Perrigo to sell Tysabri drug royalty to RPI for $2.85bn

Ireland-based Perrigo has signed an agreement to sell its right to the royalty stream from the global net sales of the multiple sclerosis drug Tysabri (natalizumab) to Royalty Pharma’s (RPI) affiliate RPI Finance Trust for $2.85bn.

Tysabri is an FDA-approved treatment for multiple sclerosis and Perrigo acquired the rights to the drug’s royalty stream through its purchase of Elan in 2013.

Under the agreement, RPI will acquire all of Perrigo's rights to receive Tysabri royalty payments from and after 1 January this year, which Perrigo has under an agreement with Biogen. 

Perrigo CEO John Hendrickson said: "While dilutive to adjusted EPS, the significant upfront cash component will allow us to de-lever our balance sheet, which supports our investment grade financial policy, and better positions Perrigo to pursue our strategic plan.

"This transaction also furthers our stated strategy to enhance our portfolio and focus on our consumer-facing and Rx businesses."

Furthermore, RPI will pay $2.2bn at closing and make additional payments of $250m in case the royalties earned on sales of the drug meet specified thresholds next year.

Another $400m payment will be made if the royalties earned on global net sales of Tysabri meet specified thresholds in 2020.

Perrigo will also assign certain information and audit rights to RPI under the company’s existing agreement with Biogen.

Subject to certain specified closing deliverables, the transaction is expected to close within 30 business days.