Royalty Pharma Buys 4.5 Percent Royalty on Worldwide Sales for $90 Million Plus $10 Million Equity in Cytokinetics.
Cytokinetics Agrees to Exercise Option to Co-Fund Phase 3 Development Program Under Collaboration with Amgen for Increased Royalty and Co-Promotion Rights in North America.
Royalty Pharma and Cytokinetics, Inc. (Nasdaq:CYTK) today announced that Cytokinetics has agreed to sell to Royalty Pharma a portion of the potential royalty due to Cytokinetics from Amgen on worldwide sales of omecamtiv mecarbil. Cytokinetics has also agreed to exercise its option to co-invest with Amgen in the Phase 3 development program of omecamtiv mecarbil in exchange for increased royalties from Amgen on worldwide sales of omecamtiv mecarbil outside Japan and co-promotion rights.
Cytokinetics sold to Royalty Pharma a 4.5 percent royalty on potential worldwide sales of omecamtiv mecarbil for $90 million in an upfront cash payment. The royalty rate purchased may increase up to an additional 1 percent under certain circumstances. In addition, Royalty Pharma has agreed to purchase $10 million of Cytokinetics’ common stock.
Cytokinetics has also agreed with Royalty Pharma to exercise its option to co-invest $40 million in the Phase 3 development program of omecamtiv mecarbil under its collaboration with Amgen. As a result, Cytokinetics is eligible to receive an incremental royalty of up to 4 percent on increasing worldwide sales of omecamtiv mecarbil outside of Japan. Following the transaction with Royalty Pharma, Cytokinetics retains the right to receive more than $600 million in potential milestone payments as well as escalating double-digit royalties that may exceed 20 percent on tiered worldwide sales of omecamtiv mecarbil outside Japan, with a lower royalty rate in Japan under the Amgen Agreement.
Exercising its option and co-funding will afford Cytokinetics the right to co-promote omecamtiv mecarbil in institutional care settings in North America, with reimbursement by Amgen for certain sales force activities. A joint commercial operating team comprising representatives of Cytokinetics and Amgen will then be responsible for the commercialization program of omecamtiv mecarbil.
Centerview Partners LLC acted as financial advisor to Cytokinetics on the transaction. Cooley LLP and Morrison & Foerster acted as legal advisors to Cytokinetics on the transaction. Goodwin, Wolf Greenfield, and Maiwald acted as legal advisors to Royalty Pharma on the transaction.
This text is a press release from Royalty Pharma. The full text version of the article can be found here: https://www.royaltypharma.com/royalty-pharma-and-cytokinetics-omecamtive-mecarbil/