Perrigo to Divest MS Drug Royalty Stream in $2.85-Billion Deal
Perrigo has agreed to divest its rights to the royalty stream from global net sales of Tysabri (natalizumab), Biogen’s multiple sclerosis drug, to RPI Finance Trust, an affiliate of Royalty Pharma, a New York-based company that acquires revenue-producing intellectual property, in a transaction valued at up to $2.85 billion. Tysabri had 2016 sales of $1.96 billion.
The $2.85-billion transaction value includes a $2.2 billion cash payment at closing and up to $650 million in potential milestone payments based upon future global net sales of Tysabri in 2018 and 2020. This transaction is expected to close within 30 business days from the time of the deal’s announcement on February 27. 2017. The transaction is subject to certain specified closing deliverables.
Under this agreement, Royalty Pharma will acquire all of Perrigo’s rights to receive Tysabri royalty payments from and after January 1, 2017. Perrigo gained these rights through its 2013 acquisition of Elan Corporation, which marketed the drug in partnership with Biogen. In February 2013, Elan sold its half of the rights to the drug to Biogen for $3.25 billion in cash plus royalties.
In the current transaction with Perrigo, Royalty Pharma will pay a cash purchase price of $2.2 billion at closing, plus additional payments of $250 million if the royalties earned on global net sales meet specified thresholds during 2018 and $400 million if the royalties earned meet specified thresholds in 2020.
Perrigo will also assign to Royalty Pharma certain information and audit rights under Perrigo’s existing agreement with Biogen. The agreement provides that the transaction will close within 20 business days, subject to a 10-business-day extension at Royalty Pharma’s option upon Royalty Pharma making a $1 billion purchase price deposit.