Full Press Release Details
ROYALTY PHARMA REPORTS THIRD QUARTER 2024 RESULTS
NEW YORK, NY, November 6, 2024 - Royalty Pharma plc (Nasdaq: RPRX) today reported financial results for
the third quarter of 2024 and raised full year 2024 guidance for Portfolio Receipts.
We delivered strong growth of approximately 15% in Portfolio
Receipts in the third quarter of 2024 and are delighted to raise our full year guidance said Pablo Legorreta, Royalty Pharma s founder and Chief Executive Officer. We also strengthened our portfolio by adding royalties on three
innovative therapies over the last three months, increasing our Capital Deployment to approximately $1.2 billion in the third quarter and $2.6 billion
year-to-date. Notably, two of these transactions were for synthetic royalties for $500 million in total, continuing the strong demand we are seeing for this
attractive, flexible type of capital. Lastly, we are pleased with the progress of our portfolio as Voranigo and Cobenfy were recently approved by the FDA. Based on our robust deal pipeline, our leading position as the partner of choice in the
royalty market and our efficient business model, I am confident that Royalty Pharma is well positioned to deliver attractive, compounding growth over the long term.
Growth of approximately 15% for Portfolio Receipts and Royalty Receipts in the third quarter of 2024
Strengthened portfolio by adding royalties on three innovative therapies over the last three months
Positive regulatory updates across the royalty portfolio
Raising financial guidance for full year 2024 (excludes contribution from future transactions)
Financial & Liquidity Summary
| Three Months Ended September 30, | |||||||||||||||
| (unaudited) | |||||||||||||||
| ($ and shares in millions) | 2024 | 2023 | Change | ||||||||||||
| Portfolio Receipts | 735 | 637 | 15% | ||||||||||||
| Net cash provided by operating activities | 704 | 574 | 23% | ||||||||||||
| Adjusted EBITDA (non-GAAP)* | 679 | 582 | 17% | ||||||||||||
| Portfolio Cash Flow (non-GAAP)* | 617 | 528 | 17% | ||||||||||||
| Weighted average Class A ordinary shares outstanding - diluted | 593 | 601 | (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 September 30, | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| ($ in millions) | 2024 | 2023 | Change | ||||||||||||||||
| Products: | Marketers: | Therapeutic Area: | |||||||||||||||||
| Cystic fibrosis franchise | Vertex | Rare disease | 207 | 196 | 6% | ||||||||||||||
| Trelegy | GSK | Respiratory | 91 | 58 | 55% | ||||||||||||||
| Tysabri | Biogen | Neuroscience | 68 | 71 | (4)% | ||||||||||||||
| Evrysdi | Roche | Rare disease | 48 | 16 | 204% | ||||||||||||||
| Imbruvica | AbbVie, J&J | Cancer | 46 | 51 | (10)% | ||||||||||||||
| Xtandi | Pfizer, Astellas | Cancer | 43 | 39 | 12% | ||||||||||||||
| Promacta | Novartis | Hematology | 42 | 45 | (6)% | ||||||||||||||
| Tremfya | Johnson & Johnson | Immunology | 34 | 27 | 26% | ||||||||||||||
| Cabometyx/Cometriq | Exelixis, Ipsen, Takeda | Cancer | 19 | 17 | 7% | ||||||||||||||
| Spinraza | Biogen | Rare disease | 14 | 15 | (7)% | ||||||||||||||
| Trodelvy | Gilead | Cancer | 11 | 9 | 26% | ||||||||||||||
| Orladeyo | BioCryst | Rare disease | 10 | 8 | 33% | ||||||||||||||
| Erleada | Johnson & Johnson | Cancer | 10 | 8 | 30% | ||||||||||||||
| Nurtec ODT/Zavzpret | Pfizer | Neuroscience | 8 | 5 | 48% | ||||||||||||||
| Other products (5) | 80 | 71 | 12% | ||||||||||||||||
| Royalty Receipts | 732 | 637 | 15% | ||||||||||||||||
| Milestones and other contractual receipts | 3 | n/a | |||||||||||||||||
| Portfolio Receipts | 735 | 637 | 15% |
Amounts shown in the table may not add due to rounding.
Royalty Receipts was $732 million in the third quarter of 2024, an increase of 15% compared to $637 million in the third quarter of 2023,
primarily driven by strong growth from Trelegy, Evrysdi, the cystic fibrosis franchise and Tremfya. Royalty receipts from Evrysdi included the benefit of the additional royalties acquired in October 2023 and June 2024.
Portfolio Receipts was $735 million in the third quarter of 2024, an increase of 15% compared to $637 million in the third 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 September 30, 2024, Royalty Pharma had cash and cash equivalents of $950 million and total debt with principal value of $7.8 billion.
During the third quarter of 2024, Royalty Pharma repurchased approximately three million Class A ordinary shares for $95 million. Through the first
nine months of 2024, Royalty Pharma has repurchased approximately seven million Class A ordinary shares for $180 million. The weighted-average number of diluted Class A ordinary shares outstanding for the third quarter of 2024 was
593 million as compared to 601 million for the third quarter of 2023.
| Three Months Ended September 30, | ||||||||||
| (unaudited) | ||||||||||
| ($ in millions) | 2024 | 2023 | ||||||||
| Portfolio Receipts | 735 | 637 | ||||||||
| Payments for operating and professional costs | (55) | (55) | ||||||||
| Adjusted EBITDA (non-GAAP) | 679 | 582 | ||||||||
| Interest paid, net | (62) | (54) | ||||||||
| Portfolio Cash Flow (non-GAAP) | 617 | 528 |
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.
Capital Deployment was $1.2 billion in the third quarter of 2024, consisting
primarily of the acquisitions of royalties on Voranigo, Yorvipath, deucrictibant and transaction costs related to the second quarter acquisition of royalties on frexalimab. Capital Deployment reflects cash payments during the period for new and
previously announced transactions. In the first nine months of 2024, Capital Deployment was $2.2 billion.
The table below details Capital Deployment
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| ($ in millions) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| Acquisitions of financial royalty assets | (1,195) | (451) | (2,009) | (1,113) | ||||||||||||||||
| Development-stage funding payments - upfront and milestone | (50) | (50) | ||||||||||||||||||
| Development-stage funding payments - ongoing | (1) | (1) | (2) | (2) | ||||||||||||||||
| Purchases of available for sale debt securities | (150) | |||||||||||||||||||
| Milestone payments | (50) | (12) | ||||||||||||||||||
| Investments in equity method investees | (4) | (11) | (11) | |||||||||||||||||
| Acquisitions of other financial assets | (18) | |||||||||||||||||||
| Contributions from legacy non-controlling interests - R&D | 0 | 0 | 1 | 0 | ||||||||||||||||
| Capital Deployment | (1,195) | (506) | (2,239) | (1,187) |
Amounts may not add due to rounding.
During 2024, Royalty Pharma has announced new transactions of up to approximately $2.7 billion, including approximately $294 million in the third
quarter and $350 million in November. The 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.
| trontinemab | In October 2024, Roche presented its latest Phase 1b/2a interim results for trontinemab at the Clinical Trials on Alzheimer s Disease (CTAD) conference, which demonstrated rapid and robust amyloid plaque depletion after 12 to 28 weeks of treatment and an overall favorable safety profile with very limited ARIA-E observed. | |
| pelabresib | In October 2024, Novartis announced that based on its review of 48-week data from the Phase 3 MANIFEST-2 study, longer follow-up time is needed to determine the regulatory path for pelabresib in myelofibrosis. Novartis will continue to follow patients in MANIFEST-2 and evaluate the potential for additional studies to support registration. | |
| aficamten | In October 2024, Cytokinetics announced that it submitted a New Drug Application ( NDA ) for aficamten to the U.S. Food and Drug Administration ( FDA ) in the third quarter of 2024. Additionally, Cytokinetics plans to submit a Marketing Authorization Application for aficamten to the European Medicines Agency in the fourth quarter of 2024. | |
| MK-8189 | In October 2024, Merck updated its public disclosures to remove MK-8189 from its pipeline chart and Royalty Pharma does not anticipate making a further investment in this program. | |
| Skytrofa | In September 2024, Ascendis Pharma announced the submission of a supplemental Biologics License Application (sBLA) to the FDA for TransCon hGH (marketed as Skytrofa) for the treatment of adults with growth hormone deficiency. |
| Cobenfy (KarXT) | In September 2024, Bristol Myers Squibb announced the FDA approval of Cobenfy, a first-in-class muscarinic agonist for the treatment of schizophrenia in adults. Following FDA approval of Cobenfy, Royalty Pharma will make a $25 million milestone payment to PureTech Health in the fourth quarter of 2024. | |
| Cabometyx | In September 2024, Exelixis announced final results from the Phase 3 pivotal CABINET study, which demonstrated a significant improvement in progression-free survival (PFS) for cabozantinib in patients with advanced neuroendocrine tumors. Exelixis submitted a supplemental NDA, which was assigned a Prescription Drug User Fee Act date of April 2025, and Ipsen has submitted an extension of indication Marketing Authorization to the European Medicines Agency. In September 2024, Exelixis announced final results from the Phase 3 pivotal CONTACT-02 study, which achieved one of two primary endpoints, demonstrating a statistically significant benefit in progression-free survival, and a numerical but not statistically significant improvement in overall survival for cabozantinib in combination with atezolizumab in patients with metastatic castration-resistant prostate cancer. Exelixis intends to submit a supplemental NDA with the FDA later this year. | |
| Tremfya | In September 2024, Johnson and Johnson announced the FDA approval of Tremfya for the treatment of adults with moderately to severely active ulcerative colitis. | |
| Spinraza | In September 2024, Biogen announced the pivotal cohort (Part B) of the Phase 2/3 DEVOTE study evaluating the safety and efficacy of a higher dose regimen of Spinraza in infants with spinal muscular atrophy met its primary endpoint, achieving a statistically significant improvement in motor function compared to a prespecified matched sham control group. | |
| 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. | |
| 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. |
2024 Financial Outlook
Royalty Pharma has provided guidance for full year 2024, excluding new transactions and borrowings announced after the date of this release, as follows:
| Provided November 6, 2024 | Previous | |||
| Portfolio Receipts | $2,750 million to $2,800 million | $2,700 million to $2,775 million | ||
| Payments for operating and professional costs | ~8.5% 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 11% to 13% 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 the rest of 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 a de minimis amount 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 third
quarter of 2024, Royalty Pharma collected interest of $17 million on its cash and cash equivalents. In 2025, Royalty Pharma anticipates interest paid to be approximately $260 million, including interest payments on the $1.5 billion
notes issued in June 2024.
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 or changes in foreign exchange rates and excludes the contributions from
transactions announced subsequent to the date of this press release.
Financial Results Call
Royalty Pharma will host a conference call and simultaneous webcast to discuss its third quarter 2024 results today at 8:30 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.
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