Myovant rejects $2.4B buyout offer from Japanese majority owner

Myovant Sciences on Monday said it rejected a $2.4 billion buyout offer from majority owner Sumitovant Biopharma but is willing to consider a higher bid.

Sumitovant and its parent company Sumitomo Pharma submitted a non-binding proposal to acquire the remaining shares of the Switzerland-based biotechnology company that they do not own for $22.75 per share in cash, a 27% premium to Myovant’s closing price on Friday. The two companies hold around 52% of Myovant’s 96 million common shares, putting the cash offer at around $1 billion for the rest of the stock.

Myovant said a special committee of its board of directors determined the deal “significantly undervalues the company” but that it “remains open to considering any improved proposal … and is prepared to engage further” with Sumitomo.

Sumitomo acquired its stake in Myovant in 2019 when it paid Roivant Sciences $3 billion for stock in five of the holding company’s subsidiaries, including Myovant. Each of those subsidiaries, known as “vants,” are focused on specific therapeutic areas. Myovant has been developing drugs for prostate cancer and women’s health conditions such as uterine fibroids. It’s already brought two drugs to market, sold as Orgovyx and Myfembree.

Sumitomo in 2020 decided to buy up the remaining shares in another subsidiary, urology disease-focused Urovant Sciences, shortly before U.S. approval of a drug now known as Gemtesa and used to treat overactive bladder symptoms.

Now Sumitomo is eyeing Myovant, shares of which have been climbing since the company expanded use of Myfembree in August. That month, regulators cleared Myfembree to treat pain from endometriosis, a condition that affects between 2% to 10% of U.S. women of childbearing age.

Pfizer co-markets the drug with Myovant under a deal the two struck in 2020. That alliance also gave Pfizer rights to Orgovyx, and could ultimately hand Myovant up to $4.2 billion in total.

In a note Monday, SVB Securities analyst Roanna Ruiz called Sumitovant’s bid “somewhat opportunistic” given its “modest” premium. Ruiz wrote that Myovant could push for a better offer, given the recent label expansion of Myfembree and the launch momentum for Orgovyx, which she predicts could become a $1 billion product.

Myovant shares climbed to nearly $25 apiece in early trading, up by about 38% from Friday’s closing price of $17.96.

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