BioCentury
ARTICLE | Finance

Ebb & Flow

July 31, 2006 7:00 AM UTC

The $70 million financing package provided to Oscient (OSCI) by Paul Capital's Paul Royalty fund is not your typical royalty deal: instead of straight cash in exchange for royalties, it combines a mix of cash, debt and equity. Paul Royalty expects its ability to offer such multi-pronged packages will help differentiate it from other firms that are buying royalty interests in biotech drugs. According to OSCI, the structure avoids both the excessive dilution of an all-equity deal and the high royalty of an all-cash deal.

OSCI's arrangement with Paul Royalty was made in connection with the company acquiring U.S. rights to Antara fenofibrate from Reliant. OSCI is paying $78 million in cash for the drug, which is approved as adjunctive therapy for high cholesterol and high triglycerides in combination with diet. Antara was launched in February 2005, and in the last 12 months has posted sales of $32 million. Thus, the price tag is about 2.4 times annual sales. ...