Royalty Pharma to acquire royalty interest in Sanofi’s frexalimab

Royalty Pharma will acquire royalties and milestones on frexalimab owned by ImmuNext, for approximately $525 million in cash including estimated transaction costs. ImmuNext, a privately-held biotechnology company, is entitled to a royalty on net sales of frexalimab and milestones related to the achievement of regulatory and clinical events and commercial sales. Frexalimab, in development by Sanofi, is a first-in-class, second generation anti-CD40 ligand monoclonal antibody. Frexalimab is in three Phase 3 clinical studies for the treatment of multiple sclerosis. Phase 2 clinical studies for systemic lupus erythematosus and Type 1 Diabetes are ongoing. Sanofi stated that potential non-risk-adjusted peak sales for frexalimab may be greater than EUR 5 billion. Sanofi anticipates filing a biologics license application or relapsing multiple sclerosis with the U.S. Food & Drug Administration in 2027. Worldwide sales of MS therapies amounted to approximately $25 billion in 2023 according to IQVIA. Following this transaction, Royalty Pharma will have 15 therapies in its development-stage portfolio, 11 of which will be in Phase 3 development or undergoing regulatory review. In aggregate, on a non-risk adjusted basis, Royalty Pharma’s development-stage pipeline will have the potential to generate combined peak royalties significantly greater than $1 billion per year. Under the terms of ImmuNext’s licensing agreement with Sanofi, ImmuNext is entitled to receive an upward tiering net royalty ranging from a high-single digit to low-double digit percentage of worldwide net sales of frexalimab. As a result of today’s announced transaction, Royalty Pharma will receive 100% of net royalties on annual worldwide net sales of frexalimab of up to $2.0 billion and share a minority of the royalties above this threshold with ImmuNext shareholders. In addition, the acquisition will include substantial potential milestone payments from Sanofi. Royalty Pharma estimates frexalimab, if approved, will generate royalties through 2041. The acquisition is subject to customary, administrative closing conditions and is expected to close in May 2024.