Royalty Pharma Reports Third Quarter 2024 Results
Portfolio Receipts growth of 15% to $735 million; Royalty Receipts growth of 15%
Net cash provided by operating activities of $704 million
Capital Deployment of approximately $1.2 billion
Raising full year 2024 guidance: Portfolio Receipts expected to be $2,750 to $2,800 million
NEW YORK, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Royalty Pharma plc (NASDAQ:RPRX) today reported financial results for the third quarter of 2024 and raised full year 2024 guidance for Portfolio Receipts.
"We delivered strong growth of approximately 15% in Portfolio Receipts in the third quarter of 2024 and are delighted to raise our full year guidance" said Pablo Legorreta, Royalty Pharma's founder and Chief Executive Officer. "We also strengthened our portfolio by adding royalties on three innovative therapies over the last three months, increasing our Capital Deployment to approximately $1.2 billion in the third quarter and $2.6 billion year-to-date. Notably, two of these transactions were for synthetic royalties for $500 million in total, continuing the strong demand we are seeing for this attractive, flexible type of capital. Lastly, we are pleased with the progress of our portfolio as Voranigo and Cobenfy were recently approved by the FDA. Based on our robust deal pipeline, our leading position as the partner of choice in the royalty market and our efficient business model, I am confident that Royalty Pharma is well positioned to deliver attractive, compounding growth over the long term."
Growth of approximately 15% for Portfolio Receipts and Royalty Receipts in the third quarter of 2024
Royalty Receipts grew 15% to $732 million, driven by strong performance particularly from Trelegy, Evrysdi, the cystic fibrosis franchise and Tremfya.
Portfolio Receipts increased 15% to $735 million.
Strengthened portfolio by adding royalties on three innovative therapies over the last three months
Acquired synthetic royalties on two approved products, Syndax and Incyte's Niktimvo (chronic graft-versus-host disease) and Ascendis' Yorvipath (hypoparathyroidism).
Purchased royalties on Pharvaris' deucrictibant in Phase 3 development for hereditary angioedema.
Positive regulatory updates across the royalty portfolio
FDA granted approvals for Bristol Myers Squibb's Cobenfy (formerly KarXT) for schizophrenia, Johnson and Johnson's Tremfya for ulcerative colitis and Servier's Voranigo for IDH-mutant glioma, a type of brain cancer.
Raising financial guidance for full year 2024 (excludes contribution from future transactions)
Royalty Pharma now expects 2024 Portfolio Receipts to be between $2,750 million and $2,800 million (previously between $2,700 million and $2,775 million).
2024 Portfolio Receipts guidance includes expected year/year growth in Royalty Receipts of 11% to 13% (previous guidance of 9% to 12% year/year growth).
Financial & Liquidity Summary
Three Months Ended September 30,
(unaudited)
($ and shares in millions)
2024
2023
Change
Portfolio Receipts
735
637
15%
Net cash provided by operating activities
704
574
23%
Adjusted EBITDA (non-GAAP)*
679
582
17%
Portfolio Cash Flow (non-GAAP)*
617
528
17%
Weighted average Class A ordinary shares outstanding - diluted
593
601
(1)%
*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 September 30,
(unaudited)
($ in millions)
2024
2023
Change
Products:
Marketers:
Therapeutic Area:
Cystic fibrosis franchise
Vertex
Rare disease
207
196
6%
Trelegy
GSK
Respiratory
91
58
55%
Tysabri
Biogen
Neuroscience
68
71
(4)%
Evrysdi
Roche
Rare disease
48
16
204%
Imbruvica
AbbVie, J&J
Cancer
46
51
(10)%
Xtandi
Pfizer, Astellas
Cancer
43
39
12%
Promacta
Novartis
Hematology
42
45
(6)%
Tremfya
Johnson & Johnson
Immunology
34
27
26%
Cabometyx/Cometriq
Exelixis, Ipsen, Takeda
Cancer
19
17
7%
Spinraza
Biogen
Rare disease
14
15
(7)%
Trodelvy
Gilead
Cancer
11
9
26%
Orladeyo
BioCryst
Rare disease
10
8
33%
Erleada
Johnson & Johnson
Cancer
10
8
30%
Nurtec ODT/Zavzpret
Pfizer
Neuroscience
8
5
48%
Other products(5)
80
71
12%
Royalty Receipts
732
637
15%
Milestones and other contractual receipts
3
—
n/a
Portfolio Receipts
735
637
15%
Amounts shown in the table may not add due to rounding.
Royalty Receipts was $732 million in the third quarter of 2024, an increase of 15% compared to $637 million in the third quarter of 2023, primarily driven by strong growth from Trelegy, Evrysdi, the cystic fibrosis franchise and Tremfya. Royalty receipts from Evrysdi included the benefit of the additional royalties acquired in October 2023 and June 2024.
Portfolio Receipts was $735 million in the third quarter of 2024, an increase of 15% compared to $637 million in the third quarter of 2023, primarily driven by the same Royalty Receipts increases noted above.
Liquidity and Capital Resources
Royalty Pharma's liquidity and capital resources are summarized below:
As of September 30, 2024, Royalty Pharma had cash and cash equivalents of $950 million and total debt with principal value of $7.8 billion.
During the third quarter of 2024, Royalty Pharma repurchased approximately three million Class A ordinary shares for $95 million. Through the first nine months of 2024, Royalty Pharma has repurchased approximately seven million Class A ordinary shares for $180 million. The weighted-average number of diluted Class A ordinary shares outstanding for the third quarter of 2024 was 593 million as compared to 601 million for the third quarter of 2023.
Liquidity Summary
Three Months Ended September 30,
(unaudited)
($ in millions)
2024
2023
Portfolio Receipts
735
637
Payments for operating and professional costs
(55)
(55)
Adjusted EBITDA (non-GAAP)
679
582
Interest paid, net
(62)
(54)
Portfolio Cash Flow (non-GAAP)
617
528
Amounts may not add due to rounding.
Adjusted EBITDA (non-GAAP) was $679 million in the third quarter of 2024. Adjusted EBITDA is calculated as Portfolio Receipts minus payments for operating and professional costs.
Portfolio Cash Flow (non-GAAP) was $617 million in the third quarter of 2024. Portfolio Cash Flow is calculated 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.
Refer to Table 4 for Royalty Pharma's reconciliation of each non-GAAP measure to the most directly comparable GAAP financial measure, net cash provided by operating activities.
Capital Deployment was $1.2 billion in the third quarter of 2024, consisting primarily of the acquisitions of royalties on Voranigo, Yorvipath, deucrictibant and transaction costs related to the second quarter acquisition of royalties on frexalimab. Capital Deployment reflects cash payments during the period for new and previously announced transactions. In the first nine months of 2024, Capital Deployment was $2.2 billion.
The table below details Capital Deployment by category:
Capital Deployment
Three Months Ended September 30,
Nine Months Ended September 30,
(unaudited)
($ in millions)
2024
2023
2024
2023
Acquisitions of financial royalty assets
(1,195)
(451)
(2,009)
(1,113)
Development-stage funding payments - upfront and milestone
—
(50)
—
(50)
Development-stage funding payments - ongoing
(1)
(1)
(2)
(2)
Purchases of available for sale debt securities
—
—
(150)
—
Milestone payments
—
—
(50)
(12)
Investments in equity method investees
—
(4)
(11)
(11)
Acquisitions of other financial assets
—
—
(18)
—
Contributions from legacy non-controlling interests - R&D
0
0
1
0
Capital Deployment
