NEW YORK, Jan. 19, 2024 (GLOBE NEWSWIRE) -- Royalty Pharma plc (NASDAQ:RPRX) today announced that its board of directors has declared a dividend for the first quarter of 2024 of $0.21 per Class A share, reflecting a 5% increase in the company's quarterly dividend over the previous quarter's dividend. The dividend will be paid on March 15, 2024 to shareholders of record at the close of business on February 16, 2024. About Royalty Pharma Founded in 1996, Royalty Pharma is the largest buyer of biopharmaceutic ...

2023 Portfolio Receipts expected to be approximately $3,050 million, exceeding the upper end of guidance rangeAnnounced transactions of $13 billion since 2020 expected to add approximately $1.2 billion to Portfolio Receipts in 2025 NEW YORK, Jan. 08, 2024 (GLOBE NEWSWIRE) -- Royalty Pharma plc (NASDAQ:RPRX) today provided an update on its business performance, including recent key accomplishments, and the full year 2023 outlook for Portfolio Receipts. Pablo Legorreta, Royalty Pharma's founder and Chief Exec ...

Financial Performance and Key Metrics - Adjusted Cash Flow grew by 10% in the quarter prior to Biohaven-related payments and by 8% including these payments [10][41] - Total Royalty receipts increased by 5% in Q3 compared to the previous year, with approximately 7% growth when excluding the Biohaven-related payment [41][42] - Adjusted EBITDA grew by 6% including Biohaven-related payments and by 9% prior to these payments [19][128] Business Line Performance - The cystic fibrosis franchise and Trelegy contributed significantly to growth, alongside newly acquired royalties on Spinraza [41] - Growth was partially offset by weaknesses in Imbruvica and Tysabri [41] - The company reported a solid performance from its base business, with new Royalty acquisitions driving 9% top line growth before the impact of prior period Biohaven-related payments [17] Market Data and Key Metrics - The company raised its full-year guidance for adjusted cash received to between $2.95 billion and $3 billion, reflecting expected underlying growth of around 10% from its portfolio [4][46] - The impact of foreign exchange was negligible this quarter, indicating stable market conditions [18] Company Strategy and Industry Competition - The company is focused on capital allocation, having announced transactions worth $2.2 billion in recent months, enhancing long-term growth and diversifying its portfolio [9] - The competitive environment remains stable, with no significant changes noted compared to previous years, allowing the company to maintain its strategic advantages [54][74] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver attractive long-term financial outlooks, projecting a top line CAGR of 11% to 14% from 2020 to 2025 [26] - The macro environment has expanded the opportunity set for the company, driven by increased capital needs in the biopharma industry [34][35] Other Important Information - The company has maintained significant financial capacity for future Royalty acquisitions, with around $3 billion available through cash and access to debt markets [20][21] - The company has repurchased $305 million of its shares year-to-date, indicating a commitment to returning capital to shareholders [127] Q&A Session Summary Question: What are the greatest incremental opportunities seen in the current macro environment? - Management indicated that opportunities span development stage deals, launch capital needs, and monetization of existing royalties, with no clear standout among these categories [28][29] Question: What was surprising regarding the initial list of drugs from the IRA negotiation? - Management noted that the impact on the business is manageable, with expectations of continued growth despite the IRA's influence [56][78] Question: Is there a guide to larger capital deployment or buybacks? - Management confirmed that they have significant financial flexibility and will consider larger capital deployments if the right opportunities arise [59][81] Question: Are compelling Phase II and III opportunities becoming scarce? - Management stated that while there may be variance in investment types, the overall strategy remains focused on finding the most exciting assets [62][84] Question: How does the company view its competitive environment? - Management reiterated that there has been no significant change in the competitive landscape, maintaining confidence in their strategic positioning [74][112]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Royalty Pharma plc's unaudited condensed consolidated financial statements for Q3 and 9M 2023, encompassing balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$15.86 billion** as of September 30, 2023, driven by reduced cash and debt repayment, significantly lowering current liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | As of Sep 30, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $936,448 | $1,710,751 | | Financial royalty assets, net | $13,230,474 | $13,493,106 | | **Total assets** | **$15,855,524** | **$16,813,466** | | **Liabilities & Equity** | | | | Current portion of long-term debt | $0 | $997,512 | | Total current liabilities | $127,933 | $1,166,783 | | Long-term debt | $6,131,194 | $6,118,810 | | **Total liabilities** | **$6,270,427** | **$7,288,093** | | **Total shareholders' equity** | **$9,585,097** | **$9,525,373** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the nine months ended September 30, 2023, total income increased to **$1.76 billion**, with diluted EPS rising to **$1.43**, though Q3 net income decreased to **$72.1 million** Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | :--- | :--- | | Total income and other revenues | $536,313 | $573,463 | $1,758,486 | $1,671,467 | | Operating income | $151,442 | $192,210 | $879,254 | $789,720 | | Consolidated net income | $122,077 | $220,414 | $982,502 | $840,094 | | Net income attributable to Royalty Pharma plc | $72,114 | $142,651 | $640,494 | $498,916 | | Diluted EPS | $0.16 | $0.32 | $1.43 | $1.14 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly increased to **$2.22 billion** for the nine months ended September 30, 2023, despite a **$774.3 million** net decrease in cash due to debt repayment and share repurchases Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | For the Nine Months Ended Sep 30, 2023 | For the Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,215,174 | $1,574,049 | | Net cash used in investing activities | ($1,072,617) | ($1,444,163) | | Net cash used in financing activities | ($1,916,860) | ($679,306) | | **Net change in cash and cash equivalents** | **($774,303)** | **($549,420)** | | Cash and cash equivalents, end of period | $936,448 | $991,628 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, financial royalty assets, debt, shareholder equity, and related party transactions, clarifying the company's biopharmaceutical royalty business - The company is the **largest buyer** of biopharmaceutical royalties and a **leading funder** of innovation in the biopharmaceutical industry, acquiring royalties on both approved products and development-stage candidates[35](index=35&type=chunk) - The company's largest individual marketer and payor of royalties is **Vertex**, accounting for **31%** of the current portion of financial royalty assets as of September 30, 2023[46](index=46&type=chunk) Top Financial Royalty Assets by Net Carrying Value (in thousands) | Asset | Net Carrying Value (as of Sep 30, 2023) | | :--- | :--- | | Cystic fibrosis franchise | $5,304,675 | | Tysabri | $1,200,887 | | Trelegy | $1,171,799 | | Tremfya | $775,902 | | Evrysdi | $772,667 | - In September 2023, the company repaid **$1.0 billion** of its 0.75% senior unsecured notes upon maturity[100](index=100&type=chunk) - In March 2023, the board authorized a share repurchase program of up to **$1.0 billion**. Through the first nine months of 2023, the company repurchased **8.9 million shares** for approximately **$278.6 million**[108](index=108&type=chunk) - Subsequent to the quarter end, in October 2023, the company acquired additional royalties on Roche's Evrysdi from PTC Therapeutics for an upfront payment of **$1.0 billion**[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and operations, covering business model, portfolio performance, investment activities, liquidity, and non-GAAP financial measures [Business and Portfolio Overview](index=33&type=section&id=Business%20and%20Portfolio%20Overview) Royalty Pharma, the largest biopharmaceutical royalty buyer, holds a portfolio of over 35 products, with **$2.6 billion** in royalty receipts for 9M 2023, driven by the Cystic Fibrosis franchise and Zavzpret milestone - The company's business model is **capital-efficient**, providing exposure to the biopharmaceutical industry's **long product life cycles** and **high barriers to entry** while substantially **reducing exposure to common industry risks** like early-stage development and high R&D costs[139](index=139&type=chunk) Royalty Receipts by Top Products (in thousands) | Royalties | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | | Cystic fibrosis franchise | $660,673 | $591,733 | | Zavzpret milestone | $475,000 | $0 | | Tysabri | $256,932 | $281,819 | | Imbruvica | $193,895 | $241,943 | | Trelegy | $143,111 | $42,720 | | **Total royalty receipts** | **$2,597,444** | **$2,048,103** | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) For 9M 2023, total income rose **5.2%** to **$1.76 billion**, driven by the Zavzpret milestone, while provision for changes in expected cash flows increased to **$637.2 million** and G&A expenses rose **23.7%** - Income from financial royalty assets for the first nine months of 2023 increased by **6.1%** to **$1.67 billion**, primarily driven by **$153.6 million** of interest income recognized from the **$475.0 million** Zavzpret milestone payment[180](index=180&type=chunk)[183](index=183&type=chunk) - Provision expense for changes in expected cash flows was **$637.2 million** for the first nine months of 2023, primarily due to declines in sell-side analysts' consensus sales forecasts for Imbruvica, Tremfya, and Tysabri[188](index=188&type=chunk)[192](index=192&type=chunk) - R&D funding expense decreased by **59.3%** to **$51.5 million** in the first nine months of 2023, compared to **$126.6 million** in the same period of 2022. The 2023 expense was mainly a **$50.0 million** milestone payment to Cytokinetics[179](index=179&type=chunk)[195](index=195&type=chunk) - General and administrative expenses increased by **23.7%** in the first nine months of 2023, driven by higher Operating and Personnel Payments which are calculated based on cash receipts, including the large Zavzpret milestone[197](index=197&type=chunk) [Investments Overview](index=48&type=section&id=Investments%20Overview) The company invested **$1.2 billion** in royalties during 9M 2023, including a subsequent **$1.0 billion** Evrysdi acquisition and other notable investments in Skytrofa, Adstiladrin, KarXT, and Spinraza/pelacarsen - In the first nine months of 2023, the company invested **$1.2 billion** in royalties, milestones, and related assets[214](index=214&type=chunk) - Key acquisitions in 2023 include[215](index=215&type=chunk)[216](index=216&type=chunk) - **Evrysdi:** **$1.0 billion** upfront for additional royalties (Oct 2023) - **Skytrofa:** **$150 million** upfront - **Adstiladrin:** **$300 million** upfront - **KarXT:** **$100 million** upfront - **Spinraza/pelacarsen:** **$500 million** upfront [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity from operations was **$2.2 billion** for 9M 2023, with **$936.4 million** cash, **$6.3 billion** total debt, and non-GAAP Adjusted Cash Flow increasing **52%** to **$2.0 billion** - As of September 30, 2023, cash and cash equivalents totaled **$936.4 million**. The company repaid **$1.0 billion** of senior unsecured notes in September 2023, reducing total outstanding debt to a par value of **$6.3 billion**[219](index=219&type=chunk)[220](index=220&type=chunk) Non-GAAP Financial Measures (in thousands) | Metric | 9M 2023 | 9M 2022 | % Change | | :--- | :--- | :--- | :--- | | Total royalty receipts | $2,597,444 | $2,048,103 | 26.8% | | Adjusted Cash Receipts | $2,312,807 | $1,725,377 | 34.0% | | Adjusted EBITDA | $2,123,968 | $1,583,724 | 34.1% | | Adjusted Cash Flow | $1,959,667 | $1,289,273 | 52.0% | - The significant increase in Adjusted Cash Receipts and Adjusted Cash Flow was primarily driven by the **$475.0 million** Zavzpret milestone payment, strong performance of the cystic fibrosis franchise, and contributions from newly acquired royalties like Trelegy[246](index=246&type=chunk)[248](index=248&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes in market risk exposures since the last annual report[271](index=271&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting identified - The CEO and CFO concluded that as of the end of the period, the company's disclosure controls and procedures were effective to a reasonable assurance level[272](index=272&type=chunk) - No changes in internal controls over financial reporting occurred during the third quarter of 2023 that materially affected, or are reasonably likely to materially affect, internal control[273](index=273&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, not expecting a material adverse effect on its business or financial condition - The company is involved in ordinary course legal proceedings but does not expect them to have a material adverse impact[123](index=123&type=chunk)[275](index=275&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant business risks, including dependency on biopharmaceutical product sales, competition, reliance on third-party marketers, holding company status, and tax complexities - The company's business is subject to **significant risks**, including sales risks of the underlying biopharmaceutical products, reliance on the Manager, uncertainties in acquiring new assets, and potential conflicts of interest[277](index=277&type=chunk)[281](index=281&type=chunk) - A significant risk is the reliance on a limited number of products, with the top five product franchises accounting for **66%** of royalty receipts in the first nine months of 2023 (excluding the Zavzpret milestone)[312](index=312&type=chunk) - The company is **entirely dependent** on its external Manager for all required services, and its success depends on the Manager's **key personnel**, particularly **CEO Pablo Legorreta**[294](index=294&type=chunk)[295](index=295&type=chunk) - The company expects to be classified as a **Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes, which could result in **adverse tax consequences** for U.S. shareholders[411](index=411&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=92&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, the company repurchased **4.86 million** shares for **$144.1 million**, with **$721.4 million** remaining under the authorized repurchase program Issuer Purchases of Equity Securities (Q3 2023) | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | Total Cost (thousands) | | :--- | :--- | :--- | :--- | | July 2023 | 1,296 | $31.03 | $40,218 | | August 2023 | 1,252 | $30.50 | $38,186 | | September 2023 | 2,314 | $28.42 | $65,764 | | **Total Q3 2023** | **4,862** | **$29.65** | **$144,168** | - As of September 30, 2023, approximately **$721.4 million** remained available for future repurchases under the company's **$1.0 billion** share repurchase program, which expires on June 23, 2027[420](index=420&type=chunk) [Item 5. Other Information](index=93&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption and termination of Rule 10b5-1 trading plans by executive officers and directors during Q3 2023 - During Q3 2023, **CFO Terrance Coyne** terminated a Rule 10b5-1 trading plan, while **EVP Marshall Urist** and **Director Rory Riggs** each adopted new plans for the sale of company shares[423](index=423&type=chunk)[424](index=424&type=chunk) [Item 6. Exhibits](index=94&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed with the report include **CEO and CFO certifications** and **XBRL interactive data files**[427](index=427&type=chunk)

Royalty Pharma plc (NASDAQ:RPRX) Q2 2023 Earnings Conference Call August 8, 2023 8:00 AM ET Company Participants Pablo Legorreta - Chief Executive Officer Marshall Urist - Executive Vice President, Head of Research and Investment Terrance Coyne - Executive Vice President, Chief Financial Officer Chris Hite - Executive Vice President, Vice Chairman George Grofik - Head of Investor Relations and Communications Conference Call Participants Chris Shibutani - Goldman Sachs Hardik Parekh - JP Morgan Geoff Meacha ...

Financial Performance - Total royalty receipts for the second quarter of 2023 were $637.1 million, slightly up from $633.2 million in the same period of 2022, while total receipts for the first six months of 2023 reached $1.86 billion, compared to $1.34 billion in 2022, representing a 39% increase [148]. - Total income and other revenues for the first six months of 2023 increased by $124.2 million, or 11.3%, compared to the same period in 2022, reaching $1,222.2 million [172]. - Consolidated net income for the first six months of 2023 was $860.4 million, an increase of $240.7 million, or 38.8%, compared to the same period in 2022 [172]. - Net income attributable to Royalty Pharma plc decreased by $76.9 million, or 25.2%, in Q2 2023 compared to Q2 2022 [172]. - Income from financial royalty assets increased by $139.2 million, or 13.6%, in the first six months of 2023, driven by a $475.0 million milestone payment from Pfizer's Zavzpret [176]. Royalty Income - The cystic fibrosis franchise generated royalty receipts of $206.2 million in Q2 2023, compared to $182.0 million in Q2 2022, reflecting a growth of 13% [148]. - Royalty income from the cystic fibrosis franchise accounted for 39% of total income for Q2 2023, compared to 38% in Q2 2022 [158]. - Royalty receipts from the cystic fibrosis franchise grew by 10.1% to $422.8 million, driven by the uptake of Kaftrio and continued performance of Trikafta [236]. - Royalty receipts from Tysabri decreased by 10.7% to $170.2 million, impacted by pricing pressure and competition [236]. - Royalty receipts from Imbruvica fell by 21.4% to $131.7 million due to increased competition and market suppression [236]. Investments and Acquisitions - The company has deployed $17.0 billion to acquire royalties, milestones, and related assets on approved products since its inception in 1996, with $12.1 billion deployed from 2012 to 2022 [136]. - For development-stage product candidates, the company has invested $8.3 billion since 2012, indicating a strong commitment to funding innovation in the biopharmaceutical sector [136]. - The company invested $682.1 million in royalties, milestones, and related assets during the first six months of 2023 [205]. - In June 2023, the company acquired a royalty interest in Erleada for an upfront payment of $59 million [206]. Cash Flow and Liquidity - Cash and cash equivalents totaled $2.2 billion as of June 30, 2023, an increase from $1.7 billion as of December 31, 2022 [209]. - Net cash provided by operating activities was $1.6 billion for the first six months of 2023, compared to $1.0 billion for the same period in 2022 [208]. - Adjusted Cash Receipts for the first six months of 2023 were $1,675.6 million, up from $1,128.7 million in 2022, reflecting a significant increase in cash generation from royalty investments [226]. - Adjusted Cash Flow for the first six months of 2023 was $1,485.8 million, an increase from $848.6 million in 2022 [226]. - Current assets increased to $143.3 million as of June 30, 2023, up from $92.8 million as of December 31, 2022, indicating a significant growth in liquidity [255]. Operating Expenses - Total operating expenses for the first six months of 2023 were $494.4 million, a slight decrease of 1.2% compared to the same period in 2022 [172]. - The company recorded provision expense of $241.2 million in Q2 2023, significantly higher than the $105.7 million recorded in Q2 2022 [182]. - In the first six months of 2023, R&D funding expense decreased by $100.1 million, or 99.0%, compared to the same period in 2022, with no upfront and milestone R&D funding expense recognized in 2023 [186]. - G&A expenses increased by $29.9 million, or 29.0%, in the first six months of 2023 compared to the same period in 2022, primarily due to higher Operating and Personnel Payments [188]. Debt and Financing - The par value of total outstanding borrowings was $7.3 billion as of June 30, 2023, with $1.0 billion of senior unsecured notes maturing in September 2023 [210]. - The company’s total long-term debt as of June 30, 2023, was $6.13 billion, slightly up from $6.12 billion at the end of 2022 [241]. - The company issued $6.0 billion of senior unsecured notes in September 2020 with a weighted average coupon rate of 2.13% and annual interest payments of approximately $127.5 million [242]. - Future principal and interest payments under the notes total approximately $7.3 billion and $2.6 billion, respectively, over the next five years [251]. Strategic Initiatives - The company’s flexible business model allows it to acquire royalties across diverse therapeutic areas and treatment modalities, reducing exposure to common industry challenges [135]. - The company’s strategic alliance with MSCI Inc. aims to develop thematic life science indexes, indicating ongoing efforts to leverage capabilities for market expansion [137]. - The company’s business model relies on cash generated from existing royalties to fund investments in new royalties, highlighting its unique approach in the biopharmaceutical industry [217]. Non-GAAP Measures - Non-GAAP measures such as Adjusted Cash Receipts, Adjusted EBITDA, and Adjusted Cash Flow are critical for assessing the company's liquidity and operational performance [222]. - Adjusted EBITDA for the first six months of 2023 was $1,541.8 million, compared to $1,035.7 million in the same period of 2022 [226]. - Adjusted Cash Receipts rose by $547 million to $1.68 billion in the first half of 2023, primarily driven by a $475 million milestone payment from the FDA approval of Zavzpret [233].

Q1 2023 Financial Results Forward Looking Statements & Non-GAAP Financial Information 3 | --- | --- | --- | |-------------------|----------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------| | Portfolio Update | Marshall Urist | EVP, Head of Research & Investments | | Financial Results | Terrance Coyne | EVP, Chief Financial Officer | | Conclusion | Pablo Legorreta | Founder & Chief Executiv ...

Financial Data and Key Metrics Changes - The company reported an 11% growth in adjusted cash receipts and adjusted EBITDA in the first quarter of 2023, with adjusted cash flow growing by 49% prior to Biohaven-related payments [7][8][37] - Including Biohaven-related payments, top-line growth was 87%, driven by a $475 million milestone payment from Pfizer and $13 million in fixed Biohaven payments received in the same period a year ago [8][12] - Adjusted cash flow for the quarter amounted to $973 million, resulting in an adjusted cash flow margin of 86% [42][136] Business Line Data and Key Metrics Changes - Total royalty receipts grew by 72% year-over-year, with an 8% growth excluding Biohaven-related payments [12] - Strong contributions came from the cystic fibrosis franchise, Tremfya, and Trelegy royalties, alongside growing contributions from Evrysdi and Cabometyx [12][136] - The company added three new therapies to its portfolio, including Spinraza and potential blockbusters pelacarsen and KarXT [36] Market Data and Key Metrics Changes - The company expects underlying growth of 4% to 9% for adjusted cash receipts in 2023, driven by the cystic fibrosis franchise, Tremfya, and a full year of Trelegy royalties [139] - Foreign exchange impacts are expected to be a headwind of approximately 1% to 2% on top-line growth [17] Company Strategy and Development Direction - The company aims to maintain a balanced royalty acquisition strategy, with a target of $10 billion to $12 billion in capital deployed over the next five years [43][112] - The management expressed confidence in the ability to execute on the business plan and create shareholder value through a combination of capital generation and strategic acquisitions [15][137] - The company is focused on under-innovated markets, particularly in the areas of schizophrenia and neurodegenerative diseases, to drive future growth [133][141] Management's Comments on Operating Environment and Future Outlook - Management noted that the competitive landscape has not significantly changed, with a growing marketplace in biopharma and a continued dominance in larger transactions [54] - The company reaffirmed its full-year guidance for adjusted cash receipts between $2.85 billion and $2.95 billion, reflecting strong underlying growth [113][140] - Management highlighted the importance of maintaining a strong cash position and efficient capital allocation to drive shareholder returns [137][141] Other Important Information - The company announced a multiyear share repurchase program of up to $1 billion, reflecting confidence in the value of its shares [3][137] - The company expects to make a $50 million milestone payment to Cytokinetics in the second half of 2023, which will reduce adjusted cash flow for the year [16] Q&A Session All Questions and Answers Question: What is the company's view on the balance between development stage and commercial royalties? - Management expressed confidence in the current balance of approved and development stage therapies, emphasizing a focus on finding therapies that are important to patients and the medical system [118][124] Question: How does the company view the competitive landscape in light of recent M&A activity? - Management noted that while competition exists, it does not hinder the company's ability to engage in royalty agreements, and the M&A environment presents opportunities for acquiring royalties [62][98] Question: What are the company's thoughts on the Alzheimer's disease market? - Management indicated that they are monitoring the Alzheimer's disease area for potential opportunities, recognizing the excitement around new therapies [51][143]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 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 ...

Financial Data and Key Metrics Changes - Adjusted cash receipts grew by 10% in Q4 2022 and for the full year, adjusted EBITDA increased by 10% and adjusted cash flow rose by 15% prior to the accelerated Biohaven redemption payments [15][22] - Total royalty receipts grew by 79% in Q4 and 24% for the full year 2022 compared to the respective year-ago periods, with adjusted cash receipts amounting to $1.1 billion in Q4, reflecting a 96% growth [41][42] - Adjusted cash flow for the full year was $2.2 billion, representing a margin of 80% [45] Business Line Data and Key Metrics Changes - The company added 6 new therapies to its portfolio, including the blockbuster Trelegy, contributing to strong financial performance [15][16] - Royalty contributions from cystic fibrosis franchise, Xtandi, Tremfya, and Trelegy royalties were significant, while losses were noted from the DPP-IV royalties and weaknesses in Imbruvica [41][42] Market Data and Key Metrics Changes - The royalty funding market has seen a sixfold increase in transactions from 2015 to 2022, with the dollar value of transactions rising tenfold to $6.2 billion [26][68] - Royalty Pharma accounted for more than $0.5 billion in transaction value and over 25% of transaction volume in 2022, maintaining a leading share in larger transactions [26] Company Strategy and Development Direction - The company aims to deploy $10 billion to $12 billion over the next 5 years, reflecting a significant increase in capital deployment goals [21][66] - The focus remains on investing in approved therapies, with approximately 70% of capital deployed since 2020 on approved products [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changes in the industry, including the impact of the IRA, and highlighted the unique business model that minimizes early-stage development risk [54][72] - The company anticipates continued strong performance in 2023, with adjusted cash receipts expected to be in the range of $2.375 billion to $2.475 billion, excluding potential milestone payments [48] Other Important Information - The company has absorbed significant losses of exclusivity over the past two years while still delivering double-digit top line growth, showcasing the resilience of its business model [17][24] - The company has a strong financial position with $1.7 billion in cash and marketable securities at the end of December 2022, providing significant firepower for future acquisitions [46] Q&A Session All Questions and Answers Question: Thoughts on the current deal environment and funding challenges - Management noted a significant increase in the funnel of opportunities due to the challenging funding environment, leading to a higher capital deployment than in previous years [66][68] Question: Impact of IRA on royalty opportunities - Management believes the company is well-positioned to adapt to changes brought by the IRA, viewing it as an opportunity rather than a challenge [71][72] Question: Long-term prospects of Spinraza and market creation for Lp(a) - Management expressed confidence in Spinraza's role in SMA treatment and highlighted the potential for Lp(a) therapies to create a significant market, especially if clinical outcomes are favorable [83][74]