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Overview Bookmark this page The biopharma industry is facing significant challenges to their existing business models because of expiring drug patents, declining risk tolerance of venture capitalists and other investors, and increasing complexity in translational medicine. In response to these challenges, new alternative investment companies have emerged to bridge the biopharma funding gap by purchasing economic interests in drug royalty streams. Such purchases allow universities and biopharma companies to monetize their intellectual property, creating greater financial flexibility for them while giving investors an opportunity to participate in the life sciences industry at lower risk. Royalty Pharma is a privately owned alternative investment company that focuses on the acquisition of these pharmaceutical royalty interests. The company invests in products after regulatory approval and, more recently, also in the late stages of clinical trials. By the end of 2013, its portfolio consisted of royalty interests in 39 approved and marketed biopharmaceutical products, and 2 products in clinical trials and/or under review by the FDA and/or EMA. With such a large portfolio diversified across multiple therapeutic indications, it is the global leader in dedicated royalty investment entities. In this case study, we analyze Royalty Pharma's unique financing structure and business model. Problem 4 0.0/1.0 point (graded) An example of pre-FDA- approval financing is Royalty Pharma's "adaptive financing" for Sunesis Pharmaceuticals lead product candidate, Vosaroxin. At the time, Vosaroxin was being evaluated in a Phase-III, randomized, double-blind, placebo-controlled trial among patients with first relapsed or refractory acute myeloid leukemia (AML). Suppose, given a 2.5% significance level threshold for a one-tailed Z-test, the trial was designed to have a 90% probability of detecting a 2- month increase in overall survival among patients in the study. If the treatment response standard deviation was 6.5 months and there are an equal number of patients in was 6.5 months and there are an equal number of patients in each arm of the study, then how many patients would the study require in total? Assume that treatment responses are independent and identically distributed given the treatment arm. Therefore, by the central limit theorem, the average treatment response in each arm can be estimated by a normal distribution. (Note: Your answer should be the total number of patients in the trial, NOT the number of patients in each arm.) patients Overview Bookmark this page The biopharma industry is facing significant challenges to their existing business models because of expiring drug patents, declining risk tolerance of venture capitalists and other investors, and increasing complexity in translational medicine. In response to these challenges, new alternative investment companies have emerged to bridge the biopharma funding gap by purchasing economic interests in drug royalty streams. Such purchases allow universities and biopharma companies to monetize their intellectual property, creating greater financial flexibility for them while giving investors an opportunity to participate in the life sciences industry at lower risk. Royalty Pharma is a privately owned alternative investment company that focuses on the acquisition of these pharmaceutical royalty interests. The company invests in products after regulatory approval and, more recently, also in the late stages of clinical trials. By the end of 2013, its portfolio consisted of royalty interests in 39 approved and marketed biopharmaceutical products, and 2 products in clinical trials and/or under review by the FDA and/or EMA. With such a large portfolio diversified across multiple therapeutic indications, it is the global leader in dedicated royalty investment entities. In this case study, we analyze Royalty Pharma's unique financing structure and business model. Problem 4 0.0/1.0 point (graded) An example of pre-FDA- approval financing is Royalty Pharma's "adaptive financing" for Sunesis Pharmaceuticals lead product candidate, Vosaroxin. At the time, Vosaroxin was being evaluated in a Phase-III, randomized, double-blind, placebo-controlled trial among patients with first relapsed or refractory acute myeloid leukemia (AML). Suppose, given a 2.5% significance level threshold for a one-tailed Z-test, the trial was designed to have a 90% probability of detecting a 2- month increase in overall survival among patients in the study. If the treatment response standard deviation was 6.5 months and there are an equal number of patients in was 6.5 months and there are an equal number of patients in each arm of the study, then how many patients would the study require in total? Assume that treatment responses are independent and identically distributed given the treatment arm. Therefore, by the central limit theorem, the average treatment response in each arm can be estimated by a normal distribution. (Note: Your answer should be the total number of patients in the trial, NOT the number of patients in each arm.) patients

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