Urovant Sciences Ltd. (Nasdaq: UROV), which is developing medications to treat urologic issues, is starting the year with a new main investor from Japan, a $300 million loan, and progress in getting its core drug, vibegron, to market in the U.S.
Sumitomo Dainippon Pharma Co., one of Japan’s largest pharmaceutical companies with a market cap topping $8 billion, became the largest investor in the Irvine-based company at the end of 2019 after inking a deal with Urovant’s prior majority shareholder, Roivant Sciences Ltd.
Sumitomo and Roivant completed an alliance that includes the transfer of Roivant’s ownership interests in Urovant, as well as four additional biopharmaceutical “Vant” companies it is associated with.
The alliance will operate as Sumitovant Biopharma Ltd., a newly formed subsidiary of Sumitomo Dainippon Pharma.
Upsized Loan
As well as the new ownership stake, Sumitomo has provided Urovant a $300 million loan, described as a “low interest, interest-only, five-year term loan facility, with no repayments due until the end of the term.”
The loan is more than previously expected, according to Urovant Chief Executive Keith Katkin.
“Sumitomo Dainippon Pharma’s willingness to increase the size of the facility by $100 million from the originally agreed-upon $200 million, demonstrates its belief in vibegron and their long-term commitment to Urovant,” Katkin said.
The loan “provides Urovant with capital well into 2021, eliminating the need for any short-term equity financing,” he added. The company’s cash totaled $67.8 million as of Sept. 30, down from $85.4 million in March 31, which is the end of its fiscal 2019.
Sumitomo also said it expects to continue to support Urovant “through profitability.”
FDA Application
The loan was announced on Dec. 30, the same day that Urovant submitted a new drug application (NDA) to the U.S. Food and Drug Administration for approval of a 75 milligram dosage for its vibegron, a drug designed for patients with overactive bladder issues, including those with symptoms of urge urinary incontinence, urgency, and urinary frequency.
The submission for vibegron “is a significant milestone for our company and brings us one step closer to potentially providing a new oral therapy to a highly dissatisfied market,” Katkin said.
The symptoms of overactive bladder (OAB) affect over 30 million people in the U.S., according to Katkin.
Vibegron, if approved this year, would be the first new branded prescription drug for the treatment of OAB in nearly a decade, he said.
2 Years Public
The company’s stock got a nearly 20% bump after the pair of announcements and traded at an all-time high of $15.75 before slipping; its shares now trade at $13.25 and a $405 market cap.
The company went public in 2018 at $14 a share.
Five analysts on average are expecting Urovant’s revenue to climb to $22.4 million in fiscal 2021, which begins in April. n
