Royalty Pharma plc announced a $275 million synthetic royalty funding agreement with Denali Therapeutics, Inc., providing an upfront payment of $200 million at closing and an additional $75 million upon European Medicines Agency approval by December 31, 2029. The agreement grants Royalty Pharma a 9.25 % royalty on worldwide net sales of Denali’s lead investigational therapy, tividenofusp alfa, for mucopolysaccharidosis type II (Hunter syndrome).
Royalty Pharma’s Q3 2025 results underscored the company’s capacity to deploy capital in high‑potential assets. Portfolio receipts grew 11 % year‑over‑year to $814 million, and the firm raised its full‑year guidance, reflecting confidence in its diversified royalty pipeline. The new deal adds a promising therapy to that portfolio, reinforcing the company’s strategy of investing in innovative biopharmaceutical products.
Denali Therapeutics reported a net loss of $126.9 million in Q3 2025, an increase from $107.2 million in the same quarter a year earlier, driven by higher R&D and G&A expenses related to tividenofusp alfa. Despite the loss, Denali’s cash position remains robust, providing the liquidity needed to advance its pipeline. The $275 million infusion is a critical source of capital that will support clinical development and potential commercialization of tividenofusp alfa.
Tividenofusp alfa is a novel therapy that uses Denali’s TransportVehicle™ platform to deliver biologics across the blood‑brain barrier, addressing both cognitive and physical symptoms of Hunter syndrome. The global market for Hunter syndrome therapies is estimated at $650–$700 million annually, with pricing around $500,000 per patient per year. The drug has Fast Track and Breakthrough Therapy designations from the FDA, and the accelerated approval target date is April 5, 2026, following an extension from January 5, 2026.
The royalty agreement is contingent on Denali obtaining U.S. FDA accelerated approval. Royalty Pharma will receive the additional $75 million payment only after EMA approval, and the royalty will terminate once cumulative payments reach a multiple of 3.0 × the initial investment, or 2.5 × if achieved by the first quarter of 2039. These terms align Royalty Pharma’s upside with the commercial success of tividenofusp alfa while providing Denali with upfront capital.
Pablo Legorreta, CEO of Royalty Pharma, said the partnership “demonstrates our commitment to backing therapies that address unmet medical needs and our confidence in Denali’s technology platform.” Ryan Watts, CEO of Denali Therapeutics, added that the deal “provides the financial flexibility to accelerate tividenofusp alfa’s development and bring a transformative treatment to patients.”
The transaction positions Royalty Pharma to capture a new royalty stream from a potentially high‑revenue therapy while diversifying its portfolio. For Denali, the funding mitigates cash burn and supports the clinical milestones required for FDA approval, setting the stage for a commercial launch that could generate significant revenue in a sizable rare‑disease market.
The announcement was well received by investors, reflecting confidence in both companies’ strategic directions and the potential upside of tividenofusp alfa.
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