Roivant Sciences Ltd. is attracting interest from large pharmaceutical companies for its treatment for inflammatory bowel disease, which could be worth more than $7 billion, according to people familiar with the matter.
While deliberations have focused on the treatment, it’s possible the entire company could be sold as well, some of the people said, asking not to be identified because the matter isn’t public. The drug is being tested to treat ulcerative colitis and Crohn’s disease. The interest from large pharmaceutical companies, which are studying a potential purchase of the mid-stage drug, underscores the excitement for potentially lucrative immunology treatments.
There’s no certainty deliberations will result in a deal and Roivant could opt to keep the asset, for now called RVT-3101, the people said.
A representative for New York-based Roivant declined to comment.
Roivant fell 4.9% to $10.11 at 2:05 p.m. in New York trading Thursday, giving the company a market value of about $7.8 billion. The shares have gained 110% in the past year.
Roivant is among several companies developing an antibody that blocks a protein called TL1A that’s thought to play a role in autoimmune disease. Interest in the drug class has increased since Merck & Co. said in April it would shell out $10.8 billion to buy Prometheus Biosciences Inc. primarily for its IBD treatment, which is expected to generate billions of dollars in revenue. Merck edged out competitors including AbbVie Inc. and Bristol Myers Squibb Co., which had also vied for the biotechnology company, Bloomberg reported in May.
Teva Pharmaceutical Industries Ltd. has also been exploring a sale or partnership of its own anti-TL1A treatment, Bloomberg News reported in May.
Biotech dealmaking has been heating up as drug makers look for ways to replenish some $200 billion of revenues that are set to evaporate when blockbuster drugs lose patent protection at the end of this decade. Pharma companies have been increasingly interested in treatments for autoimmune and inflammatory diseases because one drug can often be used for many different applications.
Roivant acquired its anti-TL1A treatment from Pfizer Inc. in December through a deal that saw it take on responsibility for global development of RVT-3101 in ulcerative colitis and other inflammatory diseases. Roivant has commercial rights to the drug in the US and Japan, while Pfizer, which has a 25% stake in the Roivant subsidiary developing the drug, maintains commercial rights everywhere else, the companies said at the time.
Roivant released data at the end of June showing that its treatment was more effective than previously thought.
The Roivant data provided “validation of both the asset and Roivant’s leadership team” and “suggest a best in class profile,” SVB Securities analysts led by David Risinger wrote.
Roivant sees a $15 billion market for inflammatory bowel disease in the US alone, according to an investor presentation in January. About 2 million people in the US have inflammatory bowel disease, with the two most common forms being ulcerative colitis and Crohn’s disease, according to the presentation.
Author: Michelle F. Davis and Dinesh Nair