SoftBank acquires $5bn stake in Swiss drugmaker Roche
Deal struck through unit of Japanese technology group that was behind ‘Nasdaq whale’ trade
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SoftBank has acquired a $5bn non-voting stake in Swiss drugmaker Roche through its unit that was responsible for the “Nasdaq whale” trade, according to two people with knowledge of the transaction.
The architect of the investment was Akshay Naheta, the former Deutsche Bank trader who runs SB Northstar, a vehicle set up last year to manage the Japanese technology investor’s public equity trades.
Naheta has been behind some of SoftBank’s most controversial investments. These include the so-called Nasdaq whale, which bought billions of dollars of US equity derivatives in a series of trades that stoked a rally in tech stocks, and the scandal-ridden German payments company Wirecard.
The Roche deal, which was first reported by Bloomberg, comes just months after SoftBank founder Masayoshi Son told investors he would scale back investments by SB Northstar after the unit racked up $5.6bn in derivative losses since it was set up in July 2020.
The decision to buy a stake in a large pharmaceutical company marks a shift away from SB Northstar’s recent investments, which have been focused on tech and earlier stage biotech companies. A person briefed on the matter said the move signalled Naheta’s attempts to diversify SB Northstar’s portfolio.
SB Northstar’s investments, which are partly funded by Son’s personal money, have raised questions within SoftBank and among investors about the unit’s strategy and due diligence process.
SoftBank’s shares fell 1.1 per cent on Wednesday.
Roche, one of world’s largest drugmakers by revenue, focuses on diagnostics, cancer drugs and treatments for immune conditions, among other diseases. Some of those medicines deploy a targeted, or “precision medicine” approach, which Roche has developed with its own data and those it has acquired.
Sales at the company, one of the “Big Four” diagnostic makers worldwide, have increased in the past year on demand for its Covid-19 tests, though it does not make vaccines.
In the first half of 2021, diagnostics sales grew 51 per cent to make up about a third of the group’s overall revenues of SFr31bn ($34bn).
While sales by its pharmaceutical division decreased during the pandemic, the company said last month that the unit had returned to growth, buoyed by a bounceback in routine healthcare.
One of the company’s rheumatoid arthritis drugs, Actemra, has been repurposed to treat severe Covid patients and is recommended by the World Health Organization. Roche has also developed a Covid antibody treatment with US company Regeneron.
Shares in Roche have risen 18 per cent this year.
The Basel-based group is controlled by the Hoffmann-La Roche family, which holds 50.1 per cent of shares. Company disclosures show rival Novartis, which is also based in Basel, owns a third.
After a protracted battle, Roche took over US biotech Genentech in 2009 for $47bn. The latter’s early research and development centre continues to operate independently within Roche out of San Francisco, where the pharma company’s US operations are headquartered.
Roche and SoftBank declined to comment. Naheta was not immediately available for comment.