Cystic Fibrosis Foundation Receives $3.3 Billion Royalty Pay Out

Cystic Fibrosis Foundation Receives $3.3 Billion Royalty Pay Out

The Cystic Fibrosis Foundation has announced that it has sold its royalty rights to CF treatments developed by Vertex Pharmaceuticals to drug investment firm Royalty Pharma for $3.3 billion.

The proceeds of the sale will dramatically accelerate and expand the foundation’s research, care, and patient programs and significantly boost its funding of research targeting the genetic cause of CF. The organization also plans to use the funds to strengthen the specialized care and support that people with CF and their families receive at more than one hundred and twenty centers across the country and to expand its resources for people with CF and their families.

For well over a decade, CFF has employed a venture philanthropy model that provides upfront funding to pharmaceutical companies to help reduce the financial risk associated with the development of drugs to treat CF. As a result, the organization has a pipeline of drugs in various phases of development and reinvests the funds from any royalties it owns to advance drug discovery and efforts to find a cure. According to the New York Times, the foundation’s investments in Vertex led to the development of Kalydeco, the first drug that treats the underlying cause of cystic fibrosis rather than its symptoms. Boston-based Vertex is testing two other drugs that also have shown promise in clinical trials.

Critics of the venture philanthropy drug discovery approach have expressed concerns that the profit motive could distract organizations like CFF from their mission and create conflicts of interest. They note, for example, that Kalydeco costs $300,000 a year and argue that CFF should be doing more to bring down its cost. "I would like to see them do more to get the price of this drug down to something that is going to be sustainable," Paul M. Quinton, a CF researcher at the UC San Diego School of Medicine, told the Times. "And I have some concern about the possible appearance of a conflict."

The organization's president and CEO, Robert J. Beall, told the Times that he had expressed his concern about the cost of the drug to Vertex but had no power to set the drug's price, adding that CFF's mission has always been focused on delivering treatments to CF patients, and that an income stream from the sale of royalty rights would only help.

"This is a transformational moment for the foundation and the entire CF community," Beall said in a press release. "These new resources will allow us to supercharge our efforts to help all people with CF live long, healthy, and fulfilling lives today and work to find a cure. We could not have taken this exciting step forward without the steadfast commitment and decades of hard work of many volunteers and donors, researchers, and healthcare professionals, together with people with CF and their families."