Roche strikes $3.5 billion deal for U.S.-Israeli biotech 89bio
Founded in 2018 from Teva’s pipeline, the biotech firm is set to become a centerpiece in Roche’s obesity strategy.
Roche has agreed to acquire 89bio, a U.S.-Israeli biotechnology company developing treatments for advanced liver disease, in a deal worth up to $3.5 billion. The move positions the Swiss drugmaker at the forefront of a new therapeutic frontier that sits at the intersection of obesity and metabolic disorders, just as global competition in weight-loss drugs reaches a fever pitch.
89bio was founded in Israel in 2018 and is currently headquartered in the U.S., with an R&D center in Israel. The Roche deal caps a rapid ascent from startup to acquisition target in less than a decade. The company was founded after licensing a pipeline of liver and metabolic drug candidates from Teva Pharmaceutical Industries, Israel’s largest drugmaker.
89bio secured $60 million in Series A funding in 2018 from OrbiMed Advisors, Longitude Capital, RA Capital, and Pontifax. The founding team included veterans of Teva’s R&D unit, among them Michal Ayalon and Ram Waisbourd. Michael Hayden, Teva’s former global R&D chief, joined as a founding board member.
That early foundation allowed 89bio to advance pegozafermin into late-stage trials, drawing interest from investors and ultimately from Roche, which has been looking to deepen its footprint in metabolic diseases.
Under the terms announced Thursday, Roche will tender $14.50 per share in cash for all outstanding common stock of 89bio, along with a contingent value right of up to $6 per share tied to future milestones. The deal values the company at roughly $2.4 billion upfront, rising to $3.5 billion if milestones are met.
At the center of Roche’s interest is pegozafermin, 89bio’s lead drug candidate. Part of a class of experimental therapies known as FGF21 analogues, pegozafermin is in late-stage trials for metabolic dysfunction-associated steatohepatitis (MASH), a progressive form of fatty liver disease that affects millions worldwide and is often linked to obesity. Roche executives said they view the compound as having the potential to become best-in-class.
“This is a very nice complement in terms of being able to treat another very common comorbid condition with obesity,” said Teresa Graham, head of Roche’s pharmaceutical division. She added that the company is considering testing pegozafermin not only as a standalone therapy but also in combination with Roche’s pipeline of weight-loss drug candidates.
The deal underscores how major pharmaceutical companies are racing to expand beyond GLP-1 weight-loss drugs into related areas such as cardiovascular, renal, and liver diseases. Roche itself has moved aggressively over the past year, paying $2.7 billion for weight-loss drug developer Carmot and striking a deal worth up to $5.3 billion with Zealand Pharma for rights to an obesity treatment.
Rival companies are pursuing similar strategies. GSK agreed in May to pay up to $2 billion for rights to a Boston Pharmaceuticals liver disease therapy, while Akero Therapeutics’ own FGF21 analogue recently showed promise in reversing liver damage in mid-stage trials. Novo Nordisk and Eli Lilly, leaders in the weight-loss market, are also testing their drugs for broader applications against liver disease.
