Roche to pay $7.1bn for Telavant to boost its pipeline

Basel-based Roche has come under pressure to improve its pipeline as a windfall of revenue from products used in the Covid-19 pandemic comes to an end. © Keystone / Georgios Kefalas

Roche Holding AG said Monday it will pay $7.1 billion (CHF6.35 billion) to acquire Telavant Holdings, Inc. in a bid to shore up its pipeline of experimental medicines.

The Swiss pharmaceutical company will gain rights in the US and Japan to develop and market RVT-3101, a promising new therapy for treating inflammatory bowel disease that’s currently undergoing clinical trials. Roche will also provide a near-term milestone payment of $150 million.

The antibody therapy developed by Telavant, which is owned by Roivant Sciences Ltd. and Pfizer Inc., has a novel mode of action that targets both inflammation and fibrosis, giving it potential to be applied in multiple other diseases, Roche said in a statement. In trials so far the drug, which can be delivered at home via injection, has shown it can be used safely by patients. 

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Roche has come under pressure to improve its pipeline as a windfall of revenue from products used in the Covid-19 pandemic comes to an end. Roche said it will start a global Phase 3 trial for RVT-3101 as soon as possible.

Roche’s shares plunged last week after the company didn’t upgrade its financial targets and reported declining quarterly revenue.

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Chief Executive Officer Thomas Schinecker faces a two-pronged challenge: the loss of billions of dollars of pandemic-linked revenue at the same time that some clinical trial stumbles have left many investors questioning the company’s ability to deliver on its highest-profile projects.

Schinecker has pledged to improve the drugmaker’s research and development productivity. Transactions are “not a must” and the existing pipeline and portfolio will be able to fuel growth, Schinecker said in an interview with Bloomberg Television.

“For us it’s important if we look at early-stage deals or late-stage deals that it make sense from a scientific perspective and it has to make sense from a financial perspective,” Schinecker said.

Inflammatory bowel disease is a group of chronic gastrointestinal disorders that affects almost 8 million people worldwide and most of them, some 80%, cannot find lasting treatments. 

Telavant was formed in 2022 specifically to develop and commercialize RVT-3101 in the US and Japan. Roivant owns 75% of Telavant and Pfizer owns the rest. 

©2023 Bloomberg L.P.

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