Research charity LifeArc cashes $1.2bn royalty from Keytruda

UK-based medical research charity LifeArc is to receive $1.29bn in a royalty deal arising from its work on immuno-oncology blockbuster Keytruda.

Already a big funder of research, the new cash will make LifeArc one of the UK’s leading medical research charities by size of its investment assets.

It says it will now “significantly expand its mission” to advance research that has direct benefits for human health.

Marketed by MSD (Merck & Co in North America), Keytruda (pembrolizumab) is set to reach sales of $8bn this year, and is the leader in the immunotherapy class redefining cancer treatment – and LifeArc is now making the most of its significant contribution to the drug’s development.

The royalties are based on LifeArc’s collaboration with Dutch pharma company Organon on the early development work for what turned out to be pembrolizumab.

In 2007, Organon called on LifeArc to carry out the humanisation process on its mouse antibody, a vital step to reduce the antibody’s immunogenicity and improve its tolerability in patients.

Organon was ultimately acquired by MSD, but LifeArc (previously known as as Medical Research Council Technology,) has been accruing royalties for the drug since its launch, and has now traded a percentage of those rights for a lump sum.

CPPIB Credit Europe, a subsidiary of Canada Pension Plan Investment Board (CPPIB), has bought a portion of the charity’s royalty interest in Keytruda for S1.297 bn. The Canadian pension fund is on the look out for stable and long-term cash flows, and Keytruda fits that bill perfectly, with its patent in place until 2026 outside the US, and longer in the US.

For LifeArc, the money opens up new possibilities in the translational medicine field.

Melanie Lee, CEO, LifeArc, said: “At LifeArc, we advance promising research into new health interventions for patients and the public benefit. This agreement with CPPIB allows us to increase our support for new approaches and collaborations and bolster access to our expertise and resources. Ultimately, we can support life sciences research and accelerate the development of new therapies, diagnostics and devices for those people in greatest need.”

Dr John Stageman, chairman of the board, LifeArc, said: “The agreement with CPPIB is a once in a generation opportunity, providing LifeArc with additional resources to accelerate our work. The board of trustees are committed to ensuring our resources enhance the translation of medical innovation and boost the UK life science ecosystem. We are continuing to evolve our strategy and approach to maximise the impact on innovation, sustainability and patient benefit.”

Recent weeks have seen a surge of activity from the medical research charity. In March it formed a cancer immunotherapy alliance with CRUK and Ono Pharma, in April it licensed an ion channel drug discovery programme to Daiichi Sankyo,and in early May it launched a biomarker and proteomics alliance with the Medicines Discovery Catapult.