% in Roivant and will have options to acquire Roivant’s ownership interests in up to six additional Vants, which will remain owned by Roivant after the closing of the strategic alliance transaction. Sumitomo Dainippon Pharma may exercise the options for each company by 2024. The eleven Vants involved in this strategic alliance collectively have over 25 innovative clinical programs. In addition, Sumitomo Dainippon Pharma will acquire a right of first refusal in relation to Roivant’s ownership interests in Axovant Gene Therapies, Ltd.

Roivant will transfer its ownership interests in its five subsidiaries and its employees involved in healthcare technology to a company to be newly established by Roivant for the purpose of this strategic alliance, and Sumitomo Dainippon Pharma will acquire all the shares of this new company. In addition, Roivant will transfer its assets related to DrugOme and Digital Innovation to Sumitomo Dainippon Pharma. After the stock acquisition procedure is completed, Sumitomo Dainippon Pharma will financially consolidate the new parent company and the five subsidiary companies. The new company will be led by CEO Myrtle Potter, Vant Operating Chair at Roivant Pharma. Additional management team members will include: Adele Gulfo, Chief of Commercial Development at Roivant Pharma, Dr. Sam Azoulay, Chief Medical Officer at Roivant Pharma, and Dan Rothman, Chief Information Officer.

The transaction is subject to customary closing conditions and any required governmental approvals. Exercise of the options by Sumitomo Dainippon Pharma will trigger additional payments to Roivant. In addition, Sumitomo Dainippon Pharma will enter separate strategic client relationships with two technology, data-based Vants: Datavant (real-world healthcare data) and Alyvant (customer relationship management) to augment development and commercialization activities.

Source: Roivant Sciences and Sumitomo Dainippon Pharma