Roche pays $7B to challenge Merck for bowel disease market, intensifying TL1A feeding frenzy

Roche really was lining up a $7 billion challenge to Merck & Co. Months after a media report about a potential deal, the Swiss drugmaker has agreed to pay Roivant and Pfizer $7.1 billion upfront for regional rights to a bowel disease candidate that is on the cusp of phase 3.

The deal, which also includes a $150 million near-term milestone payment, will give Roche rights to the anti-TL1A antibody RVT-3101 in the U.S. and Japan. A feeding frenzy has formed around TL1A as the release of midphase data on RVT-3101 and MK-7240, a rival candidate that Merck bought earlier this year, have shown targeting the protein may improve outcomes in conditions including ulcerative colitis. 

Roche has secured a slot at the front of the TL1A pack by acquiring Telavant, a biotech that Roivant and Pfizer set up to advance the candidate in the U.S. and Japan. Roivant owns 75% of Telavant, with Pfizer owning the remaining 25% as well as the rights to RVT-3101 in the rest of the world.

The deal represents a quick win for Roivant, which partnered with Pfizer on the program 11 months ago. For Roche, buying Telavant gives it a chance to go toe-to-toe with Merck for a blockbuster opportunity. Developers of TL1A are initially focusing on ulcerative colitis, an indication in which RVT-3101 is ready for phase 3, but also have their sights on Crohn’s disease and other conditions.

“We strongly believe this novel TL1A-directed antibody has the transformational potential to make a significant difference for patients living with inflammatory bowel disease and potentially other diseases,” Roche CEO Thomas Schinecker, Ph.D., said in a statement.

The deal caps off a dramatic 12 months in the TL1A space. In November, Pfizer partnered with Roivant to advance its drug candidate, leading to the formation of a jointly owned biotech, Telavant, with regional rights to the asset. Any fears that the deal implied a lack of confidence in TL1A were soon blown away by clinical data, as Prometheus Biosciences and Roivant shared impressive results in quick succession.

Merck was excited enough about the Prometheus data to pay $10.8 billion to acquire the biotech. Sanofi entered the space early this month, paying Teva around $500 million for the chance to co-develop a drug candidate that is tucked in behind the leaders in the race to bring TL1A treatments to market.

In addition to gaining rights to a TL1A front-runner, Roche has secured an option to partner on a prospect that could come from behind to capture the market. The option allows Roche to form a global collaboration with Pfizer to develop a p40xTL1A bispecific antibody that is currently in phase 1.