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 ...

Business Growth and Acquisitions - The company has been able to grow its business by acquiring numerous royalties, including those related to leading therapies, but may face challenges in identifying and acquiring sufficient royalties to sustain growth[129] - The company partnered with Pfizer to provide up to $300 million in funding for clinical trials of Ibrance, but subsequent trials did not meet primary endpoints, highlighting risks associated with development-stage product candidates[130] - The company intends to continue acquiring development-stage product candidates, but there is no assurance that regulatory authorities will approve these products or that they will achieve commercial success[133] - The company may undertake strategic acquisitions of biopharmaceutical companies, but these acquisitions could expose it to unanticipated liabilities and affect profitability[136] - Unsuccessful attempts to acquire new royalties may lead to significant costs and hinder future asset acquisition efforts, impacting management resources[166] Financial Risks and Debt Management - The company uses leverage to finance a significant portion of its capital deployment, which increases the risk of loss if acquired royalties do not generate sufficient income[137] - The company must comply with various financial covenants in its debt agreements, which may restrict its ability to pay dividends and achieve business objectives[142] - As of December 31, 2020, the total principal amount of Notes outstanding was $6.0 billion, with an additional $1.5 billion available under the Revolving Credit Facility[145] - The company is subject to interest rate fluctuations, which could increase borrowing costs and diminish net profits if interest rates rise[147] - The company is exposed to credit risk from royalty assets and receivables, with Vertex accounting for 27% of the current portion of financial royalty assets as of December 31, 2020[470] Revenue Dependence and Market Vulnerability - The company relies on a limited number of products for revenue, which increases vulnerability to market fluctuations and product performance[128] - The top five therapies accounted for 61% of the company's royalty receipts for the year ended December 31, 2020, indicating a reliance on a limited number of products[155] - The company faces significant competition in acquiring high-quality royalties, with intense competition from other potential acquirers, including larger companies and financial institutions[156] - Sales of products generating royalties are subject to uncertainties related to healthcare reimbursement policies and pricing pressures, which may limit revenue potential[169] Regulatory and Compliance Risks - The company faces risks related to the competitive nature of the biopharmaceutical industry, including pricing pressures and competition for royalties[128] - Regulatory changes and pricing controls in the U.S. and other major markets could adversely affect the company's royalties and future acquisitions[170] - The biopharmaceutical industry may be negatively impacted by federal deficit reduction policies, potentially reducing cash flows from royalties[175] - Regulatory approvals for biopharmaceutical products vary by country, and delays or denials could harm sales and royalty payments[176] - The company is required to comply with Section 404 of the Sarbanes-Oxley Act, which necessitates effective internal controls over financial reporting[237] Operational and Management Risks - The company is entirely dependent on the Manager for all services, which poses risks if key personnel are unable to meet the company's needs[139] - The Manager's liability is limited under the Management Agreement, which may result in unfavorable operating results for the company[205] - Operational risks, including cyber-attacks and system failures, could disrupt business operations and lead to significant financial losses[207] - The company is highly dependent on information systems and technology, which may not accommodate growth, potentially increasing costs and adversely affecting financial condition[210] Currency and Taxation Risks - Foreign currency risk exists as certain products pay royalties in currencies other than U.S. dollars, impacting cash flow based on exchange rate fluctuations[148] - The company expects to be classified as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, which could lead to adverse tax consequences for U.S. holders of its Class A ordinary shares[242] - Changes to the U.S.-Ireland income tax treaty could result in increased withholding taxes, materially impacting financial position and cash flows[249] - U.K. tax resident companies are subject to U.K. corporation tax on worldwide taxable profits, with potential additional costs if treated as resident in another jurisdiction[257] Shareholder and Dividend Considerations - The ability to pay dividends is limited by English law and contractual obligations, with no assurance that dividends will be paid[191] - Dividends can only be paid from profits available for distribution, and accumulated losses may prevent dividend payments even in profitable years[193] - The rights of shareholders differ from those typically offered to U.S. corporation shareholders, potentially making Class A ordinary shares less attractive[225] - The board of directors has the authority to approve interim dividends without shareholder approval, but final dividends require majority approval[192]

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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, 2020 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 Not applicable (State or othe ...

Financial Performance - Royalty receipts are the primary measure of operating performance, encompassing cash collections from financial royalty assets and other sources [205]. - Adjusted Cash Receipts and Adjusted Cash Flow are key liquidity measures used to evaluate the company's ability to generate cash from operations [207]. - Total royalty receipts from growth products reached $567.993 million for the three months ended June 30, 2020, compared to $409.833 million in the same period of 2019, representing a 38.6% increase [220]. - Adjusted Cash Receipts for the six months ended June 30, 2020, totaled $844.1 million, down from $1,075.6 million in 2019, indicating a decrease of 21.5% [220]. - Adjusted EBITDA for the six months ended June 30, 2020, was $774.1 million, a decline of 24.7% from $1,028.5 million in 2019 [220]. - Total income and other revenues for the three months ended June 30, 2020, reached $510.9 million, an increase of $53.3 million or 11.7% year-over-year [250]. - Consolidated net income for the three months ended June 30, 2020, was $602.0 million, a significant increase of $423.2 million or 236.7% year-over-year [250]. - Net income attributable to controlling interest for the three months ended June 30, 2020, was $442.1 million, an increase of $290.4 million or 191.4% year-over-year [250]. - Adjusted Cash Flow decreased by 19.0% year-over-year to $666.498 million for the six months ended June 30, 2020 [299]. - The company reported an increase in financial royalty receipts of $108.4 million for the six months ended June 30, 2020, contributing to the overall growth in cash provided by operating activities [339]. Revenue Sources - The portfolio includes royalties on over 45 marketed therapies and four development-stage product candidates, addressing areas such as rare diseases, oncology, and diabetes [209]. - Income from financial royalty assets increased by $57.2 million to $474.2 million for the three months ended June 30, 2020, representing a 13.7% increase compared to the same period in 2019 [250]. - The cystic fibrosis franchise contributed $136.119 million in revenue for the three months ended June 30, 2020, up from $85.745 million in 2019, marking a 58.7% increase [220]. - The HIV franchise generated $64.692 million in revenue for the three months ended June 30, 2020, compared to $52.193 million in 2019, reflecting a growth of 24.0% [220]. - Royalty receipts from the cystic fibrosis franchise increased by $42.8 million, driven by the successful launch of Trikafta in the U.S. [303]. - Royalty receipts from Tysabri increased by $11.7 million, benefiting from extra shipping days and a pricing adjustment in Italy [304]. - Royalty receipts from Imbruvica increased by $31.9 million, driven by continued penetration in chronic lymphocytic leukemia patients [305]. - Royalty receipts from the HIV franchise increased by $20.0 million, primarily due to strong performance of Biktarvy [306]. Acquisitions and Investments - Royalty Pharma has deployed $12 billion to acquire royalties on approved products since its inception in 1996, with $7 billion acquired from 2012 to 2019 [195]. - The company has invested $6.1 billion in royalties on development-stage product candidates since 2012 [195]. - The company acquired a royalty on risdiplam for $650 million, which was approved by the FDA in August 2020, marking a significant addition to its portfolio [333]. - The company invested $497.2 million in royalties and related assets during the second quarter of 2020, totaling $667.3 million for the first six months of 2020, including four new investments [331]. Debt and Liquidity - The company raised $1.9 billion in net proceeds from its IPO in June 2020, significantly enhancing its liquidity position [335][343]. - As of June 30, 2020, the company had cash and cash equivalents totaling $2.4 billion, up from $283.7 million as of December 31, 2019 [344]. - The company had total long-term debt outstanding of $5.7 billion as of June 30, 2020, down from $6.0 billion as of December 31, 2019 [337]. - The company has entered into new senior secured credit facilities totaling $6.04 billion, consisting of a Term Loan A of $3.12 billion and a Term Loan B of $2.83 billion, with interest rates of 1.50% and 1.75% above LIBOR, respectively [345]. - The company is required to make total term loan amortization payments of $5.95 billion over the next five years, with $94.2 million due in the remainder of 2020 [354]. Operational Efficiency - The company operates with a capital-efficient business model, reducing exposure to common industry challenges like high R&D costs [194]. - Management emphasizes that income from royalties should not be viewed as a direct measure of near-term financial performance due to accounting volatility [204]. - The total operating expenses for the three months ended June 30, 2020, were $101.6 million, a decrease of $28.2 million or 21.7% compared to the same period in 2019 [250]. - General and administrative expenses increased by $12.5 million to $42.8 million for the three months ended June 30, 2020, reflecting a 41.0% increase compared to the same period in 2019 [250]. Regulatory Approvals - The FDA approved a supplemental New Drug Application for Erleada in September 2019, expanding its market [285]. - Vertex's cystic fibrosis franchise received FDA approval for Trikafta in October 2019, significantly expanding the addressable market and extending royalty duration to 2037 [286]. - Epizyme received FDA approval for Tazverik for relapsed or refractory follicular lymphoma, marking a significant regulatory milestone [290]. - The FDA granted accelerated approval for Trodelvy, the first antibody-drug conjugate approved specifically for metastatic triple-negative breast cancer [292].