Royalty Pharma plc (NASDAQ:RPRX) is one of the stocks Jim Cramer shared his take on. A caller asked for Cramer’s take on the stock, and here’s what he had to say: Royalty just keeps going higher… I love that whole business where they help fund bio, and they get the returns. It’s a terrific company. I remember when GA brought it public, and I liked it then, I like it now. Stock market data. Photo by Alesia Kozik on Pexels Royalty Pharma plc (NASDAQ:RPRX) makes money by buying up royalties for multiple ...

Core Viewpoint - Royalty Pharma plc will report its fourth quarter and full year 2025 financial results on February 11, 2026, before U.S. markets open, followed by a conference call at 8:00 a.m. Eastern Time [1]. Company Overview - Royalty Pharma, founded in 1996, is the largest buyer of biopharmaceutical royalties and a key funder of innovation in the biopharmaceutical industry [3]. - The company collaborates with various entities, including academic institutions, research hospitals, non-profits, small and mid-cap biotechnology companies, and leading global pharmaceutical companies [3]. - Royalty Pharma's portfolio includes royalties on over 35 commercial products, such as Vertex's Trikafta, GSK's Trelegy, Roche's Evrysdi, and others, as well as 20 development-stage product candidates [3].

Core Insights - Royalty Pharma is positioned as a leader in the rapidly growing biopharma sector, focusing on financing innovation through royalty funding [3]. Group 1: Company Overview - The company is celebrating its sixth year as a public entity and has a strong leadership presence with its Founder and CEO, Pablo Legorreta [2]. - Royalty Pharma aims to highlight the significant growth potential in royalty funding within the life sciences industry [3]. Group 2: Growth Potential - The presentation emphasizes the rapid growth and enormous potential of royalty funding in life sciences, indicating a clear path for value creation and share price appreciation in the coming years [3].

Summary of Royalty Pharma Conference Call Company Overview - **Company**: Royalty Pharma - **Industry**: Biopharma royalty market - **Position**: Clear leader with no direct public competitors [3][4] Core Points and Arguments Growth and Financial Performance - **2025 Financial Goals**: Expected growth in portfolio receipts between 14% and 16% [4] - **Return Metrics**: Reported return on invested capital at 15.7% and return on invested equity at 22.9% for the last 12 months [4] - **Capital Deployment**: Deployed $2.6 billion in value-creating royalty transactions, acquiring eight new royalties [5] - **Shareholder Returns**: $1.2 billion in share repurchases and growing dividends [5] Strategic Developments - **Internalization of Management**: Significant cost reductions and improved governance following the internalization of the external manager [5] - **Long-term Financial Goals**: Targeting compounded annual growth in portfolio receipts of 10% or more from 2020 to 2030, aiming for a top line of $4.7 billion by 2030 [7] Market Dynamics - **Royalty Funding Advantages**: Royalties provide a non-dilutive funding option with flexibility compared to traditional debt and equity [9][10] - **Market Growth**: The average value of announced royalty transactions has doubled over the past five years, reaching $10 billion in 2025 [11] - **Synthetic Royalties**: Significant growth in synthetic royalty transactions, with a 50% increase to $4.7 billion in 2025 compared to 2024 [11] Investment Strategy - **Investment Focus**: Emphasis on late-stage opportunities with a high success rate; 90% of development-stage investments have received approval [14][16] - **Risk Management**: Investments are made in opportunities with compelling proof-of-concept data, focusing on approved products [16] Pipeline and Future Potential - **Development Pipeline**: 20 products in development, with several expected to generate royalties in the near future [18] - **Upcoming Trials**: Anticipated pivotal trial readouts for several key therapies over the next 24 months [19] Financial Capacity and Capital Allocation - **Future Capital Deployment**: Capacity to deploy around $30 billion by 2030, with a focus on royalties [23] - **Dynamic Capital Allocation Framework**: Adjusts capital allocation based on the attractiveness of royalties versus equity buybacks [23] Market Expansion - **China as Growth Opportunity**: Significant potential in the Chinese biotech market, with around 3,000 biotech companies needing funding [39] - **Royalty Structure in China**: Royalties are seen as a less risky investment compared to equity, allowing for partnerships with local companies [43] Other Important Insights - **Conservative Projections**: The $4.7 billion target is considered conservative, with expectations to exceed this figure based on current growth trends [27] - **Market Education**: Continuous efforts to educate the market on the benefits of royalty funding, especially in regions where Royalty Pharma is less known [34] This summary encapsulates the key points discussed during the Royalty Pharma conference call, highlighting the company's strategic direction, financial performance, and market opportunities.

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance & Goals - Royalty Pharma's 2025 Portfolio Receipts guidance midpoint is $3225 million, representing approximately 15% growth[7] - The company's Return on Invested Capital was 157% and Return on Invested Equity was 229% in Q3 2025 LTM (Last Twelve Months)[7] - The company aims for Portfolio Receipts of over $47 billion by 2030, implying a CAGR of 10% or more from 2020[18] - The company projects approximately $30 billion of capital deployment capacity from H2 2025 to 2030[73] Capital Allocation & Investment - The company announced $47 billion in new royalty deals in 2025, with $26 billion in Capital Deployment[7] - The company repurchased $12 billion of shares and increased dividends by a mid-single digit percentage[7] - The company deployed approximately 65% of capital on approved products since 2012[45] - The company announced four synthetic royalty deals in 2025, totaling $2075 million in announced value[36] Portfolio & Pipeline - The company's portfolio includes therapies like Tremfya, which received FDA and EC approval for Crohn's disease and EC approval for ulcerative colitis[59] - The company anticipates peak royalties ranging from approximately $180 million to $340 million from daraxonrasib for pancreatic cancer[62, 64] - The company expects peak royalties of over $400 million from frexalimab for multiple sclerosis[62, 64]

Core Insights - Teva Pharmaceutical Industries Ltd. and Royalty Pharma plc have entered into a funding agreement of up to $500 million to expedite the clinical development of Teva's anti-IL-15 antibody, TEV-'408, which targets autoimmune diseases [1][3] - Preliminary Phase 1b data from the TEV-'408 vitiligo study supports IL-15 as a potential therapeutic target for various autoimmune conditions [1][2] Funding Agreement - Royalty Pharma will provide Teva with up to $500 million, including $75 million for R&D co-funding to initiate a Phase 2b study in vitiligo, expected to start in 2026 [3] - Based on the results from the Phase 2b study, Royalty Pharma has the option to contribute an additional $425 million for the Phase 3 development program [3] Clinical Development and Future Outlook - Teva anticipates sharing results from the TEV-'408 trials in 2026 and is also evaluating the candidate in a Phase 2a study for celiac disease [2] - The company expects fiscal 2026 sales to be flat to slightly down compared to 2025, with low-single digit growth projected for fiscal 2027 and mid-single digit CAGR for fiscal 2030 [4] Financial Projections - Teva forecasts around 30% operating profit in 2026 and over 30% in 2027 [5] - The company reaffirmed its fiscal year 2025 adjusted earnings guidance to a range of $2.55-$2.65 per share, slightly above the consensus of $2.58 [5] - Teva narrowed its 2025 sales guidance to $16.8 billion-$17 billion, compared to the consensus of $16.89 billion [5] Credit Ratings - In December 2025, S&P Global Ratings upgraded Teva's long-term issuer credit rating to BB+ from BB, maintaining a stable outlook, while Moody's affirmed its Ba1 rating with a positive outlook [6]

Core Insights - Teva Pharmaceuticals has entered a funding agreement with Royalty Pharma to receive up to $500 million for the development of its anti-IL-15 antibody, TEV-'408, which is in early-stage development for vitiligo and other autoimmune diseases [1][2] Funding Agreement Details - The agreement includes $75 million for R&D co-funding of a phase IIb vitiligo study expected to start in 2026, with an option for an additional $425 million to co-fund phase III development based on phase IIb results [2] - Teva will retain rights to the drug while being responsible for milestone payments and ongoing royalties on global net sales if the drug is approved [5][11] Strategic Benefits for Teva - The collaboration with Royalty Pharma strengthens Teva's immunology pipeline, reduces financial exposure, and accelerates the development of TEV-'408, allowing for faster clinical progression [3][4] - Teva's shares have increased by 95% over the past six months, outperforming the industry growth of 54.1% [4] Market Potential - Vitiligo is a chronic autoimmune condition with a global prevalence of 0.5% to 2%, representing a significant unmet medical need due to limited treatment options [7] - TEV-'408 aims to address both the physical and psychosocial burdens of vitiligo by targeting the IL-15 pathway responsible for immune-driven melanocyte destruction [7] Ongoing Research and Development - Teva is also evaluating TEV-'408 in a phase IIa study for celiac disease, which received Fast Track designation from the FDA in 2025 [8] - The current collaboration with Royalty Pharma marks Teva's second agreement, following a previous deal for the development of TEV-'749 for schizophrenia [9]

Core Insights - Royalty Pharma experienced a landmark year in 2025, achieving a top-line growth of 14%-16% and announcing $4.7 billion in royalty transactions, while the royalty market reached a record high of $10 billion [2][3][5]. Company Performance - The company internalized its external manager, leading to cost savings and improved governance, and is on track to meet its 2025 guidance for Portfolio Receipts of $3,200 to $3,250 million [6][7]. - Royalty Pharma achieved a Return on Invested Capital of 15.7% and a Return on Invested Equity of 22.9% on a trailing twelve-month basis [7]. Industry Trends - The royalty funding market saw a 40% increase in total value, reaching $10 billion in 2025, compared to an average of $7.1 billion over the previous five years [3][4]. - Synthetic royalties, a concept pioneered by Royalty Pharma, accounted for $4.7 billion of the total market value, highlighting their growing acceptance in the biopharma capital structure [4][5]. Future Outlook - The company anticipates continued favorable industry conditions in 2026, supported by a robust pipeline of potential transactions and several important milestones in its development-stage portfolio [2][10]. - Royalty Pharma expects to achieve at least $4.7 billion in Portfolio Receipts by 2030, implying a growth rate of 9% or greater from 2025 to 2030 [9]. Development Pipeline - The company’s pipeline includes 20 development-stage therapies, with several expected to achieve pivotal milestones in 2026, including daraxonrasib, litifilimab, and pelacarsen [11][12]. - The late-stage pipeline therapies have the potential for combined peak sales exceeding $43 billion annually, translating to over $2.1 billion in new royalties for Royalty Pharma [12].

Group 1: Collaboration with Royalty Pharma - Teva Pharmaceutical Industries has entered into a collaboration with Royalty Pharma to jointly develop the anti-IL-15 antibody, TEV-408, for the treatment of vitiligo [2] - Royalty Pharma will invest $500 million in the development costs, including $75 million for a phase 2b study set to begin in 2026 [2] - If the trials are successful, Royalty Pharma has the option to invest an additional $425 million for phase 3 trials, and Teva will pay royalties on worldwide sales if the drug is launched [2] Group 2: Financial Forecasts - Teva's revenue guidance for 2025 is projected to be near the lower end of the range at approximately $16.8 billion, with EBITDA expected to be in the middle of the range at around $4.8 billion [4] - For 2026, sales are anticipated to be similar to or slightly lower than 2025, with low single-digit growth expected in 2027 and a mid single-digit compound annual growth rate from 2027 to 2030 [5] - Free cash flow is targeted to exceed $2.7 billion in 2027 and reach over $3.5 billion by 2030, with net leverage expected to fall below two times by 2027 [5] Group 3: Market Performance - Teva has a market capitalization of $36.7 billion, reflecting a 53% increase in its share price over the past year [6] - As of the latest trading session, Teva's share price increased by 0.96%, reaching NIS 105 [6]