Epizyme (EPZM +6.3%) is up on below-average volume in reaction to its agreements with Royalty Pharma and its affiliate Pharmakon Advisors that, it says, could raise up to $270M in new capital, extending its cash runway into at least 2022.
The deal includes a $100M upfront investment by Royalty Pharma based on $15 per share and an 18-month option for Epizyme to sell an additional $50M of stock to Royalty at market prices not to exceed $20/share. Royalty has a three-year option to buy an additional 2.5M Epizyme shares at $20.
The parties have agreed to reduce the existing royalty rates owed by Epizyme to Royalty related to global sales of tazemetostat outside of Japan.
In a separate deal, Epizyme has established a $70M loan facility with Pharmakon which will fund the regulatory milestones owed to Eisai (OTCPK:ESALY +0.3%) triggered by NDA filings and approvals in the U.S. for epithelioid sarcoma and follicular lymphoma. It is expandable up to $300M following the FDA nod for follicular lymphoma, subject to mutual agreement.
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