Summary
Vertex Pharmaceuticals Incorporated (VRTX) announced on May 30, 2008, that it has entered into a material definitive agreement to sell its rights to future royalty payments from Lexiva® and Agenerase® to Fosamprenavir Royalty, L.P. for a cash payment of $160 million. This transaction includes the sale of royalty streams previously generated under a 1993 license agreement with GlaxoSmithKline plc. This strategic move allows Vertex to monetize future royalty income, providing immediate capital. GlaxoSmithKline will now directly pay Fosamprenavir Royalty, L.P. for these royalties and will also handle the royalty payments that Vertex previously made to a third party. The agreement includes standard representations, warranties, covenants, and indemnification clauses typical for such a divestiture.
Key Highlights
- 1Vertex Pharmaceuticals sold its rights to future royalty payments for Lexiva® and Agenerase®.
- 2The buyer is Fosamprenavir Royalty, L.P.
- 3The transaction generated a one-time cash payment of $160 million for Vertex.
- 4The royalties stem from a 1993 license agreement with GlaxoSmithKline plc.
- 5GlaxoSmithKline will now pay Fosamprenavir Royalty, L.P. directly.
- 6Vertex will no longer be responsible for paying a third party related to these royalties.