The Wistar Institute Sells Partial Royalty Interest in Merck's ROTATEQ to the Paul Royalty Fund

The Wistar Institute Sells Partial Royalty Interest in Merck's ROTATEQ to the Paul Royalty Fund

December 14, 2005

(Philadelphia - December 15, 2005) – The Wistar Institute today announced that it has sold a portion of its anticipated worldwide royalty revenues from ROTATEQ to an affiliate of the Paul Royalty Fund for up to $45 million.  ROTATEQ is a new Merck & Co., Inc., vaccine to prevent rotavirus infection, a highly contagious virus that is the most common cause of severe dehydrating diarrhea in infants and young children.

On Wednesday, December 14, 2005, the Food and Drug Administration’s vaccines advisory committee unanimously agreed that clinical data from 70,000 infant Phase 3 trials supported the efficacy and safety of ROTATEQ.   The technology which forms the basis for the vaccine was jointly developed by scientists at Wistar and the Children’s Hospital of Philadelphia in the 1980s and licensed to Merck in 1991.  The Vaccines and Related Biological Products Advisory Committee of the Food and Drug Administration today reviewed Merck’s application to license ROTATEQ for sale in the U.S.  

Under the terms of the agreement with the Paul Royalty Fund, Wistar will receive an up-front payment of $1 million and a second payment of up to $44 million when ROTATEQ is marketed in the United States. In addition, Wistar is expected to retain all worldwide royalties on ROTATEQ sales in excess of approximately $300 million annually. These funds will be used to significantly increase the organization’s endowment and support implementation of Wistar’s strategic plan.  

“We are extremely pleased to enter into this agreement for several reasons,” says Russel E. Kaufman, M.D., president and CEO of The Wistar Institute. “This transaction represents a confirmation of the value, both in monetary terms and in terms of advancing public health, of the kind of basic research we conduct. Also, with the additional resources made available to us from this sale, we will be able to aggressively pursue the scientific goals outlined in our strategic plan, ensuring that Wistar will continue to make significant discoveries to benefit human health worldwide.”   Kaufman adds: “Paul Royalty Fund is an excellent partner for this transaction with Wistar because of its tailored investment approach and optimum blend of financing and product commercialization expertise. They are part of a top-tier private equity group and have a proven track record of completing a full spectrum of healthcare product investments.” 

Dr. Walter Flamenbaum, Managing Partner, Paul Royalty Fund commented, “The Wistar deal underscores our ability to offer research institutions and companies a flexible source of capital to expand their activities including clinical development programs. We are pleased to be partnering with Wistar on this important pediatric vaccine.”  

According to the Centers for Disease Control, rotavirus is the most common cause of diarrhea in infants and young children in the United States. Rotavirus is also a major cause of childhood deaths worldwide. Virtually all children become infected with rotavirus in the first 3 to 5 years of life, but severe diarrhea and dehydration occur mainly among children aged 3 to 35 months. In the U.S., rotavirus is responsible for approximately 5-10 percent of all diarrhea among children less than 5 years of age. Rotavirus accounts for more than 500,000 physician visits, 250,000 emergency room visits, and approximately 50,000 hospitalizations each year among children less than 5 years of age. An estimated one in 200,000 children with rotavirus diarrhea dies from the complications of the infection.

About Paul Capital Partners and Paul Royalty Fund: Paul Capital Partners manages close to $5 billion in equity capital commitments for its three investment platforms and has offices in New York, San Francisco, Paris, and London. The Paul Royalty Fund comprises one of the largest dedicated healthcare funds globally, with approximately $1 billion in equity capital commitments. The Paul Royalty Fund has made investments in the pharmaceutical, biotechnology, and medical device sectors valued at more than $600 million. These investments are focused on commercial stage companies and products, and consist of investments in the form of royalties, revenue interests and equity. For more information on Paul Capital Partners and the Paul Royalty Fund visit www.paulcapital.com.

The Wistar Institute is an independent nonprofit biomedical research institution dedicated to discovering the causes and cures for major diseases, including cancer, cardiovascular disease, autoimmune disorders, and infectious diseases. Founded in 1892 as the first institution of its kind in the nation, The Wistar Institute today is a National Cancer Institute-designated Cancer Center focused on basic and translational research. Discoveries at Wistar have led to the development of vaccines for such diseases as rabies and rubella, the identification of genes associated with breast, lung, and prostate cancer, and the development of monoclonal antibodies and other significant research technologies and tools.  Additional information about The Wistar Institute is available on the web at www.wistar.org.

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