Drug manufacturer Perrigo has completed the sale of its right to the royalty stream from the global net sales of the drug Tysabri (natalizumab) to Royalty Pharma's (RPI) affiliate RPI Finance Trust for $2.85bn.

Tysabri is a treatment approved by the US Food and Drug Administration (FDA) for multiple sclerosis.

The agreement will see RPI acquire all of Perrigo's rights to receive Tysabri royalty payments from and after 1 January this year.

Perrigo CEO John Hendrickson said: "This divestiture enables the company to create additional flexibility for growth and maintain its investment grade commitment, while focusing on operational execution in our consumer-facing and Rx businesses.

“Completing this sale is a positive action step in our ongoing portfolio review. The Perrigo Board of Directors and I will continue to make decisions to create value and deliver on our mission of providing Quality, Affordable Healthcare Products to consumers around the globe."

"This divestiture enables the company to create additional flexibility for growth and maintain its investment grade commitment, while focusing on operational execution in our consumer-facing and Rx businesses."

The transaction includes $2.2bn in cash at closing and up to $650m in potential milestone payments, based upon future global net sales of the multiple sclerosis drug in 2018 and 2020.

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The rights to Tysabri’s royalty stream were acquired by Perrigo through the acquisition of Elan Corporation in 2013.

Royalty Pharma's portfolio includes royalty interests in more than 40 approved products, including AbbVie's Humira, AbbVie and J&J's Imbruvica, Biogen's Tecfidera, Vertex's Kalydeco and Orkambi, and J&J's Remicade. 

Merck's Januvia, Gilead's Atripla and Truvada, Pfizer's Lyrica, and Astellas and Pfizer's Xtandi are also a part of the company's royalty intake portfolio.

Morgan Stanley & Co. LLC acted as sole structuring agent and lead financial advisor for the transaction.