KalVista Secures Non-Dilutive Financing with DRI Healthcare

KalVista Pharmaceuticals, Inc. (NASDAQ: KALV), based in Cambridge, Massachusetts, and Salisbury, England, has successfully secured a synthetic royalty financing arrangement with DRI Healthcare Trust worth up to $179 million. This agreement includes an upfront payment of $100 million, an optional $22 million payment upon U.S. product approval, and up to $57 million in sales-based milestone payments. The funds from this transaction will be directed towards the commercialization of sebetralstat, which, if approved, is set to become the first oral on-demand therapy designed to treat hereditary angioedema (HAE). The U.S. Food and Drug Administration (FDA) is currently reviewing KalVista’s New Drug Application for sebetralstat, with a Prescription Drug User Fee Act (PDUFA) target date of June 17, 2025.

DRI Healthcare Trust has also shown interest in investing up to $5 million in KalVista’s common stock through a private placement transaction. However, this is not a binding agreement, and DRI might decide to adjust the investment amount or not proceed with the purchase.

Ben Palleiko, the CEO of KalVista, stated that this financing is a critical step for the company, facilitating the establishment of a global commercial organization in anticipation of the potential launch of sebetralstat in the U.S. in June 2025. Palleiko expressed confidence in achieving long-term growth while delivering a transformative treatment for individuals with HAE, acknowledging DRI’s trust in KalVista and sebetralstat.

Navin Jacob, Chief Investment Officer of DRI, highlighted that their royalty investment is driven by the belief that sebetralstat could become the primary treatment for all HAE patients. He expressed enthusiasm about supporting KalVista at this critical juncture. Ali Hedayat, Acting CEO of DRI, noted that acquiring a synthetic royalty on a promising asset like sebetralstat demonstrates DRI’s commitment to partnering with companies aiming to significantly improve patient outcomes.

The terms of the synthetic royalty financing agreement stipulate that KalVista will receive an immediate $100 million and will owe DRI a tiered royalty based on annual global net sales. This includes 5.00% on sales up to $500 million, 1.10% on sales between $500 million and $750 million, and 0.25% on sales exceeding $750 million. Additionally, KalVista is eligible for a one-time milestone payment of $50 million if global sales of sebetralstat meet or surpass $550 million in any calendar year before January 1, 2031. Should sebetralstat receive approval before October 1, 2025, KalVista has the option to receive a $22 million payment, which would increase the royalty rate on net sales up to $500 million to 6.00% and the sales-based milestone to $57 million.

Jefferies LLC served as the exclusive financial advisor to KalVista during the synthetic royalty financing process.

Sebetralstat, discovered and developed by KalVista’s scientific team, is an investigational oral plasma kallikrein inhibitor intended for the on-demand treatment of HAE. The FDA has granted sebetralstat Fast Track and Orphan Drug Designations, and it has also received Orphan Drug Designation and an approved Pediatric Investigational Plan from the European Medicines Agency (EMA).

HAE is a rare genetic disorder characterized by deficiency or dysfunction of the C1 esterase inhibitor protein, leading to uncontrolled activation of the kallikrein-kinin system. This results in painful and debilitating tissue swelling attacks, which can be life-threatening depending on the affected area. Currently approved on-demand treatments for HAE require intravenous or subcutaneous administration.

KalVista Pharmaceuticals, Inc. is dedicated to developing and delivering oral medicines for rare diseases with significant unmet needs. Sebetralstat, KalVista’s investigational candidate for HAE, is under regulatory review by the FDA, with a PDUFA goal date set for June 17, 2025. KalVista has also submitted marketing authorization applications for sebetralstat to the EMA, as well as regulatory authorities in the United Kingdom, Switzerland, Australia, and Singapore, with plans to submit in Japan in late 2024.

DRI Healthcare Trust, managed by DRI Capital Inc., specializes in global pharmaceutical royalty monetization. Since its initial public offering in 2021, DRI has deployed over $1 billion, acquiring more than 25 royalties on over 20 drugs.