LifeArc monetises Keytruda® (pembrolizumab) royalty interests

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UK-based medical research charity LifeArc has received US$1.297 billion from CPPIB Credit Europe S.à r.l. – a wholly owned subsidiary of Canada Pension Plan Investment Board (CPPIB) – for a portion of its royalty interest in Keytruda®* (pembrolizumab), MSD’s anti-PD-1 therapy.

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

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.

In 2016, LifeArc sold a small proportion of its pembrolizumab royalty interest for US $150 million to a private equity fund. It used 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.

Dr Melanie Lee, CEO, LifeArc, said: “This agreement with CPPIB allows us to increase our support for new approaches and collaborations and bolster access to our expertise and resources. Ultimately, we can support life sciences research and accelerate the development of new therapies, diagnostics and devices for those people in greatest need.”

John Graham, Senior Managing Director & Global Head of Credit Investments, CPPIB, said: “This investment in Keytruda provides us with the opportunity to continue expanding CPPIB’s global intellectual property program. The acquisition of royalty interests from LifeArc for this market-leading cancer therapy provides stable, long-term cash flows.”

MTS Health Partners, L.P. acted as exclusive financial and structural advisor, and Covington & Burling LLP acted as special counsel to LifeArc in connection with the transaction.