Tech Transfer eNews Blog

UCLA gets huge payday in billion dollar royalty monetization deal for prostate drug

By David Schwartz
Published: March 9th, 2016

In a record-breaking royalty monetization deal, the University of California-Los Angeles (UCLA) will receive more than half a billion dollars for a prostate cancer drug developed by researchers there.

New York-based Royalty Pharma has bought royalty rights for the drug known as Xtandi for $1.14 billion in the largest tech transfer deal to date involving a University of California invention.

UCLA will keep $520 million of the proceeds for its 43.9% ownership stake in Xtandi. The funds will go towards an investment portfolio that is expected to generate $60 million a year and will be used to fund campus research, scholarships for undergrads, and fellowships for grad students.

According to campus officials, the deal comes at a crucial time for the university, as state support and federal funding for basic research are declining.

Initially developed in the early 2000s under the leadership of UCLA chemist Michael Jung, Xtandi works by preventing testosterone, the hormone that fuels prostate cancer cells, from latching on to those cells, thus slowing the growth of cancer. In clinical trials, prostate cancer patients who took Xtandi lived longer and in some cases were able to delay chemotherapy treatments, compared to similar patients who took a placebo.

In 2005, UCLA licensed the drug’s key chemical compound to Medivation Inc. of San Francisco. The company received FDA approval to market Xtandi as a prostate cancer medication in 2012 and reported $1.9 billion in worldwide sales of the drug in 2015.

The deal generated $33.3 million in royalties and other income for UC last year, more than any other drug from the entire university system. But experts from UCLA’s nonprofit advisory board Westwood Technology Transfer, which was launched last year to help the university benefit more from its innovations, recommended the deal with Royalty Pharma. Advisors noted that the monetization deal eliminates risk of market changes or competition that could cause revenues from the drug to drop at any time.

“By selling future royalty rights to Royalty Pharma, we are strategically supporting one of our essential missions: funding and generating research with practical applications that serve the public good,” says UCLA chancellor Gene Block. “Facilitating equal access to education also is a campus priority, and we will use a portion of the sale proceeds to support scholarships and fellowships.”

The research on Xtandi was led by chemist Michael Jung, who has been at UCLA since 1974, and Dr. Charles Sawyers, now at the Memorial Sloan Kettering Cancer Center in New York. Those two men and six other researchers will share equally in the proceeds from their 37.5% stake in the drug’s royalty interest. The remaining 19% was owned by the Howard Hughes Medical Institute, which helped fund Sawyers’ work.

Sources: UCLA Newsroom and Los Angeles Times

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