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(Alliance News) - PureTech Health PLC on Thursday said Royalty Pharma PLC has acquired an interest in PureTech's royalty in Karuna Therapeutics Inc's KarXT schizophrenia treatment.
PureTech shares rose 11% to 226.30 pence each in London on Thursday morning.
The Boston, Massachusetts-based clinical-stage biotherapeutics company said Royalty Pharma's interest was acquired for up to USD500 million, with USD100 million in cash up front, and up to USD400 million in additional payments dependent on the achievement of regulatory and commercial milestones.
Puretech said Royalty Pharma will receive a 3% royalty from Karuna on sales up to USD2 billion annually, after which Royalty Pharma will receive 33%, and PureTech will retain 67% of royalty payments.
The company noted that it retains its 3.1% equity ownership in Nasdaq-listed Karuna, and holds the right to receive milestone payments upon the achievement of regulatory approvals and 20% of sublicense income.
Chief Executive Officer Daphne Zohar said: "This agreement will provide PureTech with additional non-dilutive capital to advance our wholly owned pipeline, including our rapidly maturing clinical programs, towards potential commercialization. Such non-dilutive sources of capital have allowed us to fund our pipeline and operations without having to raise capital from the public markets in over five years, and we are pleased to be able to benefit from the success of our invented programs."
Karuna, which also is based in Boston, plans to submit a new drug application for KarXT in schizophrenia to the US Food & Drug Administration in mid-2023, PureTech said.
By Harvey Dorset, Alliance News reporter
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