PTC Therapeutics, Inc. announced an agreement with Royalty Pharma plc. to monetize up to $1.5 billion of the Evrysdi royalty stream. Under the agreement, Royalty Pharma acquires additional royalties on Evrysdi for $1.0 billion upfront. The agreement includes options for PTC to sell up to all of its retained royalties on Evrysdi for up to $500 million or for Royalty Pharma to acquire half of such retained royalties for up to $250 million at a later date. PTC maintains all economics associated with up to $250 million in remaining commercial sales milestones associated with Evrysdi global net sales.
This agreement builds on the previous strategic partnership established with Royalty Pharma in 2020. The initial agreement was for the monetization of approximately 43% of the Evrysdi royalty stream for $650 million. As a result of the current agreement, PTC will maintain ownership of approximately 19% of the Evrysdi royalty stream pending any exercise of future options by PTC or Royalty Pharma.
The proceeds from the financing will be used to retire all outstanding debt obligations with Blackstone Life Sciences and to fund planned operations.
"We are pleased to expand our existing strategic partnership with Royalty Pharma," said Matthew B. Klein, M.D., Chief Executive Officer, PTC Therapeutics. "This non-dilutive financing provides PTC with the capital to support operations and allows for increased operational and financial flexibility by removing the Blackstone debt obligation from our balance sheet. In addition, the deal structure provides important flexibility for additional non-dilutive capital over the next two years."
"We are excited to acquire an additional royalty interest in Evrysdi, a convenient, oral therapy that has transformed and benefited the lives of SMA patients worldwide," said Pablo Legorreta, founder and Chief Executive Officer of Royalty Pharma. "This is our second transaction with PTC, which builds on our longstanding partnership, and highlights our ability to structure creative, win-win funding solutions for our partners."
Transaction Terms
Following the transaction announced today, PTC has agreed to sell approximately 67% of both the outstanding 57% of the Evrysdi royalties and the outstanding royalty over the existing cap from the previous royalty financing agreement with Royalty Pharma.
Additionally, until December 31, 2025, PTC will have the option to sell the remainder of the Evrysdi royalty to Royalty Pharma for $500 million in five $100 million tranches, less royalties received. If fewer than three of these options are exercised, Royalty Pharma has the option to purchase 50% of the remaining PTC royalty for $250 million less royalties received until March 31, 2026.
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