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Epizyme Establishes Agreements for Up to $270 Million in Funding to Support Tazemetostat Commercialization and Pipeline Advancement

November 4, 2019

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Nov 4, 2019--

Epizyme, Inc. (Nasdaq: EPZM), a late-stage biopharmaceutical company developing novel epigenetic therapies, today announced funding agreements with Royalty Pharma and its affiliate Pharmakon Advisors that, in aggregate, could bring in up to $270 million in capital, significantly strengthening Epizyme’s financial position and extending its operating runway into at least 2022.

“These funding transactions support our strategy of becoming a fully integrated, commercial biopharmaceutical company, and provide us significant optionality for the future,” said Robert Bazemore, president and chief executive officer of Epizyme. “We are well capitalized to fully fund the anticipated launches of tazemetostat for epithelioid sarcoma and follicular lymphoma next year, and further invest in both the continued development of tazemetostat and our epigenetic pipeline. Royalty Pharma has an outstanding reputation for investing in promising, late-stage companies, and we are thrilled to have their support as we head into the next phase of our evolution.”

As part of the agreements, Royalty Pharma will make an upfront payment of $100 million for shares of Epizyme common stock based on a price of $15 per share, representing a 27% premium to the prior trading day’s closing price. Epizyme also has an 18-month option to sell an additional $50 million of its common stock to Royalty Pharma at then prevailing prices, not to exceed $20 per share, and Royalty Pharma has a three-year option to purchase an additional 2.5 million shares of Epizyme common stock at $20 per share.

Epizyme and Royalty Pharma have also agreed to reduce the existing royalty rates owed by Epizyme to Royalty Pharma on worldwide sales of tazemetostat outside Japan at specified annual net sales levels. This reduction follows Royalty Pharma’s acquisition of certain future royalty streams on sales of tazemetostat in all regions except for Japan, which Epizyme previously owed to Eisai as part of their April 2015 amended and restated agreement. In addition, Epizyme has assigned to Royalty Pharma the future royalty streams on tazemetostat sales in Japan previously owed to Epizyme by Eisai.

“We are very pleased to partner with Epizyme, particularly given the tremendous progress in advancing tazemetostat over the course of 2019,” stated Pablo Legorreta, founder and chief executive of Royalty Pharma. “With impressive data in treating both solid tumors and hematologic malignancies, we share the company’s excitement for tazemetostat’s broad therapeutic potential and are committed to supporting tazemetostat’s further development and anticipated launches to fully maximize its commercial opportunity. We look forward to working closely with this talented team as they transition into a commercial-stage organization.”

As part of the transactions, Mr. Legorreta will be appointed to Epizyme’s Board of Directors.

Under a separate agreement, Epizyme has established a $70 million loan facility with Pharmakon Advisors, an affiliate of Royalty Pharma, which will fund the regulatory milestones owed to Eisai for the NDA submissions and U.S. approvals for tazemetostat for epithelioid sarcoma and follicular lymphoma. The facility may be drawn down in up to three tranches in conjunction with achievement of the milestones and is expandable by up to $300 million following approval of tazemetostat in follicular lymphoma, subject to mutual agreement.

For a further description of terms of the transaction agreements, please refer to Epizyme’s Form 8-K filed today.

Wilmer Cutler Pickering Hale and Dorr LLP acted as legal advisor to Epizyme; Goodwin Procter LLP, Dechert LLP and Maiwald Patentanwalts- und Rechtsanwalts GmbH acted as legal advisors to Royalty Pharma; and, Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to Pharmakon Advisors.

About Epizyme, Inc.

Epizyme, Inc. is a late-stage biopharmaceutical company committed to rewriting treatment for cancer and other serious diseases through novel epigenetic medicines. Epizyme is broadly developing its lead product candidate, tazemetostat, an oral, first-in-class EZH2 inhibitor, with studies underway in both solid tumors and hematological malignancies, as a monotherapy and combination therapy in relapsed and front-line disease. The company is also exploring development candidates in its novel G9a inhibitor program. By focusing on the genetic drivers of disease, Epizyme’s science seeks to match targeted medicines with the patients who need them. For more information, visit www.epizyme.com.

About Royalty Pharma

Founded in 1996, Royalty Pharma is the industry leader in acquiring pharmaceutical royalties, with over $16 billion in royalty assets. Royalty Pharma funds innovation in life sciences both directly and indirectly: directly when it partners with life sciences companies to co-develop and co-fund products in late-stage clinical trials, and indirectly when it acquires existing royalty interests from the original innovators (academic institutions, research hospitals, foundations and inventors). The company’s portfolio includes royalty interests in over 50 approved products including AbbVie and J&J’s Imbruvica, Astellas and Pfizer’s Xtandi, Biogen’s Tysabri, Gilead’s HIV franchise, Merck’s Januvia, Novartis’ Promacta, and Vertex’s Kalydeco, Symdeko and Trikafta. Royalty Pharma is also a leading investor in pre-approval royalties, having since 2011 invested over $4 billion in royalties on pre-approval products and committed over $900 million to direct R&D funding in exchange for royalties. For more information, visit www.royaltypharma.com.

About Pharmakon Advisors

Pharmakon Advisors, LP is the investment manager of the BioPharma Credit funds and of BioPharma Credit PLC (LON:BPCR). the only listed specialist investor in debt from the life sciences industry. Established in 2009, Pharmakon has raised a total of $3.6 billion and has committed $3.7 billion across 36 different financing transactions for companies in the life sciences.

Cautionary Note on Forward-Looking Statements

Any statements in this press release about future expectations, plans and prospects for Epizyme, Inc., including statements about the expected closing of the transactions referred to in this release, the expected proceeds from the transactions and the use of such proceeds and the sufficiency of funds for future operations, and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether the company will be able satisfy the closing conditions under the agreements and consummate the transactions, whether the company will receive all the funds contemplated by the transactions, including under the loan agreement, the purchase agreement and the warrant; whether the proceeds from the transactions, together with the company’s cash and cash equivalents will be sufficient to fund the company’s operations for the period indicated; whether results from clinical studies will warrant meetings with regulatory authorities, submissions for regulatory approval or review by governmental authorities under the accelerated approval process; uncertainties with respect to regulatory approvals, including accelerated approval, to conduct trials or to market products; other matters that could affect the availability or commercial potential of the company’s therapeutic candidates; and other factors discussed in the “Risk Factors” section of the company’s most recent Form 10-Q filed with the SEC and in the company’s other filings from time to time with the SEC. In addition, the forward-looking statements included in this press release represent the company’s views as of the date hereof and should not be relied upon as representing the company’s views as of any date subsequent to the date hereof. The company anticipates that subsequent events and developments will cause the company’s views to change. However, while the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so.

View source version on businesswire.com:https://www.businesswire.com/news/home/20191104005346/en/

CONTACT: Media:

Erin Graves, (617) 500-0615

Epizyme, Inc.

media@epizyme.comInvestors:

Monique Allaire

THRUST Strategic Communications

monique@thrustsc.com

KEYWORD: UNITED STATES JAPAN NORTH AMERICA ASIA PACIFIC MASSACHUSETTS

INDUSTRY KEYWORD: BIOTECHNOLOGY PHARMACEUTICAL HEALTH ONCOLOGY

SOURCE: Epizyme, Inc.

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PUB: 11/04/2019 07:00 AM/DISC: 11/04/2019 07:00 AM

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