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Roivant Sciences 8-K Report, Material Agreement (Sep 23, 2024)

Reports
Material Agreements·Exhibits & Filings
Filing Date
Filed September 23, 2024
Period End
September 17, 2024
Security
ROIV
In the record · 2021–202610-K510-Q168-K82

ROIV filed 5 annual reports (10-K), 16 quarterly reports (10-Q) and 82 current reports (8-K) between 2021 and 2026.

  1. Leadership change8-K · Oct ’21Oct ’21
  2. Leadership change8-K · Nov ’22Nov ’22
  3. Deal closed8-K · Dec ’23Dec ’23
  4. Material agreement8-K · Mar ’26Mar ’26

01—Abstract

Summary

Summary of the 8-K filed September 23, 2024. Cited figures are marked; the original filing is the authoritative source.

On September 17, 2024, Dermavant Sciences Ltd., a subsidiary of Roivant Sciences Ltd. (ROIV), entered into an Agreement and Plan of Merger with Organon & Co. and Organon Bermuda Ltd., under which Organon will acquire Dermavant.

Roivant owns approximately 87% of Dermavant's issued and outstanding common and preference shares. Merger Sub will merge into Dermavant, which will continue as a wholly owned subsidiary of Organon. The aggregate cash consideration is up to approximately $1.2 billiona, consisting of a $175 million payment at closing (subject to certain adjustments), a $75 million milestone payable upon FDA approval of VTAMA for atopic dermatitis, and up to $950 million in additional milestones tied to tiered net sales.

Organon will also pay tiered royalties of low-to-mid single digit percentages on annual net sales up to $1 billionb and 30% on annual net sales above $1 billion. Payments are distributed pro rata to all Dermavant equity holders after the liquidation preference of preference shares, all of which are held by Roivant. Outstanding amounts under the Dermavant credit agreement will be paid at closing, and Organon will assume the revenue interest purchase agreement and funding agreement with NovaQuest entities.

The boards of Roivant and Dermavant approved the transaction, and shareholders holding at least 75%c of Dermavant's voting rights approved it by written consent. The merger is expected to close in the fourth quarter of calendar 2024, subject to customary conditions including expiration of the HSR waiting period. The agreement may be terminated if not consummated by March 17, 2025, extendable to June 17, 2025 for antitrust-related delays, and either Roivant or Organon may terminate if the merger is not consummated by January 5, 2025 due to failure to satisfy certain antitrust-related conditions.

02—Key points

Key Highlights

  1. Organon & Co. agreed to acquire Dermavant Sciences Ltd., a Roivant subsidiary, for aggregate cash consideration of up to approximately $1.2 billion.
  2. Upfront payment of $175 million at closing, subject to certain adjustments.
  3. A $75 million milestone is payable upon FDA approval of VTAMA for atopic dermatitis, plus up to $950 million in additional sales-based milestones.
  4. Organon will pay tiered royalties of low-to-mid single digit percentages on annual net sales up to $1 billion and 30% on annual net sales above $1 billion.
  5. Roivant owns approximately 87% of Dermavant's common and preference shares, and the transaction was approved by shareholders holding at least 75% of Dermavant's voting rights.
  6. The merger is expected to close in the fourth quarter of calendar 2024, subject to HSR clearance and other customary conditions.
  7. Outstanding Dermavant credit agreement amounts will be paid at closing, and Organon will assume the NovaQuest revenue interest purchase and funding agreements.

03—Questions

Frequently Asked Questions

  1. What is Roivant selling and to whom?

    Roivant, through its subsidiary Dermavant Sciences Ltd., agreed to sell Dermavant to Organon & Co. via a merger in which Organon's indirect subsidiary Organon Bermuda Ltd. merges into Dermavant, which then becomes a wholly owned Organon subsidiary. Dermavant's key product referenced is VTAMA for atopic dermatitis.

  2. How much will Dermavant's equity holders receive?

    Aggregate cash consideration is up to approximately $1.2 billion, including a $175 million closing payment, a $75 million milestone upon FDA approval of VTAMA for atopic dermatitis, and up to $950 million in sales-based milestones. Payments are made pro rata to equity holders after the liquidation preference of preference shares, all held by Roivant, is applied.

  3. What royalties are payable under the deal?

    Organon agreed to pay tiered royalties of low-to-mid single digit percentages on annual net sales of the product up to $1 billion, and 30% on annual net sales above $1 billion.

  4. When is the transaction expected to close and what could delay it?

    The merger is expected to close in the fourth quarter of calendar 2024. Closing is subject to customary conditions, including expiration of the HSR Act waiting period and the absence of any government antitrust lawsuit challenging the merger.

  5. What are the termination rights?

    The parties may terminate if the merger is not consummated by March 17, 2025, extendable to June 17, 2025 at the option of either Dermavant or Organon if antitrust-related conditions are not satisfied. Roivant or Organon may also terminate if the merger is not consummated by January 5, 2025 due to failure to satisfy certain antitrust-related conditions.

04—Continue

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