Rumour confirmed as Roche buys Telavant for $7.1bn

Roche has announced a $7.1 billion deal to acquire Roivant group company Telavant and its RVT-301 drug candidate for inflammatory bowel disease (IBD), confirming rumours that have been swirling around since the summer.

The transaction – with an upfront payment of $7.1 billion and a near-term milestone payment of $150 million – will give Roche rights to RVT-3101 in the US and in Japan. Telavant was formed as a joint venture between Roivant and Pfizer, which has a 25% stake in the company and has rights to RVT-301 in other markets.

The drug is a tumour necrosis factor-like ligand 1A (TL1A) directed antibody, administered as a once-monthly subcutaneous injection, which has the potential to become a first-in-class therapy for Crohn’s disease and ulcerative colitis (UC).

While the price being paid for partial rights to the drug may seem steep at first glance, the deal also includes an option to form a global collaboration with Pfizer on a next-generation p40/TL1A-directed bispecific antibody, currently in phase 1.

In a study reported earlier this year, Roivant said that the drug showed preliminary evidence of efficacy in the phase 2b TUSCANY-2 trial in ulcerative colitis, with “clinically meaningful” improvements in clinical and endoscopic remission rates at 56 weeks.

On the strength of that data, RVT-301 is ready to start phase 3 testing in UC, while the drug is also in the phase 2 TAHOE trial in Crohn’s due to read out next year. Analysts have suggested the drug could have blockbuster sales potential as a second-line therapy for IBD refractory to first-line TNF biologics, with additional upside if it is shown to be effective in other indications.

“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, Roche’s chief executive, pointing to the drug’s ability to target both inflammation and fibrosis.

The transaction is the largest to date on Schinecker’s watch since he took over from Severin Schwann in March, and is expected to close before the end of the year or in early 2024.

The deal has been announced shortly after Sanofi paid Teva $500 million upfront in a deal worth up to $1 billion for TEV’574, another TL1A-targeted drug in mid-stage testing for IBD.

Meanwhile, MSD also has a horse in the race through its $10.8 billion acquisition earlier this year of Prometheus Biosciences and its TL1A candidate – now called MK-7240 – which has already generated phase 2 results in both UC and Crohn’s.