On October 31, 2019 Myovant Sciences (NYSE: MYOV), a healthcare company focused on developing innovative treatments for women’s health and prostate cancer, reported that it has entered into a landmark agreement with Sumitomo Dainippon Pharma Co., Ltd. (TSE: 4506), a leading Japanese pharmaceutical company, on a $350 million low-interest, five-year term loan facility and an Investor Rights Agreement (Press release, Myovant Sciences, OCT 31, 2019, https://investors.myovant.com/news-releases/news-release-details/myovant-sciences-enters-landmark-agreement-sumitomo-dainippon [SID1234550137]). This agreement was made in conjunction with Myovant’s founding shareholder, Roivant Sciences, and Sumitomo Dainippon Pharma entering into a definitive agreement for the creation of a broad strategic alliance. At closing, the alliance entity will assume Roivant’s ownership interest in Myovant, which is expected to represent not less than a majority of Myovant’s outstanding shares.
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"Sumitomo Dainippon Pharma is committed to supporting Myovant through commercialization and profitability as the robust potential of relugolix is unlocked for women with uterine fibroids or endometriosis, and for men with prostate cancer," said Hiroshi Nomura, Representative Director, President and CEO of Sumitomo Dainippon Pharma.
"Myovant is delighted to have the support of Sumitomo Dainippon Pharma," said Lynn Seely, M.D., President and CEO of Myovant. "With total cash and committed financing of approximately $500 million, including the Sumitomo Dainippon Pharma term loan facility, we will be in a strong financial position to advance the commercialization of relugolix."
Sumitomo Dainippon Pharma has committed to provide Myovant a $350 million low-interest, five-year term loan facility, with no repayments due until the end of the term to fund Myovant’s operating expenditures. Myovant will be able to access the facility on a quarterly basis, subject to certain terms and conditions. The agreement will become effective upon close of the Sumitomo Dainippon Pharma transaction with Roivant.
Myovant and Sumitomo Dainippon Pharma will also enter into an Investor Rights Agreement, which provides that the Myovant Board of Directors will continue to include a minimum of three independent directors who will have approval rights over certain corporate actions, including related-party transactions between Myovant and Sumitomo Dainippon Pharma. The ratio of independent to non-independent directors is also expected to remain unchanged. The Investor Rights Agreement will further include standstill provisions including a non-waivable condition requiring approval by a majority of the minority shareholders for any transaction that would cause Sumitomo Dainippon Pharma to hold beneficial ownership of Myovant of greater than 60%. Additionally, for a standstill period of three years, any such transaction must also be made on a confidential basis to the independent directors and is subject to approval by a majority of the independent directors.
Subject to the closing of the strategic alliance transaction, Sumitomo Dainippon Pharma has also agreed that upon Myovant’s request, the parties will discuss terms upon which Sumitomo Dainippon Pharma will provide Myovant access to its U.S. commercial infrastructure and operational support as Myovant moves forward with the commercialization of relugolix.
Earlier this year, Myovant announced positive topline data from two Phase 3 studies, LIBERTY 1 and LIBERTY 2, evaluating relugolix combination therapy in women with uterine fibroids, as well as positive results from a separate bioequivalence study supporting a potential one pill, once-a-day dosing regimen of relugolix combination therapy. Myovant expects to announce topline results from its Phase 3 study, HERO, evaluating relugolix monotherapy in men with advanced prostate cancer later this year and results from two Phase 3 studies, SPIRIT 1 and SPIRIT 2, evaluating relugolix combination therapy in women with endometriosis in the first and second quarters of 2020.