Advent International and Aurora Investment, a subsidiary of Singapore sovereign wealth fund GIC, have offered to buy all shares of biotechnology player Swedish Orphan Biovitrum (Sobi) for $8 billion and take the company private under Agnafit Bidco, a newly established Swedish LLC indirectly owned by Advent and Aurora.
The offer represents a 37.7% premium over the volume-weighted average trading price of Sobi shares during the last 30 trading days ended Aug. 25, and Sobi’s board of directors unanimously recommended that shareholders accept the deal. However, the Wallenberg family, Sweden’s wealthiest clan, injected some uncertainty by saying they would accept the offer but are very much open to a better one. Investor AB, a Wallenberg vehicle, is Sobi’s biggest shareholder with 36.45% of voting shares.
Whether the bidding war the Wallenberg are clearly hoping for could materialize, biotech industry observers such as Jefferies’ Eun Yang are dubious. Sobi’s days as a major player in the hemophilia market appear to be behind it; the company’s best-selling drug, the hemophilia A treatment Elocta (efmoroctocog alfa) with revenue of SEK 4.6 billion ($537 million) in 2020, has Roche’s Hemlibra (emicizumab) nipping at its heels.
Sobi announced a major restructuring two years ago, letting go almost 100 staffers while launching two new development centers focused mostly on hematology and immunology. The company’s bets since then have shown mixed results, with Gamifant (emapalumab), a treatment for the rare disease hemophagocytic lymphohistiocytosis) that Sobi gained through its purchase of the immunology assets of Novimmune, receiving approval in the U.S. but not in Europe. A $250 million cash deal to buy non-U.S. rights to Apellis’ C3 therapy pegcetacoplan last year may yield better results; Jefferies analysts see the product, which received FDA approval for the rare disease paroxysmal nocturnal hemoglobinuria, on track for $4 billion in annual sales.
Sobi also has four programs in late-stage development, including treatments for gout and respiratory syncytial virus (RSV), and the prospective buyers expressed faith in the company’s prospects. “Over the coming years, Sobi will continue its ongoing transformation towards becoming a global leader in rare diseases,” said Advent Managing Director Tom Allen. “Advent has significant experience of supporting the growth of international healthcare innovators and is committed to help Sobi achieve its long-term goals and improve life for a number of small and often overlooked patient populations.”
Choo Yong Cheen, GIC’s CIO for Private Equity, sounded a similar note. “We believe this investment by GIC, together with our longstanding partner Advent, will provide Sobi with the required level of support to succeed in the next stage of its growth as a diversified, rare disease platform,” he said.