KalVista enters synthetic royalty financing with DRI Healthcare Trust

KalVista (KALV) announced the closing of a synthetic royalty financing agreement with DRI Healthcare Trust for up to $179M, comprised of a $100M upfront payment, a one-time $22M optional payment upon U.S. product approval, and up to $57M in a sales-based milestone payment. The proceeds of this transaction will be used to fund the commercialization of sebetralstat, which, if approved, is expected to be the first approved oral on-demand therapy to treat hereditary angioedema, or HAE. KalVista has a new drug application for sebetralstat under review by the FDA with a Prescription Drug User Free Act, or PDUFA, target action date of June 17. DRI has also indicated an interest in investing up to $5M in KalVista’s common stock in a private placement transaction. However, this indication of interest is not binding agreement or commitment to purchase KalVista’s common stock and DRI may decide to purchase more, less or no shares of KalVista’s common stock and KalVista may decide to not sell shares of its common stock to DRI. Under the terms of the synthetic royalty financing agreement, KalVista will immediately receive $100M and be obligated to pay DRI a tiered royalty of 5% of annual global net sales up to and including $500M, 1.10% of annual global net sales above $500M and up to and including $750M, and 0.25% of annual global net sales above $750M. KalVista is entitled to a potential one-time sales-based milestone payment of $50M if annual global net sales of sebetralstat meet or exceed $550M in any calendar year before January 1, 2031. If sebetralstat is approved prior to October 1, 2025, KalVista will have the option to receive a one-time payment of $22M. If KalVista chooses to receive this optional payment, the royalty rate on net sales up to and including $500M will increase from 5% to 6%, and the sales-based milestone amount will increase from $50M to $57M.