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Monetizing Revenues as an Alternative to Equity Capital
Situation
Cell Therapeutics was in need of capital to fund ongoing development expenses, but was not interested in further equity dilution. As an alternative, they considered monetizing a royalty interest in Trisenox®, their only marketed oncology product.
Solution
NovaQuest's predecessor, PharmaBio Development, provided Cell Therapeutics with $25 million in upfront cash plus a services credit. PharmaBio's return derived from product-based royalties and its ongoing services relationship with Cell Therapeutics.
Value Added
Cell Therapeutics obtained exactly the amount of capital they were seeking, in exchange for only a portion of the present value of the Trisenox asset. Cell Therapeutics later divested the asset, realizing even greater value from it, net of a payment to buy out the PharmaBio interest.
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