Royalty Pharma pays $3.3 billion for CFF royalty rights to Kalydeco

Royalty Pharma says it has acquired royalties on Vertex Pharmaceuticals' (Nasdaq: VRTX) cystic fibrosis treatments, notably the already marketed Kalydeco (ivacaftor), owned by Cystic Fibrosis Foundation Therapeutics, an affiliate of the Cystic Fibrosis Foundation, for a cash payment of $3.3 billion.

The payout is believed to be the largest financial return ever achieved for a charitable organization pursuing treatments for disease, and is likely to encourage other patient advocacy groups to seek their own deals with pharmaceutical companies; a growing number are already doing so, according to a report in Business Day.

Vertex pays the foundation “single-digit to sub-teen tiered royalties” on ivacaftor, and would do so for two experimental CF drugs in its pipeline - VX-809 (lumacaftor) and VX-661 - if they eventually win regulatory approval, according to a note from RBC Capital Markets analyst Michael Yee. Those rights will now transfer over to Royalty Pharma.