Layer 01 · Status
Clinical
Approval state, indication, sales trajectory, patent runway. Boundary conditions on every cash flow downstream.
Layer 02 · Who pays?
Royalty stack
Counterparties, rates, base, caps, step-downs, upstream layers. Including the layers most databases miss.
Tiered rate, stepped up by net-sales tranche. Gold tier active at the highest sales band.
Per Chugai's February 2024 disclosure of Lilly's 10-K terms. The royalty is tiered by net sales: starts at 4% on the first sales tranche and steps up to 13% at the highest tier. No sub-licensee layer, no upstream royalty obligation, no step-down clause linked to generic entry before patent expiry.
Layer 03 · Fair rate?
Rate comparables
Every disclosed rate in the therapeutic area and stage, benchmarked against the asset.
Benchmarked against ~340 obesity / GLP-1 comparables, 2018–2025 vintage.
The rate sits at the upper end of the obesity / GLP-1 cohort, reflecting the structural advantage of being first oral in class. The 7.2% median is from comparable approved or near-approved metabolic-disease deals between 2018 and 2025.
Layer 04 · Triggers
Milestones
Upfronts, regulatory and sales milestones, and the timing of the cash flows they create.
All Lilly to Chugai. The April 2026 FDA approval triggered the regulatory milestone tranche. The sales milestone tranche begins to crystallise once net sales pass approximately $1B per year — likely in calendar year 2026 if launch tracks consensus.
Layer 05 · Threats
Competitors
Same-class assets, generic and biosimilar timing, label-expansion risk. Why a royalty does or does not perform.
Foundayo's structural moat is being the first oral GLP-1 in class. Novo's oral semaglutide 25mg and Amgen's MariTide are the live competitive threats; both face their own development and approval timing risks. Generic entry is gated by patent expiry around 2042 and likely first generic launch around 2037.
Layer 06 · Value
Acquisition scenarios
Concrete carve-outs with deal size, Y1 royalty, peak royalty, IRR, and peak-royalty multiple.
Chugai's full royalty entitlement
At a 7% blended rate against consensus sales: Y1 royalty $105–196M (7% × $1.5–2.8B Y1 sales) · Peak royalty $1.0–1.4B/yr (7% × $14–20B peak) · Cumulative undiscounted ~$10–13B over a 16-year runway · NPV $5–7B at 8–10% discount.
5–10 bps carve
- Transaction size
- $35–100M
- Y1 royalty
- $0.8–2.8M
- Peak royalty
- $7–20M/yr
- Indicative IRR
- 9–12%
The size band where origination economics work best for everyone. Chugai retains ~6.9% — gives up almost nothing in exchange for present-value certainty. The kind of structure CFC origination flow surfaces regularly.
25–50 bps carve
- Transaction size
- $175–500M
- Y1 royalty
- $3.8–14M
- Peak royalty
- $35–100M/yr
- Indicative IRR
- 9–12%
Single-fund or club-deal territory. Chugai diversifies meaningfully while retaining the bulk of upside. Typically reaches the sell-side bank channel; our origination adds context but the process is conventional.
1% carve to full buyout
- Transaction size
- $0.7–7.9B
- Y1 royalty
- $15M–$196M
- Peak royalty
- $140M–$1.4B/yr
- Indicative IRR
- ~8–10%
Major-fund or syndicate territory. Shown for context. The big royalty funds have BD teams well-equipped to originate at this size; our edge is largest below that threshold.
The contrast between A/B and C is the page's clearest statement of where origination is hardest.
CFC's origination focus is on sub-$100M positions that sit below the practical economics of major funds' BD teams. Where we add the most value is exactly where the origination-cost gap is widest.