Item
1.01. Entry into a Material Definitive Agreement.
Royalty Purchase
On June 30, 2022, Blueprint Medicines Corporation (the
“Company”) entered into a purchase and sale agreement (the “Purchase Agreement”) with Royalty Pharma
Investments 2019 ICAV, an Irish collective asset-management vehicle (“Royalty Pharma”), pursuant to which the Company
sold to Royalty Pharma all of the royalties payable to the Company with respect to net sales by F. Hoffmann-La Roche Ltd and
Genentech, Inc. (collectively, “Roche”), in all countries besides China, Hong Kong, Macau and Taiwan (collectively,
“Greater China”) and the United States, of GAVRETO (pralsetinib) (the “Purchased Royalty Interest”) under
the Collaboration Agreement, dated July 13, 2020, by and between the Company and Roche, as amended (the “Collaboration
Agreement”). In consideration for the sale of the Purchased Royalty Interest, Royalty Pharma paid to the Company $175.0
million and has agreed to pay the Company certain milestone payments totaling up to $165.0 million, subject to the achievement of
specified net sales milestones by Roche.
Under the Purchase Agreement, and in connection with its sale of the
Purchased Royalty Interest, the Company has agreed to certain covenants with respect to the exercise of its rights under the Collaboration
Agreement, including with respect to the Company’s right to amend, assign and terminate the Collaboration Agreement. The Purchase
Agreement contains other customary terms and conditions, including representations and warranties, covenants and indemnification obligations
in favor of each party.
The foregoing summary of the Purchase Agreement is not complete and
is qualified in its entirety by reference to the complete text of the Purchase Agreement, which the Company intends to file as an exhibit
to its Quarterly Report on Form 10-Q for the quarter ending June 30, 2022.
Synthetic Royalty Facility
On June 30, 2022, the Company entered into a purchase and sale
agreement (the “Synthetic Purchase Agreement”), with Garnich Adjacent Investments S.a.r.l. (the “Purchaser”),
any other purchasers from time to time party thereto (collectively, the “Purchasers”), and Garnich Adjacent Investments S.a.r.l.,
as representative for the purchasers (the “Purchaser Representative”).
Under the Synthetic Purchase Agreement, the Purchasers are entitled
to receive tiered, future royalty payments at a rate of 9.75% on up to $900 million each year of (i) aggregate worldwide annual net
product sales of AYVAKIT (avapritinib), excluding in Greater China, and (ii) aggregate worldwide annual net product sales of BLU-263
(together with AYVAKIT, collectively, the “Products”), subject to a cumulative cap of 1.45 times the upfront invested capital
or a total of $362.5 million. In the event that certain revenue targets are not achieved by specified dates, the royalty rate
and cumulative cap shall be increased to 15% and 1.85 times the invested capital (or $462.5 million), respectively.
The transactions contemplated by the Synthetic Purchase Agreement
are expected to close on July 22, 2022, subject to customary closing conditions. At the closing, in consideration for the sale
of the Purchased Royalty Interest, the Purchaser will pay to the Company $250.0 million.
The Synthetic Purchase Agreement is subject to customary closing conditions
and contains customary representations and warranties of the Company and the Purchasers, including with respect to organization, authorization
and tax matters, indemnification obligations, and certain covenants with respect to payment, reports, intellectual property, in-licenses,
out-licenses, and certain other actions with respect to the Products. Pursuant to the Synthetic Purchase Agreement, and an additional
security agreement, the Purchaser Representative, for the benefit of the purchasers was granted a first priority security interest in
and to all right, title and interest in, to and under the Products and certain regulatory approvals, intellectual property, material agreements,
proceeds, tangible assets, and intangible assets related to the Products.
The foregoing description of the Synthetic Purchase Agreement is
not complete and is qualified in its entirety by reference to the complete text of the Synthetic Purchase Agreement, which the
Company intends to file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending June 30, 2022.
Debt Facility
On June 30, 2022, the Company entered into a financing agreement
(the “Financing Agreement”) for up to $660.0 million among the Company, certain subsidiaries of the Company (together with
the Company, the “Loan Parties”), the other lenders from time to time party thereto (the “Lenders” and each a
“Lender”) and Tao Talents, LLC, as the administrative agent for the lenders (“Administrative Agent”). The Financing
Agreement provides for (i) a senior secured term loan facility of up to $150.0 million (the “Term Loans” and (ii) a
senior secured delayed draw term loan facility of up to $250.0 million to be funded in two tranches: (i) a Tranche A Delayed Draw
Loan in an aggregate principal amount of $100.0 million (the “Tranche A Delayed Draw Term Loan”) and (ii) a Tranche
B Delayed Draw Term Loan in an aggregate principal amount of up to $150.0 million (the “Tranche B Delayed Draw Term Loan, and together
with the Tranche A Loan, the “Delayed Draw Term Loans”, and together with the Term Loans, the “Loans”). The Company
may at any time request an incremental term loan in an amount not to exceed $260.0 million on terms to be agreed and subject to the consent
of the Lenders providing such incremental term loan.
The Term Loans are expected to be funded on July 22, 2022. The
Tranche A Delayed Draw Term Loan will be requested no later than May 22, 2023, the Tranche B Delayed Draw Term Loan may be requested
no later than May 22, 2024, in each case, subject to customary terms and conditions, including, (i) in the case of the Tranche
A Delayed Draw Term Loan, revenue from sales of AYVAKIT and BLU-263 outside of the CStone Territories of at least $115.0 million, measured
as of the last day of the most recently ended four fiscal quarter period and (ii) in the case of the Tranche B Delayed Draw Term
Loan, revenue from sales of AYVAKIT and BLU-263 outside of the CStone Territories of at least $200.0 million, measured as of the last
day of the most recently ended four fiscal quarter period.
The Loans will mature on June 30, 2028 (the “Maturity
Date”). Borrowings under the Financing Agreement bear interest at a variable rate equal to either the SOFR plus six and one
half percent (6.50%) or the base rate plus five and one half percent (5.50%), subject to a floor of one percent (1%) and two percent
(2%) with respect to the SOFR and base rate, respectively.
In the event a Loan is prepaid in whole or in part prior to the
Maturity Date, the amount so prepaid or terminated will be subject
to the following prepayment fees (the “Prepayment Premium”) from the date the applicable Loan is funded (such date, the
“Funding Date”).
| | |
| |
| Prepayment Date | |
Premium | |
| Prior to and on the date that is 36 months from the Funding Date | |
5% | |
| On and after the date that is 37 months from the Funding Date, but less than 49 months from the Funding Date | |
3% | |
| On and after the date that is 49 months from the Funding Date, but less than 61 months from the Funding Date | |
1% | |
| On and after the date that is 61 months from the Funding Date | |
Par | |
Additionally, if a Loan is prepaid in whole or in part prior to
the Maturity Date, on or prior to the date that is 24 months after
the applicable Funding Date, the amount so prepaid or terminated will be subject to an additional premium equal to the present value
of the amount of interest that would have been required to be paid through the date that is 24 months after the applicable Funding
Date.
All obligations under the Financing Agreement will be secured, subject
to certain exceptions, by security interests in the substantially all assets of the Company and certain of its subsidiaries (collectively,
the “Collateral”).
The Financing Agreement contains negative covenants that, among other
things and subject to certain exceptions, could restrict the Company’s ability to, incur additional liens, incur additional indebtedness,
make investments, including acquisitions, engage in fundamental changes, sell or dispose of assets that constitute Collateral, including
certain intellectual property, pay dividends or make any distribution or payment on or redeem, retire or purchase any equity interests,
amend, modify or waive certain material agreements or organizational documents and make payments of certain subordinated indebtedness.
The Financing Agreement also requires the Company to have consolidated
liquidity of at least (i) $50.0 million during the period commencing from the date on which the Term Loans are funded to the date
which is the day before the first Delayed Draw Term Loans are funded and (ii) $80.0 million for each day thereafter. Additionally,
the Financing Agreement contains certain customary representations and warranties, affirmative covenants and provisions relating to events
of default, including nonpayment of principal, interest and other amounts; failure to comply with covenants; the rendering of judgments
or orders or default by the Company in respect of other material indebtedness; and certain insolvency, ERISA events and regulatory events.
The foregoing summary of the Financing Agreement is not complete
and is qualified in its entirety by reference to the complete text of the Financing Agreement, a copy of which the Company intends
to file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending June 30, 2022.