La Jolla Pharmaceutical Company entered a $125 million royalty financing deal with private equity firm HealthCare Royalty Partners to commercialize its blood pressure drug Giapreza.
Under the agreement, the San Diego-based biopharmaceutical company will receive $125 million in exchange for tiered royalty payments on worldwide net sales of Giapreza. The payment obligations will expire once reaching the threshold limit of 180% of the $125 million.
La Jolla said adjusting for the net proceeds from the transaction, the company's cash and cash equivalents as of March 31 were $279 million.
The U.S. Food and Drug Administration approved Giapreza in December 2017. The medicine helps to increase blood pressure in adults who experience abnormal distribution of blood flow in blood vessels resulting in inadequate supply to the body's tissues and organs — known as distributive shock.
La Jolla President and CEO George Tidmarsh said the transaction will provide the company with a "strong financial position" to support the commercial launch of Giapreza and development of other product candidates.