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.
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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/
