Deal provides Cytokinetics with diversified access to capital as company advances its specialty cardiology franchise
NEW YORK, NY and SOUTH SAN FRANCISCO, CA, May 22, 2024 – Royalty Pharma plc (Nasdaq: RPRX) and Cytokinetics, Incorporated (Nasdaq: CYTK) today announced they have entered into a strategic funding collaboration providing capital to support the commercialization of aficamten and advance the company’s expanding cardiovascular pipeline while diversifying access to capital as the company advances its muscle biology-directed specialty cardiology business.
The transaction includes funding for planned commercialization, development funding, royalty restructuring and revenue sharing, and the purchase of Cytokinetics equity, together, affording Cytokinetics $250 million on closing and up to a total of $575 million to support the company’s further maturation and corporate development.
The key components of this strategic funding collaboration include:
- Commercial launch funding: Cytokinetics to receive $50 million and is eligible to draw an additional $175 million within 12 months of approval of aficamten in oHCM; the capital will be repayable over 10 years in quarterly installments (totaling 1.9x).
- Royalty restructuring: Royalty Pharma’s royalty on aficamten was restructured so that Royalty Pharma will now receive 4.5% up to $5.0 billion of annual net sales of aficamten and 1% above $5.0 billion of annual net sales compared to the prior 4.5% up to $1.0 billion of annual net sales and 3.5% above $1.0 billion of annual net sales.
- Development funding: Cytokinetics will receive $100 million in upfront capital to fund a confirmatory Phase 3 clinical trial of omecamtiv mecarbil in patients with heart failure and reduced ejection fraction. If the Phase 3 clinical trial is positive and FDA approval is received within specified time frames, Royalty Pharma will receive fixed payments totaling $100 million following approval, as well as an incremental 2.0% royalty on annual net sales and/or fixed quarterly payments. If the Phase 3 trial is not successful or does not lead to FDA approval, Cytokinetics will repay Royalty Pharma up to $237.5 million over eighteen or twenty-two quarters, in fixed quarterly payments.
Development funding: Cytokinetics to receive $50 million in upfront capital to fund a proof-of-concept Phase 2 clinical trial for CK-586 in patients with heart failure and preserved ejection fraction and Royalty Pharma will have an option to invest up to an additional $150 million to fund Phase 3 development of CK-586, for which it would be eligible to receive a $150 million milestone payment upon FDA approval and a 4.5% royalty on annual net sales of CK-586.
If Royalty Pharma does not opt-in to fund Phase 3 development, Royalty Pharma will receive a 1.0% royalty on annual net sales of CK-586.
- Equity Purchase: Royalty Pharma will purchase $50 million of Cytokinetics’ common stock in a private placement that will be concurrent with the underwritten public offering that Cytokinetics plans to launch today.
From these transactions, Cytokinetics anticipates receipt of up to $250 million in nearer-term funding. Together with its proforma cash at the end of the first quarter of 2024, this funding from Royalty Pharma enables Cytokinetics extended cash runway based on expected 2024 expenditures, inclusive of planned commercialization activities and expanded pipeline development programs.
Maiwald acted as advisor for Royalty Pharma.
This text is a press release from Royalty Pharma. The full text version of the press release can be found here.
