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  4. A biotech firm founded by Vivek Ramaswamy turned $15 million into $5 billion by flipping a bowel-disease treatment that Pfizer gave it for free

A biotech firm founded by Vivek Ramaswamy turned $15 million into $5 billion by flipping a bowel-disease treatment that Pfizer gave it for free

Filip De Mott   

A biotech firm founded by Vivek Ramaswamy turned $15 million into $5 billion by flipping a bowel-disease treatment that Pfizer gave it for free
  • Roche acquired a bowel-disease treatment from Roivant for over $7 billion, the Wall Street Journal reported.
  • Roivant made $5 billion from the sale, after having only spent $15 million on development.

Roche's acquisition of a bowel-inflammation treatment delivered a massive windfall for presidential candidate Vivek Ramaswamy's company Roivant, the Wall Street Journal reported.

And that came after Pfizer handed it over to Roivant for free.

Pfizer elected to out-license the drug 11 months ago to avoid research and development costs. But Roivant's expenses to develop the treatment, which targets an inflammatory protein called TL1A, amounted to just $15 million.

Now, Roivant will receive $5 billion in cash from the Roche deal.

For its part, Pfizer pointed out to the Journal that the deal with Roivant was part R&D prioritization and that Pfizer will still benefit from the 25% stake it retained as well as full rights to the drug outside the US and Japan.

In fact, Pfizer can expect around $1.4 billion from Roche's acquisition, which totals $7.1 billion for the treatment's developer, Telavant Holdings.

Responding to Insider's request for comment, Pfizer said, "We are very pleased with our TL1A/Telavant partnership, and we think shareholders were well served."

The company added that the deal freed up R&D capacity for other high-priority programs while still letting it retain royalties to US and Japan sales, in addition to the 25% stake and the rights outside the US and Japan.

"Taken together, this partnership allowed us to keep more than 50% of the total value of TL1A with zero incremental R&D spend," Pfizer said in a statement. "For a Phase 2 program, we feel that this is a very sound move for Pfizer shareholders. Finally, Pfizer currently retains 100% ownership of a next generation p40/TL1a bispecific candidate through [phase 1]; Roche has the option to enter into an agreement for global development of that asset with a 50/50 cost share and co-commercialization rights with Pfizer prior to [phase 2] (expected in 2025)."

Though the treatment has yet to be approved by the Food and Drug Administration, anti-TL1A therapies sprang into popularity soon after Pfizer let go of its license.

Six days after the biotech giant announced its deal with Roivant on December 1, shares in rival company Prometheus Biosciences soared on positive studies for its own, similar drug, the Journal said. The company was later bought for $10.8 billion by Merck.

And just this month, a $1.5 billion collaboration between Sanofi and Teva Pharmaceuticals was announced for more TL1A treatment.

While the compound shows promise in treating things such as ulcerative colitis, its potential use in treating other health needs, such as in dermatology or gynecology, adds to the allure for big pharma.

"This is a $15 billion market just in the US, and that's just in [inflammatory bowel disease," Roche chief Teresa Graham told the Journal. "This molecule clearly has megablockbuster potential."


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