Core Insights - Royalty Pharma is hosting an Investor Day to discuss its strategies for shareholder value creation through its unique business model in the biopharma royalty market [1][2] - The company anticipates continued strong growth in the biopharma royalty market, targeting a mid-teens average annual total shareholder return through 2030 [2][12] Financial Performance and Projections - Royalty Pharma expects a compound annual growth rate of approximately 12% in Portfolio Receipts from 2020 to 2025, aiming for at least $4.7 billion in Portfolio Receipts by 2030 [3][4] - The company has achieved a Return on Invested Capital (ROIC) of approximately 15% and a Return on Invested Equity (ROIE) of approximately 21% since 2019 [6][7] - The biopharma royalty market has seen significant growth, averaging $6.2 billion in announced transaction value per year from 2020 to 2024, more than double the previous five-year average [7][9] Capital Deployment and Investment Strategy - Royalty Pharma is on track to exceed its five-year capital deployment target of $10 billion to $12 billion, with $14 billion in announced transactions and $9 billion deployed to date [4][5] - The company expects to achieve an unlevered internal rate of return (IRR) in the mid-teens on its post-IPO investments, with strong returns on both approved and development-stage products [5][6] Market Trends and Industry Position - A Deloitte market study indicates growing interest in royalty funding among biopharma executives, with 54% reporting increased interest and 87% considering royalties for capital needs [9][10] - Royalty Pharma has expanded its workforce approximately three-fold since its IPO, enhancing its capabilities in data and analytics to support its growth strategy [10][11] Shareholder Value Creation - The company aims to be a premier capital allocator in life sciences, with plans for share buybacks and a commitment to grow dividends by a mid-single digit percentage annually [11][12] - Royalty Pharma's investment platform is expected to gain recognition, potentially leading to significant upside beyond the targeted mid-teens total shareholder return [12]

Core Insights - The report by Royalty Pharma and Deloitte highlights the increasing importance of royalties in funding biopharma innovation, marking a shift towards a diversified funding model in the industry [1][2][6] - Royalties are recognized as a vital component of capital structure, providing flexible, non-dilutive capital to support significant capital requirements in biopharma [2][3][6] Industry Dynamics - The study involved over 110 biopharma leaders, primarily CEOs and CFOs, to gather insights on royalty funding, revealing that royalties play a crucial role in supporting life sciences innovation and commercial success [3][6] - The report indicates a growing acceptance of royalties as part of a diversified funding strategy, driven by their non-dilutive nature, absence of covenants, and retention of operational control [7] Market Outlook - 87% of surveyed biopharma executives expressed willingness to consider royalties in their capital raising plans over the next three years, indicating a positive outlook for royalty funding in the industry [7] - The strategic benefits of royalties, including attractive cost of capital and positive investor perception, are contributing to their increasing adoption in the biopharma sector [6][7] Company Overview - Royalty Pharma, founded in 1996, is the largest buyer of biopharmaceutical royalties and a key funder of innovation, collaborating with various entities from academic institutions to leading global pharmaceutical companies [4] - The company has a diverse portfolio of royalties, entitling it to payments based on the sales of over 35 commercial products, including notable therapies from Vertex, GSK, Roche, and others [4]

PresentationTerence FlynnEquity Analyst Great. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. Very pleased to be hosting Royalty Pharma this afternoon. Joining us from the company, we have Pablo Legorreta, who is the company's Founder and CEO; and Terry Coyne, the company's CFO. Thank you both so much for being here. I've just got to read a disclosure statement first before we get started. Please see the Morgan Stanley research disclosure website at www.morgans ...

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].