Republican Presidential Candidate Vivek Ramaswamy Founded Roivant In Discussions With Roche For $7B Stomach Disease(s) Drug Deal

Roivant Sciences Ltd ROIV, a biotech company founded by Vivek Ramaswamy, a Republican presidential candidate, is reportedly in discussions with Roche Holdings AG RHHBY regarding the potential sale of an experimental drug for a debilitating stomach disease. 

The drug at the center of the talks is RVT-3101 for ulcerative colitis and Crohn's disease.

The deal, which may exceed $7 billion in value, could be announced in the near future, according to sources familiar with the matter. However, the negotiations are still ongoing Wall Street Journal reported, and there is a possibility that the talks could collapse or another buyer could emerge.

Since its establishment in 2014 by Ramaswamy, Roivant has primarily focused on acquiring stalled drugs and establishing subsidiaries to develop and commercialize them. 

In February, Ramaswamy announced his resignation from Roivant's board to concentrate on his presidential campaign. 

Roivant obtained the stomach disease drug RVT-3101 through a deal with Pfizer Inc PFE. Last year, the companies announced that Roivant would establish a new subsidiary to finance the drug's development, which is currently in the final Phase 3 testing stage. 

In a recent study, Roivant reported Phase 2b study results for the drug.

Pfizer retains a 25% stake in the subsidiary and holds commercial rights outside the U.S. and Japan. However, it remains unclear what would happen to Pfizer's stake in the event of a deal.

Ulcerative colitis and Crohn's disease are chronic conditions caused by an overactive immune system, leading to inflammation and ulcers in the large intestine and gastrointestinal tract. 

These disorders affect up to two million individuals in the U.S. Drugs targeting immune diseases represent a significant market within the pharmaceutical industry, estimated to be worth around $40 billion worldwide.

If the deal with Roivant goes through, it would be one of the significant strategic moves made by Roche's Chief Executive, Thomas Schinecker, since assuming leadership of the Swiss life-sciences company in March.

Price Action: ROIV shares are up 3.45% at $12.00 during the premarket session on the last check Friday.