Biogen sells royalty rights on lupus drug to Canadian fund
(Reuters) - Biotechnology company Biogen Idec (BIIB.O: Quote) 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: Quote), 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)
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