On March 23, 2023 PureTech Health plc (Nasdaq: PRTC, LSE: PRTC) ("PureTech" or the "Company"), a clinical-stage biotherapeutics company dedicated to changing the treatment paradigm for devastating diseases, and Royalty Pharma (Nasdaq: RPRX), the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the life sciences industry, reported that Royalty Pharma has acquired an interest in PureTech’s royalty in Karuna Therapeutics’ KarXT for up to $500 million, with $100 million in cash up front and up to $400 million in additional payments contingent on the achievement of certain regulatory and commercial milestones (Press release, PureTech Health, MAR 23, 2023, View Source [SID1234629248]).
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"We are delighted to partner with PureTech, which began a remarkable innovation story with KarXT that has demonstrated an impressive clinical profile in Phase 3," said Pablo Legorreta, Royalty Pharma’s Founder and Chief Executive Officer. "We believe this important therapy will have a significant impact on patients with schizophrenia if approved by the FDA. This medicine is a notable addition to our royalty portfolio and is well aligned with our strategy of investing in breakthrough therapies that address areas of high unmet medical need."
"We’ve seen extraordinary clinical success demonstrated by KarXT, which, if approved, will be the first new mechanism for treating schizophrenia in more than fifty years. KarXT has now demonstrated efficacy in registration enabling studies and is heralded as a potential treatment paradigm shift that could impact millions of patients," said Daphne Zohar, Founder and Chief Executive Officer of PureTech. "This agreement will provide PureTech with additional non-dilutive capital to advance our Wholly Owned Pipeline, including our rapidly maturing clinical programs, towards potential commercialization. Such non-dilutive sources of capital have allowed us to fund our pipeline and operations without having to raise capital from the public markets in over five years, and we are pleased to be able to benefit from the success of our invented programs."
As part of this transaction, PureTech has sold its right to receive a 3% royalty from Karuna to Royalty Pharma on sales up to $2 billion annually, after which threshold Royalty Pharma will receive 33% and PureTech will retain 67% of the royalty payments. PureTech retains its 3.1% equity ownership in Karuna.[1] Additionally, under its license agreement with Karuna, PureTech retains the right to receive milestone payments upon the achievement of certain regulatory approvals and 20% of sublicense income.
KarXT was invented by a team at PureTech, including its Chief Innovation Officer, Eric Elenko, Ph.D., who served as the founding CEO of Karuna Therapeutics. KarXT is an oral, investigational M1/M4-preferring muscarinic agonist in development for the treatment of psychiatric and neurological conditions, including schizophrenia as a monotherapy and adjunctive therapy and psychosis in Alzheimer’s disease. Karuna has announced that it plans to submit a New Drug Application for KarXT in schizophrenia to the U.S. Food and Drug Administration (FDA) in mid-2023.
Sills Cummis & Gross P.C., acted as legal advisors to PureTech and Gibson, Dunn & Crutcher, LLP, Jones Day and Maiwald GmbH acted as legal advisors to Royalty Pharma.
About PureTech’s Wholly Owned Pipeline
In addition to the excellent progress across its Founded Entities, PureTech’s Wholly Owned Pipeline is rapidly advancing, and the Company’s operational runway, including its $341.4 million Cash and Cash Equivalents as of June 30, 2022, not including this transaction, is expected to support this growth into the first quarter of 2026. PureTech’s pipeline is comprised of six therapeutic candidates, four of which are currently clinical stage, including one partnered program. These candidates are centered on a strategy of leveraging validated biology to rapidly advance therapeutics with proven efficacy. Several upcoming milestones are anticipated for these candidates, including the following:
LYT-100 (deupirfenidone) is in development for the potential treatment of conditions involving inflammation and fibrosis, including idiopathic fibrosis (IPF), for which current standards of care are associated with significant tolerability issues, resulting in approximately three out of four patients in the U.S. foregoing treatment with these otherwise efficacious medicines.[2] LYT-100 is a deuterated form of one of the two standard of care treatments, pirfenidone, which has proven efficacy and has been shown to improve survival in these patients by approximately three years, but its side effects cause patients to discontinue or dose reduce, thereby limiting its effectiveness.[3] LYT-100 has shown a 50% reduction in gastrointestinal tolerability issues in a head-to-head study versus pirfenidone, and it can be dosed at a higher exposure level, but with a lower Cmax, than the FDA-approved dosage of pirfenidone, potentially enabling improved efficacy. PureTech is currently evaluating two doses of LYT-100, one with comparable exposure to the approved dose of pirfenidone and one with a higher level of exposure, in a global, randomized double blind, placebo-controlled trial in patients with IPF, which is expected to serve as the first of two registration enabling trials. As previously noted, the Company has taken measures to accelerate enrollment. Topline results are now expected in 2024.
LYT-300 (oral allopregnanolone) is in development for the potential treatment of anxiety disorders and postpartum depression (PPD) where there is a need for more effective treatments that work quickly, have more favorable tolerability and can be administered orally. A placebo-controlled, Phase 2a, proof-of-concept trial using a validated clinical model of anxiety in healthy volunteers is expected to begin in the first half of 2023, with topline results anticipated by the end of 2023. An open-label, Phase 2a, proof-of-concept clinical trial in women with PPD is expected to initiate in the second half of 2023.
LYT-200 (anti-galectin-9 mAb) is in development for the potential treatment of metastatic solid tumors that have poor survival rates as well as hematological malignancies, such as acute myeloid leukemia (AML), where more than 50% of patients either don’t respond to initial treatment or experience relapse after responding to initial treatment.[4] PureTech recently initiated a Phase 1b trial in acute myeloid leukemia, and initial results are expected by the end of 2023. PureTech also recently initiated a Phase 1b trial of LYT-200 in combination with an anti PD-1 antibody, tislelizumab, in patients with urothelial or head and neck cancer. Topline results are expected in 2024.
LYT-310 (oral cannabidiol [CBD]) is in development to expand the therapeutic application of CBD across a range of epilepsies and neurological disorders. LYT-310 is designed to enable oral administration of CBD in a capsule; expand the use of CBD into a broad range of therapeutic areas and patient populations (such as adolescents and adults) where higher doses are required to achieve a therapeutic effect; potentially improve safety and reduce gastrointestinal (GI) tract side effects that are associated with the currently approved CBD-based treatment by reducing GI and liver exposure; and allow for a readily scalable, consistent product in a cost-effective manner. LYT-310 is expected to enter the clinic in the fourth quarter of 2023.