Sidley represented Sagard Healthcare in purchasing a 1% royalty in net sales of Tyvaso DPI® (treprostinil) inhalation powder from MannKind Corporation (Nasdaq: MNKD), in exchange for up to US$200 million, including the purchase price of US$150 million and an additional potential milestone payment of up to US$50 million.
United Therapeutics Corporation licensed Tyvaso DPI from MannKind in 2018 and began marketing it in June 2022 for the treatment of pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease following FDA approval. Pursuant to a license agreement with United Therapeutics, MannKind is entitled to a 10% royalty on net sales of Tyvaso DPI, subject to certain reductions.
Under the terms of the royalty purchase agreement, Sagard Healthcare will receive royalty payments equal to 1% of the net sales of Tyvaso DPI that occur between October 1, 2023, and December 31, 2042, with MannKind retaining a 9% royalty. MannKind received a US$150 million purchase payment for the 1% royalty and is entitled to receive a milestone payment as follows:
- US$50 million in the event that the trailing 12-month net sales of Tyvaso DPI equals or exceeds US$1.9 billion by December 31, 2026; or
- if the preceding milestone is not achieved, US$45 million in the event that the trailing 12-month net sales of Tyvaso DPI equals or exceeds US$2.3 billion by September 30, 2027.
The Sidley team was led by Asher Rubin, Adriana V. Tibbitts, and Dina M.P. Kang (Technology and Life Sciences Transactions) and by BinQuan Zhuang, Ph.D. (M&A); the team included Emily Marden and Kelly Cho (Food, Drug and Medical Device), Brian E. Minyard and Joe Zenruffinen (Global Finance), Sona De and Vania Wang (IP Litigation), and Tara M. Lancaster and Andy J. Lau (Tax).
For additional information, please refer to the press release.
