UK-based medical research charity LifeArc has received almost US$1.3 billion for a portion of its royalty interests for a cancer drug, which it is to use to fund further research and investment.
The royalty interest has been sold to CPPIB Credit Europe, a wholly owned subsidiary of Canada Pension Plan Investment Board. According to LifeArc, the US$1.297 billion it has received will make it one of the UK’s leading medical research charities by size of its investment assets and allows it to significantly expand its mission of advancing research that has direct benefits for human health.
LifeArc secured rights to royalties from Keytruda® (pembrolizumab), which stimulates the immune system to target cancer cells, as a result of its 2007 collaboration to humanise the antibody-based therapy, now marketed by MSD.
It previously sold a small proportion of its pembrolizumab royalty interest in 2016, for US $150 million to a private equity fund. It used part of this capital to establish two funds, worth £30 million: the LifeArc Philanthropic Fund provides grants for translational research in rare diseases, and the LifeArc Seed Fund invests in nascent or early stage spin-out companies.
Dr Melanie Lee, CEO, LifeArc, said:
“This agreement with CPPIB allows us to increase our support for new approaches and collaborations and bolster access to our expertise and resources. Ultimately, we can support life sciences research and accelerate the development of new therapies, diagnostics and devices for those people in greatest need.”
Commenting on the benefits for CPPIB, John Graham, Senior Managing Director & Global Head of Credit Investments, said:
“This investment in Keytruda provides us the opportunity to continue expanding CPPIB’s global intellectual property program. Alternative assets related to intellectual property help to diversify the Fund through income streams that are typically uncorrelated to the broader capital markets. The acquisition of royalty interests from LifeArc for this market-leading cancer therapy provides stable, long-term cash flows.”
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