Royalty Pharma plc (RPRX) Acquires Additional Royalty Interests in BCX9930 and ORLADEYO from BioCryst (BCRX) for $350M
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Royalty Pharma plc (Nasdaq: RPRX), BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX) and OMERS Capital Markets (OMERS) today announced transactions totaling $350 million in new funding for BioCryst, with all funds immediately available at closing.
The funds from these transactions will enable further advancement of BCX9930, BioCryst’s oral Factor D inhibitor, toward filing for registration, expand the development of BCX9930 across multiple indications and support additional investment in the global launch of ORLADEYO® (berotralstat), which is on a trajectory to become the market-leading prophylactic hereditary angioedema (HAE) therapy.
For a $150 million upfront cash payment, Royalty Pharma, the largest buyer of pharmaceutical royalties globally, has purchased royalties on combined annual net sales of BCX9930 and another earlier stage Factor D inhibitor of 3.0% on sales up to $1.5 billion, 2.0% on sales between $1.5 billion and $3.0 billion, and no royalty on sales over $3.0 billion. Royalty Pharma also purchased royalties of 0.75% on direct annual net sales of ORLADEYO up to $350 million, 1.75% on sales between $350 million and $550 million, no royalty on sales over $550 million, and a tiered, declining percentage on ORLADEYO sublicense revenue in certain territories. These royalties are additional to the royalties purchased by Royalty Pharma in December 2020.
For a $150 million upfront cash payment, OMERS, one of Canada’s largest defined benefit pension plans, has purchased a capped, tiered, declining royalty on direct annual net sales of ORLADEYO. Under the agreement, BioCryst does not owe any royalties for the first two years. The first royalty payment from BioCryst to OMERS will occur based on royalties from direct annual net sales of ORLADEYO in the fourth quarter of 2023. Once OMERS has achieved its maximum allowed total return under the agreement, no further royalty payments will be owed. OMERS will receive a royalty of at least 7.5% on annual net sales up to $350 million, 6.0% on sales between $350 million and $550 million and no royalty on sales over $550 million. The maximum total return OMERS may earn under the agreement is capped at 1.425x or 1.550x, based on the level of 2023 global net sales of ORLADEYO relative to a prespecified sales threshold.
Royalty Pharma also has extended its relationship with BioCryst through a $50 million equity investment at a price of $13.00 per share, the volume-weighted average price of BioCryst common stock over the past 20 days.
“We are excited to expand our partnership with BioCryst to continue to support their growth journey,” said Pablo Legorreta, founder and Chief Executive Officer of Royalty Pharma. “Following our initial investment nearly one year ago, ORLADEYO has proven to be a transformative therapy for HAE patients. We are also thrilled to make an additional investment in BCX9930 following strong proof of concept data, which will support and expand the rapid development of BCX9930 in paroxysmal nocturnal hemoglobinuria (PNH) and multiple other complement-mediated diseases. Our equity investment underpins our conviction in the BioCryst team and the substantial patient need for innovative oral therapies in rare disease,” Legorreta added.
“Almost a year into its launch, BioCryst has established ORLADEYO as a leading HAE prophylactic therapy. This investment provides direct exposure to a high-quality pharmaceutical asset and aligns well with our mandate to deliver steady long-term returns to our 525,000 members,” said Rob Missere, managing director and head of life sciences, OMERS Capital Markets.
“The focused execution of our plan this year, with the successful launch of ORLADEYO and the rapid advancement of BCX9930, has led to further investment from exceptional and committed partners like Royalty Pharma and Athyrium, and new investment from OMERS. The infusion of $350 million on top of our growing revenue base from ORLADEYO, and our existing cash, enables us to invest now to maximize the value of our oral Factor D program and ORLADEYO. We appreciate the confidence our partners are demonstrating in BioCryst with this financing as we continue to bring oral medicines to patients with rare diseases,” said Jon Stonehouse, Chief Executive Officer of BioCryst.
BioCryst also is pleased to continue its strong partnership with Athyrium Capital Management. Having now achieved the defined ORLADEYO revenue milestones in its prior agreement with Athyrium, BioCryst has committed to access the additional $75 million available under the agreement and will draw this $75 million in mid-2022.
The new financing enables BioCryst to further advance and expand its Factor D program over the next two years by achieving the following:
- Complete and report data from the ongoing REDEEM-1 and REDEEM-2 pivotal trials in PNH
- Complete the renal proof-of concept (PoC) basket trial in three nephritis indications and advance to pivotal trials in each
- Commence PoC trials in other complement-mediated diseases
- Prepare to submit regulatory approval filings in PNH
Cowen acted as financial advisor to BioCryst on the transaction. Gibson Dunn acted as legal advisor to BioCryst. Goodwin Procter, Wolf Greenfield and Maiwald acted as legal advisors to Royalty Pharma. Sidley Austin LLP acted as legal advisor to OMERS.
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