Corcept Therapeutics (CORT) Sells Synthetic Capped Royalty on Future Sales to Fund
8/7/2012 12:41:51 PM
Corcept Therapeutics Inc. is a pharmaceutical company engaged in the discovery, development and commercialization of drugs for the treatment of severe metabolic and psychiatric disorders such as Cushing’s Syndrome. The company’s first FDA-approved medication is Korylm (mifepristone) which is the first and only treatment approved by the Food and Drug Administration for endogenous Cushing’s syndrome.
The company announced today that it has sold to an investment fund managed by Pharmakon Advisors a synthetic capped royalty on future product sales for $30 million. Corcept’s payments under the agreement will be limited solely to a percentage of its revenue, subject to quarterly caps, and will total $45 million. Its payments will be variable, with no fixed minimums. If the products subject to the royalty do not generate revenue, no payments will be due.
Simultaneously, Corcept reported that it has terminated its Committed Equity Financing Facility (CEFF) with Kingsbridge Capital Limited. Kingsbridge had agreed to provide, at the company’s option, up to $60 million of capital in exchange for newly issued shares of its common stock, Corcept had raised $2.6 million under the CEFF.
Pursuant to the royalty agreement, Pharmakon Advisors’ BioPharma Secured Debt Fund II will receive quarterly royalties commencing with the quarter ending June 30, 2013. The royalty rate will be 20 percent of Corcept’s revenue from sales of Korylm 300 milligram tablets and any of its next-generation selective GR-II antagonists, subject to caps of $2.25 million per quarter in 2013, $3.0 million per quarter in 2014 and $3.75 million per quarter in 2015. There will be no caps after January 1, 2016.
Corcept plans to broaden usage of Korylm to the treatment of psychotic depression and also accelerate development of its next-generation products. This royalty transaction will provide the company with a significant amount of low-risk, non-dilutive capital to meet these goals. For additional information about Corcept Therapeutics and its product pipeline, please visit its website at www.corcept.com
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