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(Reuters) - Biotechnology company Biogen Idec (BIIB.O) sold its royalty rights on the lupus treatment Benlysta to Canadian investment firm DRI Capital Inc in exchange for a multiple of the royalty amount it was due to receive over three years.
Human Genome Sciences and its acquirer GlaxoSmithKline Plc (GSK.L), which own Benlysta, will now pay royalty payments directly to DRI Capital, according to the deal.
GlaxoSmithKline pays Biogen royalty for a patent that covers the use of an antibody as a treatment for auto-immune diseases.
DRI will now pay Biogen a multiple of some of the royalties due to it between October 2011 and September 2014.
After this period, DRI will keep all of the Biogen royalties from Benlysta sales, with a few exceptions, including a contingency payment if the cumulative royalties to the fund exceed a set amount.
Biogen said it would recognize an initial payment of $18.3 million to cover the October 2011 to March 2012 royalty period. The company will record the amount as a gain in its third-quarter results.
Reporting by Vidya P L Nathan in Bangalore