When Roivant Sciences CEO Matt Gline held a meeting with pharma giant Roche at the J.P. Morgan Healthcare Conference at the beginning of the year, he expected a brief one-on-one conversation with a member of the Swiss pharma’s team.
Instead, thirteen people showed up to the meeting “and it evolved from there,” Gline said last week, just a couple days after Roche announced a $7 billion deal to buy Roivant subsidiary Telavant, picking up a promising drug candidate for inflammatory bowel disease.
The deal, fostered by Telavant chairman and CEO Frank Torti, was a case of good science and good business colliding, Torti said.
“There’s a lot of value in this ecosystem for doing things that really matter,” Torti said. “And that’s where we focus.”
Telavant came about in 2022 as a result of a joint venture between Roivant and Pfizer. While Roche will have commercialization rights for the drug, called RVT-3101, in the U.S. and Japan, Pfizer will sell it outside of those countries.
This is exactly what Roivant, founded by current presidential candidate and former CEO Vivek Ramaswamy in 2014, is all about — reading the industry tea leaves to fill unmet medical needs and conduct savvy business deals like the one with Roche, Gline said.
“The sort of market property that makes us successful is that other people have to make strategic decisions based on what’s going on in their world,” Gline said.
“There has been this Cambrian explosion in the anti-inflammatory world, and there’s a huge category of diseases, some rare and some more prevalent, where there’s white space opportunity, and we’re just getting good at it.”
Gline sees Roivant as “agnostic to therapeutic category” and focused on finding the right biological areas that can produce a return on investment with minimal risk.
“If we said we’re only interested in deals in a certain therapeutic area, that indication would be very narrowly limiting our aperture,” Gline said.
Making of a deal
RVT-3101 is in a class of drugs called TL1A directed antibodies, which has been growing at a rapid clip. Another company developing TL1A antibodies, Prometheus Therapeutics, was purchased this year by Merck & Co. for $10.8 billion.
“People forget how fast this class evolved,” Torti said. “When Prometheus put out data about a year ago, it validated the class — we followed that, and suddenly now you have two positive phase two studies.”
Making that kind of bet on a growing drug class is how Roivant anticipates where the market is headed and stays ahead of the competition, Torti said.
“Very rapidly, this went from a class that people were kind of interested in and following to a class that would look like it was going to transform the treatment of IBD,” Torti said. “And so with that transformation, every step of the way, we have had a lot of strategic inbound — we heard from a lot of folks in that process and had back-and-forth conversations with a number of parties over a number of months, which culminated in this deal.”
With Roche coming out on top after the monthslong conversation process, the pharma giant pulled in an asset in a therapeutic area that had eluded them once before. Roche last year pulled the plug on etrolizumab, an antibody the company was developing for Crohn’s disease. RVT-3101 could bring Roche back into the game.
And Gline believes Roche is the right company to make the most of RVT-3101.
“Roche’s credentials developing drugs probably speak for themselves at some level, and what we liked about it is we thought they saw a big opportunity to benefit patients certainly with IBD but potentially beyond IBD,” Gline said.
Opportunity in change
Immunology is a wide and deep facet of the pharma industry boasting multiple blockbusters such as Humira, which topped the list of bestselling drugs for half a decade before it began to see competition this year. But that doesn’t mean the space is oversaturated — there’s still lots of room to grow, Gline said.
“These things ebb and flow in terms of market dynamics and how crowded the space is and what pharma companies are doing, but scientifically, we’re just getting started here,” Gline said. “There has been this Cambrian explosion in the anti-inflammatory world, and there’s a huge category of diseases, some rare and some more prevalent, where there’s white space opportunity, and we’re just getting good at it.”
For Roivant, seeing a shift at companies like Roche means opportunity, Gline said. Roche, like other pharma companies its size, is looking to revamp its drug pipeline due to trial failures and near-term patent cliffs for blockbusters like Actemra.
By watching what the big dogs like Roche are doing, Gline said a company like Roivant can learn how to profit by fulfilling their needs.
“These companies are smart, thoughtful and they make good decisions about what they’re interested in — but they are large, sophisticated, complicated machines that can’t turn quickly,” Gline said. “And when they’re making changes, invariably, there’s a long tail of stuff that falls out.”
But Gline doesn’t see Roivant the way some of its critics have: as a “discard” company buying up and pursuing projects started elsewhere.
“Discard, shelf programs — these are all misnomers for it,” Gline said. “TL1A was nobody’s discard. TL1A was an incredibly important scientific program that was an oddly shaped puzzle piece that didn’t quite fit Pfizer’s strategic plan.”
So when a company like Roivant swoops in to finish development on a program that doesn’t fit elsewhere, everyone wins, Gline said.
“We’re building a business, and the deals like the one we’ve just announced are once in a lifetime,” Gline said. “When big pharma companies are moving slowly, putting a lot of their blue chips and muscle behind what they’re trying to do, sometimes the best course is something we happen to have — and that’s a good position to be in.”