PTC Therapeutics, Inc. (PTCT) announced Thursday an agreement with Royalty Pharma plc. (RPRX) to monetize up to $1.5 billion of the Evrysdi royalty stream. Under the deal, PTC will get $1 billion in upfront cash for approximately 67 percent of outstanding royalties, with option for additional $500 million.
In pre-market activity on Nasdaq, PTC shares were gaining around 14 percent to trade at $23.39.
Evrysdi (risdiplam) is a survival motor neuron 2 or SMN2 splicing modifier designed to treat SMA caused by mutations in chromosome 5q that lead to survival motor neuron or SMN protein deficiency. It is designed to treat SMA by increasing and sustaining the production of SMN protein in the central nervous system or CNS and peripheral tissues.
Until December 31, 2025, PTC will have the option to sell the remainder of the Evrysdi royalty to Royalty Pharma for $500 million in five $100 million tranches, less royalties received.
If fewer than three of these options are exercised, Royalty Pharma has the option to purchase 50 percent of the remaining PTC royalty for $250 million less royalties received until March 31, 2026.
PTC maintains all economics associated with up to $250 million in remaining commercial sales milestones associated with Evrysdi global net sales.
PTC's initial 2020 strategic partnership established with Royalty Pharma was for the monetization of around 43 percent of the Evrysdi royalty stream for $650 million.
With the latest agreement, PTC will maintain ownership of around 19 percent of the Evrysdi royalty stream pending any exercise of future options by PTC or Royalty Pharma.
The company noted that proceeds from the financing will be used to retire all outstanding debt obligations with Blackstone Life Sciences and to fund planned operations.
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