Sumitomo Dainippon Pharma has agreed to acquire five of Roivant Sciences’ 20 companies or “vants”—as well as options to buy up to six more vants, and access to Roivant proprietary technology platforms—for $3 billion upfront.

Sumitomo Dainippon plans to take a “substantial” stake of more than 10% in Roivant through the deal, which will create a Sumitomo Dainippon-Roivant Alliance overseeing more than 25 clinical programs and multiple potential product launches from 2020 to 2022.

The Alliance plans to assume Roivant’s ownership in:

• Myovant Sciences, which focuses on women’s health and prostate cancer;
• Urovant Sciences, a developer of urinary disease treatments;
• Enzyvant Therapeutics, a pediatric rare disease drug developer;
• Altavant Sciences, which aims to develop respiratory rare disease therapies;
• A fifth vant to be disclosed before the completion of the agreement establishing the Alliance.

Sumitomo Dainippon said it will also gain options to acquire Roivant’s ownership interests in up to six additional biopharmaceutical vants, which were not identified in the announcement of the Alliance. Roivant said it planned to continue unspecified “support” for those six vants, while its senior executives are expected to remain involved in all 11 affected vants and their activities by collaborating with Sumitomo Dainippon through the Alliance.

“We respect Roivant’s innovative business model and underlying culture, and we look forward to deepening our relationship with Roivant, which has a rich development pipeline, technology platforms, and distinctive talents,” Hiroshi Nomura, Sumitomo Dainippon’s Representative Director, President and CEO, said yesterday in a statement.

Roivant said its 20 vants are developing more than 45 clinical and preclinical treatment candidates, as well as multiple healthcare technologies.

Among the earliest anticipated launches would be Enzyvant’s RVT-802, a one-time regenerative therapy designed to treat pediatric congenital athymia. On June 5, Enzyvant announced that the FDA had accepted for review its BLA for RVT-802, developed through Roivant’s T cell generation platform designed to treat profound immunodeficiencies, with a regulatory decision expected in December.

By year’s end, Myovant plans to submit an NDA for relugolix combination therapy in women with uterine fibroids, based on positive topline data disclosed earlier this year from two Phase III clinical studies, LIBERTY 1 (NCT03049735) and LIBERTY 2 (NCT03103087), as well as a separate bioequivalence study that supported a potential one pill, once-daily dosing regimen of relugolix combination therapy.

Enzyvant and Altavant are privately held by Roivant, which owns substantial stakes in publicly traded Myovant and Urovant. In a separate statement, Myovant said Roivant’s 46% stake would be fully assumed by the Alliance.

“Growth Engines” Beyond Latuda

Nomura said one goal of the Alliance was to obtain sources of new revenue or “growth engines” once U.S. market exclusivity rights for its top-selling drug, the schizophrenia and bipolar I depression treatment Lautda® (lurasidone) expire by 2023 (though patents for the blockbuster antipsychotic have various expiration dates through 2031). Latuda was launched in the U.S. in 2011 by Sumitomo Dainippon’s Sunovion Pharmaceuticals subsidiary.

Longer-term, Nomura added, Sumitomo Dainippon aims to fulfill its Mid-term Business Plan 2022, “and contribute significantly to establish a position as a ‘Global Specialized Player’ which we aspire to be by 2033 through our transformation into a novel pharmaceutical business model leveraging data and digital technologies.”

Sumitomo Dainippon’s Mid-term Business Plan 2022, announced April 19, commits the company to “rebuilding the business foundation” by establishing growth engines, building a flexible and efficient organization, establishing an innovative business model, and replacing revenue to be lost after Latuda loses U.S. exclusivity: “A significant decline in revenue and profit is expected” in the company’s 2023 fiscal year, which begins April 1 of that year, the company said.

During the 2018 fiscal year which ended March 31 of this year, Latuda racked up ¥184.5 billion ($1.7 billion) in revenue.

The Alliance would draw upon what Sumitomo Dainippon said were its advantages of scale and global commercial infrastructure, such as market access and drug distribution, the companies said. In addition, the Alliance will access Roivant tech platforms such as DrugOme, designed to help accelerate pipeline acquisition and clinical development; and Digital Innovation, designed to improve business processes. The platforms will continue to be used by Roivant separately for other vants, as well as for future business activities.

Roivant and Sumitomo Dainippon have signed a memorandum of understanding, and said they expect to sign a definitive agreement completing their deal by the end of October, subject to customary closing conditions and any required governmental approvals.

“Sumitomo Dainippon’s expertise in commercializing major products globally, combined with support from our technology-oriented vants and the central Roivant platform, will enhance the value of the product portfolio included in this Alliance,” Roivant Founder and CEO Vivek Ramaswamy stated. “We view this partnership as a major validation of the Roivant platform and we will continue to launch other innovative Vants in the future.”