Blueprint rounds up $1.25B to grow cancer portfolio through internal R&D and dealmaking

With two new deals Thursday, Blueprint Medicines is “converting future revenue to cash," as CEO Kate Haviland put it.

The Massachusetts biotech is selling certain royalties to its targeted cancer drugs Ayvakit and Roche-partnered Gavreto and securing additional money for future business development in separate deals with Sixth Street and Royalty Pharma. The two agreements give Blueprint $575 million immediately in cash, and the total financing could reach $1.25 billion.

The transactions allow Blueprint to benefit now from its marketed meds and pipeline prospects, particularly when it comes to Ayvakit’s potential expansion into non-advanced systemic mastocytosis, Haviland said during a Thursday call with investors.

In the Sixth Street deal, the investment firm is putting down $250 million upfront for royalties from Ayvakit and Blueprint's follow-up KIT inhibitor candidate BLU-263. Additionally, Blueprint also gets up to $400 million in credit, including $150 million that Blueprint will draw immediately. Another $260 million credit facility has been set aside to help Blueprint buy external assets in the future.

As for the Royalty Pharma deal, that company is paying Blueprint $175 million upfront to gain access to royalties tied to Gavreto sales outside of the U.S. Previously, Roche paid those ex-U.S. Gavreto royalties to Blueprint. 

Royalty will also pay Blueprint up to $165 million in sales-based milestones on the medicine.

The deals come as Blueprint awaits top-line registrational data from Ayvakit’s PIONEER trial in non-advanced systemic mastocytosis in late summer. If the results turn out positive, Blueprint plans to file for an FDA approval by the end of this year.

With Ayvakit and RET-targeted Gavreto, Blueprint has so far been going after relatively niche cancer markets. But with three pipeline programs, the company is angling at the much larger EGFR-driven non-small cell lung cancer market currently dominated by AstraZeneca’s blockbuster Tagrisso.

Further, the company is entering human testing with a CDK2 inhibitor, which holds promise for a broad range of oncology treatment settings.

These programs represent significantly larger market opportunities that warrant additional R&D investments⁠—particularly as Blueprint tries to move into first-line treatment settings for large patient populations, Haviland said.

What’s more, “we want to continue to pursue strategic and synergistic business development opportunities, particularly those that can leverage both our development and commercial infrastructure,” Haviland said. The new deals give Blueprint the cash to pursue those deals, she added.

The company’s emphasis on external business development may be a shift for some investors, who have largely viewed Blueprint as a drug discovery and development engine, SVB Securities analysts said in a Thursday note. But it shouldn’t be a complete surprise given Haviland was Blueprint’s dealmaking mastermind before rising the ranks to become CEO in April.

Besides, these financing deals could be read as a sign for further reduced likelihood of a takeover of Blueprint, the SVB analysts said.