Roche has made a significant move in the pharmaceutical landscape by agreeing to acquire 89bio for $2.4 billion, focusing on the metabolic disorder known as MASH. This acquisition will allow Roche to introduce a third medication with a unique mechanism of action to combat this common fatty liver disease. The deal underscores Roche’s commitment to advancing treatment options for patients suffering from this condition.
According to the terms of the agreement announced on Thursday, Roche will offer $14.50 for each outstanding share of 89bio, which translates to a substantial premium of nearly 80% compared to the stock’s closing price from the previous day. This valuation places 89bio’s total worth at $2.4 billion. However, shareholders of 89bio may see additional financial rewards if the company’s drug meets specific developmental milestones.
The primary asset of 89bio, based in San Francisco, is pegozafermin, an innovative experimental treatment targeting metabolic dysfunction-associated steatohepatitis (MASH). This chronic metabolic disorder is characterized by the accumulation of fat in the liver, leading to inflammation and the development of liver scarring, known as fibrosis. MASH progresses through four stages, with the most severe stage being stage 4 or F4, which represents liver cirrhosis. The FDA estimates that approximately 14.9 million Americans are affected by MASH, a condition that may necessitate a liver transplant in its severe form.
Pegozafermin functions as an engineered protein that mimics FGF21, a metabolic hormone produced by the liver responsible for regulating energy expenditure and fat metabolism. This drug boasts a long half-life, enabling patients to receive injections every two weeks. A Phase 3 clinical trial is underway to evaluate pegozafermin’s efficacy in reducing F2 and F3 fibrosis, with preliminary data anticipated in the first half of 2027. Additionally, another Phase 3 study is enrolling F4 MASH patients to assess the drug’s impact on liver cirrhosis, with results expected in the first half of 2028.
While oncology remains Roche’s leading therapeutic area in terms of revenue, the Swiss pharmaceutical company is actively pursuing acquisitions to broaden its portfolio. Last year, Roche invested $2.3 billion to acquire Carmot Therapeutics and its promising pipeline of obesity and diabetes drug candidates focusing on GLP-1 and GIP receptors. Earlier this year, Roche entered into a $1.65 billion partnership with Zealand Pharma to collaborate on an amylin-targeting drug for obesity. In announcing the acquisition of 89bio, Roche Group CEO Thomas Schinecker emphasized that this deal enhances the company’s offerings in cardiovascular, renal, and metabolic diseases. He also noted the potential for 89bio’s drug to synergize with Roche’s existing assets, echoing sentiments shared during the Carmot and Zealand acquisitions.
“We are highly encouraged by the potential of pegozafermin to serve as a transformative treatment option for MASH, a prevalent comorbidity associated with obesity, and to effectively address the diverse needs of patients affected by this complex disease,” Schinecker stated. “With its combined anti-fibrotic and anti-inflammatory mechanisms, pegozafermin could potentially deliver best-in-class efficacy for all patients experiencing moderate to severe MASH.”
The closest competitor to pegozafermin is efruxifermin, an injection developed by Akero Therapeutics that also acts as an engineered protein analog for FGF21. Currently, this drug is under evaluation in three Phase 3 studies. Additionally, GSK recently acquired an FGF21 candidate, efimosfermin alfa, from Boston Pharmaceuticals for $1.2 billion. This drug, which is ready for Phase 3 trials, could potentially offer a more convenient dosing schedule as a once-monthly injection.
The first medication approved for MASH was Rezdiffra by Madrigal Pharmaceuticals, which is a small molecule designed to activate THR-beta, a receptor that plays a critical role in regulating metabolic activity within the liver. The accelerated approval granted by the FDA for this once-daily pill last year specifically addresses patients with moderate to advanced disease, which correlates with F2 or F3 fibrosis. Furthermore, last month, Wegovy, a GLP-1 obesity treatment from Novo Nordisk, expanded its indications to include moderate-to-advanced MASH. Although Novo was developing an FGF21 analog for this fatty liver condition, the program has recently been discontinued.
In a note to investors, Leerink Partners analyst Thomas Smith expressed confidence that the MASH market will consist of numerous drugs spanning various therapeutic classes. The acquisition of 89bio serves as further validation for the FGF21 class, which Leerink regards as having the most compelling mechanism of action for treating MASH, particularly given the strong Phase 2b data observed in patients with advanced fibrosis and F4 compensated cirrhosis.
Leerink anticipates that the 89bio drug could generate up to $4.7 billion in peak global revenue by 2035, including $2.6 billion from advanced fibrotic MASH and $1.6 billion from cirrhotic MASH. Such projections are promising for the potential financial rewards for 89bio shareholders. The acquisition agreement includes a non-tradeable contingent value right, which may pay up to $6 per share in cash if 89bio’s drug achieves specified milestones, potentially increasing the total deal value to $3.5 billion. The initial milestone of $2 per share will be triggered by the first commercial sale of pegozafermin in F4 MASH cirrhotic patients, required by the end of the first quarter of 2030. An additional $1.50 per share could be awarded if the drug achieves annual global net sales of at least $3 billion in any calendar year by the end of 2033. Reaching $4 billion in net sales by 2035 would activate the final payout of $2.50 per share.
The acquisition of 89bio by Roche is expected to finalize in the fourth quarter of this year. Notably, 89bio licensed pegozafermin from Teva Pharmaceutical Industries in 2018 for an upfront payment of $6 million, with an additional $67.5 million contingent upon milestone achievements, as outlined in the biotech’s regulatory filings. If pegozafermin successfully reaches the market, Teva will also be entitled to receive royalties from its sales.
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