Royalty Pharma plc (Nasdaq: RPRX) today reported financial
results for the second quarter of 2024 and raised full year 2024
guidance for Portfolio Receipts.
“We delivered double-digit growth in Portfolio Receipts in the
second quarter of 2024, ahead of our guidance for the quarter, and
are delighted to raise our full year guidance,” said Pablo
Legorreta, Royalty Pharma’s founder and Chief Executive Officer.
“Our performance in the first half of the year extends our track
record of strong growth since our IPO. We also had a very active
quarter for capital deployment, announcing over $2 billion of
investments across six therapies as we expanded partnerships with
Cytokinetics, PTC Therapeutics and Agios. In addition, reflecting
our attractive fundamental outlook, we continued to repurchase our
Class A ordinary shares as part of our balanced capital allocation
strategy. Lastly, as we anticipated, 2024 is proving to be an
event-rich year for our exciting development-stage pipeline with
positive clinical updates on two key therapies in our portfolio.
Looking ahead, we continue to have a robust deal pipeline and
remain highly confident in our ability to deliver attractive,
compounding growth over the long-term.”
Double-digit growth for Portfolio Receipts and Royalty
Receipts in the second quarter of 2024
- Royalty Receipts grew 11% to
$605 million, driven by strong portfolio performance
particularly from the cystic fibrosis franchise, Trelegy, Tremfya
and incremental royalties on Evrysdi.
- Portfolio Receipts increased 12% to $608 million, primarily
driven by the same royalties noted above.
Capital Deployment of approximately $2 billion in 2024,
including cash to be paid for Voranigo (vorasidenib)
- Acquired royalties on Servier’s Voranigo, a first-in-class
targeted therapy in IDH-mutant glioma.
- Purchased incremental royalties on Roche’s Evrysdi for spinal
muscular atrophy.
- Provided Cytokinetics with diversified capital, adding
incremental royalty on aficamten for hypertrophic
cardiomyopathy.
Positive clinical updates for the development-stage
royalty portfolio
- Johnson and Johnson announced positive Phase 3 results for
seltorexant in major depressive disorder with insomnia symptoms and
for Tremfya in Crohn’s disease, including demonstrating superiority
versus Stelara.
Raising financial guidance for full year 2024 (excludes
contribution from future transactions)
- Royalty Pharma now expects 2024 Portfolio Receipts to be
between $2,700 million and $2,775 million (previously between
$2,600 million and $2,700 million).
- 2024 Portfolio Receipts guidance includes expected year/year
growth in Royalty Receipts of 9% to 12% (previous guidance of 5% to
9% year/year growth).
| Financial
& Liquidity Summary |
| |
Three Months Ended June 30, |
| |
(unaudited) |
|
($ and shares in millions) |
2024 |
2023 |
Change |
|
Portfolio Receipts |
608 |
545 |
12 |
% |
|
Net cash provided by operating activities |
658 |
608 |
8 |
% |
|
Adjusted EBITDA (non-GAAP)* |
560 |
498 |
13 |
% |
|
Portfolio Cash Flow (non-GAAP)* |
574 |
516 |
11 |
% |
|
Weighted average Class A ordinary shares outstanding - diluted |
597 |
606 |
(1 |
)% |
*See “Liquidity and Capital Resources” section. Adjusted EBITDA
and Portfolio Cash Flow are non-GAAP liquidity measures calculated
in accordance with the credit agreement.
| Portfolio
Receipts Highlights |
| |
|
Three Months Ended June 30, |
| |
|
(unaudited) |
|
($ in millions) |
|
|
2024 |
2023 |
Change |
|
Products: |
Marketers: |
Therapeutic Area: |
|
|
|
|
Cystic fibrosis franchise |
Vertex |
Rare disease |
195 |
170 |
15 |
% |
|
Tysabri |
Biogen |
Neuroscience |
64 |
70 |
(8 |
)% |
|
Imbruvica |
AbbVie, J&J |
Cancer |
49 |
52 |
(5 |
)% |
|
Trelegy |
GSK |
Respiratory |
48 |
37 |
32 |
% |
|
Xtandi |
Pfizer, Astellas |
Cancer |
39 |
33 |
16 |
% |
|
Promacta |
Novartis |
Hematology |
30 |
32 |
(4 |
)% |
|
Tremfya |
Johnson & Johnson |
Immunology |
30 |
22 |
34 |
% |
|
Evrysdi |
Roche |
Rare disease |
25 |
13 |
91 |
% |
|
Cabometyx/Cometriq |
Exelixis, Ipsen, Takeda |
Cancer |
17 |
15 |
9 |
% |
|
Trodelvy |
Gilead |
Cancer |
10 |
8 |
37 |
% |
|
Spinraza |
Biogen |
Rare disease |
10 |
13 |
(23 |
)% |
|
Erleada |
Johnson & Johnson |
Cancer |
9 |
5 |
72 |
% |
|
Orladeyo |
BioCryst |
Rare disease |
9 |
7 |
30 |
% |
|
Nurtec ODT/Zavzpret |
Pfizer |
Neuroscience |
4 |
4 |
10 |
% |
| Other
products(5) |
66 |
65 |
2 |
% |
| Royalty
Receipts |
605 |
545 |
11 |
% |
|
Milestones and other contractual receipts |
3 |
— |
n/a |
|
Portfolio Receipts |
608 |
545 |
12 |
% |
Amounts shown in the table may not add due to rounding.
Royalty Receipts was $605 million in the
second quarter of 2024, an increase of 11% compared to
$545 million in the second quarter of 2023, primarily driven
by strong growth from the cystic fibrosis franchise, Trelegy,
Tremfya and incremental royalties acquired on Evrysdi in October
2023.
Portfolio Receipts was $608 million in the
second quarter of 2024, an increase of 12% compared to
$545 million in the second quarter of 2023, primarily driven
by the same Royalty Receipts increases noted above.
Liquidity and Capital Resources
Royalty Pharma’s liquidity and capital resources are summarized
below:
As of June 30, 2024, Royalty Pharma had cash and cash
equivalents of $1.8 billion and total debt with principal value of
$7.8 billion.
In June 2024, Royalty Pharma issued $1.5 billion of senior
unsecured notes (“2024 Notes”) with a weighted average coupon rate
of 5.5%. Interest on the 2024 Notes is payable semi-annually in
arrears on March 2 and September 2 of each year. The first interest
payment date will be March 2, 2025. As of June 30, 2024,
Royalty Pharma had total debt with a weighted-average duration of
approximately 13 years and an attractive weighted-average cost of
debt of 3.1%.
During the second quarter of 2024, Royalty Pharma repurchased
approximately three million Class A ordinary shares for
$84 million. Year-to-date (through August 7, 2024), Royalty
Pharma has repurchased approximately four million Class A ordinary
shares for $115 million. The weighted-average number of diluted
Class A ordinary shares outstanding for the second quarter of 2024
was 597 million as compared to 606 million for the second
quarter of 2023.
| Liquidity
Summary |
| |
Three Months Ended June 30, |
| |
(unaudited) |
|
($ in millions) |
2024 |
|
2023 |
|
|
Portfolio Receipts |
608 |
|
545 |
|
|
Payments for operating and professional costs |
(48 |
) |
(47 |
) |
|
Adjusted EBITDA (non-GAAP) |
560 |
|
498 |
|
|
Interest received, net |
14 |
|
18 |
|
|
Portfolio Cash Flow (non-GAAP) |
574 |
|
516 |
|
Amounts may not add due to rounding.
- Adjusted EBITDA
(non-GAAP) was $560 million in the second quarter of 2024.
Adjusted EBITDA is calculated as Portfolio Receipts minus payments
for operating and professional costs.
- Portfolio Cash Flow
(non-GAAP) was $574 million in the second quarter of 2024.
Portfolio Cash Flow is calculated as Adjusted EBITDA minus interest
paid or received, net. This measure reflects the cash generated by
Royalty Pharma’s business that can be redeployed into
value-enhancing royalty acquisitions, used to repay debt, returned
to shareholders through dividends or share purchases, or utilized
for other discretionary investments.
Refer to Table 4 for Royalty Pharma’s reconciliation of each
non-GAAP measure to the most directly comparable GAAP financial
measure, net cash provided by operating activities.
Royalty Pharma announced new transactions of up to approximately
$2.0 billion in the second quarter of 2024, which includes upfront
payments and potential future milestones. Capital Deployment
reflects cash payments during the period for new and previously
announced transactions. Capital Deployment was $951 million in the
second quarter of 2024, consisting primarily of the acquisition of
royalties on frexalimab, the acquisition of additional royalties on
Evrysdi, as well as the expanded strategic funding collaboration
with Cytokinetics. Royalty Pharma will also pay Agios $905 million
following the FDA approval of Voranigo (vorasidenib).
The table below details Capital Deployment by category:
| Capital
Deployment |
| |
Three Months Ended June 30, |
Six Months Ended June 30, |
|
($ in millions) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
Acquisitions of financial royalty assets |
(729 |
) |
(60 |
) |
(815 |
) |
(662 |
) |
|
Development-stage funding payments - ongoing |
(1 |
) |
(1 |
) |
(1 |
) |
(1 |
) |
|
Purchases of available for sale debt securities |
(150 |
) |
— |
|
(150 |
) |
— |
|
|
Milestone payments |
(50 |
) |
— |
|
(50 |
) |
(12 |
) |
|
Investments in equity method investees |
(4 |
) |
(3 |
) |
(11 |
) |
(7 |
) |
|
Acquisitions of other financial assets |
(18 |
) |
— |
|
(18 |
) |
— |
|
|
Contributions from legacy non-controlling interests - R&D |
0 |
|
0 |
|
0 |
|
0 |
|
|
Capital Deployment |
(951 |
) |
(64 |
) |
(1,044 |
) |
(682 |
) |
Amounts may not add due to rounding.
Recent Transactions
During 2024, Royalty Pharma announced new transactions of up to
approximately $2.0 billion. Announced transactions amount reflects
the entire amount of capital committed for new transactions during
the year, including potential future milestones.
Recent transactions include:
- In June 2024, PTC Therapeutics
exercised its option to sell approximately half of its royalty
retained on Roche’s Evrysdi, an approved product for the treatment
of spinal muscular atrophy, for approximately $242 million. This
option arose from the Evrysdi royalty transaction with PTC that was
announced in October 2023, in which Royalty Pharma acquired
additional royalties on Evrysdi for $1 billion. PTC has an option
to sell the remainder of its retained royalty on Evrysdi for up to
approximately $250 million, less royalties received, until December
31, 2025.
- In May 2024, Royalty Pharma
announced a transaction to acquire a royalty interest in Voranigo
(vorasidenib) from Agios Pharmaceuticals for an upfront payment of
$905 million. The transaction was contingent upon FDA approval
which was subsequently granted on August 6, 2024.
- In May 2024, Royalty Pharma expanded
its strategic funding collaboration with Cytokinetics, Incorporated
(“Cytokinetics”) to provide up to $575 million, including $250
million in upfront payments, in exchange for royalties and fixed
payments.
- In May 2024, Royalty Pharma acquired
royalties and milestones on frexalimab, which was owned by
ImmuNext, Inc., for approximately $525 million, including
estimated transaction costs. Royalty Pharma is entitled to receive
royalties on annual worldwide net sales of frexalimab and
milestones related to the achievement of certain commercial and
regulatory events. Frexalimab, which is in development by Sanofi,
is a second generation anti-CD40 ligand monoclonal antibody.
Frexalimab is being evaluated in Phase 3 clinical studies for the
treatment of multiple sclerosis and is in Phase 2 clinical studies
for systemic lupus erythematosus and Type 1 Diabetes.
The information in this section should be read together with
Royalty Pharma’s reports and documents filed with the SEC
at www.sec.gov and the reader is also encouraged to review all
other press releases and information available in the Investors
section of Royalty Pharma’s website at www.royaltypharma.com.
Key Developments Relating to the Portfolio
The key developments related to Royalty Pharma’s royalty
interests are discussed below based on disclosures from the
marketers of the products.
|
Voranigo (vorasidenib) |
In August 2024, Servier announced the FDA approval of Voranigo, a
first-in-class targeted therapy for patients with isocitrate
dehydrogenase 1 and 2 (IDH1/2) mutant diffuse glioma. Following
this approval, Royalty Pharma will pay $905 million upfront in
exchange for a 15% royalty on annual U.S. net sales of Voranigo up
to $1 billion and a 12% royalty on annual U.S. net sales greater
than $1 billion. |
|
BCX10013 |
In August 2024, BioCryst announced that it plans to discontinue
development of its oral Factor D inhibitor, BCX10013, as the level
of clinical activity observed was less than other therapies on the
market. |
|
Trodelvy |
In May 2024, Gilead announced that the confirmatory Phase 3
TROPiCS-04 study evaluating Trodelvy versus single-agent
chemotherapy in patients with locally advanced or metastatic
urothelial cancer did not meet the primary endpoint of overall
survival. Gilead is continuing to analyze the data and will discuss
the results and next steps with the FDA. In the United States,
Trodelvy has an accelerated approval in this indication and
continued approval may be contingent upon verification and
description of clinical benefit in confirmatory trials, including
the TROPiCS-04 study. |
|
Tremfya |
In May 2024, Johnson and Johnson announced the first Phase 3
results for Tremfya in adult patients with moderate to severely
active Crohn’s disease, which demonstrated superiority versus
placebo and Stelara. Data showed that both maintenance doses of
Tremfya met the composite co-primary endpoints compared to placebo
in each individual study. In results versus Stelara, both doses of
Tremfya demonstrated statistically significant and clinically
meaningful differences on all prespecified pooled endoscopic
endpoints.In May 2024, Johnson and Johnson announced positive Phase
3 results for Tremfya in patients with moderate to severely active
Crohn’s disease with inadequate response/intolerance to
conventional therapies and/or biologics. Johnson and Johnson
submitted a supplemental Biologics License Application to the FDA
seeking approval of Tremfya for Crohn’s disease and an application
to the European Medicines Agency for ulcerative colitis and Crohn’s
disease. |
|
Cystic fibrosis franchise |
In May 2024, Vertex announced that it submitted a New Drug
Application and Marketing Authorization Application for the new
triple combination therapy to the FDA and the European Medicines
Agency, respectively, for approval. This followed positive Phase 3
results for the new triple combination therapy in February 2024.In
April 2024, Vertex announced that the European Commission had
granted approval for the label expansion of Kalydeco for the
treatment of infants down to one month of age with cystic fibrosis
(CF) who have certain mutations in the CF transmembrane conductance
regulator gene. |
|
Xtandi |
In April 2024, Astellas Pharma announced the European Commission
approved a label extension for Xtandi as monotherapy or in
combination with androgen deprivation therapy for the treatment of
adult men with high-risk biochemical recurrent non-metastatic
hormone-sensitive prostate cancer who are unsuitable for
salvage-radiotherapy. |
|
Seltorexant |
In May 2024, Johnson and Johnson announced positive results from
the pivotal Phase 3 MDD3001 clinical trial evaluating the efficacy
and safety of seltorexant as an adjunctive treatment in patients
with major depressive disorder (MDD) with insomnia symptoms. The
study achieved all primary and secondary endpoints, with
seltorexant demonstrating both a statistically significant and
clinically meaningful improvement in depressive symptoms, and
improved sleep disturbance outcomes, in patients who had a prior
inadequate response to SSRI/SNRI antidepressants alone. |
|
Pelabresib |
In May 2024, Novartis announced that it met all tender offer
conditions to acquire MorphoSys for €68 per share. The acquisition
of MorphoSys by Novartis has been completed. |
|
TEV-’749 |
In May 2024, Teva Pharmaceuticals announced positive efficacy
results from its Phase 3 trial evaluating TEV-’749, a once monthly
subcutaneous long-acting injection of olanzapine, in adult patients
with schizophrenia. Results demonstrated that TEV-’749 met its
primary endpoint as measured by a change in the Positive and
Negative Syndrome Scale (PANSS) total score from baseline after
eight weeks compared to placebo. Additionally, no cases of
Post-injection Delirium/Sedation Syndrome (PDSS) had been reported
by that date, after administration of approximately 80% of the
minimum target injection number. |
2024 Financial Outlook
Royalty Pharma has provided guidance for full-year 2024,
excluding transactions and borrowings announced
after the date of this release, as follows:
|
|
Provided August 8, 2024 |
Previous |
|
Portfolio Receipts |
$2,700 million to $2,775 million |
$2,600 million to $2,700 million |
|
Payments for operating and professional costs |
8% to 9% of Portfolio Receipts |
8% to 9% of Portfolio Receipts |
|
Interest paid |
$160 million |
$160 million |
The above Portfolio Receipts guidance includes expected Royalty
Receipts growth of 9% to 12% in 2024.
Royalty Pharma’s full-year 2024 guidance reflects a negligible
estimated foreign exchange impact to Portfolio Receipts, assuming
current foreign exchange rates prevail for 2024.
Total interest paid is based on the semi-annual interest payment
schedule of Royalty Pharma’s existing notes and is anticipated to
be approximately $160 million in 2024. Interest paid is anticipated
to be approximately $79 million in the third quarter of 2024 with a
de minimis amount being recorded in the fourth quarter of 2024. The
projection assumes no additional debt financing in 2024, including
no drawdown on the revolving credit facility. In the second quarter
of 2024, Royalty Pharma collected interest of $14 million on
its cash and cash equivalents, which more than offset interest
paid. In 2025, Royalty Pharma anticipates interest paid to be
approximately $260 million, reflecting the aforementioned issuance
of $1.5 billion of 2024 Notes.
Royalty Pharma today provides this guidance based on its most
up-to-date view of its prospects. This guidance assumes no major
unforeseen adverse events and excludes the contributions from
transactions announced subsequent to the date of this press
release. Furthermore, Royalty Pharma may amend its guidance in the
event it engages in new royalty transactions which have a material
near-term financial impact on the company.
Financial Results Call
Royalty Pharma will host a conference call and simultaneous
webcast to discuss its second quarter 2024 results today at 8:00
a.m., Eastern Time. Please visit the “Investors” page of the
company’s website at https://www.royaltypharma.com/investors/events
to obtain conference call information and to view the live webcast.
A replay of the conference call and webcast will be archived on the
company’s website for at least 30 days.
About Royalty Pharma plc
Founded in 1996, Royalty Pharma is the largest buyer of
biopharmaceutical royalties and a leading funder of innovation
across the biopharmaceutical industry, collaborating with
innovators from academic institutions, research hospitals and
non-profits through small and mid-cap biotechnology companies to
leading global pharmaceutical companies. Royalty Pharma has
assembled a portfolio of royalties which entitles it to payments
based directly on the top-line sales of many of the industry’s
leading therapies. Royalty Pharma funds innovation in the
biopharmaceutical industry both directly and indirectly - directly
when it partners with companies to co-fund late-stage clinical
trials and new product launches in exchange for future royalties,
and indirectly when it acquires existing royalties from the
original innovators. Royalty Pharma’s current portfolio includes
royalties on more than 35 commercial products, including Vertex’s
Trikafta, GSK’s Trelegy, Roche’s Evrysdi, Johnson & Johnson’s
Tremfya, Biogen’s Tysabri and Spinraza, AbbVie and Johnson &
Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Novartis’
Promacta, Pfizer’s Nurtec ODT and Gilead’s Trodelvy, and 16
development-stage product candidates.
Forward-Looking Statements
The information set forth herein does not purport to be complete
or to contain all of the information you may desire. Statements
contained herein are made as of the date of this document unless
stated otherwise, and neither the delivery of this document at any
time, nor any sale of securities, shall under any circumstances
create an implication that the information contained herein is
correct as of any time after such date or that information will be
updated or revised to reflect information that subsequently becomes
available or changes occurring after the date hereof.
This document contains statements that constitute
“forward-looking statements” as that term is defined in the United
States Private Securities Litigation Reform Act of 1995, including
statements that express the company’s opinions, expectations,
beliefs, plans, objectives, assumptions or projections regarding
future events or future results, in contrast with statements that
reflect historical facts. Examples include discussion of Royalty
Pharma’s strategies, financing plans, growth opportunities and
market growth. In some cases, you can identify such forward-looking
statements by terminology such as “anticipate,” “intend,”
“believe,” “estimate,” “plan,” “seek,” “project,” “expect,” “may,”
“will,” “would,” “could” or “should,” the negative of these terms
or similar expressions. Forward-looking statements are based on
management’s current beliefs and assumptions and on information
currently available to the company. However, these forward-looking
statements are not a guarantee of Royalty Pharma’s performance, and
you should not place undue reliance on such statements.
Forward-looking statements are subject to many risks, uncertainties
and other variable circumstances, and other factors. Such risks and
uncertainties may cause the statements to be inaccurate and readers
are cautioned not to place undue reliance on such statements. Many
of these risks are outside of the company’s control and could cause
its actual results to differ materially from those it thought would
occur. The forward-looking statements included in this document are
made only as of the date hereof. The company does not undertake,
and specifically declines, any obligation to update any such
statements or to publicly announce the results of any revisions to
any such statements to reflect future events or developments,
except as required by law.
Certain information contained in this document relates to or is
based on studies, publications, surveys and other data obtained
from third-party sources and the company’s own internal estimates
and research. While the company believes these third-party sources
to be reliable as of the date of this document, it has not
independently verified, and makes no representation as to the
adequacy, fairness, accuracy or completeness of, any information
obtained from third-party sources. In addition, all of the market
data included in this document involves a number of assumptions and
limitations, and there can be no guarantee as to the accuracy or
reliability of such assumptions. Finally, while the company
believes its own internal research is reliable, such research has
not been verified by any independent source.
For further information, please reference Royalty Pharma’s
reports and documents filed with the U.S. Securities and Exchange
Commission ("SEC") by visiting EDGAR on the SEC's website at
www.sec.gov.
Portfolio Receipts
Portfolio Receipts is a key performance metric that represents
our ability to generate cash from our portfolio investments, the
primary source of capital that we can deploy to make new portfolio
investments. Portfolio Receipts is defined as the sum of Royalty
Receipts and Milestones and other contractual receipts. Royalty
Receipts includes variable payments based on sales of products, net
of contractual payments to the legacy non-controlling interests,
that are attributed to Royalty Pharma.
Milestones and other contractual receipts include sales-based or
regulatory milestone payments and other fixed contractual receipts,
net of contractual payments to legacy non-controlling interests,
that are attributed to Royalty Pharma. Portfolio Receipts does not
include proceeds from equity securities or proceeds from purchases
and sales of marketable securities, neither of which are central to
our fundamental business strategy.
Portfolio Receipts is calculated as the sum of the following
line items from our GAAP statements of cash flows: Cash collections
from financial royalty assets, Cash collections from intangible
royalty assets, Other royalty cash collections, Proceeds from
available for sale debt securities and Distributions from equity
method investees less Distributions to legacy non-controlling
interests - Portfolio Receipts, which represent contractual
distributions of Royalty Receipts, milestones and other contractual
receipts to RPSFT and the Legacy Investors Partnerships.
Use of Non-GAAP Measures
Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity
measures that exclude the impact of certain items and therefore
have not been calculated in accordance with GAAP. Management
believes that Adjusted EBITDA and Portfolio Cash Flow are important
non-GAAP measures used to analyze liquidity because they are key
components of certain material covenants contained within Royalty
Pharma’s credit agreement. Royalty Pharma cautions readers that
amounts presented in accordance with the definitions of Adjusted
EBITDA and Portfolio Cash Flow may not be the same as similar
measures used by other companies or analysts. These non-GAAP
liquidity measures have limitations as analytical tools, and you
should not consider them in isolation or as a substitute for the
analysis of Royalty Pharma’s results as reported under GAAP.
The definitions of Adjusted EBITDA and Portfolio Cash Flow used
by Royalty Pharma are the same as the definitions in the credit
agreement. Noncompliance with the interest coverage ratio, leverage
ratio and Portfolio Cash Flow ratio covenants under the credit
agreement could result in lenders requiring the company to
immediately repay all amounts borrowed. If Royalty Pharma cannot
satisfy these covenants, it would be prohibited under the credit
agreement from engaging in certain activities, such as incurring
additional indebtedness, paying dividends, making certain payments,
and acquiring and disposing of assets. Consequently, Adjusted
EBITDA and Portfolio Cash Flow are critical to the assessment of
Royalty Pharma’s liquidity.
Adjusted EBITDA and Portfolio Cash Flow are used by management
as key liquidity measures in the evaluation of the company’s
ability to generate cash from operations. Management uses Adjusted
EBITDA and Portfolio Cash Flow when considering available cash,
including for decision-making purposes related to funding of
acquisitions, debt repayments, dividends and other discretionary
investments. Further, these non-GAAP liquidity measures help
management, the audit committee and investors evaluate the
company’s ability to generate liquidity from operating
activities.
The company has provided reconciliations of these non-GAAP
liquidity measures to the most directly comparable GAAP financial
measure, being net cash provided by operating activities in Table
4.
Royalty Pharma Investor Relations and
Communications
+1 (212) 883-6772ir@royaltypharma.com
|
Royalty Pharma plcCondensed
Consolidated Statements of Operations
(unaudited)Table 1 |
| |
Three Months Ended June 30, |
|
($ in millions) |
2024 |
|
2023 |
|
|
Income and other revenues |
|
|
|
Income from financial royalty assets |
513 |
|
501 |
|
|
Other royalty income and revenues |
24 |
|
37 |
|
|
Total income and other revenues |
537 |
|
538 |
|
|
Operating expenses |
|
|
|
Provision for changes in expected cash flows from financial royalty
assets |
212 |
|
241 |
|
|
Research and development funding expense |
1 |
|
1 |
|
|
General and administrative expenses |
55 |
|
48 |
|
|
Total operating expenses, net |
268 |
|
289 |
|
|
Operating income |
270 |
|
249 |
|
|
Other (income)/expense |
|
|
|
Equity in (earnings)/losses of equity method investees |
(2 |
) |
1 |
|
|
Interest expense |
49 |
|
47 |
|
|
Other expenses/(income), net |
28 |
|
(150 |
) |
|
Total other expenses/(income), net |
75 |
|
(102 |
) |
|
Consolidated net income before tax |
194 |
|
351 |
|
|
Income tax expense |
— |
|
— |
|
|
Consolidated net income |
194 |
|
351 |
|
|
Net income attributable to non-controlling interests |
92 |
|
124 |
|
|
Net income attributable to Royalty Pharma plc |
102 |
|
228 |
|
Amounts may not add due to rounding.
|
Royalty Pharma plcSelected Balance Sheet Data
(unaudited)Table 2 |
|
($ in millions) |
As of June 30, 2024 |
As of December 31, 2023 |
|
Cash and cash equivalents |
1,765 |
477 |
|
Total current and non-current financial royalty assets, net |
14,640 |
14,827 |
|
Total assets |
17,657 |
16,382 |
|
Long-term debt |
7,602 |
6,135 |
|
Total liabilities |
7,905 |
6,298 |
|
Total shareholders’ equity |
9,752 |
10,084 |
|
Royalty Pharma plcCondensed Consolidated
Statements of Cash Flows (unaudited)Table
3 |
| |
Three Months Ended June 30, |
Six Months Ended June 30, |
|
($ in millions) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
Cash collections from financial royalty assets |
669 |
|
595 |
|
1,414 |
|
1,746 |
|
|
Cash collections from intangible royalty assets |
0 |
|
0 |
|
14 |
|
1 |
|
|
Other royalty cash collections |
23 |
|
40 |
|
50 |
|
60 |
|
|
Distributions from equity method investees |
— |
|
2 |
|
13 |
|
19 |
|
|
Interest received |
14 |
|
19 |
|
21 |
|
35 |
|
|
Development-stage funding payments - ongoing |
(1 |
) |
(1 |
) |
(1 |
) |
(1 |
) |
|
Payments for operating and professional costs |
(48 |
) |
(47 |
) |
(109 |
) |
(134 |
) |
|
Interest paid |
(1 |
) |
(1 |
) |
(80 |
) |
(83 |
) |
|
Net cash provided by operating activities |
658 |
|
608 |
|
1,323 |
|
1,642 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
Distributions from equity method investees |
4 |
|
— |
|
9 |
|
35 |
|
|
Investments in equity method investees |
(4 |
) |
(3 |
) |
(11 |
) |
(7 |
) |
|
Purchases of equity securities |
(50 |
) |
— |
|
(50 |
) |
— |
|
|
Proceeds from equity securities |
99 |
|
— |
|
99 |
|
— |
|
|
Purchases of available for sale debt securities |
(150 |
) |
— |
|
(150 |
) |
— |
|
|
Proceeds from available for sale debt securities |
3 |
|
— |
|
4 |
|
— |
|
|
Proceeds from sales and maturities of marketable securities |
— |
|
— |
|
— |
|
24 |
|
|
Acquisitions of financial royalty assets |
(729 |
) |
(60 |
) |
(815 |
) |
(662 |
) |
|
Acquisitions of other financial assets |
(18 |
) |
— |
|
(18 |
) |
— |
|
|
Milestone payments |
(50 |
) |
— |
|
(50 |
) |
(12 |
) |
|
Other |
2 |
|
— |
|
2 |
|
— |
|
|
Net cash used in investing activities |
(893 |
) |
(63 |
) |
(980 |
) |
(622 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
Distributions to legacy non-controlling interests - Portfolio
Receipts |
(92 |
) |
(92 |
) |
(180 |
) |
(184 |
) |
|
Distributions to continuing non-controlling interests |
(31 |
) |
(31 |
) |
(63 |
) |
(64 |
) |
|
Dividends to shareholders |
(95 |
) |
(91 |
) |
(189 |
) |
(179 |
) |
|
Repurchases of Class A ordinary shares |
(80 |
) |
(134 |
) |
(80 |
) |
(134 |
) |
|
Contributions from legacy non-controlling interests - R&D |
0 |
|
0 |
|
0 |
|
0 |
|
|
Contributions from non-controlling interests - other |
1 |
|
1 |
|
2 |
|
4 |
|
|
Proceeds from issuance of long-term debt, net of discount |
1,471 |
|
— |
|
1,471 |
|
— |
|
|
Debt issuance costs and other |
(9 |
) |
— |
|
(9 |
) |
— |
|
|
Other |
(9 |
) |
— |
|
(9 |
) |
— |
|
|
Net cash provided by/(used in) financing
activities |
1,157 |
|
(347 |
) |
945 |
|
(557 |
) |
|
Net change in cash and cash equivalents |
922 |
|
197 |
|
1,288 |
|
462 |
|
|
Cash and cash equivalents, beginning of period |
843 |
|
1,976 |
|
477 |
|
1,711 |
|
|
Cash and cash equivalents, end of period |
1,765 |
|
2,173 |
|
1,765 |
|
2,173 |
|
Amounts may not add due to rounding.
|
Royalty Pharma plcGAAP to Non-GAAP
Reconciliation (unaudited)Table 4 |
| |
Three Months Ended June 30, |
|
($ in millions) |
2024 |
|
2023 |
|
|
Net cash provided by operating activities
(GAAP) |
658 |
|
608 |
|
|
Adjustments: |
|
|
|
Proceeds from available for sale debt securities(6) |
3 |
|
— |
|
|
Distributions from equity method investees(6) |
4 |
|
— |
|
|
Interest received, net(6) |
(14 |
) |
(18 |
) |
|
Development-stage funding payments - ongoing |
1 |
|
1 |
|
|
Distributions to legacy non-controlling interests - Portfolio
Receipts(6) |
(92 |
) |
(92 |
) |
|
Adjusted EBITDA (non-GAAP) |
560 |
|
498 |
|
|
Interest received, net(6) |
14 |
|
18 |
|
|
Portfolio Cash Flow (non-GAAP) |
574 |
|
516 |
|
Amounts may not add due to rounding.
Royalty Pharma
plcDescription of Approved Indications for Select
Portfolio TherapiesTable 5
|
Cystic fibrosis franchise |
Cystic fibrosis |
|
Tysabri |
Relapsing forms of multiple sclerosis |
|
Imbruvica |
Hematological malignancies and chronic graft versus host
disease |
|
Trelegy |
Chronic obstructive pulmonary disease and asthma |
|
Xtandi |
Prostate cancer |
|
Promacta |
Chronic immune thrombocytopenia purpura and aplastic anemia |
|
Tremfya |
Plaque psoriasis and active psoriatic arthritis |
|
Evrysdi |
Spinal muscular atrophy |
|
Cabometyx/Cometriq |
Kidney, liver and thyroid cancer |
|
Trodelvy |
Breast and bladder cancer |
|
Spinraza |
Spinal muscular atrophy |
|
Erleada |
Prostate cancer |
|
Orladeyo |
Hereditary angioedema |
|
Nurtec ODT/Zavzpret |
Acute and preventative treatment of migraine |
Notes
(1) Portfolio Receipts is a key performance
metric that represents our ability to generate cash from our
portfolio investments, the primary source of capital that we can
deploy to make new portfolio investments. Portfolio Receipts is
defined as the sum of Royalty Receipts and milestones and other
contractual receipts. Royalty Receipts includes variable payments
based on sales of products, net of contractual payments to the
legacy non-controlling interests, that are attributed to Royalty
Pharma (“Royalty Receipts”). Milestones and other contractual
receipts include sales-based or regulatory milestone payments and
other fixed contractual receipts, net of contractual payments to
the legacy non-controlling interests, that are attributed to
Royalty Pharma. Portfolio Receipts does not include proceeds from
equity securities or marketable securities, both of which are not
central to our fundamental business strategy.
Portfolio Receipts is calculated as the sum of the following
line items from our GAAP statements of cash flows: Cash collections
from financial royalty assets, Cash collections from intangible
royalty assets, Other royalty cash collections, Proceeds from
available for sale debt securities and Distributions from equity
method investees less Distributions to legacy non-controlling
interests - Portfolio Receipts, which represent contractual
distributions of Royalty Receipts, milestones and other contractual
receipts to RPSFT and the Legacy Investors Partnerships.
(2) Adjusted EBITDA is defined under the credit
agreement as Portfolio Receipts minus payments for operating and
professional costs. Operating and professional costs reflect
Payments for operating and professional costs from the GAAP
statements of cash flows. See GAAP to Non-GAAP reconciliation in
Table 4.
(3) Portfolio Cash Flow is defined under the
credit agreement as Adjusted EBITDA minus interest paid or
received, net. See GAAP to Non-GAAP reconciliation in Table 4.
Portfolio Cash Flow reflects the cash generated by Royalty Pharma’s
business that can be redeployed into value-enhancing royalty
acquisitions, used to repay debt, returned to shareholders through
dividends or share purchases or utilized for other discretionary
investments.
(4) Capital Deployment is calculated as the
summation of the following line items from our GAAP statements of
cash flows: Investments in equity method investees, Purchases of
available for sale debt securities, Acquisitions of financial
royalty assets, Acquisitions of other financial assets, Milestone
payments, Development-stage funding payments - ongoing,
Development-stage funding payments - upfront and milestone less
Contributions from legacy non-controlling interests - R&D.
(5) Other products primarily include Royalty
Receipts on the following products: Cimzia, Crysvita, Emgality,
Farxiga/Onglyza, IDHIFA, Lexiscan, Nesina, Prevymis, Soliqua and
distributions from the Legacy SLP Interest, which is presented as
Distributions from equity method investees on the GAAP statements
of cash flows.
(6) The table below shows the line item for
each adjustment and the direct location for such line item on the
GAAP statements of cash flows.
|
Reconciling Adjustment |
Statements of Cash Flows Classification |
|
Interest received, net |
Operating activities (Interest paid less Interest received) |
|
Distributions from equity method investees |
Investing activities |
|
Proceeds from available for sale debt securities |
Investing activities |
|
Distributions to legacy non-controlling interests - Portfolio
Receipts |
Financing activities |
Grafico Azioni Royalty Pharma (NASDAQ:RPRX)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Royalty Pharma (NASDAQ:RPRX)
Storico
Da Gen 2024 a Gen 2025
