Kodiak Sciences Announces Sale of Future Royalties on KSI-301 for $225 Million to Baker Bros. Advisors

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[{"type":"text","content":"PALO ALTO, Calif., Dec. 2, 2019 /PRNewswire/ -- Kodiak Sciences Inc. (Nasdaq: KOD) today announced that the Company has entered into a funding agreement to sell a capped royalty right on global net sales of KSI-301 to Baker Bros. Advisors for $225 million. KSI-301 is Kodiak's investigational therapy being developed for the treatment of retinal vascular diseases including age-related macular degeneration and diabetic eye diseases.\nUnder the terms of the agreement, Baker Bros. Advisors (BBA) purchased a capped 4.5% royalty on net sales of the Company's anti-VEGF antibody biopolymer conjugate therapy known as KSI-301 to be paid upon marketing approval in exchange for $225,000,000 in committed development funding payable to the Company (the \"funding amount\"). Unless earlier terminated or re-purchased by the Company, the royalty \"caps\" or terminates upon the date that BBA has received an aggregate amount equal to 4.5 times the funding amount paid to the Company. In an instance where Kodiak develops anti-VEGF containing follow-on products to KSI-301, there may be royalties of 1.5% to 2.25% owed on these products, but total payments under the funding agreement will never exceed the cap of 4.5 times the funding amount paid to the Company.\nBBA is required to pay to the Company the first $100,000,000 of the funding amount at the closing of the funding transaction (expected to occur on January 10, 2020) and the remaining $125,000,000 of the funding amount upon Kodiak achieving, among other things, 50% enrollment in its two planned pivotal clinical studies of KSI-301 in patients with retinal vein occlusion (estimated to occur in late 2020).\nThe Company has the option, exercisable at any point during the term of the funding agreement, to repurchase from BBA 100% of the royalties due to BBA under the funding agreement for a purchase price equal to the funding amount paid to the Company as of such time times 4.5 less amounts paid by the Company to BBA.\n\"In thinking through how best to finance our accelerating clinical, manufacturing and commercial plans for KSI-301 and our ABC platform, royalty funding is meaningfully less dilutive than equity and preserves both our future financing and strategic flexibility,\" said Victor Perlroth, MD, Chairman and Chief Executive Officer of Kodiak Sciences. \"This royalty financing provides the foun...

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