Royalty Pharma competitor stirs the pot with plans for $750M IPO
Ostensibly aiming to piggyback off the success of Royalty Pharma and CEO Pablo Legorreta’s IPO in June 2020, another royalty-gobbling company is nearly set to do the Nasdaq shuffle.
Healthcare Royalty, a Stamford, CT-based company founded by life sciences investing vet Clarke Futch, has set the terms for a $750 million IPO expected to price next week, according to Renaissance Capital. The likely figure is still dwarfed by Legorreta’s $2.2 billion raise a little over a year ago, but should Healthcare Royalty match its terms, it would be larger than any biotech IPO so far in 2021, per the Endpoints News tally.
Futch and his crew have set the pricing range for $15 to $17 per share.
Royalty businesses have ramped up the competition in the past few years. Canadian investment Sagard Holdings launched a new $725 million fund this past February to purchase royalties in drugs, diagnostics and medical products. The move followed other high-profile firms launching royalty pots, including Blackstone’s $2 billion deal for Alnylam royalties in 2020 and OrbiMed’s third such fund for $1.2 billion in 2019.
HCR also got in on the action last year, launching a new $1.8 billion fund in 2020 for the same purpose. The firm continued spinning deals while it did so, shelling out $150 million for royalties on a Nektar drug in December 2020.
Among HCR’s more notable purchases include a $230 million stake in Shingrix royalties formerly owned by Agenus back in 2018.
Since their own IPO, Legorreta and Royalty Pharma have remained busy, particularly in the few months after the multibillion dollar raise. In November 2020, the company added on to its biggest deal ever — a $3.3 billion royalty purchase on Vertex’s CF franchise from the Cystic Fibrosis Foundation — by putting down another $575 million.
Thursday’s terms come after Futch founded the company way back in 2006, following stints at several investment firms’ healthcare groups, including helping found a San Francisco-based company that was ultimately acquired by Stifel. Healthcare Royalty filed for an IPO in early July, penciling in the $100 million figure that’s become the norm for initial S-1 paperwork.