Full Press Release Details
ROYALTY PHARMA REPORTS FIRST QUARTER 2024 RESULTS
NEW YORK, NY, May 9, 2024 - Royalty Pharma plc (Nasdaq: RPRX) today reported financial results for the first quarter of 2024 and
confirmed full year 2024 guidance for Portfolio Receipts.
We continued to execute on our strategy in the first quarter of 2024 and are on track to
deliver our full year guidance said Pablo Legorreta, Royalty Pharma s founder and Chief Executive Officer. We achieved double-digit growth in Royalty Receipts driven by the strength of our diversified portfolio. With today s
transaction to acquire royalties on Sanofi s frexalimab, a therapy with multi-blockbuster potential, we ve increased our development-stage portfolio by five-fold to 15 medicines since our IPO. Looking ahead, 2024 is expected to be an
event-rich year for our expanding development-stage pipeline with multiple potential regulatory and clinical events. Furthermore, we continue to be highly active in assessing attractive new royalty opportunities, reflecting the strong demand for
capital to fund the ongoing wave of healthcare innovation. Based on the powerful fundamental tailwinds underpinning our business, we remain highly confident in our ability to deliver attractive, long-term compounding growth.
Strong Royalty Receipts growth; Portfolio Receipts growth impacted by a high base of comparison
Capital Deployment of approximately $670 million,
including cash expected to be paid for frexalimab
Development-stage portfolio growing to 15 therapies with potential significantly >$1 billion in peak royalties
Financial guidance for full year 2024 (excludes contribution from future transactions)
Financial & Liquidity Summary
| Three Months Ended March 31, | ||||||||||||
| (unaudited) | ||||||||||||
| ($ and shares in millions) | 2024 | 2023 | Change | |||||||||
| Portfolio Receipts | 717 | 1,131 | (37 | )% | ||||||||
| Net cash provided by operating activities | 665 | 1,034 | (36 | )% | ||||||||
| Adjusted EBITDA (non-GAAP)* | 656 | 1,044 | (37 | )% | ||||||||
| Portfolio Cash Flow (non-GAAP)* | 584 | 977 | (40 | )% | ||||||||
| Weighted average Class A ordinary shares outstanding - diluted | 597 | 607 | (2 | )% |
Portfolio Receipts Highlights
| Three Months Ended March 31, | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| ($ in millions) | 2024 | 2023 | Change | |||||||||||||
| Products: | Marketers: | Therapeutic Area: | ||||||||||||||
| Cystic fibrosis franchise | Vertex | Rare disease | 218 | 197 | 11 | % | ||||||||||
| Trelegy | GSK | Respiratory | 71 | 48 | 46 | % | ||||||||||
| Tysabri | Biogen | Neuroscience | 69 | 71 | (2 | )% | ||||||||||
| Imbruvica | AbbVie, J&J | Cancer | 50 | 57 | (12 | )% | ||||||||||
| Evrysdi | Roche | Rare disease | 45 | 18 | 156 | % | ||||||||||
| Promacta | Novartis | Hematology | 43 | 41 | 4 | % | ||||||||||
| Xtandi | Pfizer, Astellas | Cancer | 41 | 36 | 14 | % | ||||||||||
| Tremfya | Johnson & Johnson | Immunology | 36 | 32 | 15 | % | ||||||||||
| Cabometyx/Cometriq | Exelixis, Ipsen, Takeda | Cancer | 18 | 16 | 14 | % | ||||||||||
| Trodelvy | Gilead | Cancer | 10 | 7 | 57 | % | ||||||||||
| Erleada | Johnson & Johnson | Cancer | 9 | 6 | 57 | % | ||||||||||
| Orladeyo | BioCryst | Rare disease | 9 | 7 | 28 | % | ||||||||||
| Spinraza | Biogen | Rare disease | 7 | n/a | ||||||||||||
| Nurtec ODT/Zavzpret | Pfizer | Neuroscience | 6 | 4 | 40 | % | ||||||||||
| Other products (5) | 73 | 78 | (6 | )% | ||||||||||||
| Royalty Receipts | 705 | 616 | 14 | % | ||||||||||||
| Milestones and other contractual receipts | 12 | 515 | (98 | )% | ||||||||||||
| Portfolio Receipts | 717 | 1,131 | (37 | )% |
Amounts shown in the table may not add due to rounding.
Portfolio Receipts were $717 million in the first quarter of 2024, a decrease of 37% compared to $1,131 million in the same period of 2023.
The decrease was attributable to a high base of comparison in the first quarter of 2023 in milestones and other contractual receipts, which reflected a $475 million Zavzpret milestone payment and a $29 million Airsupra payment.
Royalty Receipts increased 14% to $705 million, primarily driven by strong growth in Trelegy and the cystic fibrosis franchise, and incremental
royalties acquired on Evrysdi in October 2023.
Liquidity and Capital Resources
Royalty Pharma s liquidity and capital resources are summarized below:
As of March 31, 2024, Royalty Pharma had cash and cash equivalents of $843 million and total debt with principal value of $6.3 billion.
| Three Months Ended March 31, | ||||||||
| (unaudited) | ||||||||
| ($ in millions) | 2024 | 2023 | ||||||
| Portfolio Receipts | 717 | 1,131 | ||||||
| Payments for operating and professional costs | (61 | ) | (87 | ) | ||||
| Adjusted EBITDA (non-GAAP) | 656 | 1,044 | ||||||
| Interest paid, net | (73 | ) | (67 | ) | ||||
| Portfolio Cash Flow (non-GAAP) | 584 | 977 |
Amounts shown in the table may not add due to rounding.
Royalty Pharma has provided a reconciliation of each non-GAAP measure to the most directly comparable GAAP financial
measure, net cash provided by operating activities, in Table 4.
Royalty Pharma announced new transactions of up to $94 million in the first quarter
of 2024, which include upfront payments and potential future milestones. Royalty Pharma is also providing an aggregate amount for Capital Deployment, which reflects cash payments during the period for new and previously announced transactions.
Capital Deployment was $93 million in the first quarter of 2024, consisting primarily of the $49 million upfront payment for ecopipam and $36 million in research and development funding support for
TEV- 749. Additionally, in April 2024, Royalty Pharma made a $50 million milestone payment to Arrowhead related to olpasiran. In May 2024, Royalty Pharma announced a transaction to acquire royalties
and milestones on frexalimab owned by ImmuNext for approximately $525 million in cash including estimated transaction costs.
The table below details
Capital Deployment by category:
| Three Months Ended March 31, | ||||||||
| ($ in millions) | 2024 | 2023 | ||||||
| Acquisitions of financial royalty assets | (86 | ) | (602 | ) | ||||
| Development-stage funding payments - ongoing | (1 | ) | (1 | ) | ||||
| Milestone payments | (12 | ) | ||||||
| Investments in equity method investees | (7 | ) | (4 | ) | ||||
| Contributions from legacy non-controlling interests - R&D | 0 | 0 | ||||||
| Capital Deployment | (93 | ) | (618 | ) |
Amounts may not add due to rounding.
During 2024, Royalty Pharma
announced new transactions of up to $619 million. Announced transactions amount reflects the entire amount of capital committed for new transactions during the year, including potential future milestones.
Recent transactions include:
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.
| 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) have been reported to date, after administration of approximately 80% of the minimal target injection number. | |
| 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 Food & Drug Administration and the European Medicines Agency, respectively, for approval. This follows 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. | |
| Tremfya | In May 2024, Johnson and Johnson announced positive Phase 3 results for Tremfya in patients with moderately to severely active Crohn s disease with inadequate response/intolerance to conventional therapies and/or biologics. Johnson and Johnson submitted applications to the European Medicines Agency seeking to expand the Marketing Authorization Application for Tremfya to include ulcerative colitis and Crohn s disease. | |
| 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. In January 2024, Pfizer announced that the European Commission had approved Talzenna (talazoparib), an oral poly ADP-ribose polymerase inhibitor, in combination with Xtandi, for the treatment of adult patients with metastatic castration-resistant prostate cancer in whom chemotherapy is not clinically indicated. | |
| KarXT | In March 2024, Bristol Myers Squibb announced that it completed its acquisition of Karuna. Bristol Myers acquired Karuna for $330 per share, for a total equity value of $14 billion. The New Drug Application for KarXT for the treatment of schizophrenia in adults was accepted for review by the FDA, with a Prescription Drug User Fee Act date of September 26, 2024. | |
| Trontinemab | In March 2024, Roche held a neurology update event in which it announced that in people with Alzheimer s Disease, trontinemab demonstrated rapid and robust amyloid plaque reduction at relatively low doses compared with standard anti-A monoclonal antibodies. The sustained low Amyloid Related Imaging Abnormalities incidence and overall favorable safety and tolerability profile support further investigation. |
| Pelabresib | In February 2024, Novartis announced that it had entered into an agreement to make a voluntary public takeover offer to acquire MorphoSys for 68 per share, for a total equity value of 2.7 billion. The closing is expected in the first half of 2024. | |
| Trodelvy | In January 2024, Gilead announced that the Phase 3 EVOKE-01 study evaluating Trodelvy compared to docetaxel did not meet its primary endpoint of overall survival in patients with previously treated metastatic non-small cell lung cancer. |
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 May 9, 2024 | Previous | |||
| Portfolio Receipts | $2,600 million to $2,700 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 5% to 9% 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 de minimis amounts being recorded in the second and fourth quarters of 2024. The
projection assumes no additional debt financing in 2024, including no drawdown on the revolving credit facility. In the first quarter of 2024, Royalty Pharma collected interest of $6 million on its cash and cash equivalents, which partially
offset interest paid.
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 first 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 15 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 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 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