US$325 million deal for Walter and Eliza Hall Institute

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The Walter and Eliza Hall Institute of Medical Research has made a landmark deal worth up to US$325 million from the partial sale of royalty rights in anti-cancer treatment venetoclax, securing the Institute’s place globally for innovation in medical research.

The deal was announced today by health minister Greg Hunt and Victorian counterpart, Jill Hennessy, at the Walter and Eliza Hall Institute in Melbourne.

CPPIB Credit Europe S.à r.l., a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB), has acquired rights to a portion of the future venetoclax royalties owned by the Institute.

The transaction includes a cash payment of US$250 million upfront and potential milestone payments of up to US$75 million. The Institute will also retain partial royalties in the treatment.

Venetoclax is the result of a research collaboration with Roche and AbbVie, It is based on scientific discoveries made at the Institute over three decades. Venetoclax, known by brand name VENCLEXTA, is being commercialised in Australia by AbbVie for the treatment of chronic lymphocytic leukaemia.

Walter and Eliza Hall Institute director Professor Doug Hilton AO said the Institute’s commitment to scientific excellence, innovation and its collaborative culture underpinned the successful translation of venetoclax.

“The Institute is proud of its contribution to the realisation of this anti-cancer treatment and its potential to improve the lives of many patients around the world.

“Venetoclax demonstrates what success can look like for a collaborative, entrepreneurial and innovative medical research institute and why investment in basic research is so important,” said Professor Hilton.

“With venetoclax, we have shown the Institute has both the scientific determination and entrepreneurial acumen to take basic research all the way to being a clinical and commercial success, alongside our partners. This need not be a one-time event. Venetoclax is proof that Australian institutions can be key players in globally significant translation.

“The Institute’s mission is to make discoveries for humanity and this income will help us deliver on that. It will enhance and accelerate our ability to make fundamental discoveries that can be translated into better treatments, bringing real benefits to patients on a global scale, as well as benefiting the Australian economy,” continued Professor Hilton said.

A portion of the income will be invested in the Institute’s endowment, ensuring the long term financial stability needed to continue the Institute’s focus on fundamental and translational research. Income will also go towards enhancing and accelerating the discovery and translation of new medicines, the acquisition of state-of-the art dynamic imaging technology and to support the construction of an on-site Early Childhood Education and Care centre, as part of the Institute’s commitment to supporting staff and their families.

Walter and Eliza Hall Institute board president Mr Christopher Thomas AM said negotiating a partial sale of rights in the medicine was a unique opportunity for the Institute to solidify its financial security, to build its funds base for the long term and ensure groundbreaking scientific research could be undertaken for decades to come.

“The Institute decided to make a partial sale of rights to minimise the risks associated with the longer term volatility in the pharmaceutical marketplace. Having observed similar transactions by other research institutions, and then realising venetoclax’s potential, we decided this was the right approach for the Institute,” said Mr Thomas said.

“We will invest some of the funds into building the Institute’s endowment to create a favourable long term outlook for the Institute. This will enable us to deliver research initiatives that can lead to further collaboration with commercial partners and the potential for further successes like venetoclax.

“Retaining partial rights in the treatment ensures the Institute preserves potential future opportunities from the medicine until the global patents expire,” he added.

CPPIB’s Managing Director, Head of Principal Credit Investments, Mr John Graham said the investment was an attractive opportunity to expand CPPIB’s global intellectual property program through the acquisition of royalty rights for this proven anti-cancer treatment.

"With stable, long term cash flows, alternative assets like intellectual property add diversification to the CPP Fund as performance is generally uncorrelated to that of the broader capital markets," said Mr Graham.