LifeArc receives $1.2b in Keytruda royalties

UK-based medical research charity LifeArc has received $1.297 billion from CPPIB Credit Europe for a portion of its royalty interest in MSD’s Keytruda (pembrolizumab).

In 2016, LifeArc sold a small proportion of its Keytruda royalty interest for $150 million to a private equity fund, using part of this capital to establish two funds, worth £30 million: The LifeArc Philanthropic Fund provides grants for translational research in rare diseases, and the LifeArc Seed Fund invests in nascent or early stage spin-out companies.

The transaction will make LifeArc one of the UK’s leading medical research charities by size of its investment assets and allows it to significantly expand its mission of advancing research that has direct benefits for human health.

John Graham, senior managing director & global head of Credit Investments, CPPIB said that the investment in Keytruda "provides us the opportunity to continue expanding CPPIB’s global intellectual property program.

"Alternative assets related to intellectual property help to diversify the Fund through income streams that are typically uncorrelated to the broader capital markets. The acquisition of royalty interests from LifeArc for this market-leading cancer therapy provides stable, long-term cash flows."

LifeArc secured rights to royalties from Keytruda as a result of the charity’s 2007 collaboration to humanise the antibody-based therapy now marketed by MSD.

The blockbuster drug recently failed to meet its primary endpoint in a late-stage study testing the drug as a standalone treatment in patients with metastatic triple-negative breast cancer.

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