5 November 2019 - - US-based late-stage biopharmaceutical company Epizyme, Inc. (NASDAQ: EPZM) has inked funding agreements with Royalty Pharma and its affiliate Pharmakon Advisors that, in aggregate, could bring in up to USD 270m in capital, significantly strengthening Epizyme's financial position and extending its operating runway into at least 2022, the company said.
As part of the agreements, Royalty Pharma will make an upfront payment of USD 100m for shares of Epizyme common stock based on a price of USD15 per share, representing a 27% premium to the prior trading day's closing price.
Epizyme also has an 18-month option to sell an additional USD 50m of its common stock to Royalty Pharma at then prevailing prices, not to exceed USD 20 per share, and Royalty Pharma has a three-year option to purchase an additional 2.5 m shares of Epizyme common stock at USD 20 per share.
Epizyme and Royalty Pharma have also agreed to reduce the existing royalty rates owed by Epizyme to Royalty Pharma on worldwide sales of tazemetostat outside Japan at specified annual net sales levels.
This reduction follows Royalty Pharma's acquisition of certain future royalty streams on sales of tazemetostat in all regions except for Japan, which Epizyme previously owed to Eisai as part of their April 2015 amended and resaid agreement. In addition, Epizyme has assigned to Royalty Pharma the future royalty streams on tazemetostat sales in Japan previously owed to Epizyme by Eisai.
As part of the transactions, Legorreta will be appointed to Epizyme's board of directors.
Under a separate agreement, Epizyme has established a USD 70m loan facility with Pharmakon Advisors, an affiliate of Royalty Pharma, which will fund the regulatory milestones owed to Eisai for the NDA submissions and US approvals for tazemetostat for epithelioid sarcoma and follicular lymphoma.
The facility may be drawn down in up to three tranches in conjunction with achievement of the milestones and is expandable by up to USD 300m following approval of tazemetostat in follicular lymphoma, subject to mutual agreement.
Wilmer Cutler Pickering Hale and Dorr LLP acted as legal advisor to Epizyme; Goodwin Procter LLP, Dechert LLP and Maiwald Patentanwalts- und Rechtsanwalts GmbH acted as legal advisors to Royalty Pharma; and, Akin Gump Strauss Hauer and Feld LLP acted as legal advisor to Pharmakon Advisors.
Epizyme, Inc. is a late-stage biopharmaceutical company committed to rewriting treatment for cancer and other serious diseases through novel epigenetic medicines.
Founded in 1996, Royalty Pharma is in acquiring pharmaceutical royalties, with over USD 16bn in royalty assets.
Pharmakon Advisors, LP is the investment manager of the BioPharma Credit funds and of BioPharma Credit PLC (LON: BPCR). the only listed specialist investor in debt from the life sciences industry.
Established in 2009, Pharmakon has raised a total of USD 3.6bn and has committed USD 3.7bn across 36 different financing transactions for companies in the life sciences.