Full Press Release Details
ROYALTY PHARMA REPORTS SECOND QUARTER 2024 RESULTS
NEW YORK, NY, August 8, 2024 - 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
Capital Deployment of approximately $2 billion in 2024, including cash to be paid for Voranigo (vorasidenib)
Positive clinical updates for the development-stage royalty portfolio
Raising financial guidance for
full year 2024 (excludes contribution from future transactions)
Financial & Liquidity Summary
| Three Months Ended June 30, | |||||||||||||||
| (unaudited) | |||||||||||||||
| ($ 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)% |
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 $115 million. The weighted-average number of diluted Class A ordinary shares outstanding for the second quarter of 2024 was 597 million as compared to 606 million for the second
| Three Months Ended June 30, | ||||
| (unaudited) | ||||
| ($ 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.
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 $905 million following the FDA approval of Voranigo (vorasidenib).
The table below details Capital Deployment by category:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
| ($ 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.
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:
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
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 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