PureTech Health and Royalty Pharma Enter into KarXT Royalty Agreement for up to $500 Million
PureTech Health, a clinical-stage biotherapeutics company dedicated to changing the treatment paradigm for devastating diseases, and Royalty Pharma, the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the life sciences industry, today announced that Royalty Pharma has acquired an interest in PureTech’s royalty in Karuna Therapeutics’ KarXT for up to $500 million, with $100 million in cash up front and up to $400 million in additional payments contingent on the achievement of certain regulatory and commercial milestones.
“We are delighted to partner with PureTech, which began a remarkable innovation story with KarXT that has demonstrated an impressive clinical profile in Phase 3,” said Pablo Legorreta, Royalty Pharma’s Founder and Chief Executive Officer. “We believe this important therapy will have a significant impact on patients with schizophrenia if approved by the FDA. This medicine is a notable addition to our royalty portfolio and is well aligned with our strategy of investing in breakthrough therapies that address areas of high unmet medical need.”
“We’ve seen extraordinary clinical success demonstrated by KarXT, which, if approved, will be the first new mechanism for treating schizophrenia in more than fifty years. KarXT has now demonstrated efficacy in registration enabling studies and is heralded as a potential treatment paradigm shift that could impact millions of patients,” said Daphne Zohar, Founder and Chief Executive Officer of PureTech. “This agreement will provide PureTech with additional non-dilutive capital to advance our Wholly Owned Pipeline, including our rapidly maturing clinical programs, towards potential commercialization. Such non-dilutive sources of capital have allowed us to fund our pipeline and operations without having to raise capital from the public markets in over five years, and we are pleased to be able to benefit from the success of our invented programs.”
As part of this transaction, PureTech has sold its right to receive a 3% royalty from Karuna to Royalty Pharma on sales up to $2 billion annually, after which threshold Royalty Pharma will receive 33% and PureTech will retain 67% of the royalty payments. PureTech retains its 3.1% equity ownership in Karuna.1 Additionally, under its license agreement with Karuna, PureTech retains the right to receive milestone payments upon the achievement of certain regulatory approvals and 20% of sublicense income.
KarXT was invented by a team at PureTech, including its Chief Innovation Officer, Eric Elenko, Ph.D., who served as the founding CEO of Karuna Therapeutics. KarXT is an oral, investigational M1/M4-preferring muscarinic agonist in development for the treatment of psychiatric and neurological conditions, including schizophrenia as a monotherapy and adjunctive therapy and psychosis in Alzheimer’s disease. Karuna has announced that it plans to submit a New Drug Application for KarXT in schizophrenia to the U.S. Food and Drug Administration (FDA) in mid-2023.
Companies In This Post
- Aegis Life Awarded Grant to Develop DNA-encoded Antibodies Against Infectious Diseases Read more
- New “AI Doctor” Predicts Hospital Readmission and Other Health Outcomes Read more
- Axol Bioscience Collaborates with StrataStem to Deliver Stem Cell-Based ‘Clinical Trial in a Dish’ for Alzheimer’s Disease Read more
- MedTech Innovator Asia Pacific Names 24 Startups to Annual Accelerator Read more
- XNK Therapeutics Appoints Hugo Petit as Chief Financial Officer Read more