Roivant, the Hedge Fund Specializing in Drug Castoffs, Signs $3 Billion Deal

September 9, 2019 | Hedge Funds

Japanese drugmaker Sumitomo Dainippon Pharma will buy a stake of just over 10% in Roivant Sciences

Roivant Sciences, a Swiss holding company, is the product of former hedge fund manager Vivek Ramaswamy. The firm builds “Vants” – biotech and healthcare companies that license, or own, development drugs sidelined by Big Pharma companies.

Roivant currently owns a central technology-enabled platform and 20 Vants with over 45 investigational medicines under development.

The deal

Sumitomo Dainippon Pharma will acquire Roivant’s ownership interests in five of their biopharmaceutical companies (“Vants”).

These Vants are:

  • Myovant Sciences (women’s health and prostate cancer),
  • Urovant Sciences (urinary diseases),
  • Enzyvant Therapeutics (rare pediatric diseases),
  • Altavant Sciences (rare respiratory diseases),
  • One additional company to be specified

It will also get options to acquire up to 6 additional Vants and access to Roivant’s proprietary technology platforms, DrugOme, and Digital Innovation.

Under the deal, Sumitomo will pay $3 billion upfront to Roivant and takeover a stake of more than 10% of outstanding shares.

Sumitomo Dainippon Pharma is among the top-ten listed pharmaceutical companies in Japan.

Sumitomo taking a big risk?

Investors in previously listed Vants have taken massive haircuts on their market capitalizations after the companies went public:

  • Urovant Sciences – 25%
  • Myovant Sciences – 50%
  • Axovant Gene Therapies – over 90%

The market has punished the stocks for fear of clinical failures and poor realization on commercialization.

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