Royalty financing

A sale of rights to royalties for sale of the product which would have otherwise been due to the licensor...

A sale of rights to royalties for sale of the product which would have otherwise been due to the licensor, in return for a lump sum investment.

A sale of rights to royalties for sale of the product which would have otherwise been due to the licensor, in return for a lump sum investment.

The buyer of the royalty asset would assume right and title to receive the royalties due from the sales of the product under a pre-existing licensing agreement.

This may be for an indefinite period or until a pre-agreed sum has been paid.

Royalty financing agreement for future sales of CIMZIA and MIRCERA

Feb 2012 - Royalty Pharma, Nektar

Nektar Therapeutics announced that it agreed to sell to Royalty Pharma its royalties on future sales of CIMZIA, under Nektar's agreement with UCB Pharma, and MIRCERA, under Nektar's agreement with Roche.

In consideration for the sale, Royalty Pharma will pay Nektar an aggregate cash payment of $124.0 million.

Nektar intends to use the net proceeds of the transaction towards the repayment of its $215.0 million of convertible debt.

For the twelve month period ended December 31, 2011, Nektar recognized $8.3 million in aggregate royalties from net sales of CIMZIA and MIRCERA.

Pursuant to the agreement entered into between Nektar and RPI Finance Trust, an affiliate of Royalty Pharma, RPI Finance Trust will receive all royalties on worldwide net sales of CIMZIA and MIRCERA from and after January 1, 2012.

If certain worldwide net sales thresholds for MIRCERA are not met for the 12 month periods ending December 31, 2012 and December 31, 2013, Nektar will be required to make a payment to RPI Finance Trust of a maximum of $3.0 million in 2013 and $7.0 million in 2014, respectively.

In December 2000, Nektar entered into a license, manufacturing and supply agreement for CIMZIA with Celltech Chiroscience Ltd., which was acquired by UCB Pharma in 2004.

CIMZIA is currently approved for the treatment of Crohn's Disease in the United States and for the treatment of rheumatoid arthritis in the United States and in the European Union.

View the full deal record at CurrentAgreements

Similar term: Revenue financing

Purchase report: Royalty Financing Terms and Agreements in Pharma, Biotech and Diagnostics

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