La Jolla Pharmaceutical Company Announces $125 Million Royalty Financing Agreement with HealthCare Royalty Partners
SAN DIEGO, May 10, 2018 (GLOBE NEWSWIRE) — La Jolla Pharmaceutical Company (Nasdaq:LJPC) (La Jolla), a leader in the discovery, development and commercialization of innovative therapies intended to significantly improve outcomes in patients suffering from life-threatening diseases, today announced that it has closed a $125 million royalty financing agreement with HealthCare Royalty Partners (HCR).
Under the terms of the agreement, La Jolla will receive $125 million in exchange for tiered royalty payments on worldwide net sales of GIAPREZA. Payments under the agreement start annually at a maximum royalty rate, with step-downs based on the achievement of annual net sales thresholds. Through December 31, 2021, the royalty rate will be a maximum of 10%. Starting January 1, 2022, the maximum royalty rate may increase by 4% if an agreed-upon, cumulative sales threshold has not been met, and, starting January 1, 2024, the maximum royalty rate may increase by an additional 4% if a different agreed-upon cumulative sales threshold has not been met. The agreement is subject to maximum aggregate royalty payments to HCR of 180% of the $125 million to be received by La Jolla, at which time the payment obligations under the agreement would expire. The agreement was entered into by La Jolla’s wholly owned subsidiary, La Jolla Pharma, LLC, and HCR has no recourse under the agreement against La Jolla or any assets other than GIAPREZA.
On a pro-forma basis, adjusting for the net proceeds from this transaction, La Jolla’s cash and cash equivalents as of March 31, 2018 were $279 million.
“This transaction provides us with a strong financial position to support the commercial launch of GIAPREZA, while at the same time furthering the development of LJPC-401 and our other programs,” said George F. Tidmarsh, M.D., Ph.D., President and Chief Executive Officer of La Jolla.
“We are pleased to partner with La Jolla,” said Clarke Futch, Managing Partner and Chairman of the Investment Committee of HCR. “Our investment reflects our confidence in GIAPREZA’s ability to meaningfully improve outcomes for patients suffering from septic or other distributive shock.”
In December 2017, GIAPREZA™ (angiotensin II) was approved by the U.S. Food and Drug Administration (FDA) to increase blood pressure in adults with septic or other distributive shock. GIAPREZA mimics the body’s endogenous regulatory peptide that is central to the renin-angiotensin-aldosterone system to increase blood pressure. Prescribing information for GIAPREZA is available at www.giapreza.com.
IMPORTANT SAFETY INFORMATION
Warnings and Precautions
There is a potential for venous and arterial thrombotic and thromboembolic events in patients who receive GIAPREZA. Use concurrent venous thromboembolism (VTE) prophylaxis.
The most common adverse reactions that were reported in greater than 10% of GIAPREZA-treated patients were thromboembolic events.
Angiotensin converting enzyme (ACE) inhibitors may increase response to GIAPREZA.
Angiotensin II receptor blockers (ARB) may reduce response to GIAPREZA.
You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.
For additional information, please see Full Prescribing Information.
About Shock and Septic or Other Distributive Shock
Over 1 million Americans are affected by shock on an annual basis, with 1 in 3 patients being treated for shock in the intensive care unit. Distributive shock is the most common type of shock in the inpatient setting with approximately 800,000 distributive shock cases in the United States per year. Of these cases, an estimated 90% are septic shock patients. Approximately 300,000 do not achieve adequate blood pressure response with standard of care vasopressor therapy (catecholamines and vasopressin). The inability to achieve or maintain adequate blood pressure results in inadequate blood flow to the body’s organs and tissue and is associated with a mortality rate exceeding most acute conditions requiring hospitalization.
About HealthCare Royalty Partners
HealthCare Royalty Partners (HCR) is a private investment firm that purchases royalties and uses debt-like structures to invest in commercial or near-commercial stage life science assets. HCR has $3.7 billion in cumulative capital commitments with offices in Stamford (CT), San Francisco, Boston and London. For more information, visit www.healthcareroyalty.com.
About La Jolla Pharmaceutical Company
La Jolla Pharmaceutical Company is a biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies intended to significantly improve outcomes in patients suffering from life-threatening diseases. GIAPREZA™ (angiotensin II), formerly known as LJPC-501, was approved by the U.S. Food and Drug Administration (FDA) on December 21, 2017 as a vasoconstrictor to increase blood pressure in adults with septic or other distributive shock. LJPC‑401 (synthetic human hepcidin), a clinical-stage investigational product, is being developed for the potential treatment of conditions characterized by iron overload, such as hereditary hemochromatosis, beta thalassemia, sickle cell disease and myelodysplastic syndrome. For more information, please visit www.ljpc.com.
This press release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to expectations regarding future events or La Jolla’s future results of operations. These statements are only predictions or statements of current expectations and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those anticipated by the forward-looking statements. La Jolla cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Certain of these risks, uncertainties and other factors are described in greater detail in La Jolla’s filings with the U.S. Securities and Exchange Commission (SEC), all of which are available free of charge on the SEC’s website www.sec.gov. These risks include, but are not limited to, risks relating to: unforeseen safety issues from the administration of GIAPREZA in patients; the anticipated treatment of future clinical data by the FDA, the EMA or other regulatory authorities; potential market sizes, including for septic or other distributive shock; our ability to successfully commercialize, market and achieve market acceptance of GIAPREZA; the development of La Jolla’s other products; the expected duration over which La Jolla’s cash balances will fund its operations; and other risks and uncertainties identified in our filings with the SEC. La Jolla expressly disclaims any intent to update any forward‑looking statements to reflect the outcome of subsequent events.
Director, Investor Relations & Human Resources
La Jolla Pharmaceutical Company
Phone: (858) 207-4264 Ext: 1135
Dennis M. Mulroy
Chief Financial Officer
La Jolla Pharmaceutical Company
Phone: (858) 207-4264 Ext: 1040
Wheelhouse Life Science Advisors
Phone: (925) 785-5311