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Following their early September surprise announcement of a broad alliance, Sumitomo Dainippon Pharma Co. Ltd. (SDP) and Roivant Sciences Inc. have now finalized and fleshed out their $3bn deal under which the Japanese firm will acquire stakes in up to 11 "vant" companies.

On a strategic level, the transaction will provide SDP with much-needed late-stage candidates to tide it over its immediate post-Latuda (lurasidone) period, following the expected loss of US exclusivity for the atypical antipsychotic in early 2023.

The alliance will also bring "an early stage pipeline, health technology platforms and talent for sustained growth and transformation," SDP president and CEO Hiroshi Nomura told a 1 November investors' briefing. 

The first positive impact on SDP revenues is expected to come from the start of fiscal 2022 (in April that year). While no figures were given, there may potentially be a large hole to fill; Latuda booked North American sales of $1.66bn last fiscal year.

Myovant Sciences Ltd.'s relugolix (licensed from Takeda Pharmaceutical Co. Ltd.) and Urovant Sciences Ltd.'s vibegron (Merck Sharp & Dohme Ltd.) are seen as near-term "potential blockbusters" by SDP, both of which are at the US pre-NDA stage, the former for uterine fibroids and the latter for overactive bladder. Both are also in late development for a range of other indications.

For Roivant founder and CEO Vivek Ramaswamy, the deal represents a "validation of Roivant's model," he told the meeting. "The large capital injection will drive value creation at Roivant with strengthened ability to build new vants."

One of these has newly emerged as part of the transaction with SDP, Spirovant being disclosed as the fifth of the vants to be included in the initial scope of the deal. The Philadelphia-based venture, headed by Joan Lau, has a preclinical portfolio of gene therapies for cystic fibrosis.

Up To 11 Vants
In the now finalized alliance, expected to close in SDP's current fiscal year ending next 31 March, the Japanese firm will initially acquire Roivant's ownership in five US-based subsidiaries: Myovant (NYSE-listed, 46% held by Roivant), Urovant (Nasdaq-listed, 75%), Enzyvant Sciences Ltd. (100%), Altavant Sciences Inc. (100%) and Spirovant (100%).

SDP also has an option - exercisable until 2024 and requiring additional payments - to acquire Roivant's holdings in another six subsidiaries (Dermavant Sciences Ltd., Genevant Sciences Ltd., Sinovant Sciences Ltd., Cytovant Sciences, Metavant Sciences Ltd. and Lysovant Sciences Ltd.), plus a right of first refusal to Roivant's interest in Axovant Gene Therapies Ltd.

Also included are contract technology access deals relating to Roivant's Datavant and Alyvant technologies and at least a 10% holding in the Roivant parent itself (see side boxes).

The effect the transaction, Roivant will first set up an as yet unnamed new 100% owned company, to which it will transfer its interests in the first five subsidiaries. This new entity will then be fully acquired by SDP.

The $3bn price tag comprises $2bn for the acquisition of this new company and $1bn for the purchase of shares in NYSE-listed Roivant. SDP's Nomura said financing would come from a mix of cash, bridge loans and a loan-supported refinancing "through a hybrid financing instrument to raise equity-like capital."

The financial aspects of the deal also include loan facilities to be extended by SDP to the two vants with late-stage assets. A $350m low interest, five-year loan facility will support general operations Myovant, while Urovant will have a similar $200m loan, with both to become available on the close of the wider deal.

The new operation housing the five vants will be headed by CEO Myrtle Potter, a former president and chief operating officer at Genentech Inc. and the current vant operating chair at Roivant. Other executives have been named as Sam Azoulay (chief medical officer), Adele Gulfo (chief business and commercial development officer) and Dan Rothman (chief information officer).

Importance Of Tech Platforms
In addition to acquiring to the pipeline assets, Nomura highlighted the benefits of Roivant's DrugOme analytics platform, which he said would help "accelerate clinical development and pipeline acquisition" at the expanded SDP.

The system gathers and synthesizes a broad range of data to analyze trends and support discovery and clinical development, trial enrollment and the identification and valuation of promising assets for in-licensing.

Digital innovation forms a pillar of Dainippon Sumitomo's current mid-term business plan and the strategic aim is to raise operational efficiency, the CEO said.

Rothman will also act as chief digital officer for the broader SDP group, which will establish a new dedicated office to promote the adoption and use of DrugOme and other digital technology.

Near-Term Drugs
As for the main near-term vant assets, Ramaswamy pointed to relugolix's potential best-in-class profile as a once-daily GnRH receptor antagonist combination therapy (with estradiol and progestin) for uterine fibroids.

"There is no need to titrate and the therapy maintains bone density and mitigates hot flushes, potentially enabling long-term use" by optimizing estrogen levels, he noted.

As for vibegron, the beta-3 agonist reduced urge urinary incontinence micturition in the Phase III EMPOWUR trial, and the Roivant head pointed to differentiation in terms of dementia and drug-drug interaction risks.

The potential US market opportunity is sizable, with over 18 million prescription annually for overactive bladder symptoms.

Spirovant Gene Therapies
Of the two gene therapies for cystic fibrosis under development at Spirovant, SPIRO-2101 uses a proprietary adeno-associated virus vector to deliver a functional CFTR gene to airway epithelial cells.

SPIRO-2012 uses a proprietary engineered, tropic lentiviral vector transduce airway epithelial cells and deliver the CFTR gene.

Both therapies use technology developed at the University of Iowa Center for Gene Therapy and the Carver College of Medicine in the US. Spirovant has also developed aerosolization technology to maximize lung uptake.

Others working on the gene therapy approach to the disease include Boehringer Ingelheim International GmbH, which last year teamed up with Oxford BioMedica PLC and the UK Cystic Fibrosis Gene Therapy Consortium. (Also see "Boehringer Takes Out Option For Cystic Fibrosis Gene Therapy" - Scrip, 6 Aug, 2018.)

SDP has just reported revenues of JPY230.6bn ($2.11bn; +2%) and core operating profit of JPY44.8bn (+21%) for its fiscal first half ended 30 September.

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