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Urovant Sciences (UROV)’ Largest Shareholder set to Acquire UROV for $584 Million

Sumitovant Biopharma, the largest shareholder of Urovant already owns 72% of the company and is now set to acquire it entirely.

Shares of Urovant Sciences Ltd. (UROV) spiked on Friday after the company announced the acquisition deal with Sumitovant Biopharma. UROV soared up to 93.48% trading at $16.02.

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The stock jumped from a previous close of $8.28 to $15.98 at the opening of the last trading session. The stock was on a heavy volume with the shares trading around 10 million.

On November 12, Urovant Sciences entered into a definitive merger agreement with Sumitovant Biopharma to acquire the outstanding common stock shares of UROV.

Sumitovant already holds 72% of the outstanding UROV common stock shares and with the latest acquisition agreement, it will buy the remaining outstanding shares of UROV’s common stock. The biopharma firm will acquire the remaining shares at a per share price of $16.25 in cash, totaling an equity value for Urovant of $584 million and an enterprise value of $681 million.

The major reason behind the acquisitions seems to be vibegron project. The CEO of Urovant, James Robinson highlighted that they were inconsideration for collaboration with Sumitovant for planning to launch vibegron. The company wanted to achieve high sales as soon as possible, and that’s one main reason that both the firms have joined forces.

Urovant’s lead pipeline candidate, Vibegron, is currently in last-stage testing. The vaccine is being developed for the potential treatment of overactive bladder.

The agreement based on the per share consideration reflects a 96% premium value of UROV shares as of the closing on Nov. 12, 2020. Thus far, the merger agreement has been approved by a special committee of Urovant’s BoDs. However, the remaining shareholders apart from Sumitovant are yet to approve the merger deal.

The special committee has recommended the remaining shareholders of UROVto vote in the favor of the merger.

Based on the customary closing conditions, the transaction is expected to take place in the first quarter of 2021. And, the transaction is not subject to any financing condition. 

After the completion of the merger, Urovant will merge with a wholly-owned subsidiary of Sumitovant and continue its operations as a wholly-owned subsidiary of Sumitovant.

Sumitovant’s goal is to continue working with the team of Urovant and focus on the commercial launch of their most important project, vibegron. If the commercial launch of vibegrongoes successful, it will be the first branded drug for OAB patients over a period oflast 10 years. 

Urovant Sciences Ltd. (UROV) is hoping to obtain FDA approval for vibegron in near future. The decision for the potential approval of OAB drug is expected to be taken on December 26, 2020.

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