Epizyme Secures $270 Million Financing to Advance Novel Therapies for Hematologic Malignancies

VCBeat (WeChat ID: vcbeat) learned from foreign media that on November 5, 2019, Epizyme (NASDAQ: EPZM), a late-stage biopharmaceutical company based in Massachusetts, USA, announced a $270 million financing agreement with Royalty Pharma and its affiliate Pharmakon Advisors. As part of the transaction, Pablo Legorreta, Founder and CEO of Royalty Pharma, will join Epizyme’s Board of Directors.

This funding will strengthen Epizyme’s financial position, ensuring its operational runway extends at least until 2022.

Under the terms of the agreement, Royalty Pharma will pay Epizyme a $100 million upfront payment in common stock at a price of $15 per share, representing a 27% premium over the company’s closing price on the previous trading day. Additionally, Epizyme holds an 18-month option to sell up to $50 million worth of additional common stock to Royalty Pharma at prevailing market prices, capped at $20 per share. Royalty Pharma also holds a three-year option to purchase an additional 2.5 million shares of Epizyme’s common stock at $20 per share.

Epizyme, founded in 2007, is a biopharmaceutical company headquartered in Massachusetts, USA, dedicated to researching treatments for blood cancers and other solid tumors. Led by President and Chief Executive Officer Robert Bazemore, the company is developing its lead candidate, tazemetostat, for hematologic malignancies and other solid tumors, as well as novel compounds targeting various disease pathways. Tazemetostat is a first-in-class EZH2 inhibitor currently in clinical trials involving adult and pediatric patients with relapsed or refractory non-Hodgkin lymphoma (NHL).

Under this agreement, the parties also agreed to reduce the existing royalty rate payable by Royalty Pharma to Epizyme based on the global sales volume of tatimetostat in territories outside Japan (calculated according to the net sales level in the specified year). Royalties refer to the fees paid by the buyer of imported goods to obtain licenses or transfers from intellectual property rights holders and their duly authorized licensors regarding patent rights, trademark rights, know-how, copyrights, distribution rights, or sales rights. Previously, Royalty Pharma obtained the licensing rights for the sale of tatimetostat in territories excluding Japan.

Under a separate agreement, Epizyme has entered into a $70 million collaboration with Pharmakon Advisors, an affiliate of Royalty Pharma. Pharmakon Advisors will fund Eisai’s submission of the New Drug Application (NDA) and secure regulatory approval for tazemetostat in the treatment of epithelioid sarcoma and follicular lymphoma. This funding will be disbursed in three tranches upon the achievement of this milestone. Following the approval of tazemetostat for follicular lymphoma, the collaboration value may be expanded to $300 million, subject to mutual agreement between the parties.

Royalty Pharma, founded in 1984 and headquartered in London, UK, is a company that provides drug manufacturing and compounding services. The company’s growth strategy involves acquiring royalty interests in leading pharmaceutical and biotechnology products, which it incorporates into its diversified portfolio.

Pharmakon Advisors is an investment firm headquartered in New York, USA, providing financing solutions for biotechnology companies at the commercialization stage.

(Compiled by He Li)