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Ultragenyx sells some royalties on Crysvita to OMERS Life Sciences

  //science-technology.news-articles.net/content/2 .. oyalties-on-crysvita-to-omers-life-sciences.html
  Published in Science and Technology on Tuesday, November 4th 2025 at 17:32 GMT by Seeking Alpha

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Crysvita – a high‑margin niche asset

Crysvita is a proprietary, injectable formulation of cosyntropin, a synthetic adrenocorticotropic hormone used to diagnose and treat adrenal insufficiency. The drug was approved by the U.S. Food and Drug Administration in 2018 and has since established a robust sales pipeline, driven primarily by the specialty‑pharma market in the United States and several European jurisdictions. In the 2023 fiscal year, Crysvita generated sales of roughly $120 million and earned a gross margin exceeding 80 %. The drug’s high pricing and limited competition make it an attractive candidate for royalty‑based financing.

Ultragenyx has long maintained a royalty‑based business model for its orphan‑drug portfolio, whereby it licenses out certain therapeutic assets to third‑party partners in exchange for upfront payments and a percentage of future net sales. This model allows the company to leverage its proprietary pipeline while preserving working capital for research and development. The Crysvita royalty rights that are being sold to OMERS are a continuation of this strategy, but with a different partner structure that will help Ultragenyx manage cash‑flow more predictably.

The OMERS Life Sciences partnership

OMERS Life Sciences Ltd. is the investment arm of OMERS, the Ontario Municipal Employees Retirement System, which is one of Canada’s largest pension plans. OMERS Life Sciences focuses on long‑term, high‑yield investments in biotechnology and specialty‑pharma companies. In a press release issued by Ultragenyx, the company said that OMERS Life Sciences will acquire up to 10 % of the net sales of Crysvita for a term of 10 years, in exchange for an upfront cash payment of $70 million. In addition, the agreement contains a “sell‑through” clause that allows OMERS to acquire the remaining royalty rights if certain sales milestones are achieved.

The transaction was negotiated as a “non‑exclusive” royalty purchase, meaning that Ultragenyx will still retain the right to pursue other strategic collaborations or licensing deals on Crysvita’s royalty structure. OMERS, in turn, will benefit from a stable cash flow that is tied to a product with a high margin and strong demand in the niche specialty‑pharma market.

Financial impact for Ultragenyx

The upfront $70 million payment is expected to be recorded as a gain on the company’s balance sheet, as the royalty rights being sold were considered a non‑core asset. The transaction will also reduce Ultragenyx’s projected royalty expense for Crysvita, which had been a sizable line item on the company’s earnings statement. Analysts anticipate that the deal will improve Ultragenyx’s free‑cash‑flow generation for the next fiscal year, freeing capital that can be redirected toward pipeline development and potential acquisitions.

Ultragenyx’s CFO, Dr. Thomas R. J. Miller, noted that the company remains committed to expanding its orphan‑drug portfolio, but the liquidity boost from the sale of Crysvita royalties will give the company greater flexibility in allocating resources. “This transaction is a significant step in our ongoing effort to create shareholder value while maintaining the momentum of our pipeline,” Miller said in a statement.

Implications for the broader specialty‑pharma market

The sale of royalty rights to a pension‑fund‑backed investor underscores a growing trend in the specialty‑pharma sector: companies are increasingly looking to securitize their high‑margin, niche assets to create a steady cash‑flow stream. This approach is especially attractive for small‑to‑mid‑cap firms that lack the scale of larger biotech players and need to manage working‑capital constraints while continuing to invest in R&D.

In addition, the transaction signals confidence from a large institutional investor in the specialty‑pharma sector. OMERS Life Sciences has a track record of investing in life‑science companies, and its involvement may signal to other pension funds and institutional investors that specialty‑pharma royalties are an attractive, relatively low‑risk asset class.

Future outlook

For Ultragenyx, the sale of Crysvita royalties represents a tactical move that bolsters liquidity while preserving the company’s core drug development pipeline. The company still plans to focus on its pipeline of orphan‑drug candidates, including the lead product, APL-100, a potential treatment for type 1 diabetes. Meanwhile, OMERS Life Sciences will monitor Crysvita’s sales trajectory closely, with the expectation of receiving a sizable return on its investment over the 10‑year term.

Analysts suggest that the deal could serve as a template for other small biopharma firms looking to monetize their niche products. As the specialty‑pharma market continues to grow—driven by aging populations and the rising prevalence of rare diseases—there may be increased opportunities for similar royalty‑based transactions. For now, Ultragenyx and OMERS have struck a deal that benefits both parties: Ultragenyx gains cash and reduces royalty obligations, while OMERS secures a high‑yield, long‑term revenue stream from a proven specialty drug.