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Dec 20, 2012

Nuron, Raptor in Royalty Deals

  • A pair of drug developers said today they hammered out with the same firm financing agreements aimed at paying for operations based on royalties from future sales.

    Nuron Biotech closed on $80 million in financing, more than half of it tied to sales of its vaccines – including Meningtec™, the meningitis vaccine that the company acquired from Pfizer just 10 days ago. Nuron will receive $30 million in equity from a new investor, an entity of HealthCare Royalty Partners. HC Royalty also agreed to a “Synthetic Royalty®” agreement paying Neuron an additional $50 million, in return for HC Royalty receiving cash flow payments primarily secured by future sales of the vaccines as well as their underlying value.

    Nuron said proceeds will in part support commercialization and expansion of Meningitec, a vaccine marketed for prevention of invasive disease caused by Neisseria meningitidis serogroup C. Proceeds will also support clinical development of Nuron biologic and vaccine candidates for infectious and neurodegenerative diseases. They include its most advanced drug candidate NU100, a human interferon beta-1b now in a Phase III  trial for multiple sclerosis, enrollment for which was completed last month; and HibTITER® (NU300), among the first glycoconjugate human vaccines for preventing infection caused by Haemophilus Influenza Type B bacteria, now in Phase II trials.

    “The successful closing of this transaction provides us the capital needed to execute our Meningitec commercial plan and reach key milestones in advancing our pipeline and in providing new treatment options for patients around the world,” Shankar Musunuri, Ph.D., Nuron’s CEO and founder, said in a statement.

    In the other deal, Raptor Pharmaceutical signed a $50 million loan agreement with HC Royalty to help fund commercialization of the orphan drug PROCYSBI™ (RP103) for potential treatment of nephropathic cystinosis, as well as advance the company's development programs.

    Raptor will receive a first tranche loan of $25 million at closing, and the second tranche loan of $25 million upon FDA approval of PROCYSBI. The tranche loans, which mature Dec. 31, 2019, have an annual fixed interest rate of 10.75% and a Synthetic Royalty® tiered-down variable rate based on a percentage of future PROCYSBI sales. Financing is interest-only for the first two years.

    "At closing of the first tranche, we will have over $55 million in cash on our balance sheet, with an additional $25 million to be funded under the second tranche loan upon FDA approval of PROCYSBI," Raptor CEO Christopher Starr said in a statement.

    RP103 is an oral, delayed and extended-release medication engineered specifically to allow release of cysteamine bitartrate micro-spheres in the duodenum for optimal absorption while simultaneously enabling administration every 12-hours for the potential treatment of cystinosis. RP103 is also in clinical development for the potential treatment of Huntington's disease and non-alcoholic steatohepatitis or NASH.

    Raptor has submitted a NDA to FDA, which has assigned a PDUFA date of Jan. 30, 2013; and a Marketing Authorization Application to the European Medicines Agency, respectively.

    HC Royalty, which has $1.5 billion under management, makes investments ranging from $20 million and $100 million –higher in some cases -- in commercial-stage life sciences companies seeking to finance development projects, acquire new products or technologies and fund additional capital needs. HC Royalty says its senior investment team has participated in 40 royalty financings valued at $2 billion over the past decade.


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