BioCryst Receives $350 Million in New Funding
Durham-based BioCryst Pharmaceuticals has reached funding agreements that will provide the company with $350 million to support development of two of its new drugs.
Royalty Pharma and OMERS Capital Markets will make the investment in return for a percentage of future sales of BCX9930, BioCryst’s investigational oral Factor D inhibitor, and ORLADYO, a therapy used to treat hereditary angioedema (HAE). Royalty is the largest global buyer of pharmaceutical royalties and OMERS is one of Canada’s biggest defined benefit pension plans.
BioCryst said it will use the funds to advance BCX9930 toward registration and expand the drug’s development across several indications, including paroxysmal nocturnal hemoglobinuria (PNH) – a rare blood disease. The funding also will support the global launch of ORLADEYO to treat hereditary angioedema (HAE), a serious and potentially life-threatening rare genetic illness characterized by periodic episodes of acute swelling in various parts of the body.
According to BioCryst, Royalty Pharma has invested $150 million in cash up front to buy royalties on the combined net sales of BCX9930 and another earlier stage Factor D inhibitor. It will receive 3% on combined annual sales up to $1.5 billion and 2% on sales between $1.5 billion and $3 billion. The company also purchased royalties of 0.75% on direct annual sales of ORLADEYO up to $350 million and 1.75% on sales between $350 million and $550 million. It will receive a declining percentage on sublicense revenue in certain territories.
In addition, Royalty has made a $50 million equity investment in BioCryst’s common stock at a price of $13 per share.
“We are excited to expand our partnership with BioCryst to continue to support their growth journey,” said Pablo Legorreta, founder and CEO of Royalty Pharma. “Our equity investment underpins our conviction in the BioCryst team and the substantial patient need for innovative oral therapies in rare disease.”
BioCryst said OMERS has made an upfront cash payment of $150 million as well. For its investment, it will receive a capped and tiered declining royalty on direct annual sales of ORLADEYO. The companies said no royalties will be paid for the first two years. Beginning in fourth quarter of 2023, OMARS will receive a payment of at least 7.5% on annual net sales up to $350 million and 6% on sales between $350 million and $550 million. That’s until it reaches the maximum amount allowed under the deal.
“Almost a year into its launch, BioCryst has established ORLADEYO as a leading HAE prophylactic therapy,” said Rob Missere, managing director and head of life sciences for OMERS Capital Markets. “This investment provides direct exposure to a high-quality pharmaceutical asset and aligns well with our mandate to deliver steady long-term returns to our 525,000 members.”
Jon Stonehouse, CEO of BioCryst, said, “We appreciate the confidence our partners are demonstrating in BioCryst with this financing as we continue to bring oral medicines to patients with rare diseases. The infusion of $350 million on top of our growing revenue base from ORLADEYO, and our existing cash, enables us to invest now to maximize the value of our oral Factor D program and ORLADEYO,” he added.
BioCryst was founded in 1986 and moved its headquarters to Durham in 2010. It discovers and develops small-molecule medicines that treat rare diseases for which there is a significant unmet need. The company focuses on illnesses in which enzymes play a key role in the biological pathway.
Royalty Pharma has a portfolio of royalties from which it receives payments based on the top-line sales of many of the pharmaceutical industry’s leading therapies. It’s currently invested in around 40 commercial products.
OMERS is a defined benefit plan serving 1,000 employers that range from large cities to local agencies. It has net assets of about $114 billion.