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Zealand selling rights to royalties, milestones from anti-diabetics for $205M

Zealand Pharma A/S agreed to sell its right to future royalties and potential milestones payments from certain diabetes drugs to Royalty Pharma Ltd. for $205 million.

The drugs in the agreement are Zealand and France-based Sanofi's type 2 diabetes therapies Suliqua and Lyxumia, marketed in the U.S. as Soliqua and Adlyxin, respectively.

Potential commercial milestones for the drugs could amount to $85 million, Copenhagen-based Zealand Pharma said in a Sept. 6 release.

The sale will help the company bring its own fully owned product candidates to market, including short bowel syndrome treatment glepaglutide and blood sugar therapy dasiglucagon, Zealand's President and CEO Britt Jensen said in a statement.

Under a license agreement, Sanofi bought the exclusive worldwide rights to develop and sell Zealand's Lyxumia, or lixisenatide, both as a stand-alone drug and in combination with its diabetes treatment Lantus.

Zealand will still be eligible for a payment from Sanofi up to $15 million, expected in 2020. The company added that it will become debt free after redeeming its outstanding royalty bond of $24.7 million.

Morgan Stanley & Co. LLC acted as sole structuring agent for the deal, which is expected to close later in September.