Orchestra BioMed has secured US$70 million in new capital from Ligand Pharmaceuticals and Medtronic to advance its late-stage partnered cardiology programmes—arterioventricular interval modulation (AVIM) therapy and the Virtue Sirolimus AngioInfusion Balloon (Virtue SAB).
Simultaneously, Orchestra BioMed and Medtronic, which have an existing strategic collaboration for AVIM therapy for the treatment of uncontrolled hypertension in pacemaker-indicated patients, have amended their agreement to include the potential future development of AVIM therapy-enabled leadless pacemakers.
“We are pleased to partner with Medtronic and Orchestra BioMed in this important endeavour,” Todd Davis, chief executive officer of Ligand, commented. “This investment expands our pipeline of development-stage products and demonstrates our confidence in Orchestra BioMed’s scientific advancements, as well as the strong capabilities of its partner, Medtronic. We are proud to support Orchestra BioMed as they develop novel high-impact, device-based therapies such as AVIM therapy and Virtue SAB targeting high-risk patient populations with hypertension and arterial disease, two of the most significant global health challenges.”
Under the terms of the agreement, Ligand will pay US$20 million to Orchestra BioMed at closing with an additional US$15 million to be funded, subject to conditions, at the nine-month anniversary of the transaction. Ligand has agreed to invest an additional US$5 million to purchase shares of the company’s stock in Orchestra BioMed’s next public offering of its equity securities.
In exchange, Ligand will receive a low double-digit royalty on the first US$100 million in commercial revenues from Orchestra’s AVIM therapy and Virtue SAB programmes in all indications. Ligand will also earn a mid-single-digit royalty on annual revenues exceeding US$100 million in commercial revenues from AVIM therapy in the uncontrolled hypertension and increased cardiovascular risk indication and Virtue SAB in coronary artery disease indications.
“Ligand has been one of the inspirations for our partnership-driven approach to creating long-term, capital-efficient value through royalty-based collaborations,” David Hochman, chairman and chief executive officer of Orchestra BioMed stated. “We are thrilled to welcome them as a strategic capital partner. Ligand’s decision to invest in our partnered programmes and our team reflects our shared conviction in the transformative potential of both AVIM therapy and Virtue SAB—our late-stage flagship technologies aimed to address important unmet medical needs in large, established global markets. This transaction provides foundational financial support to enable our potential achievement of key value creating milestones for both of our high-impact clinical programmes.”
Subject to the terms of the agreement, Medtronic’s US$30 million additional investment commitment to Orchestra BioMed includes a US$10 million agreement to purchase shares of the company’s common stock in the company’s next public offering of its equity securities. Medtronic also made a US$20 million commitment to purchase a five-year term secured subordinated promissory note, to be funded in nine months which automatically converts to a prepaid revenue share upon US Food and Drug Administration (FDA) approval of AVIM therapy. The prepaid revenue share will be credited back to Medtronic at a low double-digit percentage of actual AVIM therapy revenue share paid to Orchestra BioMed, up to US$40 million in cumulative revenue share.
“Our expanded investment in Orchestra BioMed reflects confidence in their clinical progress,” Robert C Kowal, vice president and general manager of Cardiac Pacing Therapies within the Medtronic Cardiac Rhythm Management operating unit, commented. “Broadening our collaboration to include integrating AVIM therapy into future leadless pacing technology reaffirms our commitment to transform care for patients who need pacing therapy and have uncontrolled hypertension.”
“Medtronic continues to be an outstanding partner for the AVIM therapy programme,” Hochman added. “We believe their US$30 million additional commitment to Orchestra BioMed reflects their belief in the clinical and commercial potential for this therapy to benefit patients with uncontrolled hypertension and increased cardiovascular risk in the pacemaker population. Expanding our existing collaboration to provide for potential future integration of AVIM therapy into a leadless pacemaker system deepens our strategic alignment and creates a potential pathway for patients to benefit from both AVIM therapy and cutting-edge leadless pacing technology, simultaneously.”
