NEW YORK – Royalty Pharma has agreed to buy from UCLA its royalty interest in a leading prostate cancer drug, Xtandi, whose development was based on discoveries by campus researchers for over $1.1 billion.
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 transaction includes a cash payment of $1.14 billion and potential additional payments based on future Xtandi sales.
UCLA will use its share of the proceeds — approximately $520 million — to support research programs aimed at generating additional discoveries that lead to medications and other products that serve the public good. UCLA also will support undergraduate scholarships and graduate student fellowships, a campus priority.
“Xtandi is the result of a unique collaboration between researchers from various academic units across campus and an outstanding example of basic science leading to a therapy that is bringing extraordinary benefits to prostate cancer patients worldwide,” said UCLA Chancellor Gene Block. “By selling future royalty rights to Royalty Pharma, we are strategically supporting one of our essential missions — funding and generating research with practical applications that serve the public good. Facilitating equal access to education also is a campus priority, and we will use a portion of the sale proceeds to support scholarships and fellowships.”
“We have great admiration for UCLA’s scientists and physicians,” said Royalty Pharma founder and CEO Pablo Legorreta. “Through their discovery of Xtandi, they have improved the lives of hundreds of thousands of prostate cancer patients who suffer from this deadly disease. Royalty Pharma’s mission is to make the life sciences research and development ecosystem more efficient and productive, and to accelerate research through innovative transactions such as this one.”
By selling the royalty interest and prudently investing proceeds, UCLA seeks to provide stability and minimize risk associated with the volatility of the pharmaceutical industry marketplace.
UCLA will hold its share of the proceeds in a broadly diversified portfolio managed by the University of California’s office of the chief investment officer. Based on the pool’s average annual returns, UCLA anticipates it will receive approximately $60 million annually until 2027.
Campus officials said they anticipated proceeds of the sale will contribute a small percent incrementally to UCLA’s total budget.
“Given ongoing funding pressures, we are pleased to have these much-needed additional resources to invest in programs that directly serve the public by fostering research that leads to commercially viable products and by educating students,” said Steve Olsen, UCLA’s vice chancellor and chief financial officer.
Xtandi is based on a chemical compound that was developed at UCLA. The oral medication inhibits the androgen receptor, the engine of prostate cancer progression. Where other treatments have failed, Xtandi has extended the lives of men with metastatic castration-resistant prostate cancer. In one phase 3 clinical study of patients previously treated with chemotherapy, Xtandi reduced the risk of death by 37 percent and increased median survival by 4.8 months, compared to those who took a placebo. In a separate phase 3 clinical study of patients not previously treated with chemotherapy, Xtandi reduced the risk of death by 23 percent and increased median survival by four months.
Royalty Pharma is an industry leader in acquiring royalty interests in marketed and late stage biopharmaceutical products, with total assets of over $15 billion. Royalty Pharma owns royalty interests in 40 products including Humira, Remicade, Lyrica, Prezista, Truvada, Januvia, Tecfidera, Imbruvica, Kalydeco and Orkambi. Royalty Pharma also funds late-stage clinical trials in exchange for royalty interests.