Beyond borders 2017

Streamlining drug development — at scale

  • Share

By
Matthew Gline
Roivant Sciences, Inc.

Roivant Sciences’ unusual corporate and capital structure is designed to cost-effectively develop pharma’s deprioritized assets — at scale. By giving experienced development executives the funding, incentives and support framework to bring drugs to market quickly, Roivant hopes to transform the ROI of R&D. Founded in 2014 by former hedge fund manager Vivek Ramaswamy, Roivant is the majority owner in several asset- or therapy-area-focused biotechs. Two of those, Axovant Sciences and Myovant Sciences, raised chart-topping IPOs in 2015 and 2016, respectively.

EY: Why is Roivant structured as it is, sitting atop a series of therapy-area-focused biotechs, some of which have gone public in their own right?

Gline: Roivant is not a holding company. It's a fully operating biopharmaceutical company, sitting as the hub within a hub- and-spoke setup. The structure is designed to allow us to fulfill our mission of reducing the time, cost and risk of delivering drugs to market. We find promising programs within pharma that have been discontinued for strategic reasons and give them the best shot at being developed in a capital-efficient way.

We do this by building self-sustaining, individual biotech companies around these new potential medicines, with experienced leadership teams that are fully supported by Roivant, with clinical research, pharmacology, central services, business development, human resources and funding. This enables them to focus on the task at hand: getting safe and effective medicines to patients as rapidly as possible.

The hub-and-spoke structure gives us the flexibility to process, in parallel, assets in many different therapeutic areas. Pharmaceutical firms want to remain focused on distinct areas. We don't have that luxury. Someone might get out of respiratory diseases today or cardiovascular conditions tomorrow, leaving drug candidates behind that might never reach patients without Roivant stepping in to provide further resources for development, approval and commercialization. We need to be able to seize those opportunities wherever they arise.

This scalability is what differentiates us from others who have successfully resurrected de-prioritized assets on a one-off basis.

EY: Is the model also about providing investors with highly focused, often single-asset-centric opportunities that they won't find in a more conventional biopharma firm?

Gline: The structure does create a differentiated opportunity for certain investors to bet on a particular program or set of programs. This investor angle is only part of our story, though. (Three of our subsidiaries are private, so in any case we're not always enabling that differentiated opportunity.) A big reason for the success of Axovant's and Myovant's IPOs was the compelling programs, but it was also the quality of the development teams.

We bring in people with a proven development track record who are unlikely to join a random small biotech company as division head. For example, Lynn Seely, recently appointed President and CEO of Myovant, was CMO at Medivation for over a decade, where she led the development of prostate cancer drug Xtandi. David Hung, CEO of Axovant, was the former CEO of Medivation. Mark Altmeyer, Chief Commercial Oficer at Axovant, led the launch of Abilify, among the top-selling central nervous system drugs in history, and ran Otsuka's US business.

EY: How do you determine which of pharma's de-prioritized assets are worth developing?

Gline: We are very focused on data. The advantage of working in later-stage development is that most of these drug candidates have already been tested in patients. We are obsessive about looking at that patient-level data and understanding what it means. We map out data not just around a program we're considering, but around all the investigational drugs being developed with the same mechanism or in the same indication - how they work, what for and who is sponsoring.

By nature, we're going after things that others are walking away from. We're contrarian. By voraciously consuming data, we can see what side of the ship everyone is running from and go there. One focus of our business development team is figuring out what the latest untrendy areas might be.

EY: Pharmaceutical firms are reluctant to part with shelved assets. How do you persuade them to do so, at as low a price as possible?

Gline: Our first deals were hard-fought, but we see ourselves as providing a solution to our partners. We're giving their assets the best shot at being developed in a capital-efficient way. They get royalties and milestone payments – we work hard to construct "win-win" arrangements for our pharma partners in each transaction. We have also shown that we can get things done fast. Less than a year after licensing-in our Alzheimer's candidate from GlaxoSmithKline in December 2014, Axovant had raised US$362 million in a June 2015 IPO and had initiated a Phase III trial. Others saw that execution, and we have seen increasing inbound interest in partnership from biopharmaceutical firms as a result.

We look forward to building even more successful partnerships in the coming years.

 

Read additional guest perspectives below from our 2017 biotechnology report, Beyond borders – staying the course, and see our full report at ey.com/Beyondborders.