DRI Healthcare Trust, a prolific acquirer of drug royalties, is paying $100 million for a piece of a first-of-its-kind Type 1 diabetes drug.
In an announcement Thursday, DRI said it bought royalties to the medicine, called Tzield and designed to delay the onset of Type 1 diabetes, from biotechnology company Macrogenics. The FDA approved Tzield last November for individuals over the age of 8 who are considered to be in Stage 2, or “at risk,” of the autoimmune disease.
Provention Bio, Tzield’s owner, is currently testing the drug in a Phase 3 study of newly diagnosed patients with Stage 3 disease.
The deal marks the latest twist in ownership of Tzield as well as a bet by DRI Healthcare on its future prospects.
First investigated by MacroGenics, the drug has been in testing for more than a decade and has changed hands multiple times. Eli Lilly struck a deal with MacroGenics in 2007 to test the medicine in patients with recent-onset type 1 diabetes, but sent the drug back to the biotech after it failed in a Phase 3 trial in 2010.
Provention, based in Red Bank, N.J., stepped in eight years later, acquiring rights to the drug as part of a plan to test it in those at risk of developing the disease. A study it ran, the results of which were published in The New England Journal of Medicine, showed patients who received it went longer before receiving a Stage 3 diagnosis than those who were given a placebo. After initially rejecting Provention’s application in 2021, regulators approved it last year.
Provention has since been gearing up for a launch. Sanofi agreed in October to help co-promote the medicine, which has a yearly list price of about $194,000 per patient. It also has the first right to negotiate a license for Tzield, while Macrogenics is due future milestone payments. Up until Thursday, Macrogenics also owned royalties.
Those royalties will now transfer over to DRI, a firm that, over its 30-plus year history, has bought into sales of drugs like Eylea, Stelara and Xolair. Tzield is “a meaningful step forward in the treatment of Type 1 diabetes, a disease that affects millions worldwide,” Behzad Khosrowshahi, DRI’s CEO, said in a statement.
DRI could also pay Macrogenics another $100 million in sales and development milestones.
Shares of the Rockville, Md. biotech climbed 12% Thursday.