Next month will show whether Sumitomo Dainippon Pharma’s decision to buy up the 28% of Urovant it did not already own was wise. Urovant’s overactive bladder project Vibegron has a US Pdufa date of December 26, and Sumitomo needs a green light.
Even if one comes, though, yesterday’s deal looks expensive. It values Urovant at $584m, more than the net present value of Vibegron, as calculated by Evaluate Omnium. Moreover, Sumitomo has already paid $3bn for rights to various projects, including Vibegron, under an alliance with Urovant’s parent company Roivant last year; one of these has already come a cropper, and another looks uncertain.
The deal between Sumitomo and Roivant saw the creation of a new entity, Sumitovant, which owns various stakes in five of Roivant’s many subsidiaries (Sumitomo bets on Roivant to solve its patent expiry woes, September 6, 2019). When yesterday’s deal closes the Sumitovant subsidiary will own four of these outright.
|Company||Ownership||Notable projects||Use||Status||2026e sales ($m)||NPV ($m)|
|Urovant||100%||Vibegron||Overactive bladder||Filed, Pdufa date Dec 26, 2020||459||558|
|IBS-associated pain||Phase II|
|URO-902||Overactive bladder||Phase II||0||0|
|Myovant||54%||Relumina||Prostate cancer||Filed, Pdufa date Dec 20, 2020||721||941|
|Uterine fibroids||Filed, Pdufa date Jun 1, 2021|
|MVT-602||Female infertility||Phase II||3||8|
|Enzyvant||100%||RVT-802||Paediatric congenital athymia||Filed, CRL rec'd Dec 20, 2019||NA||NA|
|Acid ceramidase deficiency||Phase I||NA||NA|
|Note: excludes undisclosed options over six other entities. Source: company presentations & EvaluatePharma.|
So far Sumitovant has little to show for itself. The first of its assets to have gone before the FDA, RVT-802, a T-cell stimulant for congenital athymia held under the Enzyvant brand, received a complete response letter last December owing to manufacturing concerns. Enzyvant’s website currently lists the project as filed.
And the Pdufa date for Relumina, Myovant’s oral form of relugolix, is fast approaching. The project was a technical success in phase III but missed the vital secondary endpoint of overall survival (Myovant misses its Hero moment, September 30, 2020). Should the FDA turn this down Relumina has another chance at an approval in the summer, in uterine fibroids.
Since Sumitomo bought Urovant before a major approval decision, Myovant shareholders seem to think that a similar outcome beckons for that company: Myovant stock is up 10% in early trade today.
Myovant is now the only group covered by the Roivant collaboration that Sumitomo does not own outright, and it is not unreasonable that the Japanese group might want to make a clean sweep. Indeed, having initially acquired a 46% stake from Roivant, Sumitomo bought more stock in the market, and currently owns 56% of Myovant.
However, even if it stopped far short of the 90% premium it paid in yesterday’s deal, any Myovant transaction would likely top $1bn. This could prove a stretch for the Japanese group, which has seen its market cap shrink by more than a fifth, to just over $5bn, since the Roivant transaction was unveiled.
The Urovant transaction might make a Myovant buy more likely in that, were Vibegron to get the nod in overactive bladder, Sumitomo will have a urology call point, potentially making selling Relumina an easier prospect.
One way and another, shareholders will be keen to see what December brings.