In the wake of a drubbing, Vivek Ramaswamy gambles $116M on Arbutus’ hep B work

Over the last few weeks Arbutus $ABUS has shared a positive snapshot of data from a mid-stage study of its hepatitis B therapy and enjoyed a boost from Alnylam’s big success with its late-stage study of patisiran, an RNAi drug that uses its delivery technology and may well spawn a royalty flow for the biotech. And today it’s adding to the streak of good news with the announcement that Roivant’s Vivek Ramaswamy — already an investor — is buying deeper into the company, investing $116.4 million at a premium rate to acquire preferred shares in Arbutus.

The way Roivant makes this buy-in sound, the two companies have been hammering out a partnership in which Ramaswamy’s company will collaborate on the development of the hepatitis B program. But it’s still a bit vague what all that may entail.

The 32-year-old Ramaswamy said in a statement that the alliance leaves Roivant “providing strategic and operational support to Arbutus, while also maximizing the value of Arbutus’ other assets, including through potential additional investment where required.”

The “Vant” Squad from left to right: David Hung, Jackie Fouse, Vivek Ramaswamy, Lynn Seely, and Alvin Shih. File Photo

Ramaswamy is paying $7.13 a share, a 15% premium from Friday’s close, for the new stake.

Investors loved it, driving up the stock by 16%.

Ramaswamy — who saw the stock in his original portfolio company Axovant $AXON crushed days ago on the decisive failure of its Phase III Alzheimer’s drug — has raised close to $2 billion. Most of that cash has been reserved for its subsidiary companies, a growing mix of public and private biotech ventures with a broad array of drugs and disease targets.

Arbutus — formerly called Tekmira, which pivoted away from Ebola and into hep B two years ago with the acquisition of OnCore from a group of Pharmasset vets — picked up a positive snapshot of biomarker activity for ARB-1467, reporting a week ago that one cohort of 12 patients demonstrated a significant reduction in serum HBsAg levels for several of those patients given bi-weekly dosing. Researchers plan to use that design in a possibly pivotal study to launch in Q4.

Both ARB-1467 and Alnylam’s patisiran — the first RNAi therapy to pass a Phase III test — use Arbutus’ nanoparticle delivery tech.

This is not one of Ramaswamy’s classic plays. His whole strategy centers on rescuing clinical-stage assets languishing in the pipelines of the world’s biggest biopharma companies and putting them through an efficient late-stage effort, ramping up new drug products better than any of the majors. His first effort at that, with a 5HT6 Alzheimer’s drug, proved a complete failure.

The relationship between Ramaswamy and Arbutus goes back some time. Forbes’ Matthew Herper and Nathan Vardi reported two years ago — as Ramaswamy was just getting started in biotech in a big way — that the former hedge fund player had “turned an $8 million purchase of several drugs to treat the liver virus hepatitis B into a $110 million stake in Arbutus BioPharma, a 1,275% paper return.”

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