Roche poised to buy MASH drug developer 89bio for $3.5bn

Roche has dipped its toe in the M&A water with an agreement to buy US biotech 89bio and its late-stage candidate for metabolic dysfunction-associated steatohepatitis (MASH).

The $14.50-per-share deal equates to a purchase price of $2.4 billion at closing, with Roche dangling another $6 per share in the form of a contingent value right (CVR) that will be payable if 89bio's lead drug pegozafermin achieves certain unspecified objectives. If that occurs, the value of the deal will swell to $3.5 billion.

Pegozafermin is from a class known as FGF21 analogues, one of a group of drugs in clinical development for MASH with that mechanism of action that also includes Akero's efruxifermin in phase 3 development and GSK's efimosfermin, which is being prepared for phase 3.

Efruxifermin requires dosing once a week by injection, while pegozafermin is being tested in phase 3 with a dose every one or two weeks, depending on the indication, and efimosfermin lends itself to once-monthly dosing.

89bio's drug is in two phase 3 trials in MASH – ENLIGHTEN-Fibrosis in non-cirrhotic (F2-F3) MASH patients and ENLIGHTEN-Cirrhosis trial in compensated cirrhotic (F4) MASH – as well as a third pivotal study called ENTRUST in severe hypertriglyceridaemia (SHTG).

MASH is a form of non-alcoholic fatty liver disease (NAFLD) that affects millions of people worldwide and has been billed as pharma's next big growth area, with some analysts predicting a market potentially worth tens of billions of dollars a year.

At the moment, the only two approved therapies for MASH are Madrigal Pharma's oral THR β-selective agonist Rezdiffra (resmetirom), which was cleared in the US last year and looks to be on a path to blockbuster status with sales of $350 million in the first half of this year, and Novo Nordisk's blockbuster GLP-1 agonist Wegovy (semaglutide).

Roche chief executive Thomas Schinecker said the merger agreement with 89bio – which would lead to the San Francisco-based biotech becoming a wholly-owned subsidiary of the Swiss group – will strengthen its pipeline in cardiovascular, renal, and metabolic diseases and "offers opportunities to explore combinations with existing programmes in our pipeline."

It is the second acquisition in the cardiometabolic category this year for Roche, coming after it bought rights to an anti-amylin obesity candidate (petrelintide) developed by Zealand Pharma in a deal worth up to $5.3 billion.

If all goes to plan, the merger deal is expected to close before the end of the year.