Royalty Pharma Acquires Remaining Royalty Interest in Vertex’ CF Drugs from the Cystic Fibrosis Foundation

Rare Daily Staff

Royalty Pharma, the largest buyer of biopharmaceutical royalties, said it agreed to acquire the remaining royalty interest in Vertex Pharmaceuticals’ cystic fibrosis treatments owned by the Cystic Fibrosis Foundation for $575 million and a potential milestone payment of $75 million.

As part of previous agreements with the CF Foundation, Royalty Pharma purchased all of the CF Foundation’s royalty interests on Vertex’s CF franchise. Under the terms of those agreements, Royalty Pharma was obligated to pay the CF Foundation 50 percent of royalties attributable to revenue more than $5.8 billion in any calendar year.

The new agreement eliminates this obligation and entitles Royalty Pharma to all royalties above the previous revenue threshold. The Vertex CF franchise generated net revenues totaling more than $4 billion in 2019. The royalties under this agreement are perpetual and not tied to patent expirations.

“Our initial landmark funding transaction in 2014 enabled the Foundation to expand its efforts to develop new lifesaving therapies and improve care for patients, and exemplified our leadership role as an innovator in funding the biopharma ecosystem,” said Pablo Legorreta, Royalty Pharma’s founder and CEO. “We are similarly optimistic that today’s transaction will further support the CF Foundation’s work to fund research and drug development and advance high-quality, specialized CF care.”

Photo: Pablo Legorreta, Royalty Pharma’s founder and CEO