On July 29, 2015 PDL BioPharma, Inc. (NASDAQ: PDLI) reported that it has entered into a revenue interest assignment agreement (the "Agreement") in which it has agreed to provide ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) 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 sixth and twelfth 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 5.0% of the worldwide net revenues of Iclusig and remains until December 31, 2018. Beginning January 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 pre-determined.
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"We are extremely pleased to be able to structure a flexible, customized financial agreement that provides ARIAD with capital to support its key products," stated John P. McLaughlin, president and chief executive officer of PDL BioPharma.
"We are pleased to collaborate with PDL as we begin the next phase of our company’s growth with the initiation of a front-line trial of brigatinib and plans for its commercialization, along with continued commercialization of Iclusig," said Dr. Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. "Furthermore, this agreement provides ARIAD with the flexibility needed for future financing and business development activity."
About Iclusig (ponatinib)
Iclusig is approved in the U.S., EU, Australia, Israel, Canada and Switzerland.
In the U.S., Iclusig is a kinase inhibitor indicated for the:
Treatment of adult patients with T315I-positive chronic myeloid leukemia (chronic phase, accelerated phase, or blast phase) or T315I-positive Philadelphia chromosome positive acutelymphoblastic leukemia (Ph+ ALL).
Treatment of adult patients with chronic phase, accelerated phase, or blast phase chronic myeloid leukemia or Ph+ ALL for whom no other tyrosine kinase inhibitor (TKI) therapy is indicated.
These indications are based upon response rate. There are no trials verifying an improvement in disease-related symptoms or increased survival with Iclusig.