Royalty Pharma plc (Nasdaq: RPRX) today reported financial results
for the first quarter of 2024 and confirmed full year 2024 guidance
for Portfolio Receipts.
“We continued to execute on our strategy in the first quarter of
2024 and are on track to deliver our full year guidance,” said
Pablo Legorreta, Royalty Pharma’s founder and Chief Executive
Officer. “We achieved double-digit growth in Royalty Receipts
driven by the strength of our diversified portfolio. With today’s
transaction to acquire royalties on Sanofi’s frexalimab, a therapy
with multi-blockbuster potential, we’ve increased our
development-stage portfolio by five-fold to 15 medicines since our
IPO. Looking ahead, 2024 is expected to be an event-rich year for
our expanding development-stage pipeline with multiple potential
regulatory and clinical events. Furthermore, we continue to be
highly active in assessing attractive new royalty opportunities,
reflecting the strong demand for capital to fund the ongoing wave
of healthcare innovation. Based on the powerful fundamental
tailwinds underpinning our business, we remain highly confident in
our ability to deliver attractive, long-term compounding
growth.”
Strong Royalty Receipts growth; Portfolio Receipts
growth impacted by a high base of comparison
- Royalty Receipts grew 14% to $705
million, driven by strong portfolio performance, including
royalties on Evrysdi, Trelegy and the cystic fibrosis
franchise.
- Portfolio Receipts declined to $717 million from $1,131
million, reflecting a $475 million Biohaven-related milestone
payment received in the first quarter of 2023.
Capital Deployment of approximately $670 million,
including cash expected to be paid for frexalimab
- Announced transaction to acquire royalties on Sanofi’s
frexalimab, a potential multi-blockbuster in Phase 3 development
for multiple sclerosis, for approximately $525 million including
estimated transaction costs.
- Financial capacity of >$3.5 billion (including cash and
leverage capacity) to execute on value-creating transactions.
Development-stage portfolio growing to 15 therapies with
potential significantly >$1 billion in peak
royalties
- 11 of 15 therapies are in Phase 3 development or undergoing
regulatory review.
- Key events expected over next year: FDA filings for aficamten
(cardiovascular), pelabresib (myelofibrosis); pivotal study results
for seltorexant (depression), Tremfya (Crohn’s disease); FDA action
date for KarXT (schizophrenia).
Financial guidance for full year 2024 (excludes
contribution from future transactions)
- Royalty Pharma expects 2024 Portfolio Receipts to be between
$2,600 million and $2,700 million.
- 2024 Portfolio Receipts guidance includes expected growth in
Royalty Receipts of 5% to 9%.
Financial & Liquidity Summary
|
Three Months Ended March 31, |
|
(unaudited) |
($ and shares in millions) |
2024 |
2023 |
Change |
Portfolio Receipts |
717 |
1,131 |
(37 |
)% |
Net cash provided by operating activities |
665 |
1,034 |
(36 |
)% |
Adjusted EBITDA (non-GAAP)* |
656 |
1,044 |
(37 |
)% |
Portfolio Cash Flow (non-GAAP)* |
584 |
977 |
(40 |
)% |
Weighted average Class A ordinary shares outstanding - diluted |
597 |
607 |
(2 |
)% |
*See “Liquidity and Capital Resources” section. Adjusted EBITDA
and Portfolio Cash Flow are non-GAAP liquidity measures calculated
in accordance with the credit agreement.
Portfolio Receipts Highlights
|
|
|
Three Months Ended March 31, |
|
|
|
(unaudited) |
($ in millions) |
|
|
2024 |
2023 |
Change |
Products: |
Marketers: |
Therapeutic Area: |
|
|
|
Cystic fibrosis franchise |
Vertex |
Rare disease |
218 |
197 |
11 |
% |
Trelegy |
GSK |
Respiratory |
71 |
48 |
46 |
% |
Tysabri |
Biogen |
Neuroscience |
69 |
71 |
(2 |
)% |
Imbruvica |
AbbVie, J&J |
Cancer |
50 |
57 |
(12 |
)% |
Evrysdi |
Roche |
Rare disease |
45 |
18 |
156 |
% |
Promacta |
Novartis |
Hematology |
43 |
41 |
4 |
% |
Xtandi |
Pfizer, Astellas |
Cancer |
41 |
36 |
14 |
% |
Tremfya |
Johnson & Johnson |
Immunology |
36 |
32 |
15 |
% |
Cabometyx/Cometriq |
Exelixis, Ipsen, Takeda |
Cancer |
18 |
16 |
14 |
% |
Trodelvy |
Gilead |
Cancer |
10 |
7 |
57 |
% |
Erleada |
Johnson & Johnson |
Cancer |
9 |
6 |
57 |
% |
Orladeyo |
BioCryst |
Rare disease |
9 |
7 |
28 |
% |
Spinraza |
Biogen |
Rare disease |
7 |
— |
n/a |
Nurtec ODT/Zavzpret |
Pfizer |
Neuroscience |
6 |
4 |
40 |
% |
Other
products(5) |
73 |
78 |
(6 |
)% |
Royalty
Receipts |
705 |
616 |
14 |
% |
Milestones and other contractual receipts |
12 |
515 |
(98 |
)% |
Portfolio Receipts |
717 |
1,131 |
(37 |
)% |
Amounts shown in the table may not add due to
rounding.Portfolio Receipts were $717 million in
the first quarter of 2024, a decrease of 37% compared to $1,131
million in the same period of 2023. The decrease was attributable
to a high base of comparison in the first quarter of 2023 in
milestones and other contractual receipts, which reflected a $475
million Zavzpret milestone payment and a $29 million Airsupra
payment.
Royalty Receipts increased 14% to $705 million,
primarily driven by strong growth in Trelegy and the cystic
fibrosis franchise, and incremental royalties acquired on Evrysdi
in October 2023.
Liquidity and Capital Resources
Royalty Pharma’s liquidity and capital resources are summarized
below:
As of March 31, 2024, Royalty Pharma had cash and cash
equivalents of $843 million and total debt with principal value of
$6.3 billion.
Liquidity
Summary |
Three Months Ended March 31, |
|
(unaudited) |
($ in millions) |
2024 |
2023 |
Portfolio Receipts |
717 |
1,131 |
Payments for operating and professional costs |
(61) |
(87) |
Adjusted EBITDA (non-GAAP) |
656 |
1,044 |
Interest paid, net |
(73) |
(67) |
Portfolio Cash Flow (non-GAAP) |
584 |
977 |
- Adjusted EBITDA
(non-GAAP) was $656 million in the first quarter of 2024.
Adjusted EBITDA is calculated in accordance with the credit
agreement as Portfolio Receipts minus payments for operating and
professional costs.
- Portfolio Cash Flow
(non-GAAP) was $584 million in the first quarter of 2024.
Portfolio Cash Flow is calculated in accordance with the credit
agreement as Adjusted EBITDA minus interest paid or received, net.
This measure reflects the cash generated by Royalty Pharma’s
business that can be redeployed into value-enhancing royalty
acquisitions, used to repay debt, returned to shareholders through
dividends or share purchases, or utilized for other discretionary
investments.
Royalty Pharma has provided a reconciliation of each non-GAAP
measure to the most directly comparable GAAP financial measure, net
cash provided by operating activities, in Table 4.
Royalty Pharma announced new transactions of up to $94 million
in the first quarter of 2024, which include upfront payments and
potential future milestones. Royalty Pharma is also providing an
aggregate amount for Capital Deployment, which reflects cash
payments during the period for new and previously announced
transactions. Capital Deployment was $93 million in the first
quarter of 2024, consisting primarily of the $49 million upfront
payment for ecopipam and $36 million in research and development
funding support for TEV-’749. Additionally, in April 2024, Royalty
Pharma made a $50 million milestone payment to Arrowhead related to
olpasiran. In May 2024, Royalty Pharma announced a transaction to
acquire royalties and milestones on frexalimab owned by ImmuNext
for approximately $525 million in cash including estimated
transaction costs.
The table below details Capital Deployment by category:
Capital Deployment
|
Three Months Ended March 31, |
($ in millions) |
2024 |
2023 |
Acquisitions of financial royalty assets |
(86) |
(602) |
Development-stage funding payments - ongoing |
(1) |
(1) |
Milestone payments |
— |
(12) |
Investments in equity method investees |
(7) |
(4) |
Contributions from legacy non-controlling interests - R&D |
0 |
0 |
Capital Deployment |
(93) |
(618) |
Amounts may not add due to rounding.
Recent Transactions
During 2024, Royalty Pharma announced new transactions of up to
$619 million. Announced transactions amount reflects the entire
amount of capital committed for new transactions during the year,
including potential future milestones.
Recent transactions include:
- In January 2024, Royalty Pharma
acquired a royalty interest in ecopipam for an upfront payment of
$49 million and up to $44 million in milestone payments contingent
on the achievement of certain regulatory milestones. Ecopipam is in
Phase 3 development by Emalex Biosciences for the treatment of
Tourette Syndrome.
- In May 2024, Royalty Pharma
announced a transaction to acquire royalties and milestones on
frexalimab owned by ImmuNext for approximately $525 million in cash
including estimated transaction costs. ImmuNext is entitled to
royalties on frexalimab, which is a first-in-class, second
generation anti-CD40 ligand monoclonal antibody in development by
Sanofi. Frexalimab is being evaluated in Phase 3 clinical studies
for the treatment of multiple sclerosis and is in Phase 2 clinical
studies for systemic lupus erythematosus and Type 1 Diabetes.
The information in this section should be read together with
Royalty Pharma’s reports and documents filed with the SEC at
www.sec.gov and the reader is also encouraged to review all
other press releases and information available in the Investors
section of Royalty Pharma’s website at www.royaltypharma.com.
Key Developments Relating to the Portfolio
The key developments related to Royalty Pharma’s royalty
interests are discussed below based on disclosures from the
marketers of the products.
TEV-‘749 |
In May 2024, Teva Pharmaceuticals announced positive efficacy
results from its Phase 3 trial evaluating TEV-‘749, a once-monthly
subcutaneous long-acting injection of olanzapine, in adult patients
with schizophrenia. Results demonstrated that TEV-‘749 met its
primary endpoint as measured by a change in the Positive and
Negative Syndrome Scale (PANSS) total score from baseline after
eight weeks compared to placebo. Additionally, no cases of
Post-injection Delirium/Sedation Syndrome (PDSS) have been reported
to date, after administration of approximately 80% of the minimal
target injection number. |
Cystic fibrosis franchise |
In May 2024, Vertex announced that it submitted a New Drug
Application and Marketing Authorization Application for the new
triple combination therapy to the Food & Drug Administration
and the European Medicines Agency, respectively, for approval. This
follows positive Phase 3 results for the new triple combination
therapy in February 2024. In April 2024, Vertex announced that the
European Commission had granted approval for the label expansion of
Kalydeco for the treatment of infants down to one month of age with
cystic fibrosis (CF) who have certain mutations in the CF
transmembrane conductance regulator gene. |
Tremfya |
In May 2024, Johnson and Johnson announced positive Phase 3 results
for Tremfya in patients with moderately to severely active Crohn’s
disease with inadequate response/intolerance to conventional
therapies and/or biologics. Johnson and Johnson submitted
applications to the European Medicines Agency seeking to expand the
Marketing Authorization Application for Tremfya to include
ulcerative colitis and Crohn’s disease. |
Xtandi |
In April 2024, Astellas Pharma announced the European Commission
approved a label extension for Xtandi as monotherapy or in
combination with androgen deprivation therapy for the treatment of
adult men with high-risk biochemical recurrent non-metastatic
hormone-sensitive prostate cancer who are unsuitable for
salvage-radiotherapy.In January 2024, Pfizer announced that the
European Commission had approved Talzenna (talazoparib), an oral
poly ADP-ribose polymerase inhibitor, in combination with Xtandi,
for the treatment of adult patients with metastatic
castration-resistant prostate cancer in whom chemotherapy is not
clinically indicated. |
KarXT |
In March 2024, Bristol Myers Squibb announced that it completed its
acquisition of Karuna. Bristol Myers acquired Karuna for $330 per
share, for a total equity value of $14 billion. The New Drug
Application for KarXT for the treatment of schizophrenia in adults
was accepted for review by the FDA, with a Prescription Drug User
Fee Act date of September 26, 2024. |
Trontinemab |
In March 2024, Roche held a neurology update event in which it
announced that in people with Alzheimer’s Disease, trontinemab
demonstrated rapid and robust amyloid plaque reduction at
relatively low doses compared with standard anti-Aβ monoclonal
antibodies. The sustained low Amyloid Related Imaging Abnormalities
incidence and overall favorable safety and tolerability profile
support further investigation. |
Pelabresib |
In February 2024, Novartis announced that it had entered into an
agreement to make a voluntary public takeover offer to acquire
MorphoSys for €68 per share, for a total equity value of €2.7
billion. The closing is expected in the first half of 2024. |
Trodelvy |
In January 2024, Gilead announced that the Phase 3 EVOKE-01 study
evaluating Trodelvy compared to docetaxel did not meet its primary
endpoint of overall survival in patients with previously treated
metastatic non-small cell lung cancer. |
2024 Financial Outlook
Royalty Pharma has provided guidance for full year 2024,
excluding transactions and borrowings announced
after the date of this release, as follows:
|
Provided May 9, 2024 |
Previous |
Portfolio Receipts |
$2,600 million to $2,700 million |
$2,600 million to $2,700 million |
Payments for operating and professional costs |
8% to 9% of Portfolio Receipts |
8% to 9% of Portfolio Receipts |
Interest paid |
$160 million |
$160 million |
The above Portfolio Receipts guidance includes expected Royalty
Receipts growth of 5% to 9% in 2024.
Royalty Pharma’s full year 2024 guidance reflects a negligible
estimated foreign exchange impact to Portfolio Receipts, assuming
current foreign exchange rates prevail for 2024.
Total interest paid is based on the semi-annual interest payment
schedule of Royalty Pharma’s existing notes and is anticipated to
be approximately $160 million in 2024. Interest paid is anticipated
to be approximately $79 million in the third quarter of 2024 with
de minimis amounts being recorded in the second and fourth quarters
of 2024. The projection assumes no additional debt financing in
2024, including no drawdown on the revolving credit facility. In
the first quarter of 2024, Royalty Pharma collected interest of $6
million on its cash and cash equivalents, which partially offset
interest paid.
Royalty Pharma today provides this guidance based on its most
up-to-date view of its prospects. This guidance assumes no major
unforeseen adverse events and excludes the contributions from
transactions announced subsequent to the date of this press
release. Furthermore, Royalty Pharma may amend its guidance in the
event it engages in new royalty transactions which have a material
near-term financial impact on the company.
Financial Results Call
Royalty Pharma will host a conference call and simultaneous
webcast to discuss its first quarter 2024 results today at 8:00
a.m., Eastern Time. Please visit the “Investors” page of the
company’s website at
https://www.royaltypharma.com/investors/events to obtain
conference call information and to view the live webcast. A replay
of the conference call and webcast will be archived on the
company’s website for at least 30 days.
About Royalty Pharma plc
Founded in 1996, Royalty Pharma is the largest buyer of
biopharmaceutical royalties and a leading funder of innovation
across the biopharmaceutical industry, collaborating with
innovators from academic institutions, research hospitals and
non-profits through small and mid-cap biotechnology companies to
leading global pharmaceutical companies. Royalty Pharma has
assembled a portfolio of royalties which entitles it to payments
based directly on the top-line sales of many of the industry’s
leading therapies. Royalty Pharma funds innovation in the
biopharmaceutical industry both directly and indirectly - directly
when it partners with companies to co-fund late-stage clinical
trials and new product launches in exchange for future royalties,
and indirectly when it acquires existing royalties from the
original innovators. Royalty Pharma’s current portfolio includes
royalties on more than 35 commercial products, including Vertex’s
Trikafta, GSK’s Trelegy, Roche’s Evrysdi, Johnson & Johnson’s
Tremfya, Biogen’s Tysabri and Spinraza, AbbVie and Johnson &
Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Novartis’
Promacta, Pfizer’s Nurtec ODT and Gilead’s Trodelvy, and 15
development-stage product candidates.
Forward-Looking Statements
The information set forth herein does not purport to be complete
or to contain all of the information you may desire. Statements
contained herein are made as of the date of this document unless
stated otherwise, and neither the delivery of this document at any
time, nor any sale of securities, shall under any circumstances
create an implication that the information contained herein is
correct as of any time after such date or that information will be
updated or revised to reflect information that subsequently becomes
available or changes occurring after the date hereof.
This document contains statements that constitute
“forward-looking statements” as that term is defined in the United
States Private Securities Litigation Reform Act of 1995, including
statements that express the company’s opinions, expectations,
beliefs, plans, objectives, assumptions or projections regarding
future events or future results, in contrast with statements that
reflect historical facts. Examples include discussion of Royalty
Pharma’s strategies, financing plans, growth opportunities and
market growth. In some cases, you can identify such forward-looking
statements by terminology such as “anticipate,” “intend,”
“believe,” “estimate,” “plan,” “seek,” “project,” “expect,” “may,”
“will,” “would,” “could” or “should,” the negative of these terms
or similar expressions. Forward-looking statements are based on
management’s current beliefs and assumptions and on information
currently available to the company. However, these forward-looking
statements are not a guarantee of Royalty Pharma’s performance, and
you should not place undue reliance on such statements.
Forward-looking statements are subject to many risks, uncertainties
and other variable circumstances, and other factors. Such risks and
uncertainties may cause the statements to be inaccurate and readers
are cautioned not to place undue reliance on such statements. Many
of these risks are outside of the company’s control and could cause
its actual results to differ materially from those it thought would
occur. The forward-looking statements included in this document are
made only as of the date hereof. The company does not undertake,
and specifically declines, any obligation to update any such
statements or to publicly announce the results of any revisions to
any such statements to reflect future events or developments,
except as required by law.
Certain information contained in this document relates to or is
based on studies, publications, surveys and other data obtained
from third-party sources and the company’s own internal estimates
and research. While the company believes these third-party sources
to be reliable as of the date of this document, it has not
independently verified, and makes no representation as to the
adequacy, fairness, accuracy or completeness of, any information
obtained from third-party sources. In addition, all of the market
data included in this document involves a number of assumptions and
limitations, and there can be no guarantee as to the accuracy or
reliability of such assumptions. Finally, while the company
believes its own internal research is reliable, such research has
not been verified by any independent source.
For further information, please reference Royalty Pharma’s
reports and documents filed with the U.S. Securities and Exchange
Commission ("SEC") by visiting EDGAR on the SEC's website at
www.sec.gov.
Portfolio Receipts
Portfolio Receipts is a key performance metric that represents
our ability to generate cash from our portfolio investments, the
primary source of capital that we can deploy to make new portfolio
investments. Portfolio Receipts is defined as the sum of Royalty
receipts and Milestones and other contractual receipts. Royalty
receipts includes variable payments based on sales of products, net
of contractual payments to the legacy non-controlling interests,
that are attributed to Royalty Pharma (“Royalty Receipts”).
Milestones and other contractual receipts include sales-based or
regulatory milestone payments and other fixed contractual receipts,
net of contractual payments to legacy non-controlling interests,
that are attributed to Royalty Pharma. Portfolio Receipts does not
include proceeds from equity securities or proceeds from purchases
and sales of marketable securities, neither of which are central to
our fundamental business strategy.
Portfolio Receipts is calculated as the sum of the following
line items from our GAAP statements of cash flows: Cash collections
from financial royalty assets, Cash collections from intangible
royalty assets, Other royalty cash collections, Proceeds from
available for sale debt securities and Distributions from equity
method investees less Distributions to legacy non-controlling
interests – Portfolio Receipts, which represent contractual
distributions of Royalty Receipts, milestones and other contractual
receipts to RPSFT and the Legacy Investors Partnerships.
Use of Non-GAAP Measures
Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity
measures that exclude the impact of certain items and therefore
have not been calculated in accordance with GAAP. Management
believes that Adjusted EBITDA and Portfolio Cash Flow are important
non-GAAP measures used to analyze liquidity because they are key
components of certain material covenants contained within Royalty
Pharma’s credit agreement. Royalty Pharma cautions readers that
amounts presented in accordance with the definitions of Adjusted
EBITDA and Portfolio Cash Flow may not be the same as similar
measures used by other companies or analysts. These non-GAAP
liquidity measures have limitations as analytical tools, and you
should not consider them in isolation or as a substitute for the
analysis of Royalty Pharma’s results as reported under GAAP.
The definitions of Adjusted EBITDA and Portfolio Cash Flow used
by Royalty Pharma are the same as the definitions in the credit
agreement. Noncompliance with the interest coverage ratio, leverage
ratio and Portfolio Cash Flow ratio covenants under the credit
agreement could result in lenders requiring the company to
immediately repay all amounts borrowed. If Royalty Pharma cannot
satisfy these covenants, it would be prohibited under the credit
agreement from engaging in certain activities, such as incurring
additional indebtedness, paying dividends, making certain payments,
and acquiring and disposing of assets. Consequently, Adjusted
EBITDA and Portfolio Cash Flow are critical to the assessment of
Royalty Pharma’s liquidity.
Adjusted EBITDA and Portfolio Cash Flow are used by management
as key liquidity measures in the evaluation of the company’s
ability to generate cash from operations. Management uses Adjusted
EBITDA and Portfolio Cash Flow when considering available cash,
including for decision-making purposes related to funding of
acquisitions, debt repayments, dividends and other discretionary
investments. Further, these non-GAAP liquidity measures help
management, the audit committee and investors evaluate the
company’s ability to generate liquidity from operating
activities.
The company has provided reconciliations of these non-GAAP
liquidity measures to the most directly comparable GAAP financial
measure, being net cash provided by operating activities in Table
4.
Royalty Pharma Investor Relations and
Communications
+1 (212) 883-6637ir@royaltypharma.com
Royalty Pharma plcCondensed Consolidated
Statements of Operations (unaudited)Table
1 |
|
Three Months Ended March 31, |
($ in millions) |
2024 |
2023 |
Income and other revenues |
|
|
Income from financial royalty assets |
542 |
665 |
Other royalty income and revenues |
26 |
19 |
Total income and other revenues |
568 |
684 |
Operating expenses |
|
|
Provision for changes in expected cash flows from financial royalty
assets |
584 |
119 |
Research and development funding expense |
1 |
1 |
General and administrative expenses |
58 |
86 |
Total operating expenses, net |
642 |
205 |
Operating (loss)/income |
(74) |
479 |
Other expense/(income) |
|
|
Equity in losses/(earnings) of equity method investees |
14 |
(35) |
Interest expense |
44 |
47 |
Other income, net |
(128) |
(42) |
Total other income, net |
(70) |
(30) |
Consolidated net (loss)/income before tax |
(4) |
509 |
Income tax expense |
— |
— |
Consolidated net (loss)/income |
(4) |
509 |
Net (loss)/income attributable to non-controlling interests |
(9) |
168 |
Net income attributable to Royalty Pharma plc |
5 |
341 |
Amounts may not add due to rounding.
Royalty Pharma plcSelected Balance
Sheet Data (unaudited)Table
2 |
($ in millions) |
As of March 31, 2024 |
As of December 31, 2023 |
Cash and cash equivalents |
843 |
477 |
Total current and non-current financial royalty assets, net |
14,126 |
14,827 |
Total assets |
16,131 |
16,382 |
Long-term debt |
6,139 |
6,135 |
Total liabilities |
6,267 |
6,298 |
Total shareholders’ equity |
9,864 |
10,084 |
Royalty Pharma plcCondensed Consolidated
Statements of Cash Flows (unaudited)Table
3 |
|
Three Months Ended March 31, |
($ in millions) |
2024 |
2023 |
Cash flows from operating activities: |
|
|
Cash collections from financial royalty assets |
745 |
1,152 |
Cash collections from intangible royalty assets |
14 |
1 |
Other royalty cash collections |
26 |
20 |
Distributions from equity method investees |
13 |
16 |
Interest received |
6 |
16 |
Development-stage funding payments – ongoing |
(1) |
(1) |
Payments for operating and professional costs |
(61) |
(87) |
Interest paid |
(79) |
(83) |
Net cash provided by operating activities |
665 |
1,034 |
Cash flows from investing activities: |
|
|
Distributions from equity method investees |
5 |
35 |
Investments in equity method investees |
(7) |
(4) |
Proceeds from available for sale debt securities |
1 |
— |
Proceeds from sales and maturities of marketable securities |
— |
24 |
Acquisitions of financial royalty assets |
(86) |
(602) |
Milestone payments |
— |
(12) |
Net cash used in investing activities |
(87) |
(559) |
Cash flows from financing activities: |
|
|
Distributions to legacy non-controlling interests – Portfolio
Receipts |
(88) |
(92) |
Distributions to continuing non-controlling interests |
(32) |
(33) |
Dividends to shareholders |
(94) |
(89) |
Contributions from legacy non-controlling interests – R&D |
0 |
0 |
Contributions from non-controlling interests – other |
1 |
3 |
Net cash used in financing activities |
(212) |
(210) |
Net change in cash and cash equivalents |
366 |
265 |
Cash and cash equivalents, beginning of period |
477 |
1,711 |
Cash and cash equivalents, end of period |
843 |
1,976 |
Amounts may not add due to rounding.
Royalty Pharma plcGAAP to Non-GAAP
Reconciliation (unaudited)Table 4 |
|
Three Months Ended March 31, |
($ in millions) |
2024 |
2023 |
Net cash provided by operating activities
(GAAP) |
665 |
1,034 |
Adjustments: |
|
|
Proceeds from available for sale debt securities(6) |
1 |
— |
Distributions from equity method investees(6) |
5 |
35 |
Interest paid, net(6) |
73 |
67 |
Development-stage funding payments – ongoing |
1 |
1 |
Distributions to legacy non-controlling interests – Portfolio
Receipts(6) |
(88) |
(92) |
Adjusted EBITDA (non-GAAP) |
656 |
1,044 |
Interest paid, net(6) |
(73) |
(67) |
Portfolio Cash Flow (non-GAAP) |
584 |
977 |
Amounts may not add due to rounding.
Royalty Pharma plcDescription of Approved
Indications for Select Portfolio TherapiesTable
5 |
Cystic fibrosis franchise |
Cystic fibrosis |
Trelegy |
Chronic obstructive pulmonary disease and asthma |
Tysabri |
Relapsing forms of multiple sclerosis |
Imbruvica |
Hematological malignancies and chronic graft versus host
disease |
Evrysdi |
Spinal muscular atrophy |
Promacta |
Chronic immune thrombocytopenia purpura and aplastic anemia |
Xtandi |
Prostate cancer |
Tremfya |
Plaque psoriasis and active psoriatic arthritis |
Cabometyx/Cometriq |
Kidney, liver and thyroid cancer |
Trodelvy |
Breast and bladder cancer |
Erleada |
Prostate cancer |
Orladeyo |
Hereditary angioedema |
Spinraza |
Spinal muscular atrophy |
Nurtec ODT |
Acute and preventative treatment of migraine |
Notes
(1) |
Portfolio Receipts is a key performance metric that represents our
ability to generate cash from our portfolio investments, the
primary source of capital that we can deploy to make new portfolio
investments. Portfolio Receipts is defined as the sum of Royalty
receipts and milestones and other contractual receipts. Royalty
receipts include variable payments based on sales of products, net
of contractual payments to the legacy non-controlling interests,
that are attributed to Royalty Pharma (“Royalty Receipts”).
Milestones and other contractual receipts include sales-based or
regulatory milestone payments and other fixed contractual receipts,
net of contractual payments to the legacy non-controlling
interests, that are attributed to Royalty Pharma. Portfolio
Receipts does not include proceeds from equity securities or
marketable securities, both of which are not central to our
fundamental business strategy.Portfolio Receipts is calculated as
the sum of the following line items from our GAAP statements of
cash flows: Cash collections from financial royalty assets, Cash
collections from intangible royalty assets, Other royalty cash
collections, Proceeds from available for sale debt securities and
Distributions from equity method investees less Distributions to
legacy non-controlling interests - Portfolio Receipts, which
represent contractual distributions of Royalty Receipts, milestones
and other contractual receipts to RPSFT and the Legacy Investors
Partnerships. |
(2) |
Adjusted EBITDA is defined under
the credit agreement as Portfolio Receipts minus payments for
operating and professional costs. Operating and professional costs
reflect Payments for operating and professional costs from the GAAP
statements of cash flows. See GAAP to Non-GAAP reconciliation in
Table 4. |
(3) |
Portfolio Cash Flow is defined
under the credit agreement as Adjusted EBITDA minus interest paid
or received, net. See GAAP to Non-GAAP reconciliation in Table 4.
Portfolio Cash Flow reflects the cash generated by Royalty Pharma’s
business that can be redeployed into value-enhancing royalty
acquisitions, used to repay debt, returned to shareholders through
dividends or share purchases or utilized for other discretionary
investments. |
(4) |
Capital Deployment is calculated
as the summation of the following line items from our GAAP
statements of cash flows: Investments in equity method investees,
Purchases of available for sale debt securities, Acquisitions of
financial royalty assets, Acquisitions of other financial assets,
Milestone payments, Development-stage funding payments - ongoing,
Development-stage funding payments - upfront and milestone less
Contributions from legacy non-controlling interests - R&D. |
(5) |
Other products primarily include
Royalty Receipts on the following products: Cimzia, Crysvita,
Emgality, Entyvio, Farxiga/Onglyza, IDHIFA, Letairis, Lexiscan,
Mircera, Nesina, Soliqua and distributions from the Legacy SLP
Interest, which is presented as Distributions from equity method
investees on the GAAP statements of cash flows. |
(6) |
The table below shows the line
item for each adjustment and the direct location for such line item
on the GAAP statements of cash flows. |
Reconciling Adjustment |
Statements of Cash Flows Classification |
Interest paid, net |
Operating activities (Interest paid less Interest received) |
Distributions from equity method investees |
Investing activities |
Proceeds from available for sale debt securities |
Investing activities |
Distributions to legacy non-controlling interests - Portfolio
Receipts |
Financing activities |
|
|
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