Group 1 - The presentation features Terence Flynn, a U.S. biopharma analyst from Morgan Stanley, hosting Royalty Pharma [1] - Pablo Legorreta, the Founder and CEO of Royalty Pharma, and Terry Coyne, the CFO, are present for the discussion [1] - A disclosure statement is read before the presentation begins [2]

Summary of Royalty Pharma FY Conference Call (September 09, 2025) Company Overview - **Company**: Royalty Pharma (NasdaqGS:RPRX) - **Industry**: Biopharmaceuticals Key Points and Arguments Industry Insights - The biopharmaceutical ecosystem is experiencing significant innovation, particularly from China, which is producing unprecedented levels of new developments [4][5] - The current state of the industry is characterized by both opportunities and challenges, particularly in funding from government sources, which is at an unprecedented low [5][6] - Royalty Pharma has been actively engaging with the biotech community through events like the MIT conference, which brings together leaders from biotech and pharma to discuss industry trends [3][4] Funding and Capital Allocation - Royalty Pharma reviewed 440 investment opportunities last year, executing only eight deals and deploying $2.8 billion in capital [6][7] - The company is in a strong position regarding leverage, with a current leverage ratio in the low threes and access to debt markets [13] - In the first half of the year, Royalty Pharma returned $1.3 billion to shareholders, indicating a robust capital return strategy [14] Deal Structure and Opportunities - The recent $2 billion deal with Revolution Medicines is highlighted as a significant transaction, allowing the biotech to retain operational control and a higher percentage of economics compared to traditional big pharma partnerships [20][22] - Royalty Pharma's investment strategy includes a mix of approved and unapproved products, with a historical deployment of $27 billion, of which approximately $10 billion is in unapproved late-stage products [27][28] - The company is focusing on development-stage products, targeting internal rates of return (IRRs) in the teens for these investments [24] Market Dynamics and Future Outlook - The company sees a growing opportunity in the Chinese market, where many biotech firms will require Western partners for commercialization, creating potential royalty monetization opportunities [35][36] - Royalty Pharma's government exposure is relatively low, with Medicaid and Medicare combined being in the low to mid-20% range, allowing for flexibility in navigating policy changes like the Inflation Reduction Act [39][40] - The company is optimistic about its pipeline, which includes several products that are expected to generate significant revenue over the next five years, with a potential of over $2 billion [46][49] Product Launches and Pipeline - Key products such as Tremfya, Cobenfy, and Aficamten are highlighted as having strong market potential, with Tremfya already outperforming expectations [44][46] - The company emphasizes the importance of both the probability of approval and the commercial potential of products in its investment strategy [48][49] Conclusion - Royalty Pharma is well-positioned to capitalize on current market dynamics, with a strong pipeline and innovative deal structures that differentiate it from traditional big pharma partnerships [17][20][36]

Group 1 - Royalty Pharma will participate in the Morgan Stanley 23rd Annual Global Healthcare Conference on September 9, 2025, at 3:20 p.m. ET [1] - The webcast of the event will be available on Royalty Pharma's "Events" page and archived for at least thirty days [1] Group 2 - Royalty Pharma, founded in 1996, is the largest buyer of biopharmaceutical royalties and a key funder of innovation in the biopharmaceutical industry [2] - The company collaborates with various entities, including academic institutions, research hospitals, non-profits, and both small and mid-cap biotechnology companies, as well as leading global pharmaceutical companies [2] - Royalty Pharma's portfolio includes royalties on over 35 commercial products and 17 development-stage product candidates, featuring notable therapies such as Vertex's Trikafta and GSK's Trelegy [2]

Core Viewpoint - Royalty Pharma plc has announced a $2.0 billion offering of senior unsecured notes, which is expected to close on September 16, 2025, subject to customary closing conditions [1]. Group 1: Offering Details - The offering consists of three tranches: $600 million of 4.450% Notes due 2031, $900 million of 5.200% Notes due 2035, and $500 million of 5.950% Notes due 2055 [7]. - The net proceeds from the offering will be used for general corporate purposes [2]. - The offering is being managed by BofA Securities, Goldman Sachs & Co. LLC, J.P. Morgan, Morgan Stanley, and TD Securities as joint lead book-running managers [3]. Group 2: Company Background - Royalty Pharma, founded in 1996, is the largest buyer of biopharmaceutical royalties and a significant funder of innovation in the biopharmaceutical industry [6]. - The company collaborates with various entities, including academic institutions and leading global pharmaceutical companies, to fund innovation and acquire royalties [6]. - Royalty Pharma's portfolio includes royalties on over 35 commercial products, such as Vertex's Trikafta and GSK's Trelegy, as well as 17 development-stage product candidates [6].

Core Insights - Royalty Pharma plc will provide up to $300 million in funding to Zenas BioPharma, in exchange for a royalty on sales of obexelimab, targeting autoimmune diseases such as IgG4-RD [1][2][3] Company Overview - Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation in the biopharmaceutical industry, collaborating with various innovators [8] - Zenas BioPharma is a clinical-stage biopharmaceutical company focused on developing transformative therapies for autoimmune diseases, with obexelimab as its lead product candidate [9] Product Development - Obexelimab is an investigational bifunctional monoclonal antibody designed to inhibit B cell function, currently in Phase 3 development for IgG4-RD and Phase 2 for Relapsing Multiple Sclerosis and Systemic Lupus Erythematosus [2][5][7] - The funding will support the development of obexelimab and a potential commercial launch for IgG4-RD in the first half of 2027, pending FDA approval [2][3][6] Financial Terms - The agreement includes an upfront payment of $75 million, with three additional payments of $75 million each contingent on specific milestones related to clinical trials and FDA approvals [3][6] - Royalty Pharma will receive a 5.5% royalty on worldwide net sales of obexelimab by Zenas and its affiliates [3]

Core Insights - Zenas BioPharma and Royalty Pharma have entered into a partnership where Royalty Pharma will provide up to $300 million in funding for the development and potential commercialization of obexelimab, a treatment for IgG4-Related Disease [1][2][3] Funding and Financial Terms - The agreement includes an initial payment of $75 million, with three additional payments of $75 million each contingent upon specific milestones: success in the Phase 3 INDIGO trial, FDA approval for IgG4-RD, and FDA approval for Systemic Lupus Erythematosus [3] - Royalty Pharma will receive a 5.5% royalty on worldwide net sales of obexelimab by Zenas and its affiliates [3] Product Development and Clinical Trials - Obexelimab is currently in Phase 3 development for IgG4-RD and Phase 2 development for Relapsing Multiple Sclerosis and Systemic Lupus Erythematosus [2][5][7] - The topline results from the pivotal Phase 3 trial for IgG4-RD are expected around the end of 2025, with a potential commercial launch in the first half of 2027, pending FDA approval [2][6] Mechanism of Action - Obexelimab is a bifunctional monoclonal antibody designed to inhibit B cell function by binding to CD19 and FcγRIIb, which are present across B cell lineage, without depleting them [5][8] Company Background - Zenas BioPharma is a clinical-stage biopharmaceutical company focused on developing therapies for autoimmune diseases, with obexelimab as its lead product candidate [8] - Royalty Pharma is a leading funder of innovation in the biopharmaceutical industry, known for acquiring royalties and co-funding late-stage clinical trials [9]

Core Viewpoint - BeiGene has entered into a royalty purchase agreement with a subsidiary of Royalty Pharma, agreeing to receive $885 million for the rights to a significant portion of royalties from the sales of the monoclonal antibody Imdelltra (Tarlatamab) outside of China [1][2]. Group 1: Financial Details - Royalty Pharma will pay $885 million at closing for the rights to receive a mid-single-digit percentage royalty on the annual net sales of Imdelltra outside of China [1][2]. - Royalty Pharma's total assets were reported at $18.223 billion, with net assets of $10.342 billion and total revenue of $2.264 billion as of the end of last year [1]. Group 2: Product Information - Imdelltra (Tarlatamab) is primarily indicated for the treatment of relapsed or refractory small cell lung cancer (SCLC), a highly aggressive type of lung cancer with limited treatment options [3]. - The drug works by activating the patient's own T-cells to kill cancer cells, providing a new treatment option for patients who have not responded to traditional therapies [3]. Group 3: Additional Rights and Options - From the closing date until August 25, 2026, BeiGene has the option to sell additional royalty rights to Royalty Pharma, which could yield up to $65 million in extra payments [3]. - If annual net sales of Imdelltra outside of China exceed $1.5 billion, BeiGene will share a portion of the royalties on that excess amount [3].

Core Viewpoint - BeiGene has entered into a royalty purchase agreement with Royalty Pharma, receiving $885 million for the rights to royalties from the monoclonal antibody Imdelltra outside of China [1] Group 1 - The agreement involves Royalty Pharma paying $885 million at closing for the majority of the rights to receive royalties on annual net sales of Imdelltra outside of China [1] - BeiGene Switzerland retains the right to sell additional royalty rights for up to $65 million before August 25, 2026 [1] - This transaction is not classified as a related party transaction and does not require shareholder approval [1]

Core Insights - Royalty Pharma has acquired a royalty interest in Amgen's Imdelltra for $885 million upfront, with an option for BeOne Medicines to sell additional royalties for up to $65 million within the next 12 months [1][2][3] - Imdelltra is a first-in-class bispecific T-cell engager targeting DLL3, aimed at treating extensive-stage small cell lung cancer (ES-SCLC), a disease with limited treatment options [2][6] - The transaction aligns with Royalty Pharma's strategy of acquiring royalties on transformative life sciences products, enhancing its long-term growth and portfolio diversification [2][3] Financial Details - Royalty Pharma will pay $885 million upfront for approximately 7% royalty on worldwide net sales of Imdelltra, with potential total payments up to $950 million [3] - BeOne retains the option to sell an additional portion of its royalty for up to $65 million within the next year [3] - Imdelltra sales reached $215 million in the first half of 2025, with projections to exceed $2.8 billion by 2035 based on analyst consensus [2] Market Context - Small cell lung cancer affects approximately 360,000 patients globally each year, with a poor prognosis and a five-year survival rate of only 7% for invasive disease [2] - Imdelltra received accelerated approval from the U.S. FDA in May 2024 for patients who have progressed after platinum-based chemotherapy [2]

Core Insights - Royalty Pharma has acquired a royalty interest in Amgen's Imdelltra for $885 million upfront, with an option for BeOne Medicines to sell additional royalties for up to $65 million within the next 12 months [1][3] - Imdelltra is a first-in-class bispecific T-cell engager targeting DLL3, aimed at treating extensive-stage small cell lung cancer (ES-SCLC), a disease with limited treatment options [2][6] - The acquisition aligns with Royalty Pharma's strategy to invest in transformative life sciences products, enhancing its long-term growth and portfolio diversification [2][3] Transaction Details - The total potential acquisition cost for Royalty Pharma could reach $950 million, which includes a 7% royalty on worldwide net sales of Imdelltra, with royalty sharing on annual net sales exceeding $1.5 billion [3] - The royalty duration for Imdelltra is expected to extend through 2038-2041, while BeOne retains commercial rights in China [3] Market Context - Imdelltra received accelerated FDA approval in May 2024 for treating ES-SCLC in patients who have progressed after platinum-based chemotherapy [2] - Approximately 360,000 patients are affected by small cell lung cancer globally each year, with a poor prognosis and a five-year survival rate of only 7% for invasive disease [2] - Imdelltra sales reached $215 million in the first half of 2025, with projections to exceed $2.8 billion by 2035 based on analyst consensus [2]