Fenwick represented Royalty Pharma (Nasdaq: PRRX), a buyer of biopharmaceutical royalties and funder of innovation across the biopharmaceutical industry, and Pharmakon Advisors, a leading investor in non-dilutive debt for the life sciences industry, in IP due diligence relating to their agreements to provide up to $375 million in funding to Geron Corporation (Nasdaq: GERN). Geron is a commercial-stage biopharmaceutical company aiming to change lives by changing the course of blood cancer. Geron markets RYTELO (imetelstat), an oligonucleotide telomerase inhibitor therapy for treating lower-risk myelodysplastic syndrome (MDS), a rare form of blood cancer. This funding will support the commercial launch of RYTELO in the US and potential launch in the EU, as well as the ongoing Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis, and other uses.
Under the terms of Royalty Pharma’s agreement with Geron, Royalty Pharma provided $125 million at closing and will receive tiered royalty payments on US net sales of RYTELO, ranging from 7.75% of annual net sales up to $500 million, 3% of annual net sales between $500 million and $1 billion, and 1% of annual net sales over $1 billion. Payments to Royalty Pharma will cease if the aggregate royalties payable through June 31, 2021, reach a multiple of 1.65x its investment, otherwise the royalty payments will continue until Royalty Pharma receives a multiple of 2x its investment.
Under the terms of Pharmakon Advisors’ agreement with Geron, investment funds managed by Pharmakon have committed to a 5-year, senior secured loan of up to $250 million, of which a first tranche of $125 million was drawn at closing. A second tranche of $75 million can be drawn at Geron’s option, subject to certain limited conditions, and third tranche of $50 million can be drawn at Geron’s option upon reaching a specified RYTELO revenue milestone, in each case if requested prior to December 31, 2025. The facility contains no scheduled amortization payments, with all outstanding principal due at maturity in 2029, and there are no financial covenants. The loans bear interest at a variable rate per year equal to 5.75% plus the three-month Secured Overnight Financing Rate (SOFR), subject to a SOFR floor of 3%.
More information about the agreements can be found in Geron’s announcement.
The Fenwick team included intellectual property partner Dr. Carl Morales and associate Dr. Stefan Ochiana for both agreements, as well as corporate partner Eric Shedlosky for the Pharmakon Advisors agreement.