Kodiak Sciences announces sale of future royalties on KSI-301 for $225M
Kodiak Sciences announced that the company has entered into a funding agreement to sell a capped royalty right on global net sales of KSI-301 to Baker Bros. Advisors for $225M. KSI-301 is Kodiak's investigational therapy being developed for the treatment of retinal vascular diseases including age-related macular degeneration and diabetic eye diseases. Under the terms of the agreement, Baker Bros. Advisors, or BBA, purchased a capped 4.5% royalty on net sales of the company's anti-VEGF antibody biopolymer conjugate therapy known as KSI-301 to be paid upon marketing approval in exchange for $225M in committed development funding payable to the company. Unless earlier terminated or re-purchased by the company, the royalty "caps" or terminates upon the date that BBA has received an aggregate amount equal to 4.5 times the funding amount paid to the company. In an instance where Kodiak develops anti-VEGF containing follow-on products to KSI-301, there may be royalties of 1.5% to 2.25% owed on these products, but total payments under the funding agreement will never exceed the cap of 4.5 times the funding amount paid to the company. BBA is required to pay to the company the first $100M of the funding amount at the closing of the funding transaction and the remaining $125M of the funding amount upon Kodiak achieving, among other things, 50% enrollment in its two planned pivotal clinical studies of KSI-301 in patients with retinal vein occlusion. The company has the option, exercisable at any point during the term of the funding agreement, to repurchase from BBA 100% of the royalties due to BBA under the funding agreement for a purchase price equal to the funding amount paid to the company as of such time times 4.5 less amounts paid by the company to BBA.