Royalty Pharma to buy cystic fibrosis drug from Cystic Fibrosis Foundation for $3.3 bn

Royalty Pharma, a US firm that invests in royalty streams from pharmaceuticals, yesterday said it would buy royalties on Vertex Pharmaceuticals Inc's cystic fibrosis treatments owned by Cystic Fibrosis Foundation, for $3.3 billion in cash.

Royalty Pharma financed this acquisition with cash on hand and a $2.7 billion unsecured term loan from Bank of America Merrill Lynch.

Cystic fibrosis is a fatal genetic disease that primarily affects the lungs and digestive system. An estimated 70,000 children and adults worldwide have cystic fibrosis.

For most of the last century, scientists and physicians had very little understanding of the disease, other than the fact that very few patients ever reached adulthood.

Vertex's cystic fibrosis drug, Kalydeco, was approved by the US Food and Drug Administration in early 2012.

"We are honored to work with the Cystic Fibrosis Foundation on this extraordinary royalty transaction,'' said Pablo Legorreta, Royalty Pharma's founder & CEO. ''Our goal is to be the premier provider of innovative capital to enable the life sciences industry to accelerate development of important novel therapies.''

Maryland-based Cystic Fibrosis Foundation plans to reinvest the money into new research efforts, said its CEO, Robert Beall.

''These new funds give us a tremendous opportunity to supercharge our efforts to develop life saving new therapies'' and pursue opportunities to find a permanent cure, he said in a statement.

Royalty Pharma, which in 2013 launched a $6.7 billion futile hostile takeover of Irish neuroscience-focused biotechnology company Elan Corp, holds rights in 40 approved and marketed pharmaceutical products, including Johnson & Johnson's Remicade, Merck's Januvia, Sloan-Kettering Cancer Center's US royalty interest in Amgen's Neupogen drug and Gilead's Atripla.

It has royalty interests in marketed and late stage biopharmaceutical products worth over $12 billion.