Sumitomo ups ante and wins support for Myovant takeover

A sweetened offer from Sumitomo Pharma has convinced endocrinology specialist Myovant to agree to a takeover, after its first was rejected.

Sumitomo and its subsidiary Sumitovant Biopharma initially offered $22.75 per share for Myovant – which develops hormonal therapies for conditions like uterine fibroids, endometriosis, and prostate cancer – but that was deemed inadequate and was turned down earlier this month.

Now, a $27 per share offer has convinced Myovant's board to proceed with the offer, which comes almost three years after Sumitomo bought a 46% share in Myovant as part of a strategic-level, $3 billion deal that created Sumitovant from five Roivant group companies.

Sumitomo already held around 52% of the company ahead of the new offer – which values Myovant at around $2.9 billion – and is spending $1.7 billion to gain 100% ownership of its shares.

In a market update, Myovant said that the purchase price is a premium of around 50% on its closing share price on 30 September, the last day of trading prior to Sumitovant's first offer. The stock hit just under $25 per share in trading today.

The deal – which is expected to close in the first quarter of 2023 – will give Sumitomo control of Myovant's Pfizer-partnered oral GnRH antagonist Myfembree (relugolix), which was approved last year to treat uterine fibroids, as well as another formulation of the same drug called Orgovyx, used to treat prostate cancer.

Sales of the two products were $4 million and $36 million, respectively, in Myovant's fiscal first quarter ending 30 June 2022.

At the time, Myovant said Myfembree was the market leader in the oral GnRH category with a 51% share in new prescriptions for uterine fibroids that was keeping it ahead of main rival AbbVie/Neurocrine Biosciences' Orilissa/Oriahnn (elagolix). Since then, is has also been approved to treat pain associated with endometriosis.

"Myovant's two products […] have substantial potential," said Sumitomo Pharma's chief executive, Hiroshi Nomura.

"We believe the combination of Sumitovant and Myovant will strengthen Myovant's product capabilities and help continue to deliver innovative therapies addressing unmet patient needs in prostate cancer and women's health," he added.

Pfizer agreed a $4.2 billion collaboration to develop relugolix in women's health and oncology in late 2020, including $650 million upfront and $200 million for regulatory milestones. The two companies share marketing rights to relugolix products in North America, while Pfizer has exclusive rights elsewhere.

If the deal goes through, Myovant will become a wholly owned subsidiary of Sumitovant and its shares will no longer be listed on the NYSE.