Orchestra BioMed Holdings, a biomedical company accelerating high-impact technologies to patients through risk-reward sharing partnerships, has announced that the company has secured $70 million in new capital from Ligand Pharmaceuticals Incorporated and Medtronic to advance its late-stage partnered cardiology programs.
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Simultaneously, Orchestra BioMed and Medtronic, which have an existing strategic collaboration for atrioventricular interval modulation 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. Unlike traditional pacemakers that are placed in a patient's chest with leads (or wires) running to the heart, minimally-invasive Medtronic Micra leadless pacemakers are implanted directly into the heart, reducing potential sources of complications.
Ligand $40 million investment
Todd Davis, chief executive officer of Ligand said: “We are pleased to partner with Medtronic and Orchestra BioMed in this important endeavour. 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.”
David Hochman, chairman and chief executive officer of Orchestra BioMed said: “Ligand has been one of the inspirations for our partnership-driven approach to creating long-term, capital-efficient value through royalty-based collaborations. We are thrilled to welcome them as a strategic capital partner. Ligand’s decision to invest in our partnered programs 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 programs.”
Under the terms of the agreement, Ligand will pay $20 million to Orchestra BioMed at closing with an additional $15 million to be funded, subject to certain conditions precedent, at the nine-month anniversary of the transaction closing date. Ligand has also agreed to invest an additional $5 million to purchase shares of the Company’s common stock in an equity private placement at the public offering price per share in Orchestra BioMed’s next public offering of its equity securities. In exchange, Ligand will receive a low double-digit royalty on the first $100 million in commercial revenues from Orchestra’s AVIM therapy and Virtue SAB programs in all indications. Ligand will also earn a mid-single-digit royalty on annual revenues exceeding $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.
Medtronic $30 million additional investment & future leadless AVIM Therapy Device Development
Robert C. Kowal, M.D., Ph.D., vice president and general manager of Cardiac Pacing Therapies within the Medtronic Cardiac Rhythm Management operating unit, said: “Our expanded investment in Orchestra BioMed reflects confidence in their clinical progress. 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.”
Mr. Hochman said: “Medtronic continues to be an outstanding partner for the AVIM therapy program. We believe their $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.”
Subject to the terms of the agreement, Medtronic’s $30 million additional investment commitment to Orchestra BioMed includes a $10 million agreement to purchase shares of the Company’s common stock in a private placement at the public offering price in the Company’s next public offering of its equity securities. Medtronic also made a $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 U.S. 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 $40 million in cumulative revenue share.