Shares of Apogee Therapeutics (NASDAQ:APOG) climbed roughly 16% in premarket trading on Wednesday after the biotechnology company announced a $1.3 billion financing agreement with Blackstone Life Sciences to support the development and commercial launch of zumilokibart, its treatment candidate for atopic dermatitis.
The financing arrangement includes up to $800 million in synthetic royalty funding alongside as much as $500 million in senior corporate debt financing, which will be made available subject to mutual agreement between both companies.
Under the terms of the deal, Blackstone will receive tiered royalties in the low-to-mid single-digit range on annual worldwide sales of zumilokibart over a 15-year period. However, no royalties will apply to annual global sales above $8 billion.
The synthetic royalty component of the agreement will be provided through several funding stages. Apogee is set to receive an initial $100 million payment upon signing the agreement, followed by another $100 million after completion of Phase 3 patient enrollment and an additional $200 million if positive Phase 3 trial data are achieved.
A further $400 million would become available upon U.S. Food and Drug Administration approval of the treatment, with $150 million of that amount accessible at Apogee’s discretion.
The company said that, when combined with its existing cash balance of approximately $1.3 billion, the new financing package should allow Apogee to remain financially sustainable through the commercialisation of zumilokibart without needing to pursue additional equity financing.
Following the agreement, Apogee also withdrew its previous guidance regarding its projected cash runway.