On November 7, 2022 FibroGen, Inc. (NASDAQ: FGEN) reported a royalty monetization financing with NovaQuest Capital Management (NovaQuest) that will result in proceeds to FibroGen in the amount of $50 million, bringing non-dilutive capital to drive innovation and growth (Press release, FibroGen, NOV 7, 2022, View Source [SID1234623335]).
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NovaQuest is a strategic financial partner that is aligned with the company’s growth ambitions and demonstrates confidence in the anticipated commercial opportunity and launch performance of EVRENZO. The financing provides capital to expand and advance the company’s wholly-owned late-stage pipeline toward commercialization.
"This transaction reflects the meaningful value roxadustat can generate in the territories partnered with Astellas, and FibroGen’s ability to execute a non-dilutive transaction to strengthen our balance sheet," said Enrique Conterno, Chief Executive Officer, FibroGen. "Part of the proceeds will be used to further fund our wholly-owned pamrevlumab program, as we anticipate multiple pivotal Phase 3 readouts in 2023 and 2024. Executing this deal in the current market environment speaks to the quality of the assets and the aligned confidence in the commercial opportunity of EVRENZO by NovaQuest Capital Management."
The deal includes the following terms:
$50 million cash upfront in exchange for 22.5% of future EVRENZO royalties in the territories partnered with Astellas – Japan, Europe, and certain other territories.
The aggregate payments to be received by NovaQuest Capital under this Agreement are capped at certain fixed multiples of the upfront payment based upon time. Once NovaQuest receives an aggregate of either:
$100 million (2.0x the upfront) by the end of 2028, or
$112.5 million (2.25x the upfront) by the end of 2029, or
$125 million (2.50x the upfront) by the end of 2030,
the Agreement will expire resulting in FibroGen retaining all subsequent EVRENZO royalties.
"NovaQuest is excited to utilize its differentiated Product Finance solution and support FibroGen in creating innovative, first-in-class medicines for chronic and life-threatening conditions by leveraging patients’ natural pathways," said Ryan Wooten, Managing Director at NovaQuest. "We look forward to FibroGen continuing to execute on their pipeline and delivering new therapeutics to the global patient community."
Morgan Stanley & Co. LLC acted as the sole structuring agent and Goodwin Procter LLP acted as counsel to FibroGen. Wyrick Robbins Yates & Ponton LLP acted as counsel to the investor.