Riding on rosy estimates of Zolgensma sales, RegenxBio sells part of its royalty for $200M
RegenxBio’s journey as a drug developer may have been less than rosy, but there’s been little doubt about the value of the gene therapy technology it obtained from Jim Wilson’s labs.
Healthcare Royalty Management has made that clear once again, striking a deal to buy a portion of its royalties on Zolgensma for $200 million.
According to the latest quarterly filing from RegenxBio, it’s received $40.7 million in royalties in the first nine months of 2020, compared to just over $10 million in the same period in 2019.
“This agreement with HCR provides us with significant additional non-dilutive funding to continue our momentum in the clinic focused on RGX-314 and our rare neurodegenerative disease platform, including RGX-121, as well as the opportunity to develop new innovations for patients in other disease areas,” said Kenneth Mills, RegenxBio president and CEO, in a statement.
It’s a critical moment for the company as its pipeline rebounds from a couple of regulatory and clinical setbacks into late-stage development. There are also plans to build new in-house manufacturing facilities with a 2,000-liter scale to secure a suspension cell culture process ready for commercial rollout.
Notably, there is a chance that RegenxBio can get the royalty rights back if one of two caps the parties agreed upon is met: Either HCR gets from Novartis $260 million by November 7, 2024, or $320 million thereafter.
A supposed once-and-done treatment for spinal muscular atrophy, Zolgensma has a list price of $2.1 million. While that has earned it the dubious title of the most expensive drug in the world, Novartis has emphasized that payment is spread out over five years — meaning $425,000 a year — and that it’s a lifesaving, life-changing therapy for patients who faced a depressing prognosis.
AveXis, which Novartis snapped up for $8.7 billion, developed the program on Regenxbio’s NAV tech platform and AAV9 vector.
The 2018 acquisition immediately added $140 million to Regenxbio’s vault. Shortly afterward, the pharma giant forked over another $60 million in annual fees and $40 million for a commercial milestone — plus $80 million more that was paid earlier this year.
Zolgensma is currently approved in the US, Japan, Europe, Brazil and Canada, albeit only for younger children (infants below the age of 2 in the US). Despite some hiccups, Novartis is also conducting trials for older SMA patients.