Full Press Release Details
ROYALTY PHARMA AGREES TO ACQUIRE ROYALTY INTEREST IN TRELEGY
ELLIPTA FROM THERAVANCE AND INNOVIVA FOR $1.31 BILLION AND POTENTIAL MILESTONES OF $300 MILLION
July 13, 2022 Royalty Pharma plc (Nasdaq: RPRX) today announced that it has agreed to acquire a royalty interest in TRELEGY ELLIPTA (Trelegy) from Theravance Biopharma, Inc. (Nasdaq: TBPH) and Innoviva, Inc. (Nasdaq:
INVA) for $1.31 billion in cash up front and up to $300 million in additional payments contingent on the achievement of certain sales milestones. The acquisition is expected to close within ten business days.
Trelegy, marketed by GSK, is a combination of an inhaled corticosteroid (fluticasone furoate) and two bronchodilators (umeclidinium, a long-acting muscarinic
antagonist, and vilanterol, a long-acting 2 adrenoreceptor agonist) in a single delivery device administered once-daily for the maintenance treatment of chronic obstructive pulmonary
disease (COPD) and the maintenance treatment of asthma in patients aged 18 years and older(2). Many moderate to severe COPD and asthma patients still experience symptoms and Trelegy has been shown
to meaningfully improve lung function and quality of life, as well as reduce exacerbations. In 2021, Trelegy generated sales of $1.68 billion, an increase of 57% at constant exchange rates versus the prior year.
We are excited to acquire this royalty from Theravance and Innoviva, said Pablo Legorreta, Royalty Pharma s founder and Chief Executive
Officer. Trelegy is the leading triple combination therapy for COPD and asthma and adds another important, rapidly growing blockbuster therapy to our royalty portfolio. Additionally, providing capital at scale positions Theravance and Innoviva
to pursue important strategic initiatives. The transaction involves multiple parties with different motivations and goals and once again highlights how Royalty Pharma can facilitate complex transactions to create win-win solutions for its
acquiring from Theravance and Innoviva all of the equity interests in Theravance Respiratory Company, LLC, which is entitled to an upward tiering royalty of 6.5% to 10% on annual worldwide Trelegy sales, payable by GSK. Royalty Pharma will pay to
Theravance 85% of the royalties in respect of ex-U.S. net sales after June 30, 2029 and 85% of the royalties in respect of U.S. net sales after December 31, 2030.
Royalty Pharma is also providing Theravance $25 million in upfront funding and a potential $15 million regulatory milestone to support the clinical
development of ampreloxetine, an investigational once-daily norepinephrine reuptake inhibitor for the treatment of symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy. Neurogenic orthostatic hypotension is a rare
disorder in which the autonomic system fails to regulate blood pressure properly, resulting in low blood pressure upon standing. In exchange, Royalty Pharma will receive a low- to mid-single digit royalty on worldwide sales of ampreloxetine.
Trelegy Financial Contribution
The purchase of royalties on Trelegy will further diversify Royalty Pharma s portfolio with a premier, blockbuster therapy. Based on the current analyst
consensus estimate, Royalty Pharma expects this transaction to add at least $200 million to Adjusted Cash Receipts(1) (non-GAAP) in 2025, resulting in
enhanced long-term growth.
Royalty Pharma expects to fund this transaction with existing cash on the balance sheet and to maintain significant financial
capacity to deploy capital in additional value-creating opportunities.
Goodwin Procter, Jones Day and Maiwald acted as legal advisors to Royalty Pharma.
About Royalty Pharma
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-for-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 around 35 commercial products, including AbbVie and Johnson & Johnson s Imbruvica, Johnson & Johnson s Tremfya, Astellas and
Pfizer s Xtandi, Biogen s Tysabri, Gilead s Trodelvy, Novartis Promacta, Vertex s Kalydeco, Orkambi, Symdeko and Trikafta, and 10 development-stage therapies.
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 Royalty Pharma 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. Royalty Pharma 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 Royalty Pharma s own internal estimates and research. While Royalty Pharma 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.
Use of Non-GAAP Measures
Adjusted Cash Receipts, Adjusted EBITDA and Adjusted Cash Flow are non-GAAP measures presented as
supplemental measures to Royalty Pharma s 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 operating performance is a function of liquidity, the non-GAAP measures used by management are presented and defined as supplemental liquidity measures. Royalty
Pharma cautions readers that amounts presented in accordance with the 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 Royalty Pharma uses in the same manner. Royalty Pharma compensates 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 activities.
Royalty Pharma believes that Adjusted Cash
Receipts and Adjusted Cash Flow provide meaningful information about its 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 its operating results. Management strongly believes that Royalty Pharma s significant operating cash flow is one of the attributes that attracts potential investors to its business.
In addition, Royalty Pharma believes 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.
and ELLIPTA are trademarks of the GSK group of companies.
Royalty Pharma Investor Relations and Communications: