Roivant Sciences was ready to go all-in on bringing former subsidiary Immunovant back under its wing, but now, the parent-to-be is taking a step back and offering up a $200 million strategic investment instead.
“We thought that this is the best and the fastest way to advance the programs at Immunovant,” Roivant spokesperson Paul Davis told Fierce Biotech.
The complex deal came to light back in May, when Roivant said it planned to reacquire Immunovant, which left the nest and went public via a $100 million special purpose acquisition company, or SPAC, deal in 2019. The catch is, Roivant was also in the midst of a SPAC transaction itself when the Immunovant plan was hatched.
Roivant’s SPAC deal, a $611 million tie up with Montes Archimedes Acquisition, is still open, Davis said.
“Roivant and Immunovant explored a range of possible transactions over the past few months, including a potential acquisition by Roivant of the minority interest in Immunovant, and ultimately agreed on this significant investment in order to support a robust development plan for IMVT-1401 and increase our stake in the company,” said Roivant CEO Matt Gline.
Immunovant will use the funds to support the development of IMVT-1401 in several different diseases. The therapy is being developed for myasthenia gravis (MG), thyroid eye disease (TED) and warm autoimmune hemolytic anemia (WAIHA).
Trials for TED and WAIHA were put on hold in February when Immunovant found elevated cholesterol levels in the patients with TED. Then in June, the company found the same adverse event had cropped up in the other indication.
Stifel at the time said IMVT-1401 was unlikely to become a major player in the auto-immune market following the setback. But Roivant is still confident the therapy will make an impact.
“We really are pretty enthusiastic about the potential for ‘1401 to be a real game-changer for a lot of serious autoimmune conditions,” Davis said. “We think that this is the best path forward …to have the ability to pursue a wide range of programs and different indications.”
Immunovant CEO Pete Salzmann, M.D., said the investment will expedite development of IMVT-1401 for a wide range of auto-immune disorders. Over the next 12 months, Immunovant will commence a pivotal trial in MG, then get the two halted studies in TED and WAIHA back on track. Immunovant will also get two additional clinical trials going, one of them pivotal, in 2022.
Shares of Immunovant dropped 21% to $8.25 as the markets opened Monday, suggesting investors were hoping for the Roivant acquisition deal. Before the trial setbacks in February, Immunovant was trading in the range of $40 to $50 apiece.
As for the details on the strategic investment, Roivant has purchased 17,021,276 shares of Immunovant’s common stock at $11.75 apiece, boosting Immunovant’s cash balance to $600 million. Roivant has also succeeded in upping its stake from 57.5% to 63.8%.