RegenXBio will fill its coffers with up to $250 million by monetizing more royalty rights for Novartis-partnered Zolgensma as well as anticipated payments linked to a gene therapy nearing approval and a third candidate in development.
The deal will see HealthCare Royalty, which specializes in scooping up drug royalties, provide a bond of up to $250 million in exchange for the equivalent amount of expected payments related to three drugs. This includes some royalty payments due to RegenXBio from Novartis from sales of Zolgensma, the approved spinal muscular atrophy gene therapy.
It’s not the first time RegenXBio has used this type of deal to generate some much-needed cash. Back in 2020, the biopharma sold $200 million worth of Zolgensma royalties to HealthCare Royalty.
The latest agreement between the two entities will also see RegenXBio hand over some royalty and milestone payments for two as-yet-unapproved gene therapies in its pipeline. One of these, RGX-121, is awaiting an FDA decision on whether to approve the candidate for Hunter syndrome.
Following a $110 million upfront deal in January, Nippon Shinyaku is now due to oversee commercialization in the U.S. and Asia for both RGX-121 and a phase 2-stage therapy for Hurler syndrome called RGX-111. That deal put RegenXBio in line for up to $40 million in development and regulatory milestones, $660 million in sales milestones and double-digit royalties on net sales.
The latest agreement with HealthCare Royalty means RegenXBio will receive $150 million upfront, with another $50 million due by April 2027—assuming Zolgensma hits its sales milestones—and the final $50 million “funded upon the mutual agreement of the parties,” the biopharma explained in the release.
RegenXBio, which ended March with $272.7 million in the bank, said the initial $150 million windfall should extend its cash runway into early 2027. The company is also eyeing up the potential sale of the priority review voucher it will get should RGX-121 get approved.
Yesterday’s deal doesn’t cover any payments linked to the AbbVie-partnered eye disease gene therapy surabgene lomparvovec, also known as ABBV-RGX-314, RegenXBio noted. Most of the development milestone payments from Nippon are also excluded.
“This strategic financing brings future potential funds forward and extends our runway beyond multiple meaningful milestones, including the potential FDA approval of RGX-121 for MPS II, top-line data readout and BLA submission for RGX-202 for Duchenne, and top-line data readouts for two pivotal studies of subretinal ABBV-RGX-314 for wet AMD,” RegenXBio’s chief financial officer Mitchell Chan said in the release.
“As we approach potential first- or best-in-class product launches, we remain focused on leveraging low-cost, non-dilutive capital to advance our differentiated portfolio and unlock significant value for shareholders,” Chan added. “This capital infusion positions us well to accelerate commercial preparations and continue extending our longstanding leadership in rare and retinal gene therapies.”