ROYALTY PHARMA ROYALTY PHARMA Royalty Pharma plc Q3 2024 Financial Results November 6, 2024 2 Forward Looking Statements & Non-GAAP Measures 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 d ...

Royalty Pharma Q3 2024 Earnings Release [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Royalty Pharma reported strong Q3 2024 results with a 15% year-over-year growth in Portfolio Receipts to $735 million, deploying approximately $1.2 billion in capital and raising full-year 2024 guidance to $2,750 million to $2,800 million Q3 2024 Financial & Liquidity Summary | ($ 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)% | - Raised full-year 2024 guidance for Portfolio Receipts to a new range of **$2,750 million** to **$2,800 million**[1](index=1&type=chunk)[3](index=3&type=chunk) - Capital Deployment reached approximately **$1.2 billion** in Q3 and **$2.6 billion** year-to-date[1](index=1&type=chunk) - Strengthened the portfolio by acquiring royalties on three innovative therapies: Niktimvo, Yorvipath, and deucrictibant[2](index=2&type=chunk) - Recent FDA approvals for portfolio assets include Cobenfy (schizophrenia), Tremfya (ulcerative colitis), and Voranigo (glioma)[3](index=3&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) The company's financial performance in Q3 2024 was robust, highlighted by a 15% increase in Portfolio Receipts, strong liquidity with $950 million in cash, and significant growth in non-GAAP measures like Adjusted EBITDA and Portfolio Cash Flow [Portfolio Receipts](index=2&type=section&id=Portfolio%20Receipts) Portfolio Receipts grew 15% YoY to $735 million in Q3 2024, with Royalty Receipts also up 15% to $732 million, primarily driven by strong performance from Trelegy, Evrysdi, the cystic fibrosis franchise, and Tremfya Q3 2024 Portfolio Receipts by Product ($ in millions) | Product | Marketer | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | :--- | | Cystic fibrosis franchise | Vertex | $207 | $196 | 6% | | Trelegy | GSK | $91 | $58 | 55% | | Tysabri | Biogen | $68 | $71 | (4)% | | Evrysdi | Roche | $48 | $16 | 204% | | Imbruvica | AbbVie, J&J | $46 | $51 | (10)% | | Xtandi | Pfizer, Astellas | $43 | $39 | 12% | | Promacta | Novartis | $42 | $45 | (6)% | | Tremfya | Johnson & Johnson | $34 | $27 | 26% | | **Total Royalty Receipts** | | **$732** | **$637** | **15%** | | **Total Portfolio Receipts** | | **$735** | **$637** | **15%** | - The significant increase in Royalty Receipts was primarily driven by strong growth from Trelegy, Evrysdi, the cystic fibrosis franchise, and Tremfya[2](index=2&type=chunk)[5](index=5&type=chunk) [Liquidity and Capital Resources](index=2&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2024, Royalty Pharma maintained a solid liquidity position with $950 million in cash and cash equivalents against total debt of $7.8 billion, continuing its share repurchase program with $95 million in buybacks during the quarter - As of September 30, 2024, the company held **$950 million** in cash and cash equivalents and had total debt with a principal value of **$7.8 billion**[7](index=7&type=chunk) - In Q3 2024, the company repurchased approximately **3 million** Class A ordinary shares for **$95 million**, with year-to-date repurchases totaling **7 million** shares for **$180 million**[8](index=8&type=chunk) [Non-GAAP Liquidity Measures](index=3&type=section&id=Non-GAAP%20Liquidity%20Measures) In Q3 2024, Adjusted EBITDA (non-GAAP) was $679 million, and Portfolio Cash Flow (non-GAAP) was $617 million, both increasing by 17% compared to the same period last year, reflecting strong cash generation for reinvestment and shareholder returns Q3 Non-GAAP Liquidity Summary ($ in millions) | Measure | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Portfolio Receipts | $735 | $637 | 15% | | Adjusted EBITDA (non-GAAP) | $679 | $582 | 17% | | Portfolio Cash Flow (non-GAAP) | $617 | $528 | 17% | - Portfolio Cash Flow reflects cash generated that can be redeployed into royalty acquisitions, debt repayment, dividends, or share repurchases[9](index=9&type=chunk) [Capital Deployment & Recent Transactions](index=3&type=section&id=Capital%20Deployment%20%26%20Recent%20Transactions) Royalty Pharma actively deployed capital, with $1.2 billion in Q3 and $2.2 billion year-to-date for the first nine months of 2024, primarily on acquiring financial royalty assets, and announced new transactions totaling up to approximately $2.7 billion in 2024 Capital Deployment by Category ($ in millions) | Category | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Acquisitions of financial royalty assets | $(1,195) | $(2,009) | | **Total Capital Deployment** | **$(1,195)** | **$(2,239)** | - Announced new transactions of up to approximately **$2.7 billion** in 2024, including **$294 million** in Q3 and **$350 million** in November[13](index=13&type=chunk) - Key recent transactions include a **$350 million** synthetic royalty on Niktimvo, a **$150 million** synthetic royalty on Yorvipath, and a royalty interest in deucrictibant for ~**$21 million** upfront plus milestones[13](index=13&type=chunk) [Key Portfolio Developments](index=4&type=section&id=Key%20Portfolio%20Developments) The company's portfolio saw significant positive regulatory and clinical developments, including FDA approvals for Cobenfy, Tremfya, and Voranigo, alongside pipeline discontinuations for MK-8189 and BCX10013 - **FDA Approvals:** - **Cobenfy (KarXT):** Approved in September 2024 for schizophrenia in adults (Bristol Myers Squibb) - **Tremfya:** Approved in September 2024 for adults with moderately to severely active ulcerative colitis (Johnson & Johnson) - **Voranigo (vorasidenib):** Approved in August 2024 as a first-in-class therapy for IDH-mutant diffuse glioma (Servier)[17](index=17&type=chunk) - **Regulatory Submissions:** - **aficamten:** Cytokinetics submitted an NDA to the FDA in Q3 2024 - **Skytrofa:** Ascendis Pharma submitted a supplemental BLA to the FDA for adults with growth hormone deficiency[16](index=16&type=chunk) - **Pipeline Discontinuations:** - **MK-8189:** Merck removed the drug from its pipeline chart - **BCX10013:** BioCryst discontinued development due to insufficient clinical activity[16](index=16&type=chunk)[17](index=17&type=chunk) [2024 Financial Outlook](index=5&type=section&id=2024%20Financial%20Outlook) The company raised its full-year 2024 guidance for Portfolio Receipts to a range of $2,750 million to $2,800 million, reflecting an expected Royalty Receipts growth of 11% to 13% for the year Full Year 2024 Financial Outlook | Metric | Updated Guidance (Nov 6, 2024) | Previous Guidance | | :--- | :--- | :--- | | Portfolio Receipts | $2,750M to $2,800M | $2,700M to $2,775M | | Payments for operating and professional costs | ~8.5% of Portfolio Receipts | 8% to 9% of Portfolio Receipts | | Interest paid | $160 million | $160 million | - The updated guidance includes expected Royalty Receipts growth of **11% to 13%** in 2024, an increase from the previous guidance of 9% to 12%[3](index=3&type=chunk)[18](index=18&type=chunk) - Anticipated interest paid is approximately **$160 million** for 2024, projected to increase to approximately **$260 million** in 2025 following a recent debt issuance[19](index=19&type=chunk) [Financial Statements (Unaudited)](index=9&type=section&id=Financial%20Statements%20(Unaudited)) The unaudited financial statements for the third quarter ended September 30, 2024, detail the company's financial position and performance, including total income of $565 million, consolidated net income of $806 million, total assets of $18.0 billion, and net cash provided by operating activities of $704 million [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 2024, Royalty Pharma reported total income and other revenues of $565 million, with a net operating income of $735 million and consolidated net income of $806 million, of which $544 million was attributable to Royalty Pharma plc Q3 2024 Statement of Operations Highlights ($ in millions) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total income and other revenues | $565 | $536 | | Total operating (income)/expense, net | $(170) | $385 | | Operating income | $735 | $151 | | Consolidated net income | $806 | $122 | | Net income attributable to Royalty Pharma plc | $544 | $72 | [Selected Balance Sheet Data](index=10&type=section&id=Selected%20Balance%20Sheet%20Data) As of September 30, 2024, the company's balance sheet showed total assets of $18.0 billion, an increase from $16.4 billion at year-end 2023, with total liabilities at $7.8 billion and total shareholders' equity at $10.3 billion Balance Sheet Highlights ($ in millions) | Metric | As of Sep 30, 2024 | As of Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $950 | $477 | | Total assets | $18,042 | $16,382 | | Total liabilities | $7,784 | $6,298 | | Total shareholders' equity | $10,258 | $10,084 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended September 30, 2024, net cash provided by operating activities was $704 million, while net cash used in investing activities was $1.19 billion, primarily due to acquisitions of financial royalty assets, and net cash used in financing activities was $326 million Q3 2024 Cash Flow Summary ($ in millions) | Cash Flow Category | Three Months Ended Sep 30, 2024 | | :--- | :--- | | Net cash provided by operating activities | $704 | | Net cash used in investing activities | $(1,193) | | Net cash (used in)/provided by financing activities | $(326) | | Net change in cash and cash equivalents | $(815) | [Reconciliation of GAAP to Non-GAAP Measures](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides a reconciliation of the non-GAAP liquidity measures, Adjusted EBITDA and Portfolio Cash Flow, to the most directly comparable GAAP measure, Net cash provided by operating activities, showing adjustments from $704 million to $679 million and $617 million respectively for Q3 2024 Q3 2024 GAAP to Non-GAAP Reconciliation ($ in millions) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities (GAAP) | $704 | $574 | | Adjustments | ... | ... | | Adjusted EBITDA (non-GAAP) | $679 | $582 | | Interest paid, net | $(62) | $(54) | | Portfolio Cash Flow (non-GAAP) | $617 | $528 | [Appendix & Notes](index=6&type=section&id=Appendix%20%26%20Notes) The appendix contains supplementary information, including a corporate overview, forward-looking statements, definitions of key performance and non-GAAP metrics, and a table detailing approved indications for select therapies in the company's portfolio [About Royalty Pharma & Forward-Looking Statements](index=6&type=section&id=About%20Royalty%20Pharma%20%26%20Forward-Looking%20Statements) Royalty Pharma, founded in 1996, is the largest buyer of biopharmaceutical royalties with a portfolio of over 35 commercial products, and the report includes standard forward-looking statement disclaimers regarding future performance and risks - Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation, with a portfolio of royalties on more than **35** commercial products and **15** development-stage candidates[21](index=21&type=chunk) [Definition of Key Metrics](index=7&type=section&id=Definition%20of%20Key%20Metrics) This section defines key performance metrics, including Portfolio Receipts as cash generation from portfolio investments, and non-GAAP measures like Adjusted EBITDA and Portfolio Cash Flow, used to evaluate the company's ability to generate cash for deployment - Portfolio Receipts is a key metric representing cash generation, defined as the sum of Royalty Receipts, milestones, and other contractual receipts[26](index=26&type=chunk)[39](index=39&type=chunk) - Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures used by management to evaluate the company's ability to generate cash from operations for deployment into acquisitions, debt repayment, and shareholder returns[29](index=29&type=chunk)[30](index=30&type=chunk)

Portfolio Receipts growth of 15% to $735 million; Royalty Receipts growth of 15%Net cash provided by operating activities of $704 millionCapital Deployment of approximately $1.2 billion Raising full year 2024 guidance: Portfolio Receipts expected to be $2,750 to $2,800 million NEW YORK, Nov. 06, 2024 (GLOBE NEWSWIRE) -- 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 app ...

Proceeds expected to support the upcoming planned launches and fund the continued development of Niktimvo and revumenibExpected to fund Syndax through profitability; proforma cash approaching $800 million as of June 30 NEW YORK and WALTHAM, Mass., Nov. 04, 2024 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) and Syndax Pharmaceuticals (Nasdaq: SNDX) today announced that Royalty Pharma has entered into a $350 million synthetic royalty funding agreement with Syndax based on U.S. net sales of Niktimvo (a ...

In its upcoming report, Royalty Pharma (RPRX) is predicted by Wall Street analysts to post quarterly earnings of $0.95 per share, reflecting an increase of 20.3% compared to the same period last year. Revenues are forecasted to be $710.89 million, representing a year-over-year increase of 11.6%.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 0.5% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections d ...

NEW YORK, Oct. 16, 2024 (GLOBE NEWSWIRE) -- Royalty Pharma plc (Nasdaq: RPRX) today announced that it will report its third quarter 2024 financial results on Wednesday, November 6, 2024 before the U.S. financial markets open. The company will host a conference call and simultaneous webcast at 8:30 a.m. Eastern Time that day. Conference Call Information Please visit the "Investors" page of the company's website at https://www.royaltypharma.com/investors/events/ to obtain conference call information and to vi ...

NEW YORK, Oct. 11, 2024 (GLOBE NEWSWIRE) -- The board of directors of Royalty Pharma plc (Nasdaq: RPRX) has approved the payment of a dividend for the fourth quarter of 2024 of $0.21 per Class A ordinary share. The dividend will be paid on December 10, 2024, to shareholders of record at the close of business on November 15, 2024. About Royalty Pharma Founded in 1996, Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry, c ...

Core Viewpoint - Royalty Pharma (RPRX) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, with a strong correlation observed between earnings estimate revisions and near-term stock performance [4][6]. - Institutional investors play a role in this relationship, as they adjust their valuations based on earnings estimates, leading to stock price fluctuations through large transactions [4]. Company Performance and Outlook - The upgrade for Royalty Pharma indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [5]. - Analysts have raised their earnings estimates for Royalty Pharma, with the Zacks Consensus Estimate for the fiscal year ending December 2024 projected at $4.04 per share, reflecting a year-over-year change of -10% [8]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - Royalty Pharma's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

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Group 1: Western Union - Western Union's stock has decreased by over 50% since its peak in 2020, with a current dividend yield of 7.9% [3][4] - The company processed 293.2 million consumer money transfer transactions in the second quarter, a 4% year-over-year increase, but only a slight rise from 2019 [3][4] - Revenue fell by 9% year-over-year in the second quarter, impacted by a 7% decline in revenue due to Iraq's ban on dollar transactions [4][7] - Western Union is losing market share to competitors like Wise, which reported an 18% increase in transfer volume [6] - The stock is trading at a low valuation of 7.4 times trailing earnings, but earnings are declining as market competition increases [8] Group 2: Royalty Pharma - Royalty Pharma operates as a specialized lender in the biopharmaceutical industry, currently offering a 3% dividend yield [9] - The company has seen portfolio receipts grow by 13% annually from 2010 to 2020, with a 12% year-over-year increase to $608 million in the second quarter [10][11] - Royalty Pharma has raised its quarterly payout by 40% since initiating dividends in 2020 and plans to invest $2 billion in acquiring royalties in 2024 [11] - The company is trading at 18.6 times trailing earnings, which is considered low for its double-digit growth rate [12]