PRE-QUARTERLY RESULTS COMMUNICATION NEW YORK, NY (US)

PRE-QUARTERLY RESULTS

(US), July 14, 2020 - Royalty Pharma (NASDAQ: RPRX) intends to announce

its financial results for the second quarter of 2020 on August 12, 2020. An invitation for the results webcast will follow shortly.

To assist in the financial modelling of its Q2 2020 results, the Company has compiled the following items.

focuses on certain non-GAAP financial measures to manage its business. These measures, which are presented as supplemental measures

to GAAP financial performance, include Adjusted Cash Receipts, Adjusted EBITDA and Adjusted Cash Flow.

believes these non-GAAP financial measures provide meaningful information on the Company's ability to generate cash from

operations and on its liquidity. In addition, they can help to identify underlying trends in the business and permit investors

to more fully understand how management assesses the performance of the Company, including planning and forecasting for future

periods (see Appendix 2 Use of Non-GAAP Financial Measures').

intends to provide full-year 2020 guidance at the time of its second quarter 2020 results. Management currently anticipates that

this guidance will focus on Adjusted Cash Receipts. The full-year guidance will exclude the contribution from any transactions

announced subsequent to the date of our earnings release.

historical non-GAAP financial data for the second quarter of 2019, which will form the basis for comparison of the Q2 2020 non-GAAP

financial results. The figures are presented on an as reported basis. To aid in comparability, the figures are also presented

on an unaudited pro forma basis, which adjusts certain cash flow line items as if Royalty Pharma's Reorganization

Transactions (as described in the Company's final prospectus filed with the SEC on June 17, 2020 ( Prospectus'))

and its Initial Public Offering (IPO) had taken place on January 1, 2019. The most significant difference between the pro forma

and reported figures is the new non-controlling interest that resulted from the Reorganization Transactions. A new contractual

non-controlling interest arose in the Reorganization transaction that results in a higher distribution to non-controlling interests

on a pro forma basis as compared to prior historical periods. Less material differences also arise in the Royalty Receipts line

for Other Growth Products' as well as Payments for operating and professional costs, interest paid, net, and in the

payments associated with our former interest rate swap contracts.

Additional historical

non-GAAP financial measures and the respective GAAP to non-GAAP reconciliations for the quarterly and full-year 2019 periods and

for the first quarter of 2020 can be found in Appendix 1 to this release. Refer to our Prospectus for additional information on

our non-GAAP measures.

in the tables below may not add due to rounding.

Q2 2019 and Q1 2020 Non-GAAP Financial Results

by operating activities (GAAP)

Net cash provided by operating activities (GAAP) is a subtotal directly from our Statement of cash flows. In table 6 below, we

have provided reconciliations of our non-GAAP financial measures to their most comparable GAAP financial measures, in each case

Net cash provided by operating activities.

Adjusted Cash Receipts comprise the cash royalties received from the marketers of products to which the Company holds royalty

rights, less distributions to non-controlling interests:

Net Sales Performance of Key Products, Q1 2020 (unaudited)

Public Disclosures of Royalty Rates by Product

Adjusted EBITDA comprises Adjusted Cash Receipts less payments for operating and professional costs.

In the 2019 financial

year, payments for operating and professional costs were $88.5 million as reported and $145.2 million (equivalent to 8.2% of Adjusted

Cash Receipts) on a pro forma basis. In Q1 2020 as reported, payments for operating and professional costs were $25.8 million,

versus $17.7m in Q1 2019. In Q2 2020 and Q3 2020, payments for operating and professional costs will reflect certain costs associated

Adjusted Cash Flow comprises Adjusted EBITDA less ongoing R&D funding payments, interest paid, net and miscellaneous other

items relating to interest rate swap contracts, investments in non-consolidated affiliates and contributions from non-controlling

the IPO, Royalty Pharma received cash proceeds, net of underwriting fees and capitalized IPO costs, of approximately $1.9 billion

immediately prior to the closure of the second quarter.

number of shares outstanding as of June 30, 2020 was 607.1 million.

Historical Non-GAAP Financials

2019 Quarterly Non-GAAP Pro-Forma Financial Results

2019 Non-GAAP Financial Results

Table 6: Reconciliations

of Adjusted Cash Receipts, Adjusted EBITDA and Adjusted Cash Flow - Pro forma 2019 Quarters and Full Year

Proceeds from Available for sale debt securities

Reconciliations of Adjusted Cash Receipts, Adjusted EBITDA and Adjusted Cash Flow - As reported Q2 2019, Full Year 2019, and Q1

Proceeds from Available for sale debt securities

Use of Non-GAAP Measures

Receipts, Adjusted EBITDA and Adjusted Cash Flow are non-GAAP measures presented as supplemental measures to our GAAP financial

performance. These non-GAAP financial measures exclude the impact of certain items and therefore have not been calculated in accordance

with GAAP. In each case, because our operating performance is a function of our liquidity, the non-GAAP measures used by management

are presented and defined as supplemental liquidity measures. We caution readers that amounts presented in accordance with our

definitions of Adjusted Cash Receipts, Adjusted EBITDA, and Adjusted Cash Flow may not be the same as similar measures used by

other companies. Not all companies and analysts calculate the non-GAAP measures we use in the same manner. We compensate for these

limitations by using non-GAAP financial measures as supplements to GAAP financial measures and by presenting the reconciliations

of the non-GAAP financial measures to their most comparable GAAP financial measures, in each case being Net cash provided by operating

Receipts is a measure calculated with inputs directly from the Statement of Cash Flows and includes (1) royalty receipts:

(i) Cash collections from royalty assets (financial assets and intangible assets), (ii) Other royalty cash collections,

(iii) Distributions from non-consolidated affiliates, plus (2) Proceeds from available for sale debt securities

(Tecfidera milestone payments), and less (3) Distributions to non-controlling interest.

is important to our lenders and is defined under the credit agreement as Adjusted Cash Receipts less payments for operating and

professional costs. Operating and professional costs are comprised of Payments for operating costs and professional services

and Payments for rebates from the Statement of Cash Flows.

Flow is defined as Adjusted EBITDA less (1) Development-stage funding payments - ongoing, (2) Interest

paid, net, (3) Swap collateral (posted) or received, net, (4) Swap termination payments, and (5) Investment in non-consolidated

affiliates, and plus (1) Contributions from non-controlling interest- R&D, all directly reconcilable to the Statement

Adjusted Cash Receipts and Adjusted Cash Flow provide meaningful information about our operating performance because the business

is heavily reliant on its ability to generate consistent cash flows and these measures reflect the core cash collections and cash

charges comprising our operating results. Management strongly believes that our significant operating cash flow is one of the

attributes that attracts potential investors to our business.

believe that Adjusted Cash Receipts and Adjusted Cash Flow help identify underlying trends in the business and permit investors

to more fully understand how management assesses the performance of the Company, including planning and forecasting for future

periods. Adjusted Cash Receipts and Adjusted Cash Flow are used by management as key liquidity measures in the evaluation of the

Company's ability to generate cash from operations. Both measures are an indication of the strength of the Company and the

performance of the business. Management uses Adjusted Cash Receipts and Adjusted Cash Flow when considering available cash, including

for decision-making purposes related to funding of acquisitions, voluntary debt repayments, dividends and other discretionary

investments. Further, these non-GAAP financial measures help management, the audit committee, and investors evaluate the Company's

ability to generate liquidity from operating activities.

that Adjusted EBITDA is an important non-GAAP measure in analyzing our liquidity and is a key component of certain material covenants

contained within the Company's Credit Agreement. Noncompliance with the interest coverage ratio and leverage ratio covenants

under the credit agreement could result in our lenders requiring the Company to immediately repay all amounts borrowed. If we

cannot satisfy these financial covenants, we would be prohibited under our 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 is critical to the assessment of our liquidity.

Adjusted Cash Flow to evaluate its ability to generate cash and performance of the business and to evaluate the Company's