DRI Healthcare buys royalty interest in thyroid drugs

Executive Summary

• DRI Healthcare Trust has acquired a synthetic royalty interest in the U.S. net sales of Veligrotug and VRDN-003 from Viridian Therapeutics for an aggregate potential value of up to $300 million.
• The transaction includes a $55 million upfront payment and up to $115 million in near-term clinical and regulatory milestone payments, with the remainder potentially paid upon reaching higher sales thresholds.
• The deal significantly expands DRI Healthcare’s portfolio exposure to rare diseases and long-dated cash flows, focusing on therapies for Thyroid Eye Disease (TED) which have demonstrated positive Phase 3 results.

Key Details

• Transaction Value: Aggregate purchase price of up to $300 million (U.S.).
• Upfront Payment: $55 million (U.S.) paid immediately.
• Milestone Payments: Up to $115 million (U.S.) in near-term clinical and regulatory milestones.
• Royalty Structure: Tiered royalty on annual U.S. net sales of the TED franchise (Veligrotug and VRDN-003):
  • 7.50% on net sales up to and including $600 million (Tier 1).
  • 0.80% on net sales above $600 million and up to $900 million (Tier 2).
  • 0.25% on net sales above $900 million and up to $2.0 billion (Tier 3).
• Payment Terms: Royalty receipts collected quarterly on a one-quarter lag; first payment occurs in the quarter following the first commercial sale of Veligrotug in the U.S.
• Asset 1 (Veligrotug/VRDN-001):
  • Monoclonal antibody targeting IGF-1R.
  • Met all primary and secondary endpoints in two pivotal Phase 3 trials (Thrive-1 for active TED, Thrive-2 for chronic TED).
  • Granted FDA Breakthrough Therapy designation.
  • Potential to be the second approved biologic for TED.
• Asset 2 (VRDN-003):
  • Extended half-life monoclonal antibody designed for subcutaneous auto-injection.
  • Two ongoing global Phase 3 pivotal trials (Reveal-1 and Reveal-2).
  • Top-line results anticipated in H1 2026.
  • Biologics License Application (BLA) submission planned by end of 2026, subject to positive trial outcomes.
• Strategic Impact: Marks DRI Healthcare’s third synthetic royalty transaction and second pre-approval deal, extending portfolio duration and increasing exposure to rare diseases.

Notable Quotes

• "This transaction reflects our continued strategy of providing bespoke solutions to partners that are developing and commercializing novel therapies for conditions with high unmet needs." — Ali Hedayat, CEO, DRI Healthcare
• "We are pleased to partner with Viridian as they continue to advance veligrotug and VRDN-003 in thyroid eye disease... We thank the Viridian team for collaborating with us to construct a deal that benefits both parties." — Navin Jacob, CIO, DRI Healthcare