Royalty Pharma plc (NASDAQ:RPRX) Q1 2022 Earnings Conference Call May 5, 2022 8:00 AM ET Company Participants George Grofik - Senior Vice President, Head-Investor Relations & Communications Terry Coyne - Executive Vice President & Chief Financial Officer Marshall Urist - Head, Research & Investments Chris Hite - Vice Chairman Conference Call Participants Chris Schott - JPMorgan Terence Flynn - Morgan Stanley Chris Shibutani - Goldman Sachs Geoff Meacham - Bank of America Umer Raffat - Evercore Andrew Baum - ...

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, 2022 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 (State or other jur ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) Royalty Pharma is the largest buyer of biopharmaceutical royalties, acquiring streams on over 35 commercial products and 10 development-stage candidates - Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation, collaborating with academic institutions, biotech companies, and large pharmaceutical firms[18](index=18&type=chunk) 2021 Key Financial and Investment Metrics (USD) | Metric | Value (USD) | | :--- | :--- | | Cash from operating activities | $2.0 billion | | Adjusted Cash Receipts | $2.1 billion | | Adjusted Cash Flow | $1.8 billion | | Cash deployed for royalties and securities | $2.7 billion | - The company's portfolio includes royalties on more than **35 commercial products** and **ten development-stage product candidates**, with key products like Imbruvica, Xtandi, Tysabri, and the Vertex cystic fibrosis franchise[18](index=18&type=chunk)[22](index=22&type=chunk) - The business model is capital-efficient, providing exposure to the biopharmaceutical industry's attractive characteristics while mitigating common risks like early-stage development, R&D costs, and fixed manufacturing/marketing costs[19](index=19&type=chunk) - Since 1996, the company has deployed over **$22 billion** to acquire royalties, representing over **50% of all royalty transactions** in that period, and from 2012 to 2021, it deployed over **$17 billion**, capturing approximately **60% of the market share**[20](index=20&type=chunk) [Portfolio Overview](index=5&type=section&id=Portfolio%20Overview) Top 5 Products by 2021 Royalty Receipts (in millions) | Product(s) | Marketer(s) | 2021 Royalty Receipts | 2021 End Market Sales | | :--- | :--- | :--- | :--- | | Cystic fibrosis franchise | Vertex | $702 | $7,573 | | Tysabri | Biogen | $369 | $2,063 | | Imbruvica | AbbVie, Johnson & Johnson | $353 | $6,943 | | Promacta | Novartis | $174 | $2,016 | | Xtandi | Pfizer, Astellas | $158 | $4,582 | - The portfolio includes ten development-stage product candidates in Phase 2 or Phase 3 trials, targeting conditions such as Alzheimer's disease, hypertrophic cardiomyopathy, and myelofibrosis[24](index=24&type=chunk) [Our Business Model](index=7&type=section&id=Our%20Business%20Model) - The portfolio is highly diversified, with no single therapy accounting for more than **19% of royalty receipts**, no therapeutic area for more than **29%**, and no marketer for more than **27%** in 2021[35](index=35&type=chunk) - The portfolio has a long duration, with an estimated weighted average royalty duration of approximately **13 years**, and key royalty on Vertex's Trikafta is expected to have exclusivity through **2037**[37](index=37&type=chunk) - The company holds a leadership position in the royalty market, executing **9 of the 11 largest transactions (over $500 million)** since 2012, representing over **80% market share** in this segment[44](index=44&type=chunk) - The company has a significant cost of capital advantage with **$7.3 billion in senior unsecured notes** at a weighted average coupon of **2.24%** and a weighted-average maturity of approximately **13 years** as of December 31, 2021[42](index=42&type=chunk) [Our Strategic Plan to Grow the Portfolio](index=10&type=section&id=Our%20Strategic%20Plan%20to%20Grow%20the%20Portfolio) - The growth strategy is built on three pillars: - Acquiring royalties on approved products with dependable cash flows - Acquiring royalties on attractive development-stage product candidates with strong clinical proof of concept - Acquiring royalties in connection with M&A transactions[49](index=49&type=chunk) - From 2012 through 2021, the company deployed **$7.8 billion in cash** for royalties on development-stage candidates, with an **81% success rate** to date (**$6.3 billion** on products that have since been approved)[48](index=48&type=chunk) - The company takes a disciplined approach to acquisitions, focusing on therapies that are clinically validated, address high unmet needs, offer significant patient benefits, have a unique competitive position, and are marketed by strong partners[52](index=52&type=chunk)[53](index=53&type=chunk) [Our Portfolio Details](index=12&type=section&id=Our%20Portfolio%20Details) Royalty Portfolio Summary (Selected Products) | Product | Therapeutic Area | Est. Expiration | Royalty Rate Details | | :--- | :--- | :--- | :--- | | Cystic fibrosis franchise | Rare disease | 2037 | Tiered single-digit to sub-teen percentages | | Tysabri | Neurology | Perpetual | 18% on sales up to $2.0B, 25% above | | Imbruvica | Cancer | 2027-2032 | Tiered mid-single digits | | Xtandi | Cancer | 2027-2028 | Slightly less than 4% | | Tremfya | Immunology | 2031-2032 | Mid-single digit, tiered | | Trodelvy | Cancer | Perpetual | 4.15% on sales up to $2B, tiered down to 1.75% | Fixed Payment Arrangements Summary | Funding Arrangement | Key Terms | | :--- | :--- | | Biohaven Series A Preferred Shares | 16 quarterly payments of $15.6M (total $250M) from Q1 2021 to Q4 2024 | | Biohaven Series B Preferred Shares | 24 quarterly payments of $14.8M (total $354.5M) from Q1 2025 to Q4 2030 | | Zavegepant Success-Based Milestones | Payments up to 2.95x the $250M funded amount, contingent on regulatory approvals | | MorphoSys Development Funding Bonds | Payments totaling ~2.2x the amount drawn (up to $350M available) | | Cytokinetics Commercial Launch Funding | Payments totaling 1.9x the amount drawn (up to $300M available) | [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its business, organizational structure, stock, and taxation, including sales performance, reliance on its Manager, and potential changes in tax laws - **Business Risks:** The company's revenue is subject to the sales performance of biopharmaceutical products, which can be affected by pricing pressures, competition, clinical trial failures, and loss of patent protection, and the company also relies heavily on its external Manager to identify and acquire suitable assets[147](index=147&type=chunk)[160](index=160&type=chunk) - **Financial & Accounting Risks:** The use of leverage magnifies potential losses, and accounting for most royalty assets under the effective interest method can lead to volatile and unpredictable GAAP results due to sensitivity to long-term sales forecasts[158](index=158&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - **Regulatory & Legal Risks:** The business could be adversely affected if the SEC changes its interpretation of the U.S. Investment Company Act, potentially requiring impractical registration as an investment company[224](index=224&type=chunk)[228](index=228&type=chunk) - **Tax Risks:** The company's structure involves complex tax laws, with a key risk being the potential loss of benefits under the U.S.-Ireland income tax treaty, which could subject a substantial portion of its U.S.-source royalty revenue to a **30% withholding tax**[273](index=273&type=chunk)[276](index=276&type=chunk) - **General Risks:** The COVID-19 pandemic and future outbreaks could disrupt the global economy, affecting partners' clinical trials, manufacturing, and product sales, which could in turn impact the company's results[292](index=292&type=chunk)[293](index=293&type=chunk) [Properties](index=51&type=section&id=Item%202.%20Properties) The company's executive offices are located in New York, NY, provided by its external Manager, and are considered suitable and adequate for business operations - Executive offices are located in New York, NY and are provided by the Manager[298](index=298&type=chunk) [Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) The company may be a party to various legal matters in the ordinary course of business but does not expect any current proceedings to have a material adverse effect on its financial condition or operations - The company is not currently party to any legal proceedings that are expected to have a material adverse effect on its business or financial condition[298](index=298&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Royalty Pharma's Class A ordinary shares trade on the Nasdaq Global Select Market under "RPRX", and in 2021, the company declared and paid four quarterly cash dividends totaling **$0.68 per share** - The company's Class A ordinary shares are traded on the Nasdaq Global Select Market under the symbol **"RPRX"**[301](index=301&type=chunk) - In the year ended December 31, 2021, the company declared and paid four quarterly cash dividends of **$0.17 per Class A ordinary share**, totaling **$285.2 million**[303](index=303&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, Royalty Pharma's total income grew 7.9% to **$2.3 billion**, but consolidated net income decreased 27.1% to **$1.2 billion**, mainly due to increased provisions and R&D funding expenses 2021 vs. 2020 Results of Operations (in thousands) | Metric | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total income and other revenues | $2,289,463 | $2,122,353 | 7.9% | | Total operating expense, net | $858,748 | $526,954 | 63.0% | | Operating income | $1,430,715 | $1,595,399 | (10.3)% | | Consolidated net income | $1,241,201 | $1,701,954 | (27.1)% | 2021 vs. 2020 Non-GAAP Financial Results (in thousands) | Non-GAAP Metric | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total royalty receipts | $2,608,542 | $2,344,399 | 11.3% | | Adjusted Cash Receipts | $2,128,938 | $1,800,447 | 18.2% | | Adjusted EBITDA | $1,944,427 | $1,620,738 | 20.0% | | Adjusted Cash Flow | $1,766,647 | $1,482,898 | 19.1% | - The increase in Adjusted Cash Receipts was driven by growth from the cystic fibrosis franchise, fixed payments from Biohaven, and newly acquired assets, partially offset by declines from maturing assets like the HIV franchise[421](index=421&type=chunk) - The company invested **$2.7 billion** in royalties and related assets in 2021 across five transactions, including a strategic funding partnership with MorphoSys and royalty acquisitions on Tremfya, Oxlumo, and Cabometyx[445](index=445&type=chunk)[449](index=449&type=chunk) - As of December 31, 2021, the company had total long-term debt of **$7.1 billion**, consisting of senior unsecured notes, and an undrawn **$1.5 billion revolving credit facility**, indicating a strong liquidity position[453](index=453&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=88&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include foreign currency exchange rate volatility and interest rate sensitivity, with all outstanding debt having fixed interest rates as of December 31, 2021 - Primary market risks include foreign currency exchange risk (from royalties paid in currencies like the Euro, Swiss Franc, etc.) and interest rate risk (on cash equivalents and marketable securities)[500](index=500&type=chunk)[501](index=501&type=chunk) - As of December 31, 2021, **100% of the company's outstanding debt** has fixed interest rates, minimizing exposure to interest rate fluctuations on its liabilities, though the **$1.5 billion revolving credit facility**, if drawn, would have a variable rate[505](index=505&type=chunk) - The company is exposed to credit and counterparty risk, with the largest concentration being with Vertex, which accounted for **32% of the current portion of net financial royalty assets** as of year-end 2021[507](index=507&type=chunk) [Financial Statements and Supplementary Data](index=90&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Royalty Pharma plc for 2021, 2020, and 2019, including balance sheets, statements of operations, and cash flows, along with detailed notes Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,541,048 | $1,008,680 | | Financial royalty assets, net | $14,332,596 | $12,955,277 | | Total Assets | $17,515,865 | $16,020,286 | | Long-term debt | $7,096,070 | $5,816,584 | | Total Shareholders' Equity | $10,248,545 | $9,895,815 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total income and other revenues | $2,289,463 | $2,122,353 | $1,814,254 | | Operating income | $1,430,715 | $1,595,399 | $2,623,176 | | Consolidated net income | $1,241,201 | $1,701,954 | $2,461,419 | | Net income attributable to controlling interest | $619,728 | $975,040 | $2,348,535 | Consolidated Statement of Cash Flows Highlights (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,017,536 | $2,034,629 | $1,667,239 | | Net cash used in investing activities | $(1,870,280) | $(2,759,320) | $(2,153,625) | | Net cash provided by/(used in) financing activities | $385,112 | $1,487,172 | $(1,191,626) | [Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes identified - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[776](index=776&type=chunk) - Management's assessment concluded that internal control over financial reporting was effective as of December 31, 2021, and the independent registered public accounting firm issued an unqualified audit report on its effectiveness[777](index=777&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=133&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive proxy statement for the 2022 Annual General Meeting of Shareholders - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's Proxy Statement for the 2022 Annual General Meeting of Shareholders[782](index=782&type=chunk) [Executive Compensation](index=134&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the 2022 Annual General Meeting of Shareholders - Information regarding executive compensation is incorporated by reference from the company's Proxy Statement[783](index=783&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=134&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the company's definitive proxy statement for the 2022 Annual General Meeting of Shareholders - Information regarding security ownership of beneficial owners and management is incorporated by reference from the company's Proxy Statement[784](index=784&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=134&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive proxy statement for the 2022 Annual General Meeting of Shareholders - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's Proxy Statement[785](index=785&type=chunk) [Principal Accountant Fees and Services](index=134&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for the 2022 Annual General Meeting of Shareholders - Information regarding principal accountant fees and services is incorporated by reference from the company's Proxy Statement[786](index=786&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=135&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed as part of the Annual Report on Form 10-K, including corporate governance documents, material contracts, and required certifications - This section contains a list of all exhibits filed with the 10-K, including corporate governance documents, material contracts, and required certifications[789](index=789&type=chunk)

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 September 30, 2021 ☐ 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) Indicate by check mark whether the registrant h ...

ROYALTY PHARMA ROYALTY PHARMA Royalty Pharma plc Q2 2021 Financial Results August 11, 2021 2 Forward Looking Statements & Non-GAAP Financial Information 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 ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Royalty Pharma plc as of June 30, 2021, and for the three and six months ended June 30, 2021 and 2020. It includes the balance sheets, statements of comprehensive income, statements of shareholders' equity, and statements of cash flows, along with detailed notes explaining the basis of preparation and significant accounting policies Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | $16,514,913 | $16,020,286 | | Cash and cash equivalents | $1,142,281 | $1,008,680 | | Financial royalty assets, net | $12,932,077 | $12,368,084 | | **Total Liabilities** | $6,109,548 | $6,124,471 | | Long-term debt | $5,825,559 | $5,816,584 | | **Total Shareholders' Equity** | $10,405,365 | $9,895,815 | Condensed Consolidated Statements of Comprehensive Income Highlights (Unaudited) | Metric | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :--- | :--- | :--- | | Total income and other revenues | $1,127,990 | $1,011,811 | | Operating income | $974,247 | $770,776 | | Consolidated net income | $965,734 | $711,072 | | Net income attributable to controlling interest | $509,895 | $513,314 | | Basic EPS (Class A) | $1.28 | $0.09 | | Diluted EPS (Class A) | $1.25 | $0.09 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,057,820 | $960,108 | | Net cash used in investing activities | ($473,134) | ($1,006,720) | | Net cash (used in)/provided by financing activities | ($451,085) | $2,121,956 | | Net change in cash and cash equivalents | $133,601 | $2,075,344 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's significant accounting policies, IPO-related reorganization, and key financial asset and debt components - The company completed its IPO in June 2020, involving significant Reorganization Transactions, including an exchange offer for legacy investors and the creation of a new corporate structure. Old RPI is considered the predecessor for financial reporting purposes[32](index=32&type=chunk)[38](index=38&type=chunk)[42](index=42&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) on January 1, 2020, resulting in a cumulative adjustment to Retained Earnings of **$192.7 million** to recognize an allowance for expected credit losses on financial royalty assets[61](index=61&type=chunk)[125](index=125&type=chunk) Key Financial Assets as of June 30, 2021 (in thousands) | Asset Type | Net Carrying Value | | :--- | :--- | | Financial royalty assets, net | $13,528,928 | | Available for sale debt securities | $271,200 | | Investments in non-consolidated affiliates | $465,620 | Total Debt as of June 30, 2021 (in thousands) | Debt Component | Carrying Value | | :--- | :--- | | Senior Unsecured Notes (Par Value $6.0B) | $5,825,559 | | Senior Unsecured Revolving Credit Facility | $0 (undrawn) | | **Total long-term debt** | **$5,825,559** | - Subsequent to the quarter end, on July 15, 2021, the company made an upfront payment of **$1.425 billion** to MorphoSys and purchased **$100 million** of its shares. On July 26, 2021, the company issued an additional **$1.3 billion** of senior unsecured notes[217](index=217&type=chunk)[218](index=218&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business model as the largest buyer of biopharmaceutical royalties, its portfolio of over 45 commercial products, and its financial reporting methodology. The MD&A highlights the use of non-GAAP metrics like Adjusted Cash Receipts due to the volatility of GAAP income recognition for financial royalty assets. The analysis covers results of operations, key portfolio developments, liquidity, capital resources, and recent investment activities - The company's business model focuses on acquiring biopharmaceutical royalties, which provides exposure to top-line sales of leading therapies with reduced R&D and commercialization risks[222](index=222&type=chunk)[223](index=223&type=chunk) - Due to the effective interest method of accounting for financial royalty assets, GAAP income can be volatile and unpredictable. Management therefore uses non-GAAP metrics, primarily Adjusted Cash Receipts, Adjusted EBITDA, and Adjusted Cash Flow, as key measures of operating performance and liquidity[229](index=229&type=chunk)[231](index=231&type=chunk)[233](index=233&type=chunk) Non-GAAP Financial Highlights (Six Months Ended June 30) | Metric (non-GAAP) | 2021 (in millions) | 2020 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Adjusted Cash Receipts | $999.0 | $844.1 | 18.3% | | Adjusted EBITDA | $917.2 | $774.1 | 18.5% | | Adjusted Cash Flow | $838.0 | $666.5 | 25.7% | - For the six months ended June 30, 2021, the company invested **$706.9 million** in royalties and related assets. Key recent transactions include a strategic funding partnership with MorphoSys and royalty acquisitions for Oxlumo and Cabometyx[363](index=363&type=chunk)[365](index=365&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on changes in income from financial royalty assets and the provision for expected cash flows Comparison of Results (Six Months Ended June 30) | Metric (in thousands) | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total income and other revenues | $1,127,990 | $1,011,811 | 11.5% | | Income from financial royalty assets | $1,033,039 | $937,021 | 10.2% | | Provision for changes in expected cash flows | $48,499 | $135,290 | (64.2)% | | Operating income | $974,247 | $770,776 | 26.4% | | Consolidated net income | $965,734 | $711,072 | 35.8% | - The increase in income from financial royalty assets for the six months ended June 30, 2021 was primarily driven by strong performance from the cystic fibrosis franchise and income from newly acquired assets like Evrysdi and Cabometyx/Cometriq, partially offset by declines from the HIV franchise due to loss of exclusivity for certain products[275](index=275&type=chunk) - The provision for changes in expected cash flows was an expense of **$48.5 million** in the first six months of 2021, compared to an expense of **$135.3 million** in the same period of 2020. The 2021 expense was driven by declines in forecasts for Imbruvica and Tazverik, partially offset by provision income from increased forecasts for Tysabri and Xtandi[283](index=283&type=chunk)[284](index=284&type=chunk) [Non-GAAP Financial Results](index=57&type=section&id=Non-GAAP%20Financial%20Results) This section presents key non-GAAP financial metrics, including Adjusted Cash Receipts and Adjusted Cash Flow, to provide a clearer view of operational performance - Adjusted Cash Receipts increased **18.3%** to **$999.0 million** for the first six months of 2021, driven by higher royalty receipts from the cystic fibrosis franchise, new assets, and fixed payments from Biohaven, partially offset by declines from the HIV franchise[337](index=337&type=chunk)[338](index=338&type=chunk) - Adjusted Cash Flow increased **25.7%** to **$838.0 million** for the first six months of 2021, benefiting from higher Adjusted Cash Receipts, lower net interest paid due to debt refinancing, and lower R&D funding payments[337](index=337&type=chunk)[346](index=346&type=chunk) Top Royalty Receipts (Six Months Ended June 30, 2021) | Product | Royalty Receipts (in millions) | | :--- | :--- | | Cystic fibrosis franchise | $322.8 | | Tysabri | $179.0 | | Imbruvica | $176.4 | | Xtandi | $76.8 | | Promacta | $76.5 | [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's sources of liquidity, cash position, marketable securities, and outstanding debt, including recent financing activities - The primary source of liquidity is cash from operations, which amounted to **$1.1 billion** for the six months ended June 30, 2021[368](index=368&type=chunk) - As of June 30, 2021, the company had **$1.1 billion** in cash and cash equivalents and **$842.7 million** in marketable securities. It also has an undrawn **$1.5 billion** revolving credit facility[369](index=369&type=chunk)[376](index=376&type=chunk) - Total long-term debt outstanding was **$5.8 billion** as of June 30, 2021, consisting entirely of senior unsecured notes issued in September 2020. An additional **$1.3 billion** in notes were issued in July 2021[371](index=371&type=chunk)[383](index=383&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are to interest rate sensitivity and foreign currency exchange risk. Interest rate risk affects investments in marketable securities and variable-rate debt, while foreign currency risk arises from royalties paid in non-USD currencies. The company uses derivative instruments to manage these risks but not for speculative purposes - The company is exposed to foreign currency risk as some royalties are paid in currencies other than the U.S. dollar, primarily the Euro, Canadian Dollar, Swiss Franc, and Japanese Yen[406](index=406&type=chunk) - Following the September 2020 Notes issuance, **100%** of the company's outstanding debt is at a fixed rate, mitigating interest rate risk on existing debt. However, the undrawn **$1.5 billion** revolving credit facility is variable-rate[410](index=410&type=chunk) - Credit and counterparty risk is concentrated with a few large pharmaceutical companies. As of June 30, 2021, Vertex was the largest payor, accounting for **29%** of the current portion of Financial royalty assets[412](index=412&type=chunk) [Item 4. Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2021. There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls - The CEO and CFO concluded that as of June 30, 2021, the company's disclosure controls and procedures were effective to a reasonable assurance level[414](index=414&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[415](index=415&type=chunk) [PART II. OTHER INFORMATION](index=73&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, updates on risk factors, and other miscellaneous information required for the quarterly report [Item 1. Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company may be involved in various legal matters in the ordinary course of business. Management does not believe that the ultimate liability from these proceedings will have a material adverse effect on the company's business, financial condition, or results of operations - The company is not currently involved in any legal proceedings that are expected to have a material adverse impact on its financial condition or operations[418](index=418&type=chunk) [Item 1A. Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the risk factors disclosed in the Annual Report on Form 10-K have been reported[419](index=419&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=74&type=section&id=Other%20Items) This section confirms that there were no unregistered sales of equity securities, no defaults upon senior securities, and no other material information to report for the period. It also lists the exhibits filed with the quarterly report - Item 2: There were no unregistered sales of equity securities during the period[420](index=420&type=chunk) - Items 3, 4, and 5 were not applicable[421](index=421&type=chunk)[422](index=422&type=chunk)[423](index=423&type=chunk) - Item 6 lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files[424](index=424&type=chunk)

ROYALTY PHARMA UBS Global Healthcare Conference Terrance Coyne, EVP, Chief Financial Officer Marshall Urist, EVP, Co-Head of Research & Investments May 24, 2021 2 Forward Looking Statements & Non-GAAP Financial Information 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 o ...

PRE-QUARTERLY RESULTS COMMUNICATION NEW YORK, NY, April 14, 2021 - Royalty Pharma plc (Nasdaq: RPRX) intends to announce its financial results for the first quarter of 2021 on May 11, 2021. An invitation for the results webcast will follow shortly. To assist in the financial modeling of its first quarter 2021 results, the company has compiled the following items. Non-GAAP Financial Measures Royalty Pharma focuses on certain non-GAAP financial measures to manage its business. These measures, which are presen ...

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, 2021 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 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 110 East 59 Street th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) (State or other jurisdiction of incorporation or organization) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 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 ...