Group 1 - Royalty Pharma's Lead Independent Director, Henry Fernandez, has stepped down from the Board of Directors effective August 13, 2025 [1] - Fernandez joined the Board in July 2020 and was appointed Lead Independent Director in March 2021, contributing significantly to the company's growth during its early public years [2] - The company plans to appoint a new Lead Independent Director in the near future [2] Group 2 - Royalty Pharma, founded in 1996, is the largest buyer of biopharmaceutical royalties and a key funder of innovation in the biopharmaceutical industry [3] - The company collaborates with various entities, including academic institutions and leading pharmaceutical companies, and has a portfolio that includes royalties on over 35 commercial products [3] - Current royalties in Royalty Pharma's portfolio include notable therapies such as Vertex's Trikafta, GSK's Trelegy, and Roche's Evrysdi, among others [3]

Group 1 - Royalty Pharma plc (NASDAQ: RPRX) reported results that significantly exceeded expectations, indicating a strong future outlook for the company [1] - The performance of Royalty Pharma reinforces the belief that the company is well-positioned for growth [1] Group 2 - The article does not provide additional relevant content regarding the industry or company beyond the performance of Royalty Pharma [2][3][4]

Core Insights - Royalty Pharma reported a revenue of $727 million for the quarter ended June 2025, reflecting a year-over-year increase of 19.6% and surpassing the Zacks Consensus Estimate of $686.22 million by 5.94% [1] - The company's EPS for the quarter was $1.14, compared to $0.96 in the same quarter last year, resulting in an EPS surprise of 3.64% against the consensus estimate of $1.10 [1] Financial Performance Metrics - The total portfolio receipts from royalty products amounted to $672 million, slightly below the average estimate of $680.22 million [4] - Key product performances included: - Cystic fibrosis franchise: $194 million, -0.4% year-over-year, below the estimate of $206.12 million [4] - Tysabri: $56 million, -12.3% year-over-year, above the estimate of $53.9 million [4] - Imbruvica: $44 million, -10.4% year-over-year, above the estimate of $39.81 million [4] - Xtandi: $42 million, +8.8% year-over-year, below the estimate of $42.75 million [4] - Promacta: $33 million, +8.2% year-over-year, below the estimate of $39.51 million [4] - Evrysdi: $33 million, +32.4% year-over-year, above the estimate of $31.21 million [4] - Trelegy: $57 million, +17.6% year-over-year, slightly below the estimate of $57.04 million [4] - Tremfya: $37 million, +23.7% year-over-year, below the estimate of $38.47 million [4] Stock Performance - Over the past month, Royalty Pharma's shares have returned +6.8%, outperforming the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

PART I. FINANCIAL INFORMATION [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 and accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024%20(unaudited)) This section details the company's assets, liabilities, and shareholders' equity at the end of the reporting periods Key Balance Sheet Metrics | Metric (in thousands) | As of June 30, 2025 | As of December 31, 2024 | Change | | :-------------------- | :------------------ | :---------------------- | :----- | | Total Assets | $18,323,000 | $18,222,715 | +$100,285 | | Total Liabilities | $8,820,060 | $7,880,349 | +$939,711 | | Total Shareholders' Equity | $9,502,940 | $10,342,366 | -$839,426 | | Cash and cash equivalents | $631,908 | $929,026 | -$297,118 | | Financial royalty assets, net | $15,134,291 | $15,127,158 | +$7,133 | | Goodwill | $924,634 | $— | +$924,634 | | Long-term debt | $7,003,063 | $6,614,653 | +$388,410 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section outlines revenues, expenses, and net income for the reported three and six-month periods Key Operational Metrics | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total income and other revenues | $578,665 | $537,267 | $1,146,912 | $1,105,245 | | Operating income | $209,799 | $269,630 | $743,980 | $195,856 | | Consolidated net income | $90,635 | $194,377 | $524,068 | $190,104 | | Net income attributable to Royalty Pharma plc | $30,176 | $102,004 | $268,525 | $106,782 | | Basic EPS | $0.07 | $0.23 | $0.63 | $0.24 | | Diluted EPS | $0.07 | $0.23 | $0.62 | $0.24 | - Provision for changes in expected cash flows from financial royalty assets shifted from an expense of **$796.0 million in H1 2024 to an income of $331.1 million in H1 2025**[17](index=17&type=chunk) - Research and development funding expense **significantly increased from $1.0 million in H1 2024 to $351.0 million in H1 2025**[17](index=17&type=chunk) - General and administrative expenses **rose from $112.4 million in H1 2024 to $290.5 million in H1 2025**[17](index=17&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section presents changes in the company's equity accounts during the reporting periods Key Shareholders' Equity Metrics | Metric (in thousands) | As of June 30, 2025 | As of December 31, 2024 | Change | | :-------------------- | :------------------ | :---------------------- | :----- | | Total Shareholders' Equity | $9,502,940 | $10,342,366 | -$839,426 | | Class A ordinary shares outstanding | 432,288 | 445,985 | -13,697 | | Class B ordinary shares outstanding | 150,881 | 143,128 | +7,753 | | Additional paid-in capital | $4,127,665 | $4,103,482 | +$24,183 | | Retained earnings | $2,222,750 | $2,845,653 | -$622,903 | | Non-controlling interests | $3,155,030 | $3,395,785 | -$240,755 | - Repurchases of Class A ordinary shares amounted to **$1.0 billion in H1 2025**, significantly higher than $84.4 million in H1 2024[24](index=24&type=chunk) - Dividends paid to shareholders were **$188.7 million in H1 2025**, consistent with H1 2024[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section details the sources and uses of cash from operating, investing, and financing activities Key Cash Flow Metrics | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | | Net cash provided by operating activities | $960,060 | $1,322,847 | -$362,787 | | Net cash provided by/(used in) investing activities | $191,935 | $(979,826) | +$1,171,761 | | Net cash (used in)/provided by financing activities | $(1,449,113) | $944,613 | -$2,393,726 | | Net change in cash and cash equivalents | $(297,118) | $1,287,634 | -$1,584,752 | | Cash and cash equivalents, end of period | $631,908 | $1,764,644 | -$1,132,736 | - Development-stage funding payments **increased significantly from $1.0 million in H1 2024 to $351.0 million in H1 2025**[26](index=26&type=chunk) - Repurchases of Class A ordinary shares **increased from $79.9 million in H1 2024 to $1.0 billion in H1 2025**[26](index=26&type=chunk) - Proceeds from issuance of long-term debt, net of discount, was **$1.47 billion in H1 2024, with no proceeds in H1 2025**[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanations of the company's accounting policies and financial statement items [Note 1. Organization and Purpose](index=9&type=section&id=1.%20Organization%20and%20Purpose) This note describes the company's business model and recent organizational changes - Royalty Pharma is the **largest buyer of biopharmaceutical royalties** and a leading funder of innovation[28](index=28&type=chunk) - The company **completed its internalization on May 16, 2025**, integrating its former external manager's employees[29](index=29&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and estimates used in preparing the financial statements - Financial statements are prepared under **GAAP**, requiring management estimates and assumptions[30](index=30&type=chunk)[32](index=32&type=chunk) - The company consolidates majority-owned and controlled subsidiaries, including variable interest entities[33](index=33&type=chunk) - **Goodwill** was recorded as a result of the Internalization and is not amortized, but assessed for impairment annually[43](index=43&type=chunk) - **Vertex accounted for 31% of current financial royalty assets** as of June 30, 2025, down from 34% at December 31, 2024[38](index=38&type=chunk) [Note 3. Internalization](index=11&type=section&id=3.%20Internalization) This note details the acquisition of the company's external manager and its financial impact - **Internalization of RP Manager completed on May 16, 2025**[44](index=44&type=chunk) Component of Purchase Price | Component of Purchase Price (in thousands) | Amount | | :--------------------------------------- | :----- | | Cash | $81,950 | | Fair value of equity attributable to pre-Internalization service period: | | | RP Holdings Class E Interests | $57,000 | | Employee RSUs | $3,778 | | Employee EPAs | $422,479 | | Total purchase price | $565,207 | - **Goodwill of $924.6 million** was recorded as part of the Internalization[53](index=53&type=chunk) - **Acquisition-related costs of $28.7 million** were incurred in H1 2025, primarily for legal, advisory, and professional services[54](index=54&type=chunk) [Note 4. Share-Based Compensation](index=14&type=section&id=4.%20Share-Based%20Compensation) This note provides details on the company's various share-based compensation plans and related expenses Share-Based Compensation Expense | Share-Based Compensation (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------------------ | :--------------------------- | :--------------------------- | | RP Holdings Class E Interests | $44,050 | $44,050 | | Employee EPAs | $45,732 | $45,732 | | Employee and Director RSUs | $1,262 | $1,965 | | Total Share-Based Compensation | $91,044 | $91,747 | - Unrecognized compensation expense for RP Holdings Class E Interests is **$711.4 million**, vesting over 6.0 years[59](index=59&type=chunk) - Unrecognized expense for Employee EPAs is **$103.5 million**, vesting over 2.1 years[63](index=63&type=chunk) [Note 5. Shareholders' Equity](index=15&type=section&id=5.%20Shareholders%27%20Equity) This note describes changes in share capital, share repurchases, dividends, and non-controlling interests - New share repurchase program authorized for up to **$3.0 billion of Class A ordinary shares**, expiring June 23, 2027[69](index=69&type=chunk) Class A Ordinary Share Repurchases | Class A Ordinary Share Repurchases (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------- | :--------------------------- | :--------------------------- | | Shares repurchased | 31,154 | 3,117 | | Cost of repurchases | $1,000,044 | $84,426 | - As of June 30, 2025, **$2.0 billion remained available** under the share repurchase program[69](index=69&type=chunk) - RP Holdings ownership as of June 30, 2025: **74% by Royalty Pharma plc**, 22% by Continuing Investors Partnerships, and 4% by Holders of RP Holdings Class E Interests[81](index=81&type=chunk) - Quarterly cash dividend of **$0.22 per Class A ordinary share** paid in H1 2025, totaling $188.7 million[82](index=82&type=chunk) [Note 6. Available for Sale Debt Securities](index=18&type=section&id=6.%20Available%20for%20Sale%20Debt%20Securities) This note details the company's investments in debt securities, including funding collaborations - Expanded funding collaboration with Cytokinetics in May 2024, totaling up to **$525 million for commercial launch and $100 million for development**[83](index=83&type=chunk) - **MorphoSys Development Funding Bonds were sold in January 2025** for approximately $511 million[89](index=89&type=chunk) Cytokinetics Funding Arrangements | Cytokinetics Funding Arrangements (in thousands) | Funded (as of June 30, 2025) | Potential Future Draw | Total | | :--------------------------------------------- | :--------------------------- | :-------------------- | :---- | | Commercial Launch Funding | $175,000 | $275,000 | $450,000 | | Development Funding | $100,000 | $— | $100,000 | | R&D Funding Derivative (CK-586) | $50,000 | $150,000 | $200,000 | | Common Stock | $50,000 | $— | $50,000 | | Total | $375,000 | $425,000 | $800,000 | [Note 7. Fair Value Measurements and Financial Instruments](index=20&type=section&id=7.%20Fair%20Value%20Measurements%20and%20Financial%20Instruments) This note explains the methodologies used to measure the fair value of financial assets and liabilities - Fair value measurements primarily use **Level 3 inputs**, indicating unobservable inputs requiring significant judgment[111](index=111&type=chunk) Level 3 Financial Instruments | Level 3 Financial Instruments (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :----------------------------------------- | :------------------ | :---------------------- | | Available for sale debt securities | $285,100 | $751,700 | | Equity securities | $2,241 | $2,241 | | Cytokinetics R&D Funding Derivative | $9,000 | $12,000 | | Royalty at fair value | $5,323 | $5,323 | | Employee EPAs (liability) | $(467,143) | $— | | Cytokinetics Funding Commitments (liability) | $(27,200) | $(12,080) | - Employee EPAs liability of **$467.1 million** was recognized in connection with the Internalization[95](index=95&type=chunk)[117](index=117&type=chunk) - Cytokinetics R&D Funding Derivative fair value is estimated using probability-adjusted discounted cash flow calculations with Level 3 inputs, including a **risk-adjusted discount rate of 13.7%** as of June 30, 2025[113](index=113&type=chunk) [Note 8. Financial Royalty Assets](index=24&type=section&id=8.%20Financial%20Royalty%20Assets) This note provides a breakdown of the company's portfolio of financial royalty assets - Financial royalty assets are measured at amortized cost using the **effective interest method**[118](index=118&type=chunk) Top Financial Royalty Assets | Top Financial Royalty Assets (in thousands) | Net Carrying Value (as of June 30, 2025) | | :---------------------------------------- | :--------------------------------------- | | Cystic fibrosis franchise | $5,017,659 | | Evrysdi | $1,770,330 | | Trelegy | $1,053,534 | | Voranigo | $970,268 | | Tysabri | $913,435 | | Tremfya | $822,682 | | Other | $5,646,026 | | Total (before credit losses) | $16,193,934 | - Estimated fair value of financial royalty assets was **$22.2 billion** ($0.8 billion current, $21.4 billion non-current) as of June 30, 2025[120](index=120&type=chunk) [Note 9. Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets](index=26&type=section&id=9.%20Cumulative%20Allowance%20and%20the%20Provision%20for%20Changes%20in%20Expected%20Cash%20Flows%20from%20Financial%20Royalty%20Assets) This note details the activity in the allowance for credit losses related to financial royalty assets Cumulative Allowance Activity | Cumulative Allowance Activity (in thousands) | Amount | | :----------------------------------------- | :----- | | Balance at December 31, 2024 | $(3,789,281) | | Increases to allowance | $(358,493) | | Decreases to allowance | $668,154 | | Current period provision for credit losses, net | $21,417 | | Balance at June 30, 2025 | $(3,458,203) | [Note 10. Non-Consolidated Affiliates](index=26&type=section&id=10.%20Non-Consolidated%20Affiliates) This note discusses the company's investments in and income from non-consolidated entities - Income allocation from Legacy SLP Interest was **$10.6 million in H1 2025**, compared to a loss allocation of $4.7 million in H1 2024[136](index=136&type=chunk) - Distributions from Avillion I were **$13.4 million in H1 2025** and H1 2024[138](index=138&type=chunk) - Received **$27.4 million milestone payment from Avillion II** related to Airsupra in Q1 2025[139](index=139&type=chunk) - Unfunded commitments related to Avillion Entities totaled **$10.3 million** as of June 30, 2025[140](index=140&type=chunk) [Note 11. Research and Development Funding Expense](index=27&type=section&id=11.%20Research%20and%20Development%20Funding%20Expense) This note details the expenses incurred for funding development-stage biopharmaceutical assets R&D Funding Expense | R&D Funding Expense (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------------- | :--------------------------- | :--------------------------- | | Total R&D funding expense | $300,500 | $351,000 | - H1 2025 R&D funding primarily includes **$250.0 million for daraxonrasib** and **$100.0 million for litifilimab**[142](index=142&type=chunk) - Unfunded commitment of **$150 million for litifilimab** as of June 30, 2025[143](index=143&type=chunk) [Note 12. Borrowings](index=28&type=section&id=12.%20Borrowings) This note provides a summary of the company's outstanding debt and credit facilities Debt Summary | Borrowing Type (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :---------------------------- | :------------------ | :---------------------- | | Senior Unsecured Notes | $7,800,000 | $7,800,000 | | Term Loan | $380,000 | $— | | Unamortized debt discount and issuance costs | $(177,501) | $(187,574) | | Total debt carrying value | $8,002,499 | $7,612,426 | - Assumed a **$380 million Term Loan** as part of the Internalization, maturing July 2027[144](index=144&type=chunk)[152](index=152&type=chunk) - **$1.8 billion Revolving Credit Facility** available, with no outstanding borrowings as of June 30, 2025[153](index=153&type=chunk) - Future principal payments total **$8.18 billion**, with $1.0 billion due in the remainder of 2025 and $1.38 billion in 2027[156](index=156&type=chunk) [Note 13. Earnings per Share](index=30&type=section&id=13.%20Earnings%20per%20Share) This note presents the calculation of basic and diluted earnings per share for Class A ordinary shares Earnings Per Share | EPS (per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.07 | $0.23 | $0.63 | $0.24 | | Diluted EPS | $0.07 | $0.23 | $0.62 | $0.24 | - Dilutive effects include assumed exchanges of Class B ordinary shares (**138.3 million for Q2 2025**) and RP Holdings Class E Interests (**0.4 million for Q2 2025**)[159](index=159&type=chunk) [Note 14. Indirect Cash Flow](index=32&type=section&id=14.%20Indirect%20Cash%20Flow) This note provides a reconciliation of net income to net cash provided by operating activities Reconciliation of Net Income to Operating Cash Flow | Adjustment (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | | Consolidated net income | $524,068 | $190,104 | | Income from financial royalty assets | $(1,089,908) | $(1,054,411) | | Provision for changes in expected cash flows from financial royalty assets | $(331,078) | $796,029 | | Cash collected on financial royalty assets | $1,556,262 | $1,414,324 | | Net cash provided by operating activities | $960,060 | $1,322,847 | [Note 15. Commitments and Contingencies](index=32&type=section&id=15.%20Commitments%20and%20Contingencies) This note discloses the company's contractual commitments, contingencies, and legal proceedings - **$275 million remains available** under Cytokinetics Funding Commitments[162](index=162&type=chunk) - Entered a **$2 billion funding arrangement with Revolution Medicines**, including a $1.25 billion royalty purchase and a $750 million term loan[163](index=163&type=chunk)[165](index=165&type=chunk) - Recorded a **$92.5 million provision for credit losses** on unfunded commitments related to Revolution Medicines[166](index=166&type=chunk) - Operating lease liabilities for office spaces total **$20.8 million** (present value)[168](index=168&type=chunk) - Commenced dispute resolution procedures with **Vertex regarding Alyftrek royalty receipts**[171](index=171&type=chunk) [Note 16. Related Party Transactions](index=34&type=section&id=16.%20Related%20Party%20Transactions) This note details transactions with related parties, including those associated with the Internalization - **Internalization completed on May 16, 2025**, involving acquisition of RP Manager from related parties[172](index=172&type=chunk) - Operating and Personnel Payments to Legacy Manager **ceased post-Internalization**[173](index=173&type=chunk) Distributions Payable to Non-Controlling Interests | Distributions Payable to Non-Controlling Interests (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------------------------------------- | :------------------ | :---------------------- | | Payable to Founder | $808 | $— | | Payable to Legacy Investors Partnerships | $97,389 | $75,811 | | Total | $98,197 | $75,811 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operational results, and liquidity [Business Overview](index=37&type=section&id=Business%20Overview) This section describes the company's core business of acquiring biopharmaceutical royalties and funding innovation - Royalty Pharma is the **largest buyer of biopharmaceutical royalties** and a leading funder of innovation[186](index=186&type=chunk) - Portfolio includes royalties on over **35 commercial products** and 16 development-stage product candidates[186](index=186&type=chunk) [Background and Format of Presentation](index=37&type=section&id=Background%20and%20Format%20of%20Presentation) This section explains the company's organizational structure and the impact of its recent Internalization - Royalty Pharma plc holds a **controlling equity interest** in Royalty Pharma Holdings Ltd (RP Holdings)[185](index=185&type=chunk) - The company **completed the Internalization of RP Manager on May 16, 2025**, integrating former external manager employees[190](index=190&type=chunk) [Understanding Our Financial Reporting](index=38&type=section&id=Understanding%20Our%20Financial%20Reporting) This section clarifies key aspects of the company's financial reporting, including non-GAAP measures - Financial royalty assets are classified as financial assets measured under the **effective interest method**[191](index=191&type=chunk) - Income statement activity can be **volatile** due to non-cash provisions for changes in expected cash flows from financial royalty assets[193](index=193&type=chunk)[194](index=194&type=chunk) - Management uses **"Portfolio Receipts"** as a primary measure of operating performance, focusing on cash generation[195](index=195&type=chunk) [Understanding Our Results of Operations](index=39&type=section&id=Understanding%20Our%20Results%20of%20Operations) This section breaks down the key components of the company's income statement - **Non-controlling interests** include Legacy Investors Partnerships, Continuing Investors Partnerships, Founder's Equity, and Holders of RP Holdings Class E Interests[196](index=196&type=chunk)[197](index=197&type=chunk)[200](index=200&type=chunk) - **Equity Performance Awards (EPAs)** represent 20% of Net Economic Profit from investments, generally settled in RP Holdings' Class B Interests[198](index=198&type=chunk) - Total income and other revenues primarily consist of **interest income from financial royalty assets** and royalty income from R&D funding arrangements[201](index=201&type=chunk) - Provision for changes in expected cash flows includes **non-cash adjustments** for forecasted royalty payments and credit losses[207](index=207&type=chunk) - **R&D funding expense** covers development-stage funding payments for royalties or milestones on product candidates[211](index=211&type=chunk) - General and administrative expenses now primarily consist of **employee compensation (cash and share-based) post-Internalization**, replacing Operating and Personnel Payments[212](index=212&type=chunk)[213](index=213&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's operating results for the reported periods Key Operational Metrics | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total income and other revenues | $578,665 | $537,267 | $1,146,912 | $1,105,245 | | Operating income | $209,799 | $269,630 | $743,980 | $195,856 | | Consolidated net income | $90,635 | $194,377 | $524,068 | $190,104 | | Net income attributable to Royalty Pharma plc | $30,176 | $102,004 | $268,525 | $106,782 | - Income from financial royalty assets **increased by 7.3% in Q2 2025 and 3.4% in H1 2025**, primarily due to the Voranigo royalty acquisition[222](index=222&type=chunk)[223](index=223&type=chunk) - Provision for changes in expected cash flows from financial royalty assets shifted from an expense of $212.4 million in Q2 2024 to an **income of $203.9 million in Q2 2025**, driven by increases in sales forecasts for Evrysdi and Xtandi[228](index=228&type=chunk) - R&D funding expense **increased by $300.0 million in Q2 2025 and $350.0 million in H1 2025**, mainly for daraxonrasib and litifilimab[234](index=234&type=chunk)[235](index=235&type=chunk) - G&A expenses **increased by 228.6% in Q2 2025 and 158.5% in H1 2025**, primarily due to higher share-based compensation and Internalization-related costs[236](index=236&type=chunk)[237](index=237&type=chunk) - Interest expense **increased by 40.1% in Q2 2025 and 43.6% in H1 2025**, due to new senior unsecured notes and the assumed term loan[240](index=240&type=chunk)[241](index=241&type=chunk) [Portfolio Overview](index=49&type=section&id=Portfolio%20Overview) This section reviews the performance of the company's royalty portfolio, a key non-GAAP measure - **Portfolio Receipts increased by 19.7% in Q2 2025 and 18.2% in H1 2025**[257](index=257&type=chunk) Portfolio Receipts by Product | Product (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Cystic fibrosis franchise | $443,548 | $413,230 | $30,318 | 7.3% | | Trelegy | $141,853 | $119,074 | $22,779 | 19.1% | | Tysabri | $116,910 | $132,909 | $(15,999) | (12.0)% | | Xtandi | $94,339 | $79,628 | $14,711 | 18.5% | | Imbruvica | $89,435 | $99,191 | $(9,756) | (9.8)% | | Evrysdi | $85,550 | $69,879 | $15,671 | 22.4% | | Promacta | $76,828 | $73,045 | $3,783 | 5.2% | | Tremfya | $72,606 | $66,072 | $6,534 | 9.9% | | Voranigo | $46,036 | $— | $46,036 | n/a | | Cabometyx/Cometriq | $41,033 | $34,565 | $6,468 | 18.7% | | Spinraza | $24,894 | $16,236 | $8,658 | 53.3% | | Trodelvy | $22,557 | $20,656 | $1,901 | 9.2% | | Erleada | $21,031 | $18,205 | $2,826 | 15.5% | | Other products | $183,364 | $166,927 | $16,437 | 9.8% | | Royalty Receipts | $1,459,984 | $1,309,617 | $150,367 | 11.5% | | Milestones and other contractual receipts | $106,772 | $15,361 | $91,411 | n/a | | **Portfolio Receipts** | **$1,566,756** | **$1,324,978** | **$241,778** | **18.2%** | - Milestones and other contractual receipts **increased by $91.4 million in H1 2025**, driven by a one-time distribution from Legacy SLP Interest and a $27.4 million Airsupra milestone payment[265](index=265&type=chunk) [Key Developments Relating to Our Portfolio](index=52&type=section&id=Key%20Developments%20Relating%20to%20Our%20Portfolio) This section highlights recent clinical and regulatory updates for key products in the portfolio - Vertex received **EC approval for Kaftrio label expansion** for CF patients aged 2 years and older[262](index=262&type=chunk) - Gilead announced **positive Phase 3 results for Trodelvy** in previously untreated PD-L1+ mTNBC[263](index=263&type=chunk) - Johnson & Johnson received **EC approval for Tremfya** in ulcerative colitis and Crohn's disease[264](index=264&type=chunk)[265](index=265&type=chunk) - Cytokinetics announced **positive topline results from MAPLE-HCM Phase 3 trial** for aficamten[270](index=270&type=chunk) - Roche expects to initiate a **Phase 3 program for trontinemab** at the end of 2025[270](index=270&type=chunk) [Investments Overview](index=54&type=section&id=Investments%20Overview) This section summarizes the company's recent investment activities and funding arrangements - **Invested $696.3 million** in royalties, milestones, and other contractual receipts in H1 2025[271](index=271&type=chunk) - Entered a **$2 billion funding arrangement with Revolution Medicines** for daraxonrasib, including a $250 million upfront payment for a synthetic royalty[272](index=272&type=chunk) - Entered an R&D funding arrangement with Biogen for litifilimab, providing **$50 million upfront out of $250 million**[272](index=272&type=chunk) - Acquired synthetic royalties on **Rytelo for $125 million** and **Niktimvo for $350 million** in November 2024[272](index=272&type=chunk) - Acquired a royalty interest in **Voranigo for $905 million upfront** in May 2024, following FDA approval in August 2024[272](index=272&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flows, debt, and overall financial position - Net cash provided by operating activities was **$960.1 million in H1 2025**, down from $1.3 billion in H1 2024[273](index=273&type=chunk)[278](index=278&type=chunk) - Total debt carrying value was **$8.0 billion as of June 30, 2025**, including $380 million Term Loan assumed from Internalization[283](index=283&type=chunk)[285](index=285&type=chunk) - **$1.8 billion Revolving Credit Facility** available, with no outstanding borrowings as of June 30, 2025[286](index=286&type=chunk) - Cash used in financing activities was **$1.4 billion in H1 2025**, primarily due to **$1.0 billion in Class A ordinary share repurchases**[281](index=281&type=chunk) - The company was **in compliance with all financial covenants** under its debt agreements as of June 30, 2025[287](index=287&type=chunk) Non-GAAP Liquidity Measures | Non-GAAP Liquidity Measures (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Portfolio Receipts | $1,566,756 | $1,324,978 | | Adjusted EBITDA | $1,371,035 | $1,216,406 | | Portfolio Cash Flow | $1,252,104 | $1,157,552 | [Critical Accounting Policies and Use of Estimates](index=63&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) This section discusses the accounting policies that require the most significant management judgment - Most critical accounting policies relate to **financial royalty assets**, measured at amortized cost using the prospective effective interest method[311](index=311&type=chunk) - **Significant judgment** is required for forecasting expected future cash flows and royalty durations[311](index=311&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states there have been no material changes in market risk since the last annual report - **No material changes** in market risk exposures reported[312](index=312&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) This section provides management's conclusion on the effectiveness of the company's disclosure controls - Disclosure controls and procedures were **effective as of June 30, 2025**[313](index=313&type=chunk) - **No material changes** in internal control over financial reporting in Q2 2025[314](index=314&type=chunk) - Cash employee compensation for RP Manager (acquired in Q2 2025) will be **excluded from the 2025 internal control assessment**[315](index=315&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses ongoing legal actions, including a dispute with Vertex regarding Alyftrek royalties - The company is a party to **legal actions in the ordinary course of business**[171](index=171&type=chunk) - A dispute with **Vertex regarding Alyftrek royalty receipts** commenced in Q2 2025[171](index=171&type=chunk) - **No accruals for legal proceedings** have been established as of June 30, 2025, due to indeterminable probability of loss or damages[171](index=171&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) This section outlines risks related to product sales, competition, leverage, accounting volatility, and the recent Internalization - Sales of biopharmaceutical products on which royalties are received are subject to various risks, including **pricing pressures, competition, and regulatory changes**[322](index=322&type=chunk) - Acquisitions of development-stage product candidates carry **uncertainties regarding regulatory approval, market acceptance, and funding**[324](index=324&type=chunk)[330](index=330&type=chunk) - The company uses **leverage**, which magnifies potential losses if royalties do not generate sufficient income[333](index=333&type=chunk) - **GAAP results of operations can be volatile** and unpredictable due to the effective interest method for financial royalty assets[351](index=351&type=chunk) - The **Internalization exposes the company to new and additional costs and risks**, including increased direct overhead for employee compensation[413](index=413&type=chunk) - The company expects to be classified as a **PFIC** for U.S. federal income tax purposes, which could subject U.S. holders to adverse tax consequences[451](index=451&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity during the second quarter of 2025 - **No unregistered sales** of equity securities[461](index=461&type=chunk) Class A Ordinary Share Repurchases | Class A Ordinary Share Repurchases (in thousands, except per share amounts) | Q2 2025 (Total) | | :---------------------------------------------------------------------- | :-------------- | | Total Number of Shares Purchased | 8,499 | | Average Price Paid Per Share | $32.58 | | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program | $2,010,004 | - The share repurchase program, authorized in January 2025 for up to **$3.0 billion**, expires on June 23, 2027[463](index=463&type=chunk) [Item 3. Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reported period - **Not applicable**[464](index=464&type=chunk) [Item 4. Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reported period - **Not applicable**[465](index=465&type=chunk) [Item 5. Other Information](index=96&type=section&id=Item%205.%20Other%20Information) This section confirms no changes to director or officer trading plans during the quarter - **No Rule 10b5-1 trading arrangements** were adopted, modified, or terminated by directors or Section 16 officers in Q2 2025[466](index=466&type=chunk) [Item 6. Exhibits](index=97&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The report includes various exhibits such as **amended articles of association, loan agreements, and equity incentive plans**[467](index=467&type=chunk)

Financial Data and Key Metrics Changes - The company reported a 20% growth in portfolio receipts, reaching $727 million, and an 11% growth in royalty receipts to $672 million, exceeding previous guidance [6][19][24] - Operating and professional costs were 12.9% of portfolio receipts, but excluding one-time expenses, this would have been just over 8% [19][25] - The company raised its full-year 2025 top-line guidance, now expecting portfolio receipts between $3.05 billion and $3.15 billion, reflecting a growth of around 9% to 12% [9][24] Business Line Data and Key Metrics Changes - The strong performance in royalty receipts was driven by Voronego, Trelegy, Evrysdi, and Tremfya [18] - A one-time payment of approximately $50 million contributed to the growth in portfolio receipts [19] - The company completed the acquisition of its external manager, integrating its royalty portfolio with its investment platform [7] Market Data and Key Metrics Changes - The company is focusing on innovative partnerships, such as the collaboration with Revolution Medicines, which involves providing up to $2 billion in funding for a Phase III oncology therapy [8][11] - The unmet need in pancreatic cancer is significant, with around 56,000 new cases diagnosed annually in the U.S., highlighting the market potential for new therapies [15] Company Strategy and Development Direction - The company aims to be a leading partner in funding innovation in life sciences, emphasizing its ability to provide flexible funding solutions [6][8] - The recent partnership with Revolution Medicines is seen as a new funding paradigm for biotech companies, allowing them to retain control over their development while accessing large-scale capital [11][38] - The company is actively exploring opportunities in the Chinese market, recognizing the growing percentage of early-stage pipelines coming from there [34][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong financial performance for 2025, supported by a diversified portfolio and strategic partnerships [9][28] - The company is aware of potential policy impacts, such as MFN and PBM reforms, and is proactively assessing their implications [96][102] - Management highlighted the importance of maintaining a flexible business model to adapt to changing market conditions and policy environments [104] Other Important Information - The company returned $1.26 billion to shareholders in the first half of the year, a record amount [23] - The company is engaged in a dispute resolution process with Vertex regarding royalty payments, which may impact future revenue [27][70] Q&A Session Summary Question: Interest in Revolution Medicines deal and capacity for similar transactions - Management confirmed the excitement around the Revolution Medicines deal and indicated that it is not a one-off transaction, with capacity for more similar deals in the future [38][39] Question: Royalty opportunities in China - Management acknowledged the growing innovation in China and confirmed active engagement in developing relationships with emerging companies there [42][44] Question: Bladder cancer market exposure and royalty tracking - Management did not disclose specific royalty figures for adstilodrine but expressed optimism about the market's growth due to increased competition [46][51] Question: Operating expenses and share repurchase strategy - Management indicated a trend towards lower operating expenses and a dynamic approach to share repurchases based on capital allocation opportunities [48][49] Question: Vertex dispute resolution timing - Management provided a conservative estimate for the resolution of the Vertex dispute, suggesting it could extend into 2026 but may resolve sooner [81] Question: Impact of Kymzios on aficamtan market opportunity - Management expressed confidence that the success of Kymzios validates the market opportunity for aficamtan, emphasizing its unique advantages [82] Question: Competition in the biopharma royalty space - Management acknowledged increased competition but emphasized Royalty Pharma's unique structure, low cost of capital, and strong relationships as competitive advantages [88][90]

Financial Data and Key Metrics Changes - Royalty Pharma reported a 20% growth in portfolio receipts, reaching $727 million, and an 11% growth in royalty receipts to $672 million, exceeding previous guidance [5][18] - The company raised its full-year 2025 top-line guidance for portfolio receipts to a range of $3.05 billion to $3.15 billion, reflecting a growth of approximately 9% to 12% [7][23] Business Line Data and Key Metrics Changes - The strong performance in royalty receipts was driven by key products such as Voronego, Trelegy, Evrysdi, and Tremfya [17] - A one-time payment of approximately $50 million contributed to the growth in portfolio receipts [18] Market Data and Key Metrics Changes - The company highlighted the significant unmet need in pancreatic cancer, with around 56,000 new diagnoses annually, emphasizing the potential market for the oncology therapy Daraxonrezib [14] - The partnership with Revolution Medicines is expected to provide up to $2 billion in funding, indicating a strong market opportunity for innovative therapies [10][12] Company Strategy and Development Direction - Royalty Pharma aims to be a leading partner in funding innovation in life sciences, as evidenced by the groundbreaking collaboration with Revolution Medicines [6][10] - The company is focused on maintaining a diversified portfolio and capitalizing on new funding paradigms to support innovative biotech companies [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong financial performance for 2025, supported by the updated guidance and the successful execution of their strategy [25][27] - The company is actively exploring additional partnerships and investments, particularly in emerging markets like China [42][44] Other Important Information - Royalty Pharma has access to approximately $3.4 billion in cash and equivalents, providing significant financial capacity to execute its strategy [21] - The company has initiated a dispute resolution process with Vertex regarding royalty payments, which may impact future revenue [26][72] Q&A Session Summary Question: Interest in Revolution Medicines deal and future capacity for similar deals - Management confirmed the excitement around the Revolution Medicines transaction and indicated the capacity to engage in more similar deals in the future [38][39] Question: Royalty opportunities in China - Management acknowledged the growing innovation in China and expressed interest in developing relationships with emerging companies in the region [42][44] Question: Bladder cancer market exposure and royalty tracking - Management did not disclose specific royalty figures for adstilodrine but expressed optimism about the market's growth despite upcoming competitors [48][52] Question: Operating expenses and share repurchase strategy - Management indicated a trend towards lower operating expenses and a dynamic approach to share repurchases based on capital allocation opportunities [49][50] Question: Vertex dispute resolution timing - Management provided a conservative estimate for the resolution of the Vertex dispute, indicating it could extend into 2026 but may resolve sooner [81][83] Question: Impact of competition and large-scale deals - Management emphasized the company's unique position and ability to compete for large transactions, highlighting the increasing frequency of multibillion-dollar deals in the industry [88][90]

Financial Performance - Royalty Pharma's Portfolio Receipts increased by 20% year-over-year to $727 million in Q2 2025[8, 28] - Royalty Receipts grew by 11% year-over-year to $672 million in Q2 2025[8, 28] - The company repurchased 8 million shares for $277 million in Q2 2025, bringing the total for H1 2025 to $1 billion (31 million shares)[8] - Adjusted EBITDA was $633 million, representing 87.1% of Portfolio Receipts in Q2 2025[28] - Portfolio Cash Flow was $641 million, representing 88.2% of Portfolio Receipts in Q2 2025[28] Capital Allocation and Guidance - Capital Deployment totaled $595 million in Q2 2025[8, 28] - Full year 2025 Portfolio Receipts guidance is $3,050 million to $3,150 million, excluding future transactions, representing approximately 9% to 12% growth[8, 35] - Operating and professional costs are expected to be approximately 9% to 9.5% of Portfolio Receipts for FY 2025[8, 35] Revolution Medicines Partnership - Royalty Pharma entered into a funding partnership with Revolution Medicines for up to $2 billion[15, 16] - This includes up to $1.25 billion for a royalty on daraxonrasib and up to $750 million in senior secured debt[18] - The company projects multi-blockbuster sales potential and an IRR in the teens for daraxonrasib[18]

Exhibit 99.1 ROYALTY PHARMA REPORTS SECOND QUARTER 2025 RESULTS NEW YORK, NY, August 6, 2025 - Royalty Pharma plc (Nasdaq: RPRX) today reported financial results for the second quarter of 2025 and raised full year 2025 guidance for Portfolio Receipts. "We delivered excellent second quarter 2025 results, as the strength of our diversified portfolio drove 20% growth in Portfolio Receipts, and raised our full year guidance," said Pablo Legorreta, Royalty Pharma's founder and Chief Executive Officer. "Additiona ...

Core Insights - Analysts project Royalty Pharma (RPRX) will report quarterly earnings of $1.10 per share, reflecting a 14.6% year-over-year increase [1] - Revenue is expected to reach $686.22 million, marking a 12.9% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a reevaluation of initial estimates by analysts [1] Revenue Estimates - 'Portfolio Receipts- Royalty Receipts- Products- Cystic fibrosis franchise' is projected to reach $206.12 million, a 5.8% increase year-over-year [4] - 'Portfolio Receipts- Royalty Receipts- Products- Tysabri' is estimated at $53.90 million, indicating a 15.6% decrease from the prior year [4] - 'Portfolio Receipts- Royalty Receipts- Products- Imbruvica' is expected to be $39.81 million, reflecting a 19% decrease year-over-year [5] - 'Portfolio Receipts- Royalty Receipts- Products- Xtandi' is forecasted at $42.75 million, a 10.7% increase year-over-year [5] - 'Portfolio Receipts- Royalty Receipts- Products- Promacta' is anticipated to reach $39.51 million, showing a 29.5% increase from the previous year [5] Additional Product Estimates - 'Portfolio Receipts- Royalty Receipts- Products- Cabometyx/Cometriq' is projected at $19.64 million, a 17.3% increase year-over-year [6] - 'Portfolio Receipts- Royalty Receipts- Products- Evrysdi' is expected to be $31.21 million, indicating a 25.2% increase from the prior year [6] - 'Portfolio Receipts- Royalty Receipts- Products- Trodelvy' is forecasted at $10.87 million, reflecting a 4.6% increase year-over-year [7] - 'Portfolio Receipts- Royalty Receipts- Products- Trelegy' is estimated at $57.04 million, indicating a 17.6% increase year-over-year [7] - 'Portfolio Receipts- Royalty Receipts- Products- Tremfya' is projected to reach $38.47 million, reflecting a 28.6% increase year-over-year [8] Stock Performance - Shares of Royalty Pharma have increased by 6.4% in the past month, outperforming the Zacks S&P 500 composite, which moved up by 1% [8] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [8]

Group 1 - Royalty Pharma's board of directors has approved a dividend of $0.22 per Class A ordinary share for Q3 2025, to be paid on September 10, 2025, to shareholders of record by August 15, 2025 [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, collaborating with various entities from academic institutions to leading global pharmaceutical companies [2] - The company has a portfolio of royalties linked to over 35 commercial products, including notable therapies such as Vertex's Trikafta, GSK's Trelegy, and Roche's Evrysdi, among others [2] - Royalty Pharma funds innovation both directly by co-funding late-stage clinical trials and indirectly by acquiring existing royalties from original innovators [2]