Duggan has agreed to plough US$25mln into Summit, which will leave him with just shy of 49% of the shares once all the papers have been completed.
Many investors have been speculating why he has decided to invest such a handsome sum – and at a premium – but it appears the answer might be very simple: he likes what he sees.
According to people close to the transaction, the 74-year-old has been looking to invest in antibiotics having recognised the need for more drug development in the space.
He is understood to like Summit’s intellectual property (IP), including its ridinilazole C. Diff treatment, as well as the strategy of the management, whom he is said to know and respect.
Likes the tech and the strategy
That partly explains why he isn’t keen on making a formal offer for the company, preferring instead to let bosses get on with what they’re doing.
They will no doubt seek out his advice should they need to, though, especially given his track record and reputation within the biotech sector.
His turnaround of Pharmacylicals, the company which developed blockbuster cancer drug Imbruvica, culminated in its sale to US pharma giant AbbVie Inc (NYSE:ABBT) for US$21bn back in 2015, making him a billionaire in the process.
Before that, Duggan had already had success building and selling companies, although his investments – Computer Motion and Computer Machinery Corp, for example – tended to have more of a focus.
Son’s death sparked pharma interest
It was only after the death of his son from brain cancer back in 2004 that his interest in developing new, potentially life-changing drugs really piqued.
The keen surfer began buying up shares in Pharmacyclics for under US$10, with the stock having suffered various regulatory setbacks and close to collapse.
When he took the helm in 2008, he prioritised the development of Imbruvica, the success of which propped up the stock price and prompted AbbVie to cough up US$261.25 a share seven years later.
Duggan, a keen surfer who now lives in Florida, has used the huge payday from Pharmacyclicals to invest in other pharma firms.
He is the chairman and largest shareholder of Pulse Biosciences Inc (NASDAQ:PLSE) – a US$200mln company which is trying to harness the power of electricity to shock the immune system into producing a positive response.
Mates with Tom Cruise (possibly)
His money has also gone into one of his other passions: the Church of Scientology.
Duggan is often cited as the wealthiest member of the Church of Scientology and is rumoured to be the church’s biggest financial backer.
According to reports, he has donated tens of millions in the name of religion over the past decade or so, claiming in one interview that it is an “honour and personal obligation” to share his financial success with Scientology.