Cytokinetics Inc. agreed to sell Royalty Pharma a portion of the royalty on worldwide sales of omecamtiv mecarbil, a cardiac muscle activator being co-developed with Amgen Inc.
The company will receive an upfront cash payment of $90 million in exchange for the sale of a 4.5% royalty rate on potential worldwide sales, which may increase for up to an additional 1% under certain circumstances.
In addition, Cytokinetics agreed to exercise its option to co-invest $40 million in the phase 3 development program of the drug, enabling Cytokinetics to receive an incremental royalty of up to 4% on increasing worldwide sales of omecamtiv mecarbil outside of Japan.
The company will retain its right to receive more than $600 million in potential milestone payments as well as escalating double-digit royalties that may exceed 20% on tiered worldwide sales of the drug outside Japan, with a lower royalty rate in Japan under its agreement with Amgen.
Exercising its option and co-funding will afford Cytokinetics the right to co-promote omecamtiv mecarbil in institutional care settings in North America, with reimbursement by Amgen for certain sales force activities. A joint commercial operating team comprising representatives of Cytokinetics and Amgen will then be responsible for the commercialization program of the drug.
Cytokinetics also agreed to sell $10 million of its common stock to Royalty Pharma.
Centerview Partners LLC acted as financial adviser to Cytokinetics on the transaction with Cooley LLP and Morrison & Foerster as legal advisers. Goodwin Wolf Greenfield and Maiwald acted as legal advisers to Royalty Pharma on the transaction.