[Ip-health] UCLA sells royalty rights connected with cancer drug (Xtandi) to Royalty Pharma

Zack Struver zack.struver at keionline.org
Thu Mar 10 08:14:31 PST 2016


UCLA sells royalty rights connected with cancer drug to Royalty Pharma
Proceeds will fund research and scholarships; will also be shared with

Phil Hampton | March 04, 2016

UCLA has sold its royalty interest connected with a leading prostate cancer
medication, Xtandi, whose development was based on discoveries by campus

Royalty Pharma has acquired rights to a portion of the future Xtandi
royalties co-owned by UCLA, researchers working at the university at the
time of the discoveries and a research organization. The transaction
includes a cash payment of $1.14 billion and potential additional payments
based on future Xtandi sales.

UCLA will use its share of the proceeds — approximately $520 million — to
support research programs aimed at generating additional discoveries that
lead to medications and other products that serve the public good. UCLA
also will support undergraduate scholarships and graduate student
fellowships, a campus priority.

“Xtandi is the result of a unique collaboration between researchers from
various academic units across campus and an outstanding example of basic
science leading to a therapy that is bringing extraordinary benefits to
prostate cancer patients worldwide,” said UCLA Chancellor Gene Block. “By
selling future royalty rights to Royalty Pharma, we are strategically
supporting one of our essential missions — funding and generating research
with practical applications that serve the public good. Facilitating equal
access to education also is a campus priority, and we will use a portion of
the sale proceeds to support scholarships and fellowships.”

“We have great admiration for UCLA’s scientists and physicians,” said
Royalty Pharma founder and CEO Pablo Legorreta. “Through their discovery of
Xtandi, they have improved the lives of hundreds of thousands of prostate
cancer patients who suffer from this deadly disease. Royalty Pharma’s
mission is to make the life sciences research and development ecosystem
more efficient and productive, and to accelerate research through
innovative transactions such as this one.”

By selling the royalty interest and prudently investing proceeds, UCLA
seeks to provide stability and minimize risk associated with the volatility
of the pharmaceutical industry marketplace.

UCLA will hold its share of the proceeds in a broadly diversified portfolio
managed by the University of California’s office of the chief investment
officer. Based on the pool’s average annual returns, UCLA anticipates it
will receive approximately $60 million annually until 2027.

Campus officials said they anticipated proceeds of the sale will contribute
a small percent incrementally to UCLA’s total budget.

“Given ongoing funding pressures, we are pleased to have these much-needed
additional resources to invest in programs that directly serve the public
by fostering research that leads to commercially viable products and by
educating students,” said Steve Olsen, UCLA’s vice chancellor and chief
financial officer.

Xtandi is based on a chemical compound that was developed at UCLA. The oral
medication inhibits the androgen receptor, the engine of prostate cancer
progression. Where other treatments have failed, Xtandi has extended the
lives of men with metastatic castration-resistant prostate cancer. In one
phase 3 clinical study of patients previously treated with chemotherapy,
Xtandi reduced the risk of death by 37 percent and increased median
survival by 4.8 months, compared to those who took a placebo. In a separate
phase 3 clinical study of patients not previously treated with
chemotherapy, Xtandi reduced the risk of death by 23 percent and increased
median survival by four months.

The research that began in the early 2000s and culminated in the creation
of Xtandi was conducted by teams led by Michael Jung, a UCLA distinguished
professor of chemistry and biochemistry, and Dr. Charles Sawyers, a former
UCLA professor of medicine, urology and pharmacology and researcher at
UCLA’s Jonsson Comprehensive Cancer Center who now is at Memorial Sloan
Kettering Cancer Center in New York.

Sawyers, who was an investigator of the Howard Hughes Medical Institute
while at UCLA, initially identified the fundamental basis that underlies
why prostate cancer fails to respond to first-generation anti-cancer drugs.
This provided a new paradigm to discover next-generation therapies for the
treatment of late-stage prostate cancer. He and his research colleagues set
up a collaboration with Jung, a member of both the cancer center and the
California NanoSystems Institute at UCLA who, along with his team, designed
and synthesized Xtandi. Xtandi’s discovery demonstrated that this
second-generation anti-androgen functioned as an effective and safe
anti-cancer therapy in preclinical models of early- and, importantly,
late-stage prostate cancer.

In 2005, UCLA licensed the chemical compound’s patent to pharmaceutical
company Medivation Inc. of San Francisco. Medivation received FDA approval
in 2012 to market Xtandi as a prostate cancer medication. Medivation and
its sub-licensee, Astellas Pharma Inc. of Tokyo, are now selling Xtandi
worldwide. UCLA has no role in the marketing or sale of Xtandi.

By virtue of patent and licensing agreements administered by UCLA, the
campus, the researchers and Howard Hughes Medical Institute shared a
royalty interest in worldwide net sales of Xtandi. UCLA owns 43.875 percent
of the royalty interest.

The American Cancer Society estimates that 180,890 new cases of prostate
cancer will be diagnosed in 2016, and that 26,120 men will die from the
disease in 2016. About 1 in 7 men is likely to be diagnosed with prostate
cancer, according to the American Cancer Society.

UCLA is a national leader in converting research discoveries into practical
The UCLA Office of Intellectual Property and Industry Sponsored Research
manages nearly 3,000 active inventions and more than 1,000 U.S. patents.

The sale of royalty rights connected with Xtandi was facilitated by
Westwood Technology Transfer, a nonprofit company that was formed in 2014
to help oversee the intellectual property office and optimize discoveries
and inventions developed through campus research.

“Westwood Technology Transfer recommended this transaction to UCLA as a way
to diversify risks associated with an asset and fund research programs in a
more predictable way,” said board chairman Tom Unterman. “UCLA has a strong
culture of entrepreneurship, with incubators, accelerator programs,
outstanding faculty, administrators and advisory boards collaborating in
service to the university and the public.”

Goldman Sachs acted as financial advisor to UCLA and Gibson Dunn acted as
legal advisor. Goodwin Procter acted as legal advisor to Royalty Pharma.
Heyman Biotech LLC acted as strategic advisor to the inventors, and
Covington & Burling LLP acted as their legal advisor.

UCLA <http://www.ucla.edu/> is an international leader in the breadth and
quality of its academic, research, health care, cultural, continuing
education and athletics programs. With more than 43,300 undergraduate and
graduate students, it is the largest university in California. The UCLA
College and 12 professional schools offer more than 5,000 courses, 124
undergraduate majors and 91 minors, 98 master’s programs, and 109 doctoral
and professional programs. Seven alumni and six faculty have been awarded
the Nobel Prize. UCLA performs well in a wide variety of national and
international university rankings.

Royalty Pharma <http://www.royaltypharma.com/> is the industry leader in
acquiring royalty interests in marketed and late stage biopharmaceutical
products, with total assets of over $15 billion. Royalty Pharma owns
royalty interests in 40 products including Humira, Remicade, Lyrica,
Prezista, Truvada, Januvia, Tecfidera, Imbruvica, Kalydeco and Orkambi.
Royalty Pharma also funds late-stage clinical trials in exchange for
royalty interests.

The Howard Hughes Medical Institute <http://www.hhmi.org/> plays an
important role in advancing scientific research and education in the United
States. Its scientists, located across the country and around the world,
have made important discoveries that advance both human health and our
fundamental understanding of biology. The Institute also aims to transform
science education into a creative, interdisciplinary endeavor that reflects
the excitement of real research. Its headquarters are located in Chevy
Chase, Maryland, just outside Washington, D.C.

Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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