Royalty Pharma plc ( RPRX ) delivered decent financials in 2025. We saw double-digit growth in both Royalty Receipts and Portfolio Receipts. This led to very good returns on invested capital for the company. Elsewhere capital deployment remainedI hold a Master’s degree in Cell Biology and began my career working for several years as a lab technician in a drug discovery clinic, where I gained extensive hands-on experience in cell culture, assay development, and therapeutic research. That scientific foundatio ...

分组1 - Royalty Pharma plc (RPRX) reported strong financial performance in 2025, with double-digit growth in both Royalty Receipts and Portfolio Receipts, leading to excellent returns on invested capital [1] - The company has maintained effective capital deployment strategies, contributing to its financial success [1] 分组2 - The analyst emphasizes a focus on identifying promising biotechnology companies that innovate through unique mechanisms of action, first-in-class therapies, or platform technologies [1] - The approach combines scientific expertise with financial and market analysis to deliver research that is both technically sound and investment-driven [1] - The goal is to provide insights that help investors understand opportunities and risks in the biotech sector, which is characterized by the potential for significant returns through breakthrough science [1]

Following the Q4 and full-year 2025 results, we revisit Royalty Pharma plc (NASDAQ: RPRX ) with a constructive stance. Execution remains solid, and we continue to view the stock as an attractive entry point, supported by resilient figures, recentBuy-side hedge professionals conducting fundamental, income oriented, long term analysis across sectors globally in developed markets. Please shoot us a message or leave a comment to discuss ideas.DISCLOSURE: All of our articles are a matter of opinion, informed as ...

Core Insights - Royalty Pharma experienced a "landmark year" in 2025, achieving double-digit growth in both portfolio and royalty receipts, and internalizing its external manager to enhance governance and reduce costs [2][5][18] Financial Performance - The company reported a return on invested capital (ROIC) of 15.8% and return on equity (ROE) of 22.8% for 2025 [5] - Royalty receipts grew by 13% for the year and 17% in the fourth quarter, while portfolio receipts increased by 16% for the year and 18% in the fourth quarter [13] - The company ended 2025 with $619 million in cash, $9.2 billion in debt, and a leverage ratio of approximately 3x [3][15] Cost Management - Management expects to achieve $100 million in cost savings in 2026 due to the internalization of the external manager, aiming for an operating and professional cost ratio of 4%–5% over time [1][5] Strategic Transactions - In 2025, Royalty Pharma executed eight transactions with a total announced value of $4.7 billion, deploying $2.6 billion, marking its strongest year for synthetic royalties [4][6][7] - The company reviewed over 480 potential royalty transactions, resulting in 109 in-depth reviews and 35 proposals [6] 2026 Guidance - For 2026, management guided portfolio receipts of $3.275 billion to $3.425 billion, implying a royalty growth of approximately 3% to 8% [3][16] - The guidance reflects anticipated headwinds from product loss of exclusivity and the introduction of biosimilars [2][16] Pipeline and Future Catalysts - The company estimates combined peak sales of over $43 billion across 20 development-stage therapies, translating to more than $2.1 billion in peak annual royalties [11] - Upcoming pivotal readouts are expected over the next 24 months, including data from Revolution Medicines and Novartis [17] Capital Allocation - Royalty Pharma returned $1.7 billion to shareholders in 2025 through $1.2 billion in buybacks and over $500 million in dividends [14]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file number 001-39329 Royalty Pharma plc (Exact name of registrant as specified in its charter) England and Wales 98-1535773 (St ...

Financial Data and Key Metrics Changes - Royalty Pharma achieved strong double-digit growth in both portfolio receipts and royalty receipts, with portfolio receipts growing 18% in Q4 and 16% for the full year [25][5] - Return on invested capital was 15.8% and return on invested equity was 22.8% for the year, reflecting strong returns [28][5] - The company raised its guidance three times during the year, delivering results slightly above the top end of the most recent update [5][6] Business Line Data and Key Metrics Changes - The company deployed $2.6 billion in capital for the year, with 67% of investments in approved products and 33% in development stage therapies [18][31] - Synthetic royalty transactions reached a record value of $4.7 billion in 2025, exceeding traditional royalties for the first time [15][61] - Royalty receipts from key products like Voranigo, Trelstar, and Tremfya contributed significantly to growth, with minimal contribution from new acquisitions [27][25] Market Data and Key Metrics Changes - The biopharma market reached $10 billion in announced transaction value for the first time, with a strong growth trajectory observed [9] - The average annual transaction value in the biopharma market nearly doubled over the past five years compared to the previous five years [9] Company Strategy and Development Direction - Royalty Pharma aims to be the premier capital allocator in life sciences, focusing on consistent compounding growth and shareholder value creation [5][6] - The company is excited about expanding its team and platform in China, indicating a strategic focus on international growth [36][73] - The internalization of the external manager is expected to enhance governance and reduce costs, aligning intellectual capital with the royalty portfolio [7][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, highlighting the potential for significant value creation from the development stage pipeline [11][12] - The company anticipates continued growth driven by the increasing recognition of biopharma royalties and the demand for capital in life sciences [10][11] - Future guidance for 2026 indicates expected growth in royalty receipts of 3%-8%, despite anticipated losses from exclusivity expirations [32][35] Other Important Information - The company returned $1.7 billion to shareholders through share repurchases and dividends, with a 7% increase in dividends announced for Q1 2026 [8][31] - The company expects to maintain a high level of cash conversion and efficiency, with operating costs projected to decrease significantly in 2026 [33][25] Q&A Session Summary Question: Sustainability of dividends and buybacks - Management indicated that capital allocation will be based on the relative attractiveness of royalty opportunities versus stock price value, with a current bias towards royalties [40][42] Question: Involvement in private companies and capital markets - Management is open to exploring high-quality assets in private companies and remains focused on investing in high-quality pharmaceutical products [44][42] Question: Performance of Alyftrek and patient conversion - Management noted that the conversion to Alyftrek has been gradual but consistent, with expectations for continued contributions from the cystic fibrosis franchise [48][52] Question: General medicine and cardiometabolic disease categories - Management expressed excitement about opportunities in the cardiovascular space, emphasizing a diverse approach to drug delivery formats [59][54] Question: Synthetic royalties trend - Management is optimistic about the growth of synthetic royalties, noting increased awareness and demand for this funding model [61][62] Question: Lp(a) class of drugs and trial outcomes - Management remains enthusiastic about the Lp(a) class, with no change in outlook despite trial delays, awaiting results from Novartis [63][64] Question: Underappreciated assets in the portfolio - Management highlighted significant potential in the pipeline, with several products expected to deliver substantial value [70][69] Question: China opportunity and strategic focus - Management is excited about the growing opportunity in China, with plans to expand the team and platform in the region [73][72]

Financial Data and Key Metrics Changes - Royalty Pharma achieved strong double-digit growth in both portfolio receipts and royalty receipts, with portfolio receipts growing 16% for the year and royalty receipts growing 13% [5][24] - The company maintained a return on invested capital of 15.8% and a return on invested equity of 22.8% for the year [5][27] - The company returned $1.7 billion to shareholders, including $1.2 billion in share repurchases and over $500 million in dividends, with a 7% increase in dividends announced for the first quarter of 2026 [7][29] Business Line Data and Key Metrics Changes - The company reported strong performance from key products such as Voranigo, Trelstar, TREMFYA, and the cystic fibrosis franchise, contributing to the growth in royalty receipts [26] - In 2025, synthetic royalty transactions reached a record value of $4.7 billion, significantly higher than previous years, indicating a growing trend in this funding modality [14][15] Market Data and Key Metrics Changes - The biopharma market reached $10 billion in announced transaction value for the first time in 2025, with a strong growth trajectory observed over the past five years [8] - The company noted that the demand for capital in life sciences is increasing, driven by the recognition of the benefits of biopharma royalties [9] Company Strategy and Development Direction - Royalty Pharma aims to be the premier capital allocator in life sciences, focusing on consistent compounding growth and shareholder value creation [5][10] - The company plans to continue expanding its capital deployment strategy, with a focus on high-quality assets and innovative therapies [12][16] - The internalization of the external manager is expected to enhance governance and reduce costs, further supporting the company's strategic goals [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to deliver consistent returns, even in uncertain market conditions [10][11] - The guidance for 2026 indicates expected growth in royalty receipts of 3%-8%, reflecting the strength of the existing portfolio [30][33] - Management highlighted the potential for significant value creation from the development stage pipeline, with multiple pivotal readouts expected in the near term [20][22] Other Important Information - The company achieved its five-year capital deployment target of $10 billion-$12 billion one year ahead of schedule [10][17] - The company has a robust pipeline of 20 development-stage therapies, with estimated combined peak sales of over $43 billion, translating to over $2.1 billion in peak annual royalties [22] Q&A Session Summary Question: Sustainability of dividends and buybacks in 2026 - Management indicated that capital allocation will be based on the relative attractiveness of royalty opportunities versus stock price value, with a focus on returning capital to shareholders while prioritizing royalty investments [38][40] Question: Involvement in private companies and capital markets - Management stated that they are open to investing in high-quality assets within private companies and are excited about the growth of opportunities in the sector [42] Question: Performance of ALYFTREK and patient conversion - Management noted that the conversion to ALYFTREK has been gradual but consistent, with expectations for continued contributions from the cystic fibrosis franchise [45][50] Question: General medicine and cardiometabolic disease categories - Management expressed excitement about opportunities in the cardiovascular and cardiometabolic markets, emphasizing a diversified approach to drug delivery formats [51][52] Question: Future of synthetic royalties - Management is optimistic about the continued growth of synthetic royalties, highlighting their advantages over traditional financing methods [56][59] Question: Lp(a) class of drugs and trial outcomes - Management remains enthusiastic about the Lp(a) class and is awaiting results from ongoing trials, with no change in their positive outlook [60][61] Question: Underappreciated assets in the portfolio - Management highlighted the significant potential for value creation in the pipeline, with several products expected to deliver strong returns [66][68] Question: China opportunity and strategic focus - Management is excited about the growing opportunity in China and is looking to expand their team and platform in the region [69][71] Question: Teva's IL-15 asset and mid-stage investments - Management explained that the investment in Teva's asset was driven by the unmet need in the vitiligo market and emphasized their flexible investment structure [76][78] Question: Growth potential of VORANIGO - Management expressed strong confidence in the growth trajectory of VORANIGO, anticipating it to become a blockbuster product [79][80]

Financial Data and Key Metrics Changes - Royalty Pharma achieved strong double-digit growth in both portfolio receipts and royalty receipts, with portfolio receipts growing 16% for the year and royalty receipts growing 13% [4][23] - The company maintained a return on invested capital of 15.8% and a return on invested equity of 22.8% for the year [4][26] - The company returned $1.7 billion to shareholders, including $1.2 billion in share repurchases and over $500 million in dividends, with a 7% increase in dividends announced for Q1 2026 [6][28] Business Line Data and Key Metrics Changes - The cystic fibrosis franchise, along with products like Voranigo, Trelstar, and Tremfya, were key drivers of growth, contributing significantly to the overall increase in royalty receipts [25] - The company executed eight transactions for nine therapies in 2025, with an announced value of $4.7 billion, reflecting a disciplined approach to capital allocation [12][17] Market Data and Key Metrics Changes - The biopharma market reached $10 billion in announced transaction value for the first time, with a strong growth trajectory observed over the past five years [8] - Synthetic royalty transactions set a new record in 2025, with a market value increase of about 50% compared to the previous year, totaling $4.7 billion [14][15] Company Strategy and Development Direction - Royalty Pharma aims to be the premier capital allocator in life sciences, focusing on consistent compounding growth and shareholder value creation [4][5] - The company is excited about expanding its team and platform in China, indicating a strategic focus on international growth opportunities [34][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, highlighting the potential for significant value creation from the development stage pipeline [10][22] - The company anticipates a growth rate of 3%-8% in royalty receipts for 2026, reflecting strong underlying momentum despite expected challenges from loss of exclusivity for certain products [29][33] Other Important Information - The internalization of the external manager in 2025 is expected to yield cost savings and improved governance [5][6] - The company achieved its five-year capital deployment target of $10 billion-$12 billion one year ahead of schedule [10][17] Q&A Session Summary Question: Sustainability of dividends and buybacks in 2026 - Management indicated that capital allocation will be based on the relative attractiveness of royalty opportunities versus stock price value, with a current bias towards royalties [39][41] Question: Involvement in private companies and capital markets - Management is open to exploring high-quality pharmaceutical products within private companies and sees growth opportunities regardless of market conditions [43][44] Question: Performance of Alyftrek and patient conversion - Management noted that the conversion to Alyftrek has been gradual but steady, with expectations for continued contributions from the cystic fibrosis franchise [47][51] Question: General medicine and cardiometabolic disease categories - Management expressed excitement about opportunities in general medicine and indicated a flexible approach to drug delivery formats based on patient needs [53][54] Question: Future of synthetic royalties - Management is optimistic about the growth of synthetic royalties, noting increased awareness and demand for this funding model [57][60] Question: Lp(a) class of drugs and trial outcomes - Management remains enthusiastic about the Lp(a) class and is awaiting results from ongoing trials, emphasizing the potential for significant royalties [61][62] Question: Underappreciated assets in the portfolio - Management highlighted the significant potential for value creation in the pipeline, particularly in products like solanezumab and frexalimab [68][69] Question: China opportunity and transaction pipeline - Management is excited about the growing opportunity set in China and is actively pursuing expansion in that market [70][72]

Full Year and Q4 2025 Financial Results February 11, 2026 Forward Looking Statements This presentation has been prepared by Royalty Pharma plc (the "Company"), is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities. 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 presentation unless stated otherwise, and ne ...

Financial Performance - Portfolio Receipts reached $874 million in Q4 2025, an 18% increase from $742 million in Q4 2024, and $3,254 million for FY 2025, a 16% increase from $2,801 million in FY 2024[4] - Royalty Receipts grew 17% to $856 million in Q4 2025 and 13% to $3,127 million for FY 2025, driven by products like Voranigo, Trelegy, and Tremfya[6] - Adjusted EBITDA for Q4 2025 was $816 million, a 22% increase from $669 million in Q4 2024, and $2,966 million for FY 2025, a 16% increase from $2,565 million in FY 2024[4] - Total income and other revenues for the three months ended December 31, 2025, increased to $622 million, up from $594 million in the same period of 2024, representing a growth of 4.7%[49] - Operating income for the twelve months ended December 31, 2025, reached $1,560 million, compared to $1,292 million in 2024, reflecting a significant increase of 20.7%[49] - Cash collections from financial royalty assets for the twelve months ended December 31, 2025, amounted to $3,355 million, an increase of 12.5% from $2,983 million in 2024[55] - The company reported an adjusted EBITDA of $2,966 million for the twelve months ended December 31, 2025, compared to $2,565 million in 2024, marking an increase of 15.7%[60] - Royalty receipts for the three months ended December 31, 2025, totaled $856 million, a 17% increase from $729 million in the same period of 2024[62] - The cystic fibrosis franchise generated $251 million in revenue for the three months ended December 31, 2025, reflecting a 6% increase year-over-year[62] Capital Management - The company deployed $2.6 billion in capital for royalty transactions in 2025, including a partnership for the Phase 3 therapy daraxonrasib[6] - Royalty Pharma repurchased approximately 37 million Class A ordinary shares for $1.2 billion in 2025, including $75 million in Q4 2025[18] - The company increased its quarterly dividend by 7% to $0.235 per share in Q1 2026[17] - Royalty Pharma's liquidity strategy includes a new share repurchase program allowing for up to $3.0 billion in Class A ordinary shares repurchases[18] Debt and Equity - Total debt as of December 31, 2025, was $9.2 billion, with cash and cash equivalents of $609 million[17] - Total liabilities as of December 31, 2025, were $9,906 million, up from $7,880 million in 2024, indicating a rise of 25.7%[53] - The company’s cash and cash equivalents decreased to $619 million as of December 31, 2025, down from $929 million at the end of 2024[52] - Total shareholders' equity decreased to $9,715 million as of December 31, 2025, from $10,342 million in 2024, a decline of 6.1%[53] Future Guidance and Strategy - Full year 2026 guidance for Portfolio Receipts is expected to be between $3,275 million and $3,425 million, reflecting an anticipated growth of 3% to 8%[7] - Payments for operating and professional costs in 2026 are expected to decrease as a percentage of Portfolio Receipts, from 8.9% in 2025[8] - The company anticipates significant future cash flows from its portfolio, driven by ongoing product developments and acquisitions[34] - Royalty Pharma's funding agreements and acquisitions are aimed at expanding its portfolio and enhancing revenue streams[26] - The company emphasizes the importance of maintaining compliance with financial covenants to ensure liquidity and operational flexibility[43] Acquisitions and Partnerships - In January 2026, Royalty Pharma announced a funding agreement with Teva Pharmaceuticals for TEV-'408, involving up to $500 million, including $75 million for a Phase 2b study for vitiligo[26] - Royalty Pharma acquired the remaining royalties on Roche's Evrysdi for spinal muscular atrophy for an upfront payment of $240 million and up to $60 million in sales-based milestones[26] - The company acquired a royalty interest in Nuvalent's neladalkib and zidesamtinib for up to $315 million, including an upfront payment of $155 million[26] - Royalty Pharma announced a transaction to acquire royalty interest in Denali Therapeutics' tividenofusp alfa for up to $275 million, with a $200 million payment contingent on FDA approval[26] Performance Metrics - Portfolio Receipts, a key performance metric, includes Royalty Receipts and Milestones, which are critical for generating cash from portfolio investments[38] - Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures used to analyze the company's ability to generate cash from operations[42] - Royalty Pharma's portfolio includes royalties on 35 commercial products, including notable therapies like Biogen's Tysabri and Spinraza[32]