Pablo Legorreta, Royalty Pharma CEO (Patrick T. Fallon/Bloomberg via Getty Images)

Roy­al­ty Phar­ma tops its record-set­ting $3.3B deal with CF Foun­da­tion, bet­ting $575M more on Ver­tex's drugs

Roy­al­ty Phar­ma’s $3.3 bil­lion deal with the Cys­tic Fi­bro­sis Foun­da­tion to pur­chase roy­al­ties on Ver­tex’s CF fran­chise was its largest roy­al­ty deal ever. But that didn’t buy it all: Per the arrange­ment, if Ver­tex’s an­nu­al world­wide net sales go above $5.8 bil­lion, 50% of the roy­al­ties go back to the CF Foun­da­tion.

Just as Ver­tex seems poised to reach that mark, Roy­al­ty Phar­ma CEO Pablo Legor­re­ta is putting down $575 mil­lion in cash to elim­i­nate that oblig­a­tion and chan­nel 100% of the cash stream in­to his shop.

“Our ini­tial land­mark fund­ing trans­ac­tion in 2014 en­abled the Foun­da­tion to ex­pand its ef­forts to de­vel­op new life­sav­ing ther­a­pies and im­prove care for pa­tients, and ex­em­pli­fied our lead­er­ship role as an in­no­va­tor in fund­ing the bio­phar­ma ecosys­tem,” Legor­re­ta said in a state­ment. “We are sim­i­lar­ly op­ti­mistic that to­day’s trans­ac­tion will fur­ther sup­port the CF Foun­da­tion’s work to fund re­search and drug de­vel­op­ment and ad­vance high-qual­i­ty, spe­cial­ized CF care.”

Long revered for its vi­sion­ary in­vest­ment pact with Ver­tex — whose port­fo­lio of four drugs now cov­er as much as 90% of the CF pa­tient pop­u­la­tion — the CF Foun­da­tion has since gen­er­at­ed new drug can­di­dates, launched a $500 mil­lion fund fo­cused on gene-based ther­a­pies, and com­mit­ted $20 mil­lion to team up with Long­wood on a CF in­cu­ba­tor.

But Ever­core ISI an­a­lyst Umer Raf­fat called the new deal a head­scratch­er. With con­sen­sus peak sales es­ti­mate of $8.8 bil­lion, the net present val­ue for the CF Foun­da­tion would be $1.2 bil­lion to $1.3 bil­lion. So why sell for half of that?

Raf­fat of­fered three ex­pla­na­tions: Ei­ther the group didn’t get good bids, or it lacked the skillset to get the fair val­ue for their roy­al­ties, or it was ac­tu­al­ly less op­ti­mistic than the Street on peak sales — im­ply­ing the CF Foun­da­tion es­ti­mat­ed peak sales for Ver­tex’s drugs at $7.5 bil­lion to $7.8 bil­lion.

Roy­al­ty Phar­ma not­ed that the Ver­tex CF fran­chise gen­er­at­ed net rev­enues to­tal­ing over $4 bil­lion in 2019. Left un­said is the fi­nan­cial guid­ance the biotech has re­cent­ly up­dat­ed: To­tal CF prod­uct rev­enue is now ex­pect­ed to go above $6 bil­lion, based on “strong year-to-date per­for­mance dri­ven by the Trikaf­ta launch in the US.”

Pre­vi­ous­ly Ver­tex had pegged rev­enue be­tween $5.7 bil­lion and $5.9 bil­lion for the year.

Con­trast that with six years ago, when Ka­ly­de­co was the on­ly ap­proved CF prod­uct in its port­fo­lio and brought in $464 mil­lion for all of 2014.

But Roy­al­ty Phar­ma’s work with CF dat­ed back to 1999, the com­pa­ny re­count­ed in an IPO fil­ing ear­li­er this year, and it ap­proached the CF Foun­da­tion when Ver­tex re­port­ed promis­ing Phase II da­ta for Ka­ly­de­co in 2008. Those talks went nowhere; dis­cus­sions be­gan in earnest again once a sec­ond CF ther­a­py, Orkam­bi, cleared the Phase III bar.

Our deep un­der­stand­ing of the CF mar­ket and of the de­vel­op­ment-stage prod­uct can­di­dates in Ver­tex’s port­fo­lio al­lowed us to gain high con­vic­tion about ex­e­cut­ing a trans­ac­tion of this un­prece­dent­ed scale, for an as­set with no cash flow and sig­nif­i­cant clin­i­cal, reg­u­la­to­ry and com­mer­cial risk re­main­ing, all with­in a short ex­e­cu­tion win­dow.

The Nas­daq list­ing end­ed up reap­ing $2.2 bil­lion for Roy­al­ty Phar­ma. The roy­al­ties un­der its new agree­ment with the CF Foun­da­tion, the com­pa­ny added, are per­pet­u­al and not tied to patent ex­pi­ra­tions.

In ad­di­tion to the up­front, there’s a sin­gu­lar po­ten­tial mile­stone pay­ment of $75 mil­lion — al­though it was not spec­i­fied.

“Ul­ti­mate­ly, from Roy­al­ty Phar­ma per­spec­tive, the sin­gle biggest strength of this deal struc­ture is that they now have a com­plete­ly open-end­ed eco­nom­ics on Ver­tex CF drugs (<<this was a key thing miss­ing in most of their re­cent deals – which were capped),” Raf­fat wrote in his note.

What Will it Take to Re­al­ize the Promise and Po­ten­tial of Im­mune Cell Ther­a­pies?

What does it take to get to the finish line with a new cancer therapy – fast? With approvals in place and hundreds of immune cell therapy candidates in the pipeline, the global industry is poised to create a fundamental shift in cancer treatments towards precision medicine. At the same time, unique challenges associated with cell and process complexity present manufacturing bottlenecks that delay speed to market and heighten cost of goods sold (COGS) — these hurdles must be overcome to make precision treatments an option for every cancer patient. This series of articles highlights some of the key manufacturing challenges associated with the production of cell-based cancer therapies as well as the solutions needed to transcend them. Automation, process knowledge, scalability, and assured supply of high-quality starting material and reagents are all critical to realizing the full potential of CAR-based therapies and sustaining the momentum achieved in recent years. The articles will highlight leading-edge technologies that incorporate these features to integrate across workflows, accelerate timelines and reduce COGS – along with how these approaches are enabling the biopharmaceutical industry to cross the finish line faster with new treatment options for patients in need.

The biggest ques­tions fac­ing gene ther­a­py, the XLMTM com­mu­ni­ty, and Astel­las af­ter fourth pa­tient death

After three patients died last year in an Astellas gene therapy trial, the company halted the study and began figuring out how to safely get the program back on track. They would, executives eventually explained, cut the dose by more than half and institute a battery of other measures to try to prevent the same thing from happening again.

Then tragically, Astellas announced this week that the first patient to receive the new regimen had died, just weeks after administration.

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As­traZeneca touts Imfinzi im­munother­a­py com­bos for lung can­cer in push to dri­ve PD-L1 drug up­take

Facing the big dogs in the PD-(L)1 space, AstraZeneca has taken its own contender Imfinzi into blockbuster territory in its four years on the market but sees even bigger things for the drug. Combinations could be the key, and early results from a mid-stage test are adding some fuel to that strategy.

Imfinzi combined with one of two investigational immunotherapies — a CD73 antibody dubbed oleclumab or an anti-NGK2a named monalizumab — topped Imfinzi alone in terms of overall response and progression-free survival in patients with stage III non-small cell lung cancer whose tumors had not worsened during concurrent chemoradiation, according to interim data from the Phase II COAST trial set to be presented at #ESMO21.

Amgen VP of R&D David Reese

Am­gen rolls out da­ta for KRAS in­hibitor com­bo study in col­orec­tal can­cer, hop­ing to move on from ug­ly ear­ly re­sults

With the first win for its KRAS inhibitor sotorasib in hand, Amgen is pushing ahead with an aggressive clinical plan to capitalize on its first-to-market standing. The drugmaker thinks combinations — in-house or otherwise — could offer a path forward, and one early readout from that strategy is bearing fruit.

A combination of Amgen’s sotorasib and its EGFR inhibitor Vectibix posted an overall response rate of 27% in 26 patients with advanced colorectal cancer (CRC) with the KRAS-G12C mutation, according to data from the larger Phase Ib/II CODEBREAK 101 study set to present at this weekend’s virtual ESMO Congress.

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Dan O'Day, Gilead CEO (Jim Watson/AFP via Getty Images)

Eu­ro­pean study finds that Gilead­'s Covid-19 an­tivi­ral remde­sivir shows no clin­i­cal ben­e­fit

Gilead’s remdesivir — or Veklury, as it’s marketed in the US — raked in around $2.8 billion last year as the only FDA-approved antiviral to treat Covid-19. But new data from a European study suggest the drug, which has been given to about half of hospitalized Covid patients in the country, has no actual benefit.

The open-label DisCoVeRy trial enrolled Covid-19 patients across 48 sites in Europe to test a handful of treatments, including remdesivir, lopinavir–ritonavir, lopinavir–ritonavir and interferon beta-1a, and hydroxychloroquine. To participate, patients had to show symptoms for seven days and require oxygen support. A total of 429 patients were randomized to receive remdesivir plus standard of care, while 428 were assigned to standard of care alone.

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Gri­fols drops $1B on Ger­man hold­ing com­pa­ny in con­tin­ued plas­ma push

One Spanish biotech is beefing up its plasma therapy operations, and on Friday, it announced that it’s doing so in a billion-dollar deal.

Grifols is now the largest shareholder of Biotest, a company valued at more than $1.8 billion. By teaming up, the two will try to increase the number of plasma therapies available and increase patient access around the world, Grifols said in a press release.

The company did so by acquiring holding company Tiancheng Pharmaceutical, the Germany-based owner of nearly 90% of Biotest shares, for nearly $1.27 billion. Grifols now owns nearly 90% of Biotest voting rights and almost 45% of the total share capital of Biotest.

Covid-19 roundup: FDA re­veals boost­er ad­comm ques­tion; Eli Lil­ly's an­ti­body cock­tail cleared for pre­ven­tion

The FDA released briefing documents this week from the agency and Pfizer each outlining their arguments for today’s Covid-19 booster shot adcomm, but one thing conspicuously missing was the question on which panel members would be voting. But late Thursday night, regulators published that question.

Adcomm members will be asked whether or not the safety and efficacy data from Pfizer/BioNTech’s original Phase III study “support approval” of a booster shot at least six months after the second dose in individuals older than 16. The question notably excludes the real-world data from Israel and other analyses that Pfizer and the Biden administration had said would be a centerpiece of their arguments for boosters.

A Pfiz­er part­ner wel­comes ex-ADC Ther­a­peu­tics CMO Jay Fein­gold to the team; Amid tough sled­ding, Im­muno­vant choos­es Eli Lil­ly alum as CFO

→ Last week we told you about the CMO revolving door at ADC Therapeutics, as Joseph Camardo replaced the departing Jay Feingold. The next opportunity for Feingold in the CMO slot has opened up at antibody-drug conjugate and mAb developer Pyxis Oncology, which has added several new execs and scientific advisory board members in recent months, including ex-Immunovant CFO Pamela Yanchik Connealy. Before his tenure at ADC, Feingold was Daiichi Sankyo’s VP of US medical affairs and chairman of the Global Medical Affairs Oversight Committee. Within weeks in March, Pyxis struck a licensing deal with Pfizer for two of its ADCs and raked in $152 million from a Series B round.

No­vo Nordisk Foun­da­tion tees up $47.5M to ex­plore the dri­vers of ge­net­ic dis­ease with the Broad In­sti­tute

The Broad Institute of Harvard and MIT played a significant role in mapping out genes as part of the Human Genome Project about two decades ago. Now, it’s joining forces with one of the industry’s largest research foundations in an effort to translate those maps.

The Novo Nordisk Foundation, which operates independently from the biotech Novo Nordisk, is teeing up $47.5 million to work with the Broad on mining genetic data in the hopes of better understanding how variants drive disease.