Ariad to get up to $200 million through Iclusig deal with PDL BioPharma

USA-based Ariad Pharmaceuticals (Nasdaq: ARIA) says it will receive $100 million in cash – $50 million upon deal execution late yesterday and an additional $50 million in one year – through a synthetic-royalty financing from PDL BioPharma (Nasdaq: PDL).

This is in exchange for paying PDL a mid-single-digit royalty on future sales of leukemia drug Iclusig (ponatinib) until PDL receives a fixed internal rate of return (IRR). Ariad also has an option, in its discretion, to receive up to an additional $100 million at any time between six and 12 months from the date of the agreement, in one or two tranches on comparable terms.

Ariad intends to use the base funds to conduct a front-line trial of brigatinib, its investigational ALK inhibitor, in patients with non-small cell lung cancer (NSCLC) and to support brigatinib commercial readiness, as well as to continue its ongoing Iclusig initiatives. ARIAD is on track to complete enrollment in the pivotal ALTA trial of brigatinib in third quarter 2015, to file for approval in the U.S. next year, and subject to regulatory approval, to launch brigatinib by early 2017. Brigatinib has Breakthrough designation from the US Food and Drug Administration.