Dendreon cashes in Victrelis royalty

US pharma company Dendreon (Nasdaq: DNDN) says that it has agreed to sell for $125 million in cash its royalty interest related to intellectual property licensed to Schering-Plough, now merged into drug giant Merck & Co (NYSE: MRK) and associated with Victrelis (boceprevir), a treatment for chronic hepatitis C.

Victrelis was approved by the US Food and Drug Administration earlier this year for hepatitis C genotype 1 (G1) infection, in combination with peginterferon alfa and ribavirin, in adult patients (18 years and older) with compensated liver disease, including cirrhosis, who are previously untreated or who have failed previous interferon and ribavirin therapy, and is forecast to achieve blockbuster status in a $6-$7 billion market sector (The Pharma Letter May 16). The compound is also approved for the same indications in the European Union. The drug generated third-quarter 2011 sales of $31 million for Merck and around $3 million in royalties to Dendreon.

The royalty interest was acquired by CPPIB Credit Investments, a wholly-owned subsidiary of CPP Investment Board. The transaction is expected to close in December 2011. The intellectual property related to Victrelis was co-developed by Corvas International and Schering-Plough, and Corvas was acquired by Dendreon in July 2003.