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UCLA just got a huge payday.

The university took a $520 million payout as part of a deal announced Friday, transferring royalty rights for a prostate cancer drug originally discovered in one of its science labs.

It’s the biggest deal for a discovery in the history of the University of California system, according to the Los Angeles Times. It’s also a fascinating sign of how quickly innovation is transforming cancer treatments — and how a hit drug today could fall out of favor tomorrow.


UCLA says it will spend the money until 2027 supporting research, scholarships for undergraduates, and stipends for graduate students. That’s a big deal in a public university system that’s seen plenty of protests over tuition hikes in the last few years.

The backstory: The cancer drug, sold as Xtandi, got its start as a chemical compound developed by UCLA faculty members. The University of California system has received tens of millions of dollars in royalty payments from the two pharmaceutical companies that sell the drug, Astellas Pharma and Medivation, since it hit the market in 2012.


It’s among a handful of universities that are bringing in riches from their faculty members’ discoveries.

UCLA could have gotten annual royalties for years — but that would have required tethering itself to the fortunes of the drug. Xtandi generated $1.9 billion in worldwide sales last year, but there’s no telling how long that will last: Other drug companies have plenty of prostate cancer therapies in their pipelines.

So UCLA officials and researchers chose to sell their royalty rights to the drug to the New York biotech firm Royalty Pharma, which buys up intellectual property —primarily biopharmaceutical products — but does not do any R&D of its own.

In doing so, UCLA is forgoing the chance at future revenue.

Tom Unterman, the chairman of an advisory board that makes recommendations to the university about licensing deals, told the LA Times that the risk of lower drug prices and competition from new therapies could make the drug less valuable in years to come.

Cashing out now, he said “was deemed prudent.”