Rise of the chief investment officer: Why the unique role works for Roivant
Heads of business development are common in pharma and biotech companies, especially in a landscape so heavily focused on mergers, acquisitions and licensing deals.
Less common, though, are chief investment officers.
“Chief investment officer is definitely not a typical title in our industry,” said Dr. Mayukh Sukhatme, president and chief investment officer of Roivant
Sukhatme’s atypical title is fitting for the commercial-stage biotech company’s atypical approach. Roivant’s “hub-and-spoke” business model identifies new therapeutic programs for the company to develop and commercialize through acquisitions, licensing or other collaborations. From there, Roivant — founded by current U.S. presidential candidate and former CEO Vivek Ramaswamy in 2014 — spins off subsidiary companies focused on a specific program or therapeutic area. Roivant also incubates discovery-stage companies and health technology startups.
In addition to allowing small, hyper-focused teams run each subsidiary, the hub-and-spoke model lets Roivant adhere to another important operating principle: taking an “asset-centric approach” to deals, rather than focusing on therapeutic areas where the company already has experience.
“Core to our approach is to be therapeutic-area agnostic, stage-of-development agnostic, modality agnostic,” Sukhatme said. “By intent, we try to avoid being pigeonholed and try to be guided by the program and the ultimate patient impact of the program, even if it’s an area where we have not done anything historically.”
As Roivant’s chief investment officer, it’s Sukhatme’s job to be on the lookout for the company’s next program. So far his track record has been good.
“The only way to make sure you’re at the right place at the right time is to always be there.”
Dr. Mayukh Sukhatme
President, chief investment officer, Roivant
Programs he’s in-licensed or acquired have produced all 10 of the company’s positive phase 3 studies. In 2019, Roivant sold five of its subsidiaries to Sumitomo Dainippon Pharma in a $3 billion dollar deal that included assets later approved by the FDA. The growth of its subsidiaries and deals continued.
Among Roivant’s current subsidiaries is Dermavant, which markets the plaque psoriasis treatment Vtama, and has other psoriasis therapies in development.
Another of its companies, Telavant, was just plucked up for $7 billion by Roche, which also got a potentially first-in-class inflammatory bowel disease candidate in the deal.
“Principally, what I am focused on is identifying and bringing in new programs. In essence, it’s making new investments, but usually it’s investment not just in dollars, but in focus,” he said. “It’s really trying to find the next thing we’re going to work on as a company and then arranging a partnership with [those organizations], whether it’s a large pharma company, or a small biotech, or an academic institution, and to bring it in in a way that’s really a win for everyone.”
In doing so, Sukhatme draws on a background that’s perfectly suited to the role.
Wall Street smarts in biotech
Prior to Roivant, Sukhatme spent 15 years working in the New York investment world, analyzing development-stage biotech companies, and leading diligence and investment decisions.
“The core of what my job as an investor was to try to figure out [whether a drug was] going to make it in its subsequent clinical studies and ultimately be successfully commercialized,” he said. “If you get that right as an investor, the value of the company will follow.”
Among the investments he believes he got right in those years were in the hepatitis C space, with the shift from long-term injectable treatments to shorter-duration oral therapies with higher cure rates. Another key investment was in Alexion, which developed Soliris for the rare disease paroxysmal nocturnal hemoglobinuria. He called that a case “where the patient impact was probably underappreciated — because there weren’t great therapies, it was underestimated how much of an impact and how commercially successful that drug could be.”
While he draws on that investing and medical background now as chief investment officer, Sukhatme said the big-picture timeline is different in developing deals for Roivant. Instead of measuring success in each new set of events and how it affects a company’s stock over months or a few years, he’s developing deals that must stand the test of time and will require a multi-year commitment of people and resources.
“We have to own this for the long term. We’re not thinking about anything except owning it all the way through to commercialization,” he said. “The stakes of getting that right are very high.”
Scouting for the next big thing
“Ideas come from everywhere,” he said, pointing to medical meetings, seeing early data, and tracking multiple therapeutic areas as examples. The company also focuses on internal diligence, evaluating how data might evolve over the years and ensuring that they’re learning everything they can.
“I think that’s endlessly, intellectually interesting because we’re looking at things from all kinds of therapeutic areas,” he said.
In addition, much of the work is driven by relationships and developed over time. He said it’s not atypical to watch something or engage with an eventual partner for years before the “stars align” and they’re able to grow a partnership from those seeds. That’s why he considers it important to show potential partners how working with Roivant could be valuable. Keeping those relationships going can also result in repeat partnerships.
“We have this line internally, that the only way to make sure you’re at the right place at the right time is to always be there, to always be close to the hoop on something,” Sukhatme said.
It often takes years to know whether an investment pans out, and like many business deals in biotech, there’s no such thing as a slam dunk. Late last month, the company announced it’s scrapping a systemic lupus erythematosus program after a drug candidate failed to meet the primary endpoint in a mid-stage study.
Sukhatme points to several collaborations he’s proud of, though, including one with Pfizer to develop brepocitinib, a potential first-in-class dual inhibitor of TYK2 and JAK1 to treat severe autoimmune diseases.
“Those are two targets with a lot of biological validation, but it’s pretty unusual to be able to inhibit both of those at the same time,” he said.
As for what’s next, Sukhatme didn’t get into specifics, but he’s not limiting himself, his team or the company as they pursue programs with high patient impact.
“The range of things we’re looking at now is as broad as we’ve ever had it,” he said. “I think we’re in a pretty unique position as a company with a lot of capital and resources and a great track record of running late-stage studies.”
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