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Blueprint Medicines Inks $1.25B Financing Deal in Exchange for Royalties of Ayvakit, Gavreto

NEW YORK – Blueprint Medicines on Thursday said that it has inked financing collaborations with investment firm Sixth Street and pharma company Royalty Pharma that will bring up to $1.25 billion worth of capital to grow its pipeline of precision oncology products.

Blueprint will receive $250 million upfront from Sixth Street for future royalties from Ayvakit (avapritinib) and the KIT D816V inhibitor BLU-263, at a rate of 9.75 percent, subject to an annual cap of $900 million in net sales and a cumulative cap of 1.45 times the invested capital. Sixth Street will also provide up to $400 million in a senior secured credit facility, from which Blueprint will receive $150 million upfront, with the remaining available in delayed draw tranches. The investment firm will also provide Blueprint $260 million for business development opportunities.

Ayvakit is approved in the US as a treatment for advanced systemic mastocytosis and unresectable or metastatic gastrointestinal stromal tumors with PDGFRA exon 18 mutations. In Q1, the drug was also approved in Europe for advanced systemic mastocytosis (SM).

The firm is developing BLU-263 to treat patients with non-advanced SM, which is currently in Phase II trials.

In the deal with Royalty Pharma, Blueprint will receive $175 million upfront and up to $165 million in potential milestone payments for Gavreto (pralsetinib), a treatment for RET-altered non-small cell lung and thyroid cancers. In 2020, Blueprint sold certain rights for the drug to Roche. Royalty Pharma will receive a portion of royalties on Roche's sales of Gavreto outside of the US, excluding greater China.

At the close of both deals, Blueprint will receive $575 million upfront from both firms.

Blueprint CEO Kate Haviland noted in a call with investors on Thursday that proceeds from the deals will help fund research and development for its EGFR and CDK2 inhibitor programs, which are in preclinical development, along with supporting potential business development opportunities and future asset acquisitions.

"This deal … brings forward significant non-diluted capital, creating strategic flexibility and allowing us to drive innovation and growth in many facets of our business," Haviland said on the call. Referring to the EGFR and CDK inhibitor programs, she added that these therapies represent "significantly larger market opportunities" that warrant additional R&D investment.

Cowen and Company is the financial adviser and Goodwin Procter is the legal adviser to Blueprint Medicines. Cooley is legal adviser to Sixth Street, while Gibson Dunn is legal adviser to Royalty Pharma.