ROIV - Roivant Sciences: $7bn Televant Sale Sets It Up For Long-Term Success

2024-03-18 15:52:57 ET

Summary

• Roivant Sciences Ltd. has seen a slight gain of 10% in its stock over the past 10 months, since my "buy" recommendation last May.
• The company has a differentiated drug development pipeline targeting multi-billion dollar indications, thanks to its unique "Vant" subsidiaries and some smart dealmaking.
• Last October, Swiss Pharma giant Roche paid >$7bn to acquire Televant, and acquire U.S. and Japanese rights to late stage autoimmune drug RVT-3101.
• This has give Roivant a >$6bn war chest to do what it does best - make strategic investments into promising drug development opportunities.
• With several major data readouts due this year, plus a potential approval for topical cream Vtama in atopic dermatitis, Roivant stock appears to have strong upside prospects in 2024.

Investment Thesis

I last covered Roivant Sciences Ltd. ( ROIV ) in a note for Seeking Alpha back in May last year, giving the company a buy recommendation, based on an intriguing and differentiated drug development pipeline targeting multi-billion dollar indications, with multiple significant data catalysts in play.

10 months on, Roivant stock has made a slight gain of ~10%, and shown minimal volatility, despite some significant developments at the company. I covered Roivant's business model in my last note, but as a reminder, it is focused on "accelerating the development and commercialization of medicines that matter," according to its latest quarterly report / fiscal Q3 2023 10Q submission , which also explains:

We advance our pipeline by creating nimble subsidiaries or "Vants" to develop and commercialize our medicines and technologies. Beyond therapeutics, Roivant also incubates discovery-stage companies and health technology startups complementary to its biopharmaceutical business.

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