Shares of Albireo Pharma (NASDAQ: ALBO) shot up in early morning trading on Thursday after the company focused on the development of novel bile acid modulators to treat pediatric and adult liver diseases announced a royalty monetization agreement with Sagard Healthcare Partners.
This agreement will involve an upfront payment of $115 million in exchange for an average royalty rate in the mid-single digit on Bylvay global annual net revenues.
Bylvay is Albireo’s first drug approved in the U.S. for the treatment of itchy skin in patients 3 months of age and older in all types of progressive familial intrahepatic cholestasis (PFIC), a type of liver disorder.
This agreement will also provide Albireo an option to buy out Sagard’s investment. Moreover, Sagard will have no right to the Bylvay intellectual property.
Ron Cooper, President, and CEO of Albireo commented, “With this agreement, we are significantly strengthening our balance sheet, providing us flexibility, and extending our cash runway beyond at least the topline data readout of our BOLD study in biliary atresia in 2024. These additional resources allow us to build Bylvay into a billion-dollar product and advance the development of our early asset pipeline.”