Royalty Pharma Reports Q4 and Full Year 2025 Results

Core Insights - Royalty Pharma experienced a remarkable year in 2025, with a 16% growth in Portfolio Receipts, driven by a diversified portfolio and significant capital deployment [2][3][5] - The company returned a record amount of capital to shareholders and successfully internalized its external manager, enhancing its operational efficiency [2][5] - Looking ahead, Royalty Pharma anticipates a robust deal pipeline and multiple pivotal study results in 2026 that could unlock additional value [2][5] Financial Performance - Portfolio Receipts reached $874 million in Q4 2025, an 18% increase from Q4 2024, and totaled $3,254 million for FY 2025, reflecting a 16% growth year-over-year [5][6][53] - Royalty Receipts grew 17% to $856 million in Q4 2025 and 13% to $3,127 million for the full year, primarily driven by products like Voranigo, Trelegy, and Tremfya [6][14][53] - Net cash provided by operating activities was $827 million in Q4 2025 and $2,490 million for FY 2025, indicating strong operational cash flow [5][51] Capital Allocation and Shareholder Returns - The company deployed $2.6 billion in capital for royalty transactions in 2025, including a significant partnership for the therapy daraxonrasib [6][22] - Royalty Pharma repurchased 37 million Class A ordinary shares for $1.2 billion in 2025 and increased its quarterly dividend by 7% in Q1 2026 [6][16][17] - Full year 2026 guidance for Portfolio Receipts is projected to be between $3,275 million and $3,425 million, with expected growth in Royalty Receipts of 3% to 8% [5][8][9] Clinical and Regulatory Developments - Positive clinical updates were reported across the royalty portfolio in 2025, including FDA approvals for Myqorzo and Tremfya, and promising Phase 3 results for several therapies [4][6][29] - The company expects pivotal study results for daraxonrasib, pelacarsen, and litifilimab in 2026, which could further enhance its portfolio value [2][6][29] Liquidity and Financial Outlook - As of December 31, 2025, Royalty Pharma had cash and cash equivalents of $619 million and total debt of $9.2 billion [16][48] - The company anticipates interest payments of approximately $350 million to $360 million in 2026, with a decrease in operating costs as a percentage of Portfolio Receipts [9][10][16]