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Oct. 24, 2022Print(PDF/791KB)Corporate

Sumitomo Pharma, Sumitovant Biopharma, and Myovant Sciences Enter into Definitive Agreement

OSAKA, JP; NEW YORK, NY; and BASEL, CH - October 24, 2022 - Sumitomo Pharma Co., Ltd. (Sumitomo Pharma"), in conjunction with its wholly owned subsidiary Sumitovant Biopharma Ltd. ("Sumitovant"), and Myovant Sciences Ltd. ("Myovant") (NYSE: MYOV) announced today that they have entered into a definitive agreement pursuant to which Sumitovant will acquire all outstanding shares of Myovant not already owned by Sumitovant for $27.00 per share in cash. This corresponds to a total transaction value of $1.7 billion on a fully diluted basis, and a total company value of $2.9 billion on a fully diluted basis. Sumitovant currently beneficially owns approximately 52% of the issued and outstanding shares of Myovant as more particularly described in Sumitovant's Schedule 13D/A filed with the U.S. Securities and Exchange Commission (the "SEC").

The purchase price represents a premium of approximately 50% to Myovant's closing share price on September 30, 2022, the last day of trading prior to Sumitovant's initial non-binding proposal, and a premium of approximately 55% to the 60-day volume weighted average price of Myovant's shares through September 30, 2022. The agreement has been approved by the boards of Sumitovant and Sumitomo Pharma and unanimously recommended by a Special Committee of the independent directors of Myovant and, acting upon such recommendation, approved by its full board of directors with the Sumitovant designated directors recusing themselves and abstaining from the deliberations and vote.

Purpose of the Transaction
Since the investment in Myovant in December 2019, both Sumitomo Pharma and Sumitovant have enjoyed a collaborative and successful relationship with Myovant that has facilitated the continued development and commercialization of Orgovyx® and Myfembree® in prostate cancer and women's health in and outside of the U.S.

"Myovant's two products, ORGOVYX® and MYFEMBREE® have substantial potential. We believe the combination of the expertise, platforms, and resources of Sumitovant and Myovant will strengthen Myovant's product capabilities and help continue to deliver innovative therapies addressing unmet patient needs in prostate cancer and women's health," said Hiroshi Nomura, CEO of Sumitomo Pharma. "By making Myovant into a wholly owned subsidiary of Sumitovant, we believe that we will be able to accelerate implementation of management strategies that make full use of cash flow generated by ORGOVYX® and MYFEMBREE® for sustained growth of the Sumitomo Pharma Group."

Transaction Details
The transaction is anticipated to close in the first quarter of 2023, subject to customary closing conditions, including obtaining the requisite regulatory approvals and approval by Myovant shareholders holding a majority of the shares outstanding not beneficially owned by Sumitovant and its affiliates. The transaction will be financed through a combination of cash on hand and external debt financing. A financing commitment has been received from Sumitomo Mitsui Banking Corporation. The transaction is not subject to a financing condition.

A wholly owned subsidiary of Sumitovant established for the transaction will merge with and into Myovant and Myovant will continue as a surviving company.

Upon completion of the transaction, Myovant will become a wholly owned subsidiary of Sumitovant and Myovant's shares will no longer be listed on the New York Stock Exchange.

Please note that a relevant release titled "Sumitomo Pharma and Sumitovant Biopharma Announce Offer to Acquire Outstanding Shares of Myovant Sciences" was disclosed on October 3, 2022.
https://www.sumitomo-pharma.com/ir/news/pdf/ene20221003.pdf

Advisors
J.P. Morgan Securities LLC is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to Sumitovant and Sumitomo Pharma. Goldman Sachs & Co. LLC is serving as financial advisor to the Special Committee of the Board of Directors of Myovant and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to the Special Committee.

Overview of Companies

(1) Company name Sumitovant Biopharma Ltd.
(2) Address of headquarters London, UK
(3) Representative Chairman: Hiroshi Nomura
(4) Business description Management of Sumitovant group companies, and formulation and promotion of business strategies, etc.
(5) Share Capital $1 (in thousands)
(6) Date of establishment October 25, 2019
(7) Major shareholders and ownership ratio 100.0% - Sumitomo Pharma Co., Ltd.
(8) Relationship with Sumitomo Pharma Capital ties Sumitovant is a wholly-owned subsidiary of Sumitomo Pharma Co., Ltd.
Human relationship Three of Sumitomo Pharma's directors serve as directors of Sumitovant, and six of Sumitomo Pharma's employees are seconded to the company.
Business relationship Sumitomo Pharma outsources a part of its business to Sumitovant.
(1) Company name Myovant Sciences Ltd.
(2) Address of headquarters London, UK
(3) Representative Chief Executive Officer: David Marek
(4) Business description Manufacturing and sales of pharmaceuticals in the women's health, prostate cancer areas
(5) Share Capital $2 (in thousands)
(6) Date of establishment February 2, 2016
(7) Major shareholders and ownership ratio Approximately 52% - Sumitovant Biopharma Ltd.
(8) Relationship with Sumitomo Pharma Capital ties Sumitovant which is a wholly-owned subsidiary of Sumitomo Pharma owns approximately 52% of the outstanding shares of Myovant.
Human relationship One of Sumitomo Pharma's directors serves as a director of Myovant.
Business relationship Sumitomo Pharma provides a loan to Myovant.
(9) Consolidated operating results and financial position of the company over the last three years.
Unit: million US dollar (excluding consolidated net income per share and dividend per share)
Fiscal year FY2019 FY2020 FY2021
Consolidated net assets ($108) ($354) ($473)
Consolidated total assets $106 $725 $520
Consolidated sales $59 $231
Consolidated operating income ($275) ($261) ($187)
Net income ($289) ($255) ($206)
Consolidated net income per share ($3.37) ($2.83) ($2.22)
Dividend per share

Number of Shares to Be Acquired, Acquisition Price, and Status of Shares Owned Before and After Acquisition

(1) Number of shares already acquired before transfer 50,041,181 shares, (Number of voting rights: 50,041,181, Percentage of voting rights ownership: approximately 52%)
(2) Number of shares to be acquired Approximately 61,907,523 shares
(3) Total value for the acquisition Approximately $1.7 billion.
(4) Number of shares already acquired after transfer Approximately 107,705,699 shares, (Number of voting rights: approximately 107,705,699, Percentage of voting rights ownership: 100%)
The number of dilutive shares is not included for the calculation of percentage of voting rights ownership.
The number of dilutive shares is included for the calculation of the number of shares to be acquired and the number of shares already acquired after transfer.
Schedule
(1) Signing of definitive agreement October 23, 2022 (U.S. time)
(2) Stock transfer execution date (Note) In the first quarter of 2023 (scheduled)
Note: Subject to applicable regulatory approvals

Financial Impact on Business Performance
The transaction is expected to have a negative impact on each profit level below core operating profit, but the amount of impact is yet to be determined because it depends on the timing of the closing, and if it becomes necessary to revise the consolidated financial forecasts for FY2022, Sumitomo Pharma will announce such information in a timely manner.

Reference
About Sumitomo Pharma Co., Ltd.
Sumitomo Pharma is among the top-ten listed pharmaceutical companies in Japan, operating globally in major pharmaceutical markets, including Japan, the U.S., China, and other Asian countries with about 7,000 employees worldwide. Sumitomo Pharma defines its corporate mission as "To broadly contribute to society through value creation based on innovative research and development activities for the betterment of healthcare and fuller lives of people worldwide." Additional information about Sumitomo Pharma is available through its corporate website at https://www.sumitomo-pharma.com.

About Sumitovant Biopharma Ltd.
Sumitovant is a technology-driven biopharmaceutical company accelerating development and commercialization of new potential therapies for patients with rare conditions and other diseases. Through our proprietary computing and data platforms, scientific expertise and diverse company portfolio, Sumitovant has supported development of multiple FDA-approved products and a robust pipeline of early- through late-stage investigational assets addressing unmet patient needs in pediatrics, urology, oncology, women's health, specialty respiratory and infectious diseases. Sumitovant is a wholly owned subsidiary of Sumitomo Pharma. Please visit our website www.sumitovant.com for more information on Sumitovant and our portfolio.

About Myovant Sciences
Myovant Sciences aspires to redefine care for women and men through purpose-driven science, empowering medicines, and transformative advocacy worldwide. Founded in 2016, Myovant has executed five successful Phase 3 clinical trials across hormone-sensitive oncology and women's health leading to five regulatory approvals in the United States and Europe. Myovant and its partners continue to file for additional indications of its lead products as well as continue further development of pipeline assets. Sumitovant Biopharma Ltd., a wholly owned subsidiary of Sumitomo Pharma Co., Ltd., is Myovant's majority shareholder. For more information, please visit www.myovant.com.