Dive Brief:

• Royalty Pharma will pay biotechnology startup ImmuNext $525 million for the right to earn royalties and milestone payments from an autoimmune disease drug the privately held company licensed to Sanofi.
• Sanofi acquired the medicine from ImmuNext in 2017 and promised milestone payments worth as much as $500 million plus tiered royalties on potential sales. The French drugmaker moved the drug, known as frexalimab, into a Phase 3 trial after promising results in a mid-stage study of patients with relapsing multiple sclerosis released last year.
• As part of the deal with ImmuNext, Royalty will be in line for “substantial” milestone payments from Sanofi as well as all royalties on up to $2 billion of global sales for the drug. A minority of royalties on sales surpassing that threshold will be shared with ImmuNext shareholders. The tiered royalties range from high single- to low double-digits, Royalty said Thursday.

Dive Insight:

With frexalimab in its portfolio, Royalty will have 15 experimental therapies with the potential to generate combined peak annual royalties “significantly greater” than $1 billion, the company said. Approved products will add to the cash flow coming from currently marketed drugs including GSK’s asthma treatment Trelegy and Roche’s spinal muscular atrophy medicine Evyrsdi.

In 2017, ImmuNext and Sanofi envisioned frexalimab, then called INX-021, as a treatment for a range of diseases. Since then, Sanofi has seen both successes and failures. Last month, the company said it stopped development of the drug for Sjögren’s Syndrome after disappointing study results. Research for two forms of MS, Type 1 diabetes and lupus continue, Sanofi said.

The MS indication is the furthest along. In February, the mid-stage study results were published in The New England Journal of Medicine. Sanofi expects to file for approval of the medicine in 2027. In December, Sanofi told investors the medicine could generate annual sales of more than 5 billion euros, or about $5.4 billion. Royalty said it expects frexalimab to generate royalties through 2041.

Royalty has been steadily building its portfolio through a variety of deals. In October, it scooped up a greater share of royalties on Evrysdi. Before that, Royalty ventured into gene therapy, agreeing to pay $300 million for a 5% royalty on a Ferring Pharmaceuticals cancer treatment. In March 2023, it bought a portion of royalty rights to Karuna Therapeutics’ experimental schizophrenia drug.