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Vivek Ramaswamy, the hedge fund manager who became a biotechnology entrepreneur, was so confident that he could make money from pharma drug rejections.
It turns out that Ramaswamy meant his return on investment. Investors outside the "Vant" derived from Ramaswamy, traded on the stock exchange, are still waiting for their share.
As part of a broad alliance announced on Friday, Roivant sells its stake in five biopharmaceutical companies "Vant" to Japanese pharma Sumitomo Dainippon for $ 3 billion. The agreement also gives Sumitomo the opportunity to acquire six additional spin-out companies from Roivant, access to Roivant's technology platforms and a 10% stake in Roivant.
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The Sumitomo agreement is very good for Ramaswamy – $ 3 billion is a good return for what amounts to a handful of disparate assets he has recovered cheaply.
But two of the Vants included in the Sumitomo – Myovant Sciences (MYOV) and Urovant Sciences (UROV) – are listed on the stock exchange. Ramaswamy begins by withdrawing his money, leaving for the moment other investors in possession of the bag.
Myovant shares have lost 43% of their value since their IPO in 2016. Urovant is down 29% compared to the price of its IPO.
What do the shareholders of Myovant and Urovant feel on Friday morning? A popular meme helps explain:
Of course…. pic.twitter.com/tSsudN3yEw
– Adam Feuerstein (@adamfeuerstein) September 6, 2019
The terms of the Roivant-Sumitomo alliance announced Friday are still preliminary and could change once the deal is finalized later this year. The changes to the transaction could also benefit minority shareholders by allowing Sumitomo to buy their shares. Sumitomo could also acquire Myovant and Urovant immediately.
Let's hope so. The King of Roivant should not belong to Ramaswamy.
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