Japan's Astellas, U.S.-based Medivation gain new Royalty partner in $1B-plus Xtandi deal

New York-based Royalty Pharma has moved to tap into sales of Xtandi (enzalutamide) by paying a bit more than $1 billion in cash up front to buy a portion of future royalties of the prostate cancer drug previously held by the University of California, Los Angeles, and related parties.

"Royalty Pharma has acquired rights to a portion of the future Xtandi royalties co-owned by UCLA, researchers working at the university at the time of the discoveries and a research organization," the company said in a press release.

"The transaction includes a cash payment of $1.14 billion and potential additional payments based on future Xtandi sales." The Los Angeles Times said the deal was the largest-ever technology transfer transaction involving a University of California invention.

Tokyo-based Astellas Pharma and San Francisco-based Medivation ($MDVN) co-market Xtandi as part of a 2009 development and commercialization global agreement. Both companies sell the treatment in the U.S., while Astellas manufactures and handles regulatory work outside the United States.

In January of this year, Astellas and Medivation said enzalutamide met its primary endpoint in a Phase II study to treat metastatic castration-resistant prostate cancer (mCRPC).

The data, published in the Lancet medical journal, showed a "statistically significant increase in progression-free survival for enzalutamide compared to bicalutamide" in treating mCRPC, according to a press release.

The move to buy into the royalty stream in exchange for upfront cash represents a cash infusion for future research programs for UCLA as federal and state revenues drop, the Los Angeles Times said, while Royalty taps into a drug that reported $1.9 billion in worldwide sales in 2015.

UCLA will garner $520 million from the deal, the release said, and put the cash into an investment portfolio that could generate about $60 million annually through 2027 for funding efforts. The U.S. patent for Xtandi expires in 2027.

Last year, UCLA received $33.3 million in royalties from Xtandi, but the Los Angeles Times said that Westwood Technology Transfer, a not-for-profit advisory board launched by UCLA 18 months ago to help the university squeeze more value out of its patents, recommended getting cash upfront.

"It was deemed prudent to [cash out] the royalty interests," Tom Unterman, the board's chairman, told the Los Angeles Times.

According to the release, Goldman Sachs advised UCLA on the transaction and firm Gibson Dunn acted as legal advisor.

For Royalty Pharma, firm Goodwin Procter acted as legal advisor and Heyman Biotech LLC acted as strategic advisor to the inventors, and Covington & Burling LLP acted as their legal advisor.

Royalty said in the release that it holds total assets of more than $15 billion that includes royalty interest in in 40 products such as Humira, Remicade, Lyrica, Prezista, Truvada, Januvia, Tecfidera, Imbruvica, Kalydeco and Orkambi.

The company also funds late-stage clinical trials.

In 2005, Medivation licensed patents for Xtandi from UCLA with other partners in the royalty stream including the main researchers on the drug and the Chevy Chase, MD-based Howard Hughes Medical Institute.

The research effort, according to the release, was led by Michael Jung, a UCLA distinguished professor of chemistry and biochemistry, and Charles Sawyers, a former UCLA professor of medicine, urology and pharmacology and researcher at UCLA's Jonsson Comprehensive Cancer Center who now is at Memorial Sloan Kettering Cancer Center in New York.

The two researchers and six colleagues will share equally in the proceeds from their 37.5% stake in the drug's royalty interest with 19% of the stream in focus owned by Howard Hughes Medical Institute with the remaining portion held by UCLA.

- here's the release
- and a story from the Los Angeles Times

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