Deals

What’s he thinking about? Vivek Ramaswamy lines up a heavyweight title fight for a late-stage diabetes drug

Vivek Ramaswamy

Vivek Ramaswamy has carved out a late-stage alliance with a small biotech to take him into one of the most difficult big markets in the biopharma handbook.

Ramaswamy’s Roivant — the parent company to a lineup of “vant” startups — has agreed to pay Poxel $50 million in cash and up to $600 million in milestones to take their diabetes drug into Phase III in the world’s biggest markets. The upfront includes $15 million for an equity stake.

A spokesperson for Roivant confirmed to me that Ramaswamy will now set up a new biotech which will now build a pipeline in the field. This will be his 7th, and Ramaswamy evidently has the name picked out. We spied this listing in Bermuda: Metavant.

The partnership brings together two different players with their own offbeat strategies in drug development.

Thomas Kuhn, Poxel

Merck KGaA spinout Poxel (EPA: $POXEL) has garnered substantial attention for its successful Phase IIb trial in Japan of imeglimin, tracking hemoglobin A1c reductions of 0.52%, 0.94% and 1.00% for the 500 mg, 1000 mg and 1500 mg dose twice-daily. The data brought in Sumitomo Dainippon Pharma to partner on Asia in a $300 million deal, with $42 million up front. And that came some months after Poxel CEO Thomas Kuhn had vowed to do it alone in Japan, telling me that they could get an approval on a scaled down Phase III with 1,000 patients.

Kuhn had estimated a US trial would require 7,000 patients, which is why small biotechs don’t do late-stage diabetes drug development in the big markets.

Now Ramaswamy will be tackling a potentially enormously expensive development program with a high regulatory bar on safety, with Poxel on the hook for $25 million of the costs. And the biotech entrepreneur, recently slammed by the complete failure of its original effort on Alzheimer’s, hinted that it plans to make more deals around metabolic drugs.

While Roivant has been hit hard by clinical failure, Ramaswamy remains one of the most effective financial engineers in the business. He’s raised $2.5 billion in a little more than three years, including $1.1 billion from SoftBank. So far, his in-licensing deals have been concentrated heavily around Big Pharma’s pipeline discards, or in fields where the big players were looking for a partner to help shoulder ricks and expense.

He’ll now be tackling a field dominated by a few big players like Novo Nordisk, Sanofi and Eli Lilly, which have the kind of deep pockets needed to push through late-stage development.


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RAPS Convergence 2018

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