Roche has entered into a definitive merger agreement to acquire clinical-stage biopharmaceutical company 89bio, Inc. in a deal valued at up to $3.5 billion.
Under the terms of the agreement, an affiliate of Roche will commence a tender offer to purchase all outstanding shares of 89bio at $14.50 per share in cash at closing, representing an aggregate equity value of about $2.4 billion.
In addition, 89bio stockholders will receive a non-tradeable contingent value right (CVR) that could deliver up to an additional $6.00 per share upon achievement of specified regulatory or commercial milestones, bringing the total potential transaction value to roughly $3.5 billion.
The acquisition gives Roche ownership of pegozafermin, an investigational FGF21 analogue that 89bio is developing as a treatment for moderate to severe metabolic dysfunction-associated steatohepatitis (MASH).
Pegozafermin is currently in late-stage clinical development and is viewed by both companies as a potential therapy for a disease with substantial unmet medical need. Roche said the asset complements its cardiovascular, renal and metabolic disease portfolio and offers optionality for future combination development.
Financial markets reacted strongly to the announcement. Shares of 89bio surged sharply on the news, rising more than 80 percent in early trading as the market priced in Roche’s offer and the potential milestone payments.
Roche’s own shares showed mixed moves as investors assessed the strategic implications. Reports noted the cash portion of the deal values 89bio at about $2.4 billion on closing, with the CVR accounting for the upside to $3.5 billion.
Roche said the acquisition will be integrated into its pharmaceuticals division and that it expects the deal to strengthen its presence in therapies for liver and cardiometabolic diseases.
The companies indicated that Roche will work to advance pegozafermin through the remaining clinical programme and to prepare for potential regulatory submissions, while exploring how the candidate might fit alongside Roche’s broader development and commercial capabilities.
The press release noted that specific development and regulatory plans will be outlined as the integration proceeds.
The transaction remains subject to customary closing conditions, including expiration or termination of the tender offer, regulatory clearances, and other conditions specified in the merger agreement.
Roche will commence the tender offer promptly, and if the offer is successful, the companies will complete the merger and effect the payment at closing, with the CVR mechanism determining any contingent payments tied to future milestones. The timing of the closing will depend on procedural and regulatory steps.
The acquisition comes amid heightened competition among major pharmaceutical companies to build capabilities in obesity-related and metabolic disease areas, where FGF21 analogues and other novel mechanisms are attracting investment.
Pegozafermin’s late-stage status and the potential size of the MASH patient population underpin Roche’s willingness to offer a significant upfront cash consideration plus milestone-linked upside.
At the same time, regulatory review outcomes and commercial performance will determine the long-term value of the asset.
Roche has framed the acquisition as a way to enhance its cardiovascular, renal and metabolic (CVRM) portfolio by adding a late-stage therapeutic candidate for liver disease and bolstering options for future combination approaches in metabolic conditions.
89bio’s board and management have recommended the transaction to their shareholders, and 89bio will provide customary disclosures and updates as the tender offer proceeds.