BridgeBio Pharma has agreed to sell future royalties on an experimental rare disease drug in exchange for $500 million if the medicine, called acoramidis, receives Food and Drug Administration approval.

The financing was extended by asset manager Blue Owl Capital and the investment board that manages the Canada Pension Plan, which together would receive 5% royalties on any future net sales of acoramidis, up to a certain cap.

Notably the agreement, which BridgeBio announced Thursday, provides for a “change of control” in the company, whereby prior to an FDA approval decision the funding agreement could be terminated. The provision could help preserve BridgeBio’s attractiveness to a potential acquirer, analysts at Mizuho Securities and Leerink Partners noted.

Additionally, BridgeBio restructured a debt agreement it held with Blue Owl, extending the maturity of a $450 million credit facility from 2026 to 2029. If needed, BridgeBio could access an additional loan of up to $300 million more.

Acoramidis, the drug at the center of Thursday’s deal, is BridgeBio’s chief asset. A small molecule, acoramidis is designed to treat a cardiac form of the rare disease transthyretin amyloidosis. A Phase 3 study of the drug read out positive results last summer and BridgeBio submitted it in December for FDA approval. If the agency accepts the company’s application, a decision would likely come near the end of the year.

The new funds would help support a commercial launch of acoramidis, if approved, BridgeBio said. 

According to Mizuho analyst Salim Syed, the $500 million payment upon approval is indicative of a higher peak sales estimate for acoramidis than Wall Street currently forecasts. The difference, Syed wrote in a note to clients, suggests Blue Owl and CPP investments — the name of the entity managing the Canada Pension Plan — envision a longer-lasting market for acoramidis, with sales rising into the early 2030s.

Meanwhile, the debt refinancing “opens up an alternative set of financing options for the company as the rest of the pipeline matures,” added Syed. BridgeBio is developing drugs for an array of rare diseases, as well as certain cancers. 

If approved, acoramidis would compete with an approved therapy sold by Pfizer as Vyndaquel and Vyndamax. Another potential competitor from Alnylam Pharmaceuticals is in late-stage testing, with results due sometime early this year.

Shares of BridgeBio rose by about 7% in early morning trading Thursday. The company held $560 million in cash and equity investments as of early November.