Pharmaceutical product royalties acquisition advice provided by Gibson Dunn
In a strategic financial move, BridgeBio Pharma, a Palo Alto-based biotech company focused on the development and delivery of medicines to treat genetic diseases, has entered into a royalty agreement with HealthCare Royalty (HCRx) and Blue Owl Capital. The agreement, worth $300 million, will provide immediate funding for BridgeBio while sharing future royalty upside from the European sales of acoramidis, also known as BEYONTTRA®.
The deal involves the sale of 60% of royalties on the first $500 million of BEYONTTRA's annual net sales in Europe. Notably, the agreement includes a cap on total investor returns at 1.45 times the upfront payment of $300 million. This means that once the investors receive 1.45 times their initial investment, no further royalty payments are required from BridgeBio for that portion of royalties. After that cap is reached, BridgeBio retains 40% of royalties beyond the capped threshold, preserving upside for its shareholders.
This transaction is positioned as a strategic financial move by BridgeBio to strengthen its balance sheet, support the launch of acoramidis, and advance its pipeline of genetic medicines. Sandip Agarwala, managing director and head of life sciences at Blue Owl Capital, expressed confidence in BEYONTTRA's commercial potential.
BEYONTTRA, approved by major regulatory agencies including the European Commission, Japan’s Pharmaceuticals and Medical Devices Agency, and the UK Medicines and Healthcare Products Regulatory Agency, is a stabiliser of transthyretin used to treat wild-type or variant transthyretin amyloidosis in patients with Transthyretin Amyloid Cardiomyopathy.
Clarke Futch, HCRx chairman and CEO, expressed support for acoramidis' potential to positively impact the lives of patients living with ATTR-CM. HCRx has invested more than $5 billion in 90 biopharma products since its founding.
The acquisition was guided by global law firm Gibson, Dunn & Crutcher, with BridgeBio taking legal advice from Latham & Watkins. Gibson Dunn's advisory team for the acquisition included Todd Trattner, Ryan Murr, Catie Sakurai, Jin Hee Kim, Ryan Kim, Kali Jelen, Jeff Krause, Pamela Endreny, and Ryan Rott.
This capped monetization deal allows HCRx and Blue Owl to acquire 60% of European BEYONTTRA royalties up to $500 million in annual sales, with total payments capped at 1.45 times the upfront $300 million. The structure is designed to limit annual payments as well as the total payments made to the royalty investors, offering BridgeBio immediate liquidity without dilution or interest burden, while maintaining potential long-term benefits from BEYONTTRA's commercial success.
[1] Blue Owl Capital Press Release, [Link to Press Release] [2] BridgeBio Pharma Press Release, [Link to Press Release] [3] HealthCare Royalty Press Release, [Link to Press Release] [4] Financial Times Article, [Link to Article]
- This capped monetization deal, facilitated by HealthCare Royalty (HCRx) and Blue Owl Capital, represents a strategic investment in BridgeBio Pharma's medical-conditions unit, with the funding expected to bolster the company's scientific research and business expansion.
- As a part of this financial agreement, BridgeBio Pharma's shareholders will retain a significant portion of the royalties beyond the capped threshold, ensuring potential future returns from investing in innovative genetic medicines like BEYONTTRA®.
