Royalty Pharma plc (RPRX) announced Tuesday that it has acquired an interest in Agios Pharmaceuticals' (AGIO) royalty on Servier's vorasidenib for $905 million in upfront cash. The deal is contingent on the approval of vorasidenib by the U.S. Food and Drug Administration.
In pre-market activity on the Nasdaq, Agios Pharma shares were gaining around 23.2 percent to trade at $38.81.
Vorasidenib is an oral, selective, highly brain-penetrant dual inhibitor of mutant isocitrate dehydrogenase 1 and 2 (IDH1/2) enzymes for the treatment of IDH-mutant diffuse glioma.
If approved, it would be the first targeted therapy in IDH-mutant glioma, a progressive and incurable brain tumor.
Under the deal terms, Royalty Pharma will pay Agios the money in exchange for a 15% royalty on annual U.S. net sales of vorasidenib up to $1 billion and a 12% royalty on annual U.S. net sales greater than $1 billion.
Agios will retain a 3% royalty on annual U.S. net sales greater than $1 billion.
The company projects greater than $1 billion in peak annual sales potential for vorasidenib, which is expected to generate royalties of greater than $150 million annually to the firm. If approved, Royalty Pharma anticipates vorasidenib will generate royalties through 2038.
Vorasidenib was granted Breakthrough Therapy Designation by the FDA, and it received priority review with a Prescription Drug User Fee Act action (PDUFA) date of August 20, 2024.
Pablo Legorreta, founder and Chief Executive Officer of Royalty Pharma, said, "Innovation has been lacking in glioma treatment for over two decades, and we believe vorasidenib, which demonstrated unprecedented efficacy with a well-tolerated safety profile in its pivotal clinical study, is a potentially transformative therapy."
In the deal, Goodwin Procter LLP and Fenwick & West LLP acted as legal advisors to Royalty Pharma.
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