Roche strikes $7.1bn deal for Telavant

January 2024 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

January 2024 Issue

In a move to restore its drug development record following major late-stage trial setbacks, Swiss multinational healthcare company Roche is to acquire bowel drugmaker Telavant Holdings, Inc. in a transaction valued at $7.1bn.

Under the terms of the definitive agreement, Roche will pay a near-term milestone payment of $150m in addition to the purchase price. The agreement includes the development, manufacturing and commercialisation rights for Telavant’s RVT-3101, a promising new TL1A directed antibody therapy in development for people suffering from inflammatory bowel disease, including ulcerative colitis and Crohn’s disease.

Inflammatory bowel disease (IBD) is a group of chronic gastrointestinal disorders with almost 8 million people diagnosed worldwide and 80 percent of all individuals not experiencing lasting remission. The two main types of IBD are ulcerative colitis (mainly affecting the colon and rectum) and Crohn’s disease (affecting the entire gastrointestinal tract).

Upon closing of the transaction, Roche will have full rights to further develop and manufacture RVT-3101 and commercialise it in the US and in Japan pending clinical and regulatory success. Additionally, Roche is committed to starting a global phase three trial for RVT-3101 as soon as possible to bring the therapy to patients. Outside of the US and Japan, Pfizer holds commercialisation rights.

The closing of the transaction is currently expected to take place in Q4 2023 or in Q1 2024.

“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,” said Thomas Schinecker, chief executive of Roche Group. “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.”

Founded in 1896 in Basel, Switzerland and owned by Roivant Sciences Ltd. and Pfizer Inc., Roche is one of the first industrial manufacturers of branded medicines, and has grown into the world’s largest biotechnology company and the global leader in in-vitro diagnostics. The company pursues scientific excellence to discover and develop medicines and diagnostics for improving and saving the lives of people around the world.

“We are eager to see RVT-3101 rapidly advance with Roche’s resources and commitment to this programme,” said Frank Torti, chairman and chief executive of Telavant. “I would like to thank everyone who played a critical role in advancing the RVT-3101 programme thus far, including the Telavant team, our colleagues at Pfizer and Roivant, and the programme’s dedicated investigators and patients.”

The transaction is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.

Acting as the exclusive financial adviser to Roche is Citi with Davis Polk & Wardwell LLP acting as legal counsel. Freshfields Bruckhaus Deringer LLP is acting as legal counsel for Roivant.

Matt Gline, chief executive of Roivant, concluded: “It has been a great privilege to work on and meaningfully progress RVT-3101, and we are convinced that Roche will be able to build on these efforts and maximise patient impact with this important programme going forward.”

Fraser Tennant