As the Wall Street Journal reported, Roche acquired a drug for the treatment of intestinal diseases from Roivant for over $7 billion.
Roivant made $5 billion from the sale after spending just $15 million on development.
Pfizer originally gave it to Roivant for free last December.
And that came after Pfizer gave it to Roivant free of charge.
Pfizer decided to out-license the drug 11 months ago to avoid research and development costs. But Roivant’s spending to develop the treatment, which targets an inflammatory protein called TL1A, was just $15 million.
Now Roivant will receive $5 billion in cash from the Roche deal.
For its part, Pfizer noted to the Journal that the deal with Roivant was part of prioritizing research and development and that Pfizer would continue to benefit from the 25 percent stake and full rights to the drug outside the United States and Japan.
In fact, Pfizer stands to gain around $1.4 billion from the Roche acquisition, giving the treatment’s developer, Telavant Holdings, a total value of $7.1 billion.
In response to Insider’s request for comment, Pfizer said: “We are very pleased with our partnership between TL1A and Telavant and believe it has served shareholders well.”
The company added that the deal would free up research and development capacity for other high-priority programs while allowing it to continue to retain royalties on sales in the U.S. and Japan, in addition to the 25 percent stake and rights outside the U.S. and Japan .
“Together, this partnership allowed us to retain more than 50% of the total value of TL1A without additional research and development expenses,” Pfizer said in a statement. “For a Phase 2 program, we think this is a very good move for Pfizer shareholders. Finally, Pfizer currently retains 100% ownership of a next-generation bispecific p40/TL1a candidate.” [phase 1]; Roche has the option to previously enter into an agreement with Pfizer for the global development of this asset with a 50/50 cost share and co-commercialization rights [phase 2] (expected in 2025).”
Although the treatment has yet to be approved by the Food and Drug Administration, anti-TL1A therapies surged in popularity shortly after Pfizer relinquished its license.
Six days after the biotech giant announced its deal with Roivant on Dec. 1, shares of rival company Prometheus Biosciences surged on positive trials for its own similar drug, the Journal said. The company was later purchased by Merck for $10.8 billion.
And just this month, a $1.5 billion collaboration between Sanofi and Teva Pharmaceuticals for additional TL1A treatments was announced.
While the compound shows promise in treating conditions such as ulcerative colitis, its potential use in treating other health needs, such as dermatology or gynecology, increases its appeal to large pharmaceutical companies.
“This is a $15 billion market in the U.S. alone, and that’s affecting alone[entzündliche Darmerkrankungen]Roche CEO Teresa Graham told the Journal. “This molecule clearly has megablockbuster potential.”[inflammatoryboweldisease”RochechiefTeresaGrahamtoldtheJournal”Thismoleculeclearlyhasmegablockbusterpotential”[inflammatoryboweldisease”RochechiefTeresaGrahamtoldtheJournal”Thismoleculeclearlyhasmegablockbusterpotential”
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