Now this is how the knowledge-based economy is supposed to work.
Children’s Hospital of Philadelphia Thursday raised $182 million from the sale of its interest in royalties from a vaccine made by Merck & Co. Inc.
Royalty Pharma, of New York, bought the royalty interests to RotaTeq from the pediatric hospital that everyone calls “CHOP.”
The deal gives the hospital cash now, while the privately held Royalty Pharma gets an ongoing stream of income from Merck based on sales of RotaTeq for years to come.
"CHOP will use this money in the continual pursuit of advancing science to benefit children,” said Children’s Hospital CEO Steven M. Altschuler.
RotaTeq is a vaccine against rotavirus, which kills hundreds of thousands of children in the developing world. The vaccine was created from research performed at Children’s Hospital and the Wistar Institute in West Philadelphia.
It’s not bragging to say that the Philadelphia area is a center for medical research. The University of Pennsylvania is always near the top in terms of grants from the National Institutes of Health. Last year, Penn received $451.5 million from NIH, behind only Johns Hopkins University at $582.0 million.
But while Silicon Valley and Boston thrum with entrepreneurial activity inspired by the brilliant minds clustered there, Philadelphia has lagged in capitalizing on the deep thinking going on in urban and suburban labs.
RotaTeq is a home run. Merck sold $524.7 million worth of the vaccine worldwide in 2007.
This is also the first such deal done by Children’s Hospital, and hospital officials believe it’s one of the 10 largest royalty swaps.
The two biggest deals were $700 million each for a portion of Northwestern University’s royalties from Pfizer Inc.’s Lyrica fibromyalgia drug and for AstraZeneca P.L.C.’s royalties from Humira, a treatment for rheumatoid arthritis.