Investors Bet $200M On Roivant, A Biopharma Company Now Valued At $7B

Swiss biopharmaceutical company Roivant Sciences has raised $200 million, bringing its valuation to $7 billion, according to the company.

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The financing – slated to close by early December – brings Roivant’s total raised since its inception in May 2014 to $1.9 billion. New investors include Novaquest Capital Management, RTW Investments, and other large institutional asset managers. All existing institutional shareholders in Roivant also participated in the round. Previous investors include SoftBank Vision Fund and Founders Fund, among others.

Paul Davis, the company’s head of communications, told me today that Roivant was founded in 2014 with the vision of “changing the way medicines are developed and delivered to patients.”

Essentially, Roivant wants to reduce the time and cost of drug development.

Describing Roivant as the “Alphabet for health care,” Davis said the company currently has 14 subsidiaries focused on a variety of specialties such as oncology, urology, dermatology and also one focused on data. Since its last funding round in August 2017, Roivant said it has more than doubled its number of employees to more than 750 from under 350. The number of therapies has increased from 14 to 34 during the same timeframe.

The company plans to use the new financing to create more companies, a strategy investors have bought into.

Acquiring Drugs

Roviant’s strategy is to acquire drugs in development by other companies or academic institutions. Some don’t have the resources to develop the drugs. Some do have the resources but no longer consider pursuing development of certain drugs as “strategic.”

Roivant comes in and acquires rights to developing the drugs for what Davis calls as “smallish upfront payments” in the tens of millions of dollars range. Then, if the drugs are approved, those companies or institutions will receive milestone payments and royalties.

For example, pharma giant Merck at one point was working on a drug for overactive bladders in the elderly. But because it has been more focused on oncology as of late, Davis noted, it sold the rights outside of Asia to Roivant.

Only one of the company’s 14 subsidiaries (Datavant, which is focused on linking and enabling sharing of healthcare data that in a manner that is compliant) is generating any “meaningful” revenue at this point, he told Crunchbase News. Anyone familiar with biotech knows there are long cycles between conception for a drug and approval. So the industry is not for the impatient or faint of heart. Acknowledging there is an inherent risk in the sector, Davis said the company tries to mitigate risks by acquiring drugs that have already gone through human testing in many cases.

So bottom line is, a company that is not generating much revenue has just raised $200 million at a valuation of $7 billion. Nearly $2 billion raised and a valuation of $7 billion is a big bet on the company’s potential for success. Let’s hope – for the sake of patients as well as investors – that gamble pays off.

Illustration: Li-Anne Dias

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