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Huge Japan investment in Swiss start-up giant

Huge Japan investment in Swiss start-up giant

Tokyo (SCCIJ) – Sumitomo Dainippon Pharma wants to invest $3 billion in Roivant Sciences, a Swiss group of biotech startup companies from Basel founded in 2014, subject to final agreement between the parties. The Japanese pharmaceutical company will acquire a 10 percent stake in Roivant, as well as shares in five of its drug development units. The new partners want to complete the acquisition procedures by next spring.

Huge Japan investment in Swiss start-up giant

The Roivant family of companies

Critical future pillar

Sumitomo Dainippon Pharma is rebuilding its business foundation by pursuing core strategies laid out in its mid-term business plan 2022. It contains the “establishment of a growth engine” and “building a flexible and efficient organization.” These strategies should ensure sustainable growth when the U.S. market exclusivity of the antipsychotic drug Latida expires. This drug is one of the critical pillars of revenue for the Japanese group.

“This strategic alliance with Roivant will contribute significantly to establish a position as a global specialized player,” said Hiroshi Nomura, Representative Director, President and CEO of Sumitomo Dainippon Pharma. The Japanese company wants to complete the transformation to a novel pharmaceutical business model leveraging data and digital technologies by the year 2033.

Specialized subsidiaries

“We view this partnership as a major validation of the Roivant platform,” said Vivek Ramaswamy, Founder and Chief Executive Officer of Roivant. The Swiss company would continue to launch other innovative Vants in the future. The former hedge fund manager founded Roivant to systematically reduce the time and cost of the drug development process.

His company aims to deliver value with innovative medicines and digital technologies in healthcare through subsidiaries called “Vants.” Roivant collects drug candidates discarded by other pharmaceutical developers for commercial reasons or with potential in other, untested areas. The group directs investments into several subsidiaries specializing in one area of medical and pharmaceutical research.

Huge Japan investment in Swiss start-up giant

Roivant Sciences CEO Vivek Ramaswamy

Earlier Japan investment

In September 2017, Roivant Sciences had received a $1.1 billion equity investment led by the Softbank Vision Fund. This was thought to be one of the biggest deals of its kind for a biotech company at that time. Also, Roivant was the first pharma company receiving capital from the newly established fund administered by Softbank Group.

“Roivant has attracted world-class talent in its pursuit of developing and commercializing drugs that target large unmet medical needs,” said Akshay Naheta, Managing Director of Softbank Group International, two years ago about the investment.

Multiple potential products

Sumitomo Dainippon Pharma hopes to acquire a rich pipeline with multiple development compounds launched until 2022, including potential blockbusters. But it is also supposed to help the entire group to enhance its R&D productivity and accelerate digital transformation.

The group will acquire Roivant’s ownership interests in five companies, including Myovant Sciences (women’s health and prostate cancer), Urovant Sciences (urinary diseases), Enzyvant Therapeutics (rare pediatric disorders), and Altavant Sciences (rare respiratory illnesses). These Vants have a promising development pipeline with multiple potential product approvals expected in the U.S. between FY2019 and FY2022, some of which are potential blockbusters.

Options for more acquisitions

Additionally, the Japanese company will acquire Roivant’s DrugOme technology. It consists of a unique data analytics platform that assists in accelerating pipeline acquisition, clinical development, and Digital Innovation technology. Roivant will continue to utilize these technologies for its own business under a separate contract.

Sumitomo Dainippon Pharma will also have options to acquire Roivant’s ownership interests in up to six additional Vants. Those enterprises will remain with Roivant after the execution of the definitive agreement. Sumitomo Dainippon Pharma may exercise the options for each company by the second half of FY2024. A total of eleven Vants involved in this strategic alliance collectively have over 25 innovative clinical programs.

Text: SCCIJ with material of Sumitomo Dainippon Pharma; Photos: Roivant Sciences

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