RHHBY Roche Holdings Ltd AG (QX)

By Adria Calatayud

Roche Holding has agreed to buy Telavant Holdings from Roivant Sciences and Pfizer in a deal worth up to $7.25 billion as the Swiss pharmaceutical giant seeks to bolster its immunology pipeline.

The acquisition will give Roche rights over Telavant's drug candidate that has shown promise for inflammatory bowel disease and could have potential in other indications, it said. Roche will have rights to commercialize the drug in the U.S. and Japan, pending clinical-trial data and regulatory approval.

"This is a $15 billion market just in the U.S. and that's just in [inflammatory bowel disease]. This molecule clearly has megablockbuster potential," Roche Pharmaceuticals Chief Executive Teresa Graham said in an interview.

The deal is the latest example of big pharma companies' renewed appetite for acquisitions. Roche's move comes after Rahway, N.J.-based Merck earlier this year bought Prometheus Biosciences, which is developing a drug for inflammatory bowel disease that would compete with Telavant's candidate, as part of a push into immune-disease treatments.

The Wall Street Journal reported in July that Roivant, a biotech company started by Republican presidential candidate Vivek Ramaswamy, was in talks to sell the drug to Roche in a deal that could be valued at more than $7 billion.

Roche said Monday that it will pay $7.1 billion up front and make a near-term milestone payment of $150 million to acquire rights to develop and manufacture Telavant's drug candidate, called RVT-3101, and commercialize it in the U.S. and in Japan. Pfizer holds commercialization rights in other markets, Roche and Roivant said.

"Our plan is, as soon as we close this deal, move into Phase 3 clinical trials," Graham said.

Completion of the deal is expected in the fourth quarter of this year or the first quarter of 2024, the companies said.

RVT-3101 is an antibody drug in development for people suffering from inflammatory bowel disease--a chronic gastrointestinal disorder--that has potential to be applied in multiple other diseases given that it targets both inflammation and fibrosis, Roche said.

"There is very large undermet medical need and significant commercial opportunity" in inflammatory bowel disease, Graham said. "More than 8 million people around the world suffer from [inflammatory bowel disease], and more than 80% of them will never achieve clinical remission."

The drug's mechanism of action means it could also have potential in dermatology, rheumatology and gynecology, she said.

Roivant in January reported results from a Phase 2 clinical trial for RVT-3101 in ulcerative colitis, one of the two main types of inflammatory bowel diseases, that showed meaningful efficacy and a favorable safety profile.

Roche's Graham called the Phase 2 results compelling and said the way the trial was conducted would allow for a faster late-stage trial.

"This is something that we can move into the clinic very rapidly for [inflammatory bowel disease]," Graham said.

Telavant was jointly formed by Roivant and Pfizer last year to develop and commercialize RVT-3101 in the U.S. and Japan, with Roivant owning a 75% stake and Pfizer holding the remaining 25%.

As part of the agreement, Roche will also have an option to enter into a global collaboration with Pfizer for a next-generation antibody called p40/TL1A that is currently in early-stage clinical trials.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

October 23, 2023 04:01 ET (08:01 GMT)

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