PDL BioPharma completes royalty transaction with ARIAD Pharmaceuticals
PDL BioPharma, based in Incline Village, Nev., has entered into a revenue interest assignment agreement to provide ARIAD Pharmaceuticals, based in Cambridge, Mass., with up to $200 million in revenue interest financing in exchange for royalties on the net revenues of Iclusig (ponatinib).
Funding of the first $100 million will be made in two tranches of $50 million each, with the initial amount having already been funded on the closing date of the agreement and an additional $50 million to be funded on the 12-month anniversary of the closing date. In addition, ARIAD has an option to draw up to an additional $100 million at any time between the six-and 12-month anniversaries of the closing date.
PDL will initially receive 2.5% of the worldwide net revenues of Iclusig until the one-year anniversary of the closing date, at which time the royalty increases to 5% of the worldwide net revenues of Iclusig and remains until Dec. 31, 2018. Beginning Jan. 1, 2019 and thereafter, the royalty rate will increase to 6.5%, subject to an additional increase to 7.5% if PDL's funding exceeds $150 million.
If PDL does not receive payments equal to or greater than the total amount funded on or before the fifth anniversary of each of the respective fundings, ARIAD will pay PDL the difference between the amounts funded by PDL and the amounts paid to such date. PDL has a put option based upon certain events and ARIAD has a call option to repurchase the revenue interest at any time. Both the put and call prices have been predetermined.
Iclusig is approved in the U.S., E.U., Australia, Israel, Canada and Switzerland.