Royalty Pharma Invests $525M in Sanofi-Licensed MS Therapy

Royalty Pharma has announced an agreement to acquire the royalties and milestone payments associated with frexalimab, an innovative anti-CD40 monoclonal antibody developed by ImmuNext and licensed to Sanofi for Phase III trials in multiple sclerosis (MS). This move will see the New York-based biotech company paying ImmuNext approximately $525 million in cash, along with estimated transaction costs.

Under the terms of this deal, Royalty Pharma will receive all annual worldwide net royalties that ImmuNext was entitled to under its licensing agreement with Sanofi, capped at $2 billion. Once this threshold is surpassed, Royalty Pharma will share a minority portion of the royalties with ImmuNext’s shareholders. Additionally, Royalty Pharma will be entitled to substantial milestone payments from Sanofi.

The transaction is expected to be finalized within the month, contingent on regulatory and antitrust clearances as well as other customary closing conditions. Royalty Pharma CEO Pablo Legorreta stated that the agreement with ImmuNext would enhance Royalty Pharma’s developing portfolio and add a next-generation immunology candidate to their pipeline.

Frexalimab is designed to inhibit the CD40/CD40L pathway, an essential component in the activation and function of both the adaptive and innate immune systems. By blocking this pathway, frexalimab could mitigate the hyperactive autoimmune responses characteristic of MS. This investigational antibody has shown promising results. In May 2023, Sanofi released Phase II data indicating that frexalimab significantly reduced disease activity in patients with relapsing MS. Specifically, patients who received a high dose exhibited an 89% reduction in new gadolinium-enhancing T1 lesions at week 12, while those on a low dose experienced a 79% decrease.

Sanofi has high expectations for frexalimab, identifying it in December 2023 as one of its 12 pipeline assets with blockbuster potential, forecasting peak sales of $5.4 billion. The pharmaceutical company has already initiated Phase III trials for frexalimab, with plans to enroll 1,400 MS patients and compare the antibody’s effectiveness against teriflunomide.

Legorreta emphasized that frexalimab could offer high efficacy without causing the chronic immune system depletion seen with many current MS therapies. He noted that the strong mid-stage data and potential applications in other immune conditions position frexalimab as a potentially transformative therapy for MS patients.

However, frexalimab's development has not been without challenges. Sanofi, in its recent first-quarter business report, disclosed that it had halted the development of frexalimab for treating Sjögren’s syndrome due to unsatisfactory Phase II results.