Canada Pension Plan Investment Board acquires rights through subsidiary CPPIB Credit Europe S.à r.l.
20 May 2019: LifeArc, a UK-based medical research charity, has received US$1.297 billion from CPPIB Credit Europe S.à r.l. – a wholly owned subsidiary of Canada Pension Plan Investment Board (CPPIB) – for a portion of its royalty interest in Keytruda® (pembrolizumab), MSD’s anti-PD-1 therapy. LifeArc secured rights to royalties from pembrolizumab as a result of the charity’s 2007 collaboration to humanise the antibody-based therapy now marketed by MSD.
The transaction will make LifeArc one of the UK’s leading medical research charities by size of its investment assets and allows it to significantly expand its mission of advancing research that has direct benefits for human health.
Dr Melanie Lee, CEO, LifeArc, said: “At LifeArc, we advance promising research into new health interventions for patients and the public benefit. This agreement with CPPIB allows us to increase our support for new approaches and collaborations and bolster access to our expertise and resources. Ultimately, we can support life sciences research and accelerate the development of new therapies, diagnostics and devices for those people in greatest need.”
John Graham, Senior Managing Director & Global Head of Credit Investments, CPPIB said: “This investment in Keytruda provides us the opportunity to continue expanding CPPIB’s global intellectual property program. Alternative assets related to intellectual property help to diversify the Fund through income streams that are typically uncorrelated to the broader capital markets. The acquisition of royalty interests from LifeArc for this market-leading cancer therapy provides stable, long-term cash flows.”
In 2016, LifeArc sold a small proportion of its pembrolizumab royalty interest for US $150 million to a private equity fund. It used part of this capital to establish two funds, worth £30 million: the LifeArc Philanthropic Fund provides grants for translational research in rare diseases, and the LifeArc Seed Fund invests in nascent or early stage spin-out companies.
Dr John Stageman, Chairman of the Board, LifeArc, said: “The agreement with CPPIB is a once in a generation opportunity, providing LifeArc with additional resources to accelerate our work. The Board of Trustees are committed to ensuring our resources enhance the translation of medical innovation and boost the UK life science ecosystem. We are continuing to evolve our strategy and approach to maximise the impact on innovation, sustainability and patient benefit.”
MTS Health Partners, L.P. acted as exclusive financial and structural advisor, and Covington & Burling LLP acted as special counsel to LifeArc in connection with the transaction.
 KEYTRUDA® is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA.