SoftBank leads $1bn investment in US biotech group
Roivant stake is the first time conglomerate has used Vision Fund to back a drugmaker
SoftBank is leading a $1.1bn investment in a privately held US biotech company, marking the first time the Japanese technology conglomerate has used its $93bn Vision Fund to back a drugmaker.
The investment in Roivant Sciences, which is developing experimental medicines for a range of illnesses spanning Alzheimer’s to rare diseases, is the largest private financing in the healthcare sector and one of the biggest in any industry.
It is the latest in a string of investments by SoftBank and underscores the broad range of companies being backed by the tech-focused Vision Fund, which has raised capital from companies such as Apple and Qualcomm, as well as the state funds of Saudi Arabia and Abu Dhabi.
Other recent investments include Brain Corp, a robotics company, and Plenty, which develops agricultural technology. The fund is also close to making an investment in Fanatics, the online sports apparel retailer, according to people briefed on the plans.
Roivant was founded in 2014 with the intention of acquiring and developing promising unapproved medicines that had been abandoned by big pharma companies after falling victim to cost-cutting drives or corporate restructurings.
Vivek Ramaswamy, chief executive of Roivant, said the extra funds would allow the company to “double down on developing promising drugs that get stuck in an industry log jam that has nothing to do with science”.
A person briefed on the fundraising said SoftBank was by far the largest investor in the syndicate, which included early investors such as Dexcel Pharma, the Israeli drugmaker. The valuation of Roivant implied by the financing was not disclosed.
The biotech group is developing about 14 medicines through five private and publicly listed subsidiaries that are appended with the letters “vant”, such as Myovant, a women’s health group, and Dermavant, a dermatology specialist.
Its most advanced medicine is an Alzheimer’s drug being developed by the publicly listed Axovant. It could become the first new drug approved for the disease in more than a decade if it produces successful results in a clinical trial due to be unveiled next month.
The phenomenon whereby big pharma companies shelve encouraging drugs has long bedevilled the industry. In recent weeks GlaxoSmithKline, Lilly, AstraZeneca and Teva have announced they are abandoning some programmes to sharpen their focus on core areas.
The cutbacks have led to the creation of start-up companies, such as Roivant and Ovid Therapeutics, which are focused on buying the medicines — often at a large discount — and taking them through the development process.
Mr Ramaswamy said Roivant would use the funds to launch additional subsidiaries focused on new disease areas as well as developing a “computational research” system that can map the “full universe of drugs that are stuck in the industry traffic jam”.
He also announced the formation of Datavant, a technology-focused subsidiary that aims to partner with medical research institutions to aggregate sources of clinical data.
“Roivant has attracted world-class talent,” said Akshay Naheta, managing director of SoftBank Group International, referencing the company’s recruitment of industry veterans such as David Hung — who recently sold Medivation to Pfizer for $14bn — and Jackie Fouse, the former Celgene executive.
Mr Naheta added: “We look forward to supporting them in the next step of their journey, as they look to effectively harness technology and leverage big data across all aspects of their business.”