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Deferred Royalty Obligations, Net | 6 Months Ended
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Jun. 30, 2025
Deferred Royalty Obligations [Abstract] |
Deferred Royalty Obligations, Net | 10. Deferred Royalty Obligations, net Royalty Interest Purchase and Sale Agreement On June 27, 2025 (the “Closing Date”), the Company and its subsidiary Eidos Therapeutics, Inc. (“Eidos”) entered into a Royalty Interest Purchase and Sale Agreement (the “Royalty Purchase Agreement”) with Acoramidis Royalty SPV, LP (“ARS”), an affiliate of Healthcare Royalty Management, LLC (“HCRx”), as a purchaser and the purchaser representative (in such capacity, the “Purchaser Representative”), and LSI Financing Fund, LP, an affiliate of Blue Owl Capital Corporation, as a purchaser (together with ARS as a purchaser, the “Royalty Agreement Purchasers”). Pursuant to the Royalty Purchase Agreement, Eidos sold to the Royalty Agreement Purchasers certain of Eidos’ right to receive certain royalty payments (“Purchased Royalty Payment”) on net sales of certain products containing acoramidis (the “Licensed Products”) made in the EU and all member and extension states of the European Patent Organization (the “Licensed Territory”) under (i) an exclusive license agreement, dated as of March 1, 2024, by and among Bayer (as described in Note 11), Eidos and the other subsidiaries of the Company party thereto, as amended from time to time (the “Bayer License Agreement”) and (ii) an amended and restated license agreement, effective as of June 30, 2023, by and between Eidos and one of the other Company’s subsidiaries, BridgeBio International GmbH. In consideration for the sale of the Purchased Royalty Payment, the Royalty Agreement Purchasers agreed to pay Eidos $300.0 million in cash (the “Purchase Price”), which was funded in full on the Closing Date. The Royalty Agreement Purchasers’ rights to the Purchased Royalty Payment are subject to (a) an annual cap equal to 60% of all royalty payments paid by Bayer to Eidos and its affiliates under the Bayer License Agreement on the first $500.0 million of annual net sales of Licensed Products in the Licensed Territory under the Bayer License Agreement and (b) an initial hard cap equal to 145% of the Purchase Price. In addition, the Company and Eidos granted the Purchaser Representative, for the benefit of the Royalty Agreement Purchasers, a security interest in specific assets related to the Purchased Royalty Payment. The Royalty Purchase Agreement also contains certain representations and warranties, indemnification obligations, events of default and other provisions that are customary for transactions of this nature. Upon the occurrence of a change of control of the Company, the successor entity has an option to either (a) assume the obligations of the Company and/or Eidos under the Royalty Purchase Agreement or (b) pay the Royalty Agreement Purchasers an amount equal to the then-applicable hard cap, less total payments already made to the Royalty Agreement Purchasers, plus any other amounts payable under the Royalty Purchase Agreement (the “Change of Control Payment”), upon payment of which no further payments will be due to the Royalty Agreement Purchasers or the Purchaser Representative under the Royalty Purchase Agreement. If an event of default occurs and is continuing, Eidos is required to immediately pay the Change of Control Payment to the Royalty Agreement Purchasers. We have evaluated the terms of the Royalty Purchase Agreement and concluded that the features are similar to those of a debt instrument. Accordingly, we have accounted for the transaction as long-term debt, with the short-term portion presented as part of “Other current liabilities” and the long-term portion presented as part of “Deferred royalty obligation, net” on our condensed consolidated balance sheets. We recognized net cash proceeds of $297.0 million in June 2025, after deducting debt issuance costs of $3.0 million. Funding Agreement On January 17, 2024, the Company and its subsidiaries, Eidos, BridgeBio Europe B.V. and BridgeBio International GmbH (collectively, the “Seller Parties”), entered into a Funding Agreement (the “Funding Agreement”) with LSI Financing 1 Designated Activity Company and CPPIB Credit Europe S.à r.l. (together, the “Funding Agreement Purchasers”), and Alter Domus (US) LLC, as the collateral agent. Pursuant to the Funding Agreement, the Funding Agreement Purchasers agreed to pay to the Company $500.0 million (net of certain transaction expenses) (the “Investment Amount”) upon the first FDA approval of acoramidis, subject to certain conditions relating to the FDA approval and other customary conditions (such date of payment, the “Funding Date”). In return, the Company granted the Funding Agreement Purchasers the right to receive payments (the “Royalty Interest Payments”) equal to 5% of the global net sales of acoramidis (the “Net Sales”). Under certain conditions relating to the sales performance of acoramidis, the rate of the Royalty Interest Payments may adjust to a maximum rate of 10% in 2027. Each Royalty Interest Payment will become payable to the Funding Agreement Purchasers on a quarterly basis after the Funding Date. In addition, the Seller Parties granted the collateral agent, for the benefit of the Funding Agreement Purchasers, a security interest in specific assets related to acoramidis. The Funding Agreement Purchasers’ rights to the Royalty Interest Payments and ownership interest in Net Sales will terminate upon the earlier of the Funding Agreement Purchasers’ receipt of (a) Royalty Interest Payments equal to $950.0 million (the “Cap Amount”) and (b) a buy-out payment (the “Buy-Out Payment”) in an amount determined in accordance with the Funding Agreement but that will not exceed the Cap Amount. In the event that a change of control (as customarily defined in the Funding Agreement) occurs on or after the effective date of the Funding Agreement, the Purchasers may elect to require the Seller Parties to make the Buy-Out Payment and the Funding Agreement will be terminated upon payment in-full of the Seller Parties’ obligations under the Funding Agreement (including the Buy-Out Payment and all reimbursable expenses). The Funding Agreement will also terminate upon customary events. Under the Funding Agreement, the Seller Parties are required to comply with various covenants, including using commercially reasonable efforts to obtain regulatory approval for and commercialize acoramidis, providing the Funding Agreement Purchasers with certain clinical, commercial, regulatory and intellectual property updates and certain financial statements, and providing notices upon the occurrence of certain events, each as agreed under the Funding Agreement. The Funding Agreement also contains certain representations and warranties, indemnification obligations, put-option events and other provisions that are customary for transactions of this nature. Following the FDA approval of Attruby on November 22, 2024, the Company received gross proceeds of $500.0 million under the Funding Agreement in December 2024. We have evaluated the terms of the Funding Agreement and concluded that the features are similar to those of a debt instrument. Accordingly, we have accounted for the transaction as long-term debt and presented it as part of “Deferred royalty obligations, net” on our condensed consolidated balance sheets. The Company recognized net cash proceeds of $472.5 million in December 2024, after deducting debt discount and issuance costs paid in cash of $27.5 million. We have further evaluated the terms of the Funding Agreement and determined that the repayment of the Cap Amount of $950.0 million, less any payments made to date, upon a change of control is an embedded derivative that requires bifurcation from the debt instrument and fair value recognition. We determined the fair value of the derivative using an option pricing Monte Carlo simulation model taking into account the probability of change of control occurring and potential repayment amounts and timing of such payments would result under various scenarios as further described in Note 3. The aggregate fair value of the embedded derivative liability was $35.6 million and $41.1 million as of June 30, 2025 and December 31, 2024, respectively. We remeasure the embedded derivative to fair value each reporting period until the time the features lapse and/or termination of the deferred royalty obligation. In connection with the Royalty Purchase Agreement described above, the Funding Agreement was amended on June 27, 2025. All terms and conditions of the Funding Agreement remain substantially unchanged. Additional Information Related to the Deferred Royalty Obligations, net The carrying value balances of our deferred royalty obligations, net under the Funding Agreement and the Royalty Purchase Agreement consisted of the following:
|  | June 30, 2025 |
|  | Funding Agreement |  |  | Royalty Purchase Agreement |  |  | Total |
|  | (in thousands) |
Carrying value of deferred royalty obligations, net |  | $ | 544,840 |  |  | $ | 299,321 |  |  | $ | 844,161 |
Fair value of embedded derivative liability |  |  | 35,592 |  |  |  | — |  |  |  | 35,592 |
Unamortized debt discount and issuance costs |  |  | (62,790 | ) |  |  | (3,004 | ) |  |  | (65,794 | )
Deferred royalty obligations, net |  | $ | 517,642 |  |  | $ | 296,317 |  |  | $ | 813,959 |
|  | December 31, 2024 |
|  | Funding Agreement |
|  | (in thousands) |
Carrying value of deferred royalty obligation, net |  | $ | 507,114 |
Fair value of embedded derivative liability |  |  | 41,091 |
Unamortized debt discount and issuance costs |  |  | (69,114 | )
Deferred royalty obligation, net |  | $ | 479,091 |
The effective interest rate as of June 30, 2025 was 20.4% for the Funding Agreement. For the three and six months ended June 30, 2025, we recognized interest expense related to the Funding Agreement of $25.8 million and $49.8 million, respectively, of which $3.3 million and $6.3 million, respectively, relates to amortization of debt discount and issuance costs. As of June 30, 2025 and December 31, 2024, we recognized royalty interest payable related to the Funding Agreement of $3.9 million and $0.1 million, respectively, in “Other current liabilities” on our condensed consolidated balance sheets. The effective interest rate as of June 30, 2025 was 10.8% for Royalty Purchase Agreement. For the three and six months ended June 30, 2025, we recognized interest expense related to the Royalty Purchase Agreement of $0.3 million, of which an immaterial amount relates to amortization of debt issuance costs. As of June 30, 2025, we recognized royalty interest payable related to the Royalty Purchase Agreement of $0.9 million in “Other current liabilities” on our condensed consolidated balance sheets.

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