Royalty Pharma (RPRX) FY Conference June 10, 2025 02:00 PM ET Speaker0 Alright. We're just about at time. Let's get started with our next session. It's a pleasure to have the management team of Royalty Pharma here with us, Chris Hite, vice vice chairman and Ashwin Pai. Thank you for being here. Thank you. Welcome. So I guess, let's start high level. Can you maybe just start by framing Royalty Pharma for those of us who might not be that familiar with the story, provide a quick story of the sort of arc of th ...

NEW YORK, June 04, 2025 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) today announced that it will participate in a fireside chat at the Goldman Sachs 46th Annual Global Healthcare Conference on Tuesday, June 10, 2025 at 2:00 p.m. ET. The webcast will be accessible from Royalty Pharma’s “Events” page at https://www.royaltypharma.com/investors/events/. The webcast will also be archived for a minimum of thirty days. About Royalty Pharma Founded in 1996, Royalty Pharma is the largest buyer of biopharm ...

Summary of Royalty Pharma Conference Call Company Overview - Royalty Pharma is one of the largest funders of life sciences globally and the largest in royalty-based funding, with over 25 years of experience [4][6] - The company went public in 2020 and currently generates over $3 billion in revenue [6][8] - Royalty Pharma owns royalties on approximately 40-45 products, with a business model focused on capital deployment and shareholder returns [7][8] Key Portfolio Assets - Recent investment includes a $250 million R&D funding deal with Biogen for a lupus drug, litafilimab, which is in phase three trials [18][19] - The lupus market is seen as under-penetrated, with significant growth potential anticipated [20][22] - Other notable investments include royalties from MorphoSys and products in the inflammatory bowel disease (IBD) space [26][28] Investment Strategy - The company emphasizes investing in products that are meaningful to patients rather than solely focusing on attractive returns [11][12] - A rigorous vetting process is employed to assess potential investments, involving a deep diligence process [10][11] - Royalty Pharma has developed a synthetic royalty model to provide funding against specific drugs or R&D programs, filling a gap in the funding landscape [15][16] Market Dynamics - The company views its business as having a countercyclical nature to the biopharma funding environment, with a consistent need for capital in the industry [14][15] - The funding environment is currently challenging, but Royalty Pharma has successfully deployed capital into promising products [16] Recent Developments - The company has internalized its management structure, aligning the interests of the team with shareholders [42][46] - A $3 billion buyback program was announced, reflecting a commitment to shareholder value [46][47] - Guidance for portfolio receipts was raised due to favorable foreign exchange rates and growth in existing royalties [48][49] Diligence and Data Analytics - Royalty Pharma has invested significantly in its diligence platform, employing a generalist approach to evaluate various therapeutic areas [54][55] - The company utilizes extensive data sources and real-world evidence to conduct deep market evaluations [55][57] Conclusion - Royalty Pharma is positioned as a key player in the biopharma funding landscape, with a strong focus on meaningful product investments and a robust diligence process. The company is optimistic about future growth opportunities in various therapeutic areas, particularly lupus and cardiovascular diseases [20][34][46]

NEW YORK, May 16, 2025 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) today announced that it has successfully closed the acquisition of its external manager, RP Management, LLC (“RP Management”). The acquisition received overwhelming support from Royalty Pharma’s shareholders, with 99.9% of votes cast in favor of the transaction. “The completion of the internalization marks an exciting new chapter for Royalty Pharma,” said Pablo Legorreta, founder and Chief Executive Officer. “It reinforces our comm ...

Summary of Royalty Pharma Conference Call Company Overview - **Company**: Royalty Pharma - **Key Executives**: Terence Coyne (Executive VP and CFO), Marshall Uerst (EVP, Head of Research and Investments) Key Industry Insights - **Therapeutics Landscape**: The current environment in the biopharma market is characterized by uncertainty, but Royalty Pharma remains optimistic about finding attractive royalty opportunities amidst this turmoil [2][6][10] - **Capital Allocation**: The company has a balanced approach to capital allocation, focusing on share buybacks and business development (BD) to maximize returns [3][7][25] Financial Performance - **Q1 Performance**: Royalty Pharma reported a 17% growth in top-line revenue and a 12% increase in royalty receipts, maintaining consistent growth since its IPO [4][6] - **Share Buybacks**: Approximately $725 million worth of shares were repurchased in Q1, indicating a strong commitment to returning value to shareholders [7] Strategic Focus - **Internalization Transaction**: The internalization transaction was approved by 89.9% of shareholders, which is seen as a positive development for the company [2] - **Deal Pipeline**: The company is actively seeking new royalty deals, leveraging its flexibility to adapt to changing market conditions [10][11] - **Regulatory Environment**: Royalty Pharma is cautious but optimistic about drug approvals, believing that strong data will lead to successful outcomes regardless of regulatory changes [22][23] Market Risks and Opportunities - **Tariffs and Drug Pricing**: The company does not foresee significant exposure to tariffs due to its business model, which typically avoids tariff-bearing sales [15][18] - **FDA Dynamics**: The company believes that drugs with strong clinical data will continue to receive approvals, despite potential regulatory challenges [22] - **Royalty Market Growth**: The royalty market is expanding, with increasing opportunities for funding in the biopharma ecosystem [41][44] Portfolio Highlights - **Vertex Royalty**: The early adoption of Vertex's triplet product is gradual, but Royalty Pharma remains confident in its long-term value [33][34] - **Tourette's Asset**: The company identified a significant market opportunity in Tourette's syndrome, with over 100,000 patients and no new drugs approved in over a decade [47][48] - **Cytokinetics Partnership**: The long-term view on investments allows Royalty Pharma to remain optimistic about partnerships, even amidst short-term challenges [53][54] - **Olanzapine LAI**: The company is excited about the potential of the olanzapine long-acting injection, addressing a significant unmet need in the market [66][68] Conclusion - Royalty Pharma is well-capitalized with over $1 billion in cash and a debt-to-EBITDA ratio of 3x, allowing for flexibility in pursuing new deals or share buybacks [26][28] - The company maintains a positive outlook on the royalty market and is strategically positioned to capitalize on emerging opportunities while managing risks effectively [41][44]

Core Viewpoint - Royalty Pharma plc has received overwhelming shareholder approval (99.9%) for its transition from an external management model to an integrated corporate structure, marking a significant milestone for the company [1][4]. Financial Impact - The internalization transaction is expected to generate cash savings exceeding $100 million in 2026 and over $175 million in 2030, with cumulative savings projected to exceed $1.6 billion over the next ten years [3][8]. - The total transaction value is approximately $1.1 billion, which includes 24.5 million shares of Royalty Pharma equity, $100 million in cash, and the assumption of $380 million in existing Manager debt [5][6]. Corporate Governance and Structure - The internalization is anticipated to enhance corporate governance, increase transparency, and align the leadership team more closely with shareholder interests [2][3]. - Following the transaction, all employees of the external Manager will become direct employees of Royalty Pharma, simplifying the corporate structure [7][8]. Shareholder Benefits - The acquisition is expected to strengthen shareholder alignment and ensure management continuity, with shares received by management vesting over 5 to 9 years [3][9]. - The internalization may also expand Royalty Pharma's shareholder base and enhance the company's valuation over time [3][8]. Background Information - Royalty Pharma has operated under an external management model since its founding in 1996, paying quarterly fees to the Manager based on portfolio receipts and security investments [7].

Core Viewpoint - Royalty Pharma plc has demonstrated strong performance with double-digit sales growth, marking a positive start to the earnings season for the company [1]. Group 1: Financial Performance - The company reported positive results for Q4 and FY 2024, indicating robust financial health and growth potential [1]. Group 2: Market Position - Royalty Pharma is actively engaging with buy-side hedge professionals who focus on fundamental, income-oriented, long-term analysis across various sectors in developed markets [1].

Core Insights - Royalty Pharma reported revenue of $839 million for the quarter ended March 2025, reflecting a 17% increase year-over-year and surpassing the Zacks Consensus Estimate of $793.58 million by 5.72% [1] - The company's EPS for the quarter was $1.06, up from $0.98 in the same quarter last year, also exceeding the consensus EPS estimate of $0.99 by 7.07% [1] Revenue Performance - The total portfolio receipts from royalty products amounted to $788 million, exceeding the average estimate of $777.88 million, representing an 11.9% year-over-year increase [4] - Key product performances included: - Cystic fibrosis franchise: $250 million, up 14.4% year-over-year, exceeding the estimate of $234.18 million [4] - Xtandi: $52 million, a 26.8% increase year-over-year, surpassing the estimate of $49.97 million [4] - Trelegy: $85 million, reflecting a 20.4% year-over-year increase, slightly above the estimate of $84.96 million [4] - Evrysdi: $53 million, a 17.9% increase year-over-year, exceeding the estimate of $51.98 million [4] Stock Performance - Over the past month, Royalty Pharma's shares returned +1.5%, while the Zacks S&P 500 composite increased by +11.3%, indicating underperformance relative to the broader market [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the market in the near term [3]

Financial Data and Key Metrics Changes - Royalty Pharma reported a 12% growth in royalty receipts, reflecting strong performance in a diversified portfolio [6][20] - Total portfolio receipts grew by 17% to $839 million, driven by milestone payments and strong underlying performance [20][23] - The company repurchased $723 million of its shares in Q1 2025, part of a $2 billion share repurchase plan for the year [7][25] Business Line Data and Key Metrics Changes - The cystic fibrosis franchise, including Trelegy and Xtandi, was a key driver of growth in royalty receipts [20] - Milestone and other contractual receipts amounted to $51 million, including a significant milestone payment of $27 million related to Air Supra [21] Market Data and Key Metrics Changes - The company expects portfolio receipts for 2025 to be between $2.975 billion and $3.125 billion, reflecting a growth rate of 6% to 12% [9][28] - The weakening U.S. Dollar is expected to provide a tailwind to revenue growth [9] Company Strategy and Development Direction - Royalty Pharma is focused on being a leading partner in funding innovation in life sciences, with a dynamic capital allocation framework to address share price discounts and pursue attractive royalty acquisitions [7][26] - The company is expanding its development stage pipeline, including a new collaboration with Biogen for litafilimab in lupus, which has significant commercial potential [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong financial performance in 2025, supported by a robust portfolio and strategic capital allocation [33] - The company anticipates continued growth in the biopharma royalties market, driven by the need for alternative funding sources in the biotech sector [50] Other Important Information - The company raised its full-year 2025 guidance, reflecting strong portfolio performance and favorable currency effects [28] - Royalty Pharma maintains significant financial capacity, with cash and equivalents of approximately $1.1 billion at the end of Q1 2025 [24] Q&A Session Summary Question: Impact of regulatory and policy uncertainties on deal-making - Management noted that while there is policy uncertainty, it has not significantly impacted the deal-making environment, and the pipeline remains robust [41][42] Question: Updates on Vertex cystic fibrosis portfolio negotiations - No updates were provided on the Vertex situation, but management remains confident in their position regarding KALYDECO [43] Question: Potential impact of tariffs on royalties - Management does not expect tariffs to have a meaningful impact on royalties, as tariffs are typically paid upstream of the royalty-bearing sale [32][52] Question: Opportunities in academia and nonprofits due to policy changes - Management highlighted the urgent need for alternative funding in the biotech sector, presenting an opportunity for Royalty Pharma to step in [50] Question: Clinical benefit of echopipam and market parallels - Management emphasized the lack of new options for Tourette's patients and the potential for echopipam to fill this gap, drawing parallels to the tardive dyskinesia market [78] Question: Timeline for potential dispute resolution with Vertex - Management could not comment on the timing of any potential dispute with Vertex [80]

Core Insights - Royalty Pharma (RPRX) reported quarterly earnings of $1.06 per share, exceeding the Zacks Consensus Estimate of $0.99 per share, and showing an increase from $0.98 per share a year ago, resulting in an earnings surprise of 7.07% [1] - The company achieved revenues of $839 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.72%, and up from $717 million in the same quarter last year [2] - Royalty Pharma's stock has increased by approximately 28.4% since the beginning of the year, contrasting with a decline of 4.3% in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07, with expected revenues of $665.88 million, and for the current fiscal year, the EPS estimate is $4.44 on revenues of $2.97 billion [7] - The estimate revisions trend for Royalty Pharma is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Biomedical and Genetics industry, to which Royalty Pharma belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]