Roivant stock is soaring in the pre-market trading Monday as the pharma giant Roche enters a definitive agreement to acquire Telavant Holdings, marking a significant expansion of its portfolio in disease treatments.
Under the terms of this deal, Roche will make an upfront payment of $7.1 billion, alongside a near-term milestone payment of $150 million. This acquisition will also grant Roche exclusive rights to develop, manufacture, and commercialize a new treatment in the United States and Japan, which is currently under development by Telavant Holdings.
Telavant, a company jointly owned by Roivant (NASDAQ: ROIV) and Pfizer (NYSE: PFE), is actively developing an innovative therapy for inflammatory bowel disease known as RVT-3101. Roivant has described this therapy as promising, with the potential for broader applications in treating various diseases.
Roivant CEO Matt Gline expressed the privilege of working on this transformative drug and noted that Roche will continue to advance efforts to maximize its impact on patients.
“This is one of many examples of Roivant furthering its mission to accelerate the development and commercialization of medicines that matter while delivering value to patients and shareholders alike.”
He also extended gratitude to Pfizer for their invaluable partnership in driving forward creative collaborations for the betterment of patients and for their unwavering support.
The primary element of this therapy is an antibody designed to inhibit TL1A, a small protein believed to be associated with various autoimmune diseases, including rheumatoid arthritis, inflammatory bowel disease, and psoriasis.
Roche Group CEO Thomas Schinecker emphasized the potential of this TL1A-directed antibody, stating,
“We strongly believe this novel TL1A-directed antibody has the transformational potential to make a significant difference for patients living with inflammatory bowel disease and potentially other diseases. We are excited to add this promising new therapy in development to our portfolio and to make it available to patients as quickly as possible.”
Moreover, as part of the acquisition, Roche secures an option to initiate a global collaboration with Pfizer on a separate TL1A antibody, currently in early phase trials.
This deal follows the sale of $20.7 billion worth of bearer shares back to Roche by pharmaceutical giant Novartis towards the end of 2021, marking the end of Novartis’s (NYSE: NVS) more than two-decade investment in the rival company.
Roivant stock is trading at $11.01 as of writing, marking a 14% increase over the last trading session.