BioPharma Credit acquires royalty interest in diabetes drugs – In its third deal announced in rapid succession, BioPharma Credit has purchased from Royalty Pharma Investments (RPI) a 50% interest in a former Bristol-Myers Squibb-owned royalty stream on two AstraZeneca diabetes drugs. The royalty interested was acquired by RPI from Bristol Myers Squibb on 14 November 2017 and relates to sales of Onglyza and Farxiga. Under the terms , half of this deal will now be assigned BioPharma Credit on identical economic terms.
The royalties come about as AstraZeneca and Bristol-Myers originally had a joint venture to develop and market the drugs, but the UK firm later acquired its US partner’s interest in 2013 for $2.7bn with up to $1.4bn tied to regulatory, launch and sales-related payments. As part of this deal, AstraZeneca was required to pay sales-related royalties to Bristol-Myers Squibb up until 2025, and these have now been monitised to RPI and BioPharma Credit. Royalty Pharma Investments is managed by RP Management, an affiliate of Pharmakon Advisors, BioPharma Credit’s investment manager.
BioPharama Credit is expected to fund US$140 million to US$160 million in consideration during 2018 and 2020, determined by product sales and will receive payments from 2020 through 2025. The purchased payments are expected to generate attractive risk-adjusted returns in the high single digits per annum.
Onglyza and Farxiga are prescription medicines used to treat type 2 diabetes. Onglyza reduces the amount of sugar released by your liver overnight, which may result in lower blood sugar. Onglyza may also lower after-meal blood sugar spikes by helping your body increase levels of insulin after meals. Farxiga works with the body to flush sugar away in urine.
BPCR : BioPharma Credit acquires royalty interest in diabetes drugs