Myovant stands in the way of Sumitomo's consolidation

Sumitomo, increasingly reliant on the Roivant stable to fill a void left by patent expiries, is trying to take another Roivant-derived entity private. But Myovant, the entity in question, whose remaining 48% stake Sumitomo wants to buy for $1.2bn, will not go down without a fight: Myovant says the bid “significantly undervalues” its business, and the basis for this view is obvious: Sumitomo’s Sumitovant subsidiary is offering $22.75 per Myovant share and, while this is 27% above Friday’s close, Myovant stock was trading 18% higher just over a year ago. Myovant is one of several entities formed by Roivant to focus on other companies’ cast-offs, and in 2019 Sumitomo paid $3bn for Roivant’s stakes in five of these. This comprised 100% ownership of Enzyvant, Spirovant and Altavant, and 75% and 46% respective stakes in Urovant and Myovant. Sumitovant bought out the Urovant minority interest in 2020. 100% ownership of Myovant would give the Japanese group full control over Orgovyx/Myfembree, a drug partnered with Pfizer and forecast by the sellside to become a blockbuster. Two questions remain: will any other buyers – like Pfizer, say – now come forward, and by how much will Sumitomo need to raise its offer?