Fast on the heels of its $80 million investment/royalty pact on Nuron Biotech's vaccine portfolio, HealthCare Royalty Partners agreed to lend Raptor Pharmaceutical ($RPTP) up to $50 million to help finance the prospective launch of its new drug for a rare metabolic disease, now facing a PDUFA deadline at the end of January.
Here's how the deal works: Raptor gets $25 million now and another $25 million if the FDA approves Procysbi, the commercial name for RP103 for the potential treatment of nephropathic cystinosis. The loans mature at the end of 2019 at a fixes rate of 10.75% and a "Synthetic Royalty" variable rate, tiered down, based on a percentage of future Procysbi sales. The loan is interest-only for the first two years.
"This loan agreement with HC Royalty further validates the growing value of Procysbi and Raptor's pipeline. We believe that the proceeds of this financing will provide us with the necessary capital to fund our activities through FDA approval of Procysbi, based on our current assumptions for the timing of a potential FDA approval of Procysbi, as well as to fund our plans to launch Procysbi in the U.S., if approved by the FDA," said Raptor CEO Christopher Starr in a statement. "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."
- here's the press release