Replies to post #240481 on Biotech Values

[jbog]

The majority of deals are simply set out as a loan. IE, I'll give you $500 mil at XX % and this will be paid backed by your Royalties with a minimum payment due each Quarter.

If your stream can pay it faster then once the principal and interest is paid the deal is done.

You'll notice this because any of the companies will carry the outstanding amount as an Liability.

It's no difference than borrowing against your receivables.

For a $150 million upfront cash payment, Royalty Pharma, the largest buyer of pharmaceutical royalties globally, has purchased royalties on combined annual net sales of BCX9930 and another earlier stage Factor D inhibitor of 3.0% on sales up to $1.5 billion, 2.0% on sales between $1.5 billion and $3.0 billion, and no royalty on sales over $3.0 billion. Royalty Pharma also purchased royalties of 0.75% on direct annual net sales of ORLADEYO up to $350 million, 1.75% on sales between $350 million and $550 million, no royalty on sales over $550 million, and a tiered, declining percentage on ORLADEYO sublicense revenue in certain territories. These royalties are additional to the royalties purchased by Royalty Pharma in December 2020.

For a $150 million upfront cash payment, OMERS, one of Canada’s largest defined benefit pension plans, has purchased a capped, tiered, declining royalty on direct annual net sales of ORLADEYO. Under the agreement, BioCryst does not owe any royalties for the first two years. The first royalty payment from BioCryst to OMERS will occur based on royalties from direct annual net sales of ORLADEYO in the fourth quarter of 2023. Once OMERS has achieved its maximum allowed total return under the agreement, no further royalty payments will be owed. OMERS will receive a royalty of at least 7.5% on annual net sales up to $350 million, 6.0% on sales between $350 million and $550 million and no royalty on sales over $550 million. The maximum total return OMERS may earn under the agreement is capped at 1.425x or 1.550x, based on the level of 2023 global net sales of ORLADEYO relative to a prespecified sales threshold.