Myovant Sciences has rejected an acquisition offer from Sumitovant Biopharma  and its wholly owned subsidiary, Sumitomo Pharma. The news of the offer came just weeks after Myovant and its partner, Pfizer, received the US Food and Drug Administration’s (FDA) expanded approval of Myfembree (estradiol + norethindrone acetate + relugolix) for the management of moderate to severe pain associated with endometriosis. Since Myfembree’s approval, Myovant’s share price rose more than 15%, catching the eyes of the Japanese conglomerate, Sumitomo .

While Sumitomo already owns 52% of Myovant’s outstanding shares, the proposed offer was to acquire the remaining 48% at $22.75 to a share in cash. The enterprise value of the deal would total $2.5bn, representing a 27% premium to the company’s closing price on 30 September. GlobalData believes that Myovant considers its value to be higher mainly because of the company’s drug Myfembree, which has the potential to fulfil significant unmet needs in the endometriosis space.

Sumitomo acquired its stake in Myovant in 2019 when it paid Roivant Sciences $3bn for stock in five of the holding company’s subsidiaries, which included Myovant. Since its initial investment in Myovant, both Sumitovant and Sumitomo Pharma have enjoyed a successful relationship with the Swiss drugmaker; this has facilitated the continued development and commercialisation of its gonadotropin-releasing hormone receptor (GnRH) antagonists, Orgovyx (relugolix) and Myfembree, for the treatment of advanced prostate cancer and women’s health respectively.

Myfembree is a combination therapy that includes relugolix, estradiol and norethindrone acetate. The drug won its original FDA approval in May last year to treat heavy menstrual bleeding that accompanies uterine fibroids in premenopausal women. In August this year, it gained a second FDA endorsement to treat moderate to severe endometriosis.

The approval of Myfembree marks a critical step forward in the endometriosis space. Most currently available therapeutic options for endometriosis often have a diminished efficacy over time and result in negative side effects such as menopausal-like side effects and bone mineral density (BMD) loss. In contrast, Myfembree offers the convenience of an oral pill taken once daily, as well as higher efficacy rates and less BMD loss, thus providing a long-term treatment option for patients. Despite the drug being the second GnRH antagonist to reach the US market, after the launch of AbbVie’s Orilissa (elagolix) in 2018, GlobalData expects MyFembree to have a high penetration in the endometriosis market after the slow and disappointing uptake of Orilissa.

Myovant is not currently ready to accept the buyout offer, but is willing to consider a higher bid, which is likely to reflect the anticipated success of MyFembree in the endometriosis space in the coming years. Despite this, it remains to be seen whether Sumitomo will increase its offer price or whether a bidding war will break out.