US-listed Royalty Pharma has acquired an interest in PureTech Health’s royalty in Karuna Therapeutics’ KarXT drug for up to $500m, with $100m in cash up front and up to $400m in additional payments contingent on the achievement of certain regulatory and commercial milestones.
As part of the deal, PureTech has sold its right to receive a 3% royalty from Karuna to Royalty Pharma on sales up to $2bn a year, 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. 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, and is an oral treatment of psychiatric and neurological conditions, including schizophrenia and psychosis in Alzheimer’s disease. Karuna has announced that it plans to submit a New Drug Application for KarXT in schizophrenia to the US Food and Drug Administration in mid-2023.
Reporting by Frank Prenesti for Sharecast.com
