Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-39329 | |
Entity Registrant Name | Royalty Pharma plc | |
Entity Incorporation, State or Country Code | X0 | |
Entity Address, Address Line One | 110 E 59th Street | |
Entity Address, City or Town | New York, | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 212 | |
Local Phone Number | 883-0200 | |
Title of 12(b) Security | Class A ordinary shares | |
Trading Symbol | RPRX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 365,899,235 | |
Entity Central Index Key | 0001802768 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 2,443,430 | $ 283,682 |
Marketable securities | 343,679 | 56,972 |
Financial royalty assets, net | 526,937 | 452,560 |
Accrued royalty receivable | 32,307 | 33,525 |
Available for sale debt securities | 28,500 | 0 |
Other royalty income receivable | 3,147 | 5,241 |
Other current assets | 12,789 | 92 |
Total current assets | 3,390,789 | 832,072 |
Financial royalty assets, net | 11,169,857 | 10,842,052 |
Intangible royalty assets, net | 40,258 | 51,724 |
Equity securities | 477,185 | 380,756 |
Available for sale debt securities | 162,454 | 131,280 |
Derivative financial instruments | 14,717 | 42,315 |
Investments in non-consolidated affiliates | 430,296 | 124,061 |
Other assets | 0 | 45,635 |
Total assets | 15,685,556 | 12,449,895 |
Current liabilities | ||
Royalty distribution payable to affiliates | 122,771 | 31,041 |
Accounts payable and accrued expenses | 34,366 | 11,177 |
Accrued purchase obligation | 111,610 | 0 |
Current portion of long-term debt | 182,226 | 281,984 |
Derivative financial instruments | 0 | 9,215 |
Total current liabilities | 450,973 | 333,417 |
Long-term debt | 5,729,622 | 5,956,138 |
Derivative financial instruments | 0 | 18,902 |
Other liabilities | 110,000 | 0 |
Total liabilities | 6,290,595 | 6,308,457 |
Commitments and contingencies | ||
Shareholders'/Unitholders' equity | ||
Shareholders' contributions | 0 | 3,282,516 |
Deferred shares, $0.000001 par value, 294,176 and 0 issued and outstanding, respectively | 0 | 0 |
Additional paid-in capital | 2,557,237 | 0 |
Retained earnings | 1,571,399 | 2,825,212 |
Non-controlling interest | 5,237,829 | 35,883 |
Accumulated other comprehensive income | 30,515 | 2,093 |
Treasury interests | (2,119) | (4,266) |
Total shareholders'/unitholders' equity | 9,394,961 | 6,141,438 |
Total liabilities and shareholders'/unitholders' equity | 15,685,556 | 12,449,895 |
Common Class A | ||
Shareholders'/Unitholders' equity | ||
Common stock | 37 | 0 |
Common Class B | ||
Shareholders'/Unitholders' equity | ||
Common stock | 0 | 0 |
Class R Redeemable Stock | ||
Shareholders'/Unitholders' equity | ||
Common stock | $ 63 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Revenues | $ 510,932 | $ 457,608 | $ 1,011,811 | $ 892,491 | |
Operating expenses | |||||
Research and development funding expense | 5,776 | 21,457 | 13,415 | 44,448 | |
Provision for changes in expected cash flows from financial royalty assets | 47,278 | 72,210 | 135,290 | 22,177 | |
Amortization of intangible assets | 5,733 | 5,733 | 11,466 | 12,332 | |
General and administrative expenses | 42,799 | 30,349 | 80,864 | 54,775 | |
Total operating expenses, net | 101,586 | 129,749 | 241,035 | 133,732 | |
Operating income | 409,346 | 327,859 | 770,776 | 758,759 | |
Other (income)/expense | |||||
Equity in (earnings)/loss of non-consolidated affiliates | (29,292) | 8,144 | (20,218) | 13,673 | |
Interest expense | 34,189 | 69,168 | 87,773 | 136,434 | |
Unrealized (gain)/loss on derivative contracts | (647) | 39,414 | 32,798 | 65,254 | |
Unrealized gain on equity securities | (193,895) | 36,800 | (40,729) | (16,944) | |
Interest income | (2,724) | (4,474) | (5,582) | (14,501) | |
Other non-operating (income)/expense, net | (261) | 37 | 5,662 | (21) | |
Total other (income)/expense, net | (192,630) | 149,089 | 59,704 | 183,895 | |
Consolidated net income before tax | 601,976 | 178,770 | 711,072 | 574,864 | |
Income tax expense | 0 | 0 | 0 | 0 | |
Consolidated net income | 601,976 | 178,770 | 711,072 | 574,864 | |
Less: Net income attributable to non-controlling interest | (159,902) | (27,057) | (197,758) | (55,707) | |
Net income attributable to controlling interest | 442,074 | 151,713 | 513,314 | 519,157 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||
Reclassification of loss on interest rate swaps included in net income | 0 | 1,602 | 4,066 | 3,189 | |
Change in unrealized movement on available for sale debt securities | 6,949 | 2,939 | 59,674 | 2,939 | |
Other comprehensive income | 6,949 | 4,541 | 63,740 | 6,128 | |
Comprehensive income | 449,023 | 156,254 | 577,054 | 525,285 | |
Less: Other comprehensive income attributable to non-controlling interest | (1,624) | 0 | (11,296) | 0 | |
Comprehensive income attributable to controlling interest | $ 447,399 | 156,254 | $ 565,758 | 525,285 | |
Earnings per share of Class A ordinary shares (1): | |||||
Basic (in dollars per share) | [1] | $ 0.09 | $ 0.09 | ||
Diluted (in dollars per share) | [1] | $ 0.09 | $ 0.09 | ||
Weighted-average shares of Class A shares outstanding (1): | |||||
Basic (in shares) | [1] | 353,979,000 | 353,979,000 | ||
Diluted (in shares) | [1] | 353,980,000 | 353,980,000 | ||
Financial Royalty Assets | |||||
Revenues | $ 474,177 | 416,945 | $ 937,021 | 799,161 | |
Intangible Royalty Assets | |||||
Revenues | 33,445 | 35,476 | 68,428 | 78,722 | |
Royalty Income, Other | |||||
Revenues | $ 3,310 | $ 5,187 | $ 6,362 | $ 14,608 | |
[1] | Represents earnings per share of Class A ordinary shares and weighted-average Class A ordinary shares outstanding for the period from June 16, 2020 through June 30, 2020, the period following our initial public offering (see Note 13). |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Class R Redeemable Stock | Unitholders' Contributions | Common StockCommon Class A | Common StockCommon Class B | Common StockClass R Redeemable Stock | Deferred Shares | Additional Paid-In Capital | Shareholders' Contributions | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income/(Loss) | Non-Controlling Interest | Treasury Interests |
Beginning balance at Dec. 31, 2018 | $ 4,552,079 | $ 3,282,516 | $ 1,215,953 | $ (10,255) | $ 63,865 | $ 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Distributions | (475,629) | (396,049) | (79,580) | ||||||||||||
Net income (loss) | 574,864 | 519,157 | 55,707 | ||||||||||||
Change in unrealized movement on available for sale debt securities | 2,939 | 2,939 | |||||||||||||
Reclassification of loss on interest rate swaps included in net income | 3,189 | 3,189 | |||||||||||||
Purchase of treasury interests | (4,228) | (4,228) | |||||||||||||
Ending balance at Jun. 30, 2019 | 4,653,214 | 3,282,516 | 1,339,061 | (4,127) | 39,992 | (4,228) | |||||||||
Beginning balance at Mar. 31, 2019 | 4,705,337 | 3,282,516 | 1,385,728 | (8,668) | 48,088 | (2,327) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Distributions | (233,533) | (198,380) | (35,153) | ||||||||||||
Net income (loss) | 178,770 | 151,713 | 27,057 | ||||||||||||
Change in unrealized movement on available for sale debt securities | 2,939 | 2,939 | |||||||||||||
Reclassification of loss on interest rate swaps included in net income | 1,602 | 1,602 | |||||||||||||
Purchase of treasury interests | (1,901) | (1,901) | |||||||||||||
Ending balance at Jun. 30, 2019 | 4,653,214 | $ 3,282,516 | 1,339,061 | (4,127) | 39,992 | (4,228) | |||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | 0 | 0 | |||||||||||
Beginning balance at Dec. 31, 2019 | 6,141,438 | $ (192,705) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 3,282,516 | 2,825,212 | $ (192,705) | 2,093 | 35,883 | (4,266) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Contributions | 1,447,965 | 307,646 | 1,140,319 | ||||||||||||
Transfer of interests | 0 | (1,037,161) | 1,037,161 | ||||||||||||
Distributions | (689,684) | (313,408) | (376,276) | ||||||||||||
Initial share issuance upon registration of plc (in shares) | 50,000 | ||||||||||||||
Initial share issuance upon registration of plc | 63 | $ 63 | |||||||||||||
Issuance of Class B shares to Continuing Investor Partnerships (in shares) | 535,383,000 | ||||||||||||||
Issuance of Class B shares to Continuing Investors Partnerships | 1 | $ 1 | |||||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity (in shares) | 294,176,000 | (294,176,000) | 294,176,000 | ||||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | (1) | $ 30 | $ (1) | 1,402,762 | (2,553,001) | (1,261,014) | (24,022) | 2,433,098 | 2,147 | ||||||
Issuance of Class A ordinary shares sold in initial public offering, net of offering costs (in shares) | 71,652,000 | ||||||||||||||
Issuance of Class A shares sold in initial public offering, net of offering costs | 1,909,332 | $ 7 | 1,150,735 | 758,590 | |||||||||||
Share based compensation | 3,740 | 3,740 | |||||||||||||
Issuance of Class A shares under equity incentive plan (in shares) | 71,000 | ||||||||||||||
Net income (loss) | 711,072 | ||||||||||||||
Change in unrealized movement on available for sale debt securities | 59,674 | 48,378 | 11,296 | ||||||||||||
Reclassification of loss on interest rate swaps included in net income | 4,066 | 4,066 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 50,000 | 365,899,000 | 241,207,000 | 50,000 | 294,175,555 | ||||||||||
Ending balance at Jun. 30, 2020 | 9,394,961 | $ 37 | $ 0 | $ 63 | $ 0 | 2,557,237 | 0 | 1,571,399 | 30,515 | 5,237,829 | (2,119) | ||||
Beginning balance (in shares) at Mar. 31, 2020 | 0 | 0 | 0 | 0 | |||||||||||
Beginning balance at Mar. 31, 2020 | 7,162,693 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 2,553,001 | 2,561,971 | 49,212 | 2,002,775 | 4,266 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Contributions | 6,691 | 6,691 | |||||||||||||
Distributions | (296,483) | (171,632) | (124,851) | ||||||||||||
Initial share issuance upon registration of plc (in shares) | 50,000 | ||||||||||||||
Initial share issuance upon registration of plc | 63 | $ 63 | |||||||||||||
Issuance of Class B shares to Continuing Investor Partnerships (in shares) | 535,383,000 | ||||||||||||||
Issuance of Class B shares to Continuing Investors Partnerships | 1 | $ 1 | |||||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity (in shares) | 294,176,000 | (294,176,000) | 294,176,000 | ||||||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | (1) | $ 30 | $ (1) | 1,402,762 | (2,553,001) | (1,261,014) | (24,022) | 2,433,098 | 2,147 | ||||||
Issuance of Class A ordinary shares sold in initial public offering, net of offering costs (in shares) | 71,652,000 | ||||||||||||||
Issuance of Class A shares sold in initial public offering, net of offering costs | 1,909,332 | $ 7 | 1,150,735 | 758,590 | |||||||||||
Share based compensation | 3,740 | 3,740 | |||||||||||||
Issuance of Class A shares under equity incentive plan (in shares) | 71,000 | ||||||||||||||
Net income (loss) | 601,976 | ||||||||||||||
Change in unrealized movement on available for sale debt securities | 6,949 | 5,325 | 1,624 | ||||||||||||
Reclassification of loss on interest rate swaps included in net income | 0 | ||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 50,000 | 365,899,000 | 241,207,000 | 50,000 | 294,175,555 | ||||||||||
Ending balance at Jun. 30, 2020 | $ 9,394,961 | $ 37 | $ 0 | $ 63 | $ 0 | $ 2,557,237 | $ 0 | $ 1,571,399 | $ 30,515 | $ 5,237,829 | $ (2,119) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Cash collections from financial royalty assets | $ 1,003,504 | $ 895,150 |
Cash collections from intangible royalty assets | 69,646 | 73,821 |
Other royalty cash collections | 8,548 | 20,456 |
Interest received | 3,597 | 14,458 |
Swap collateral received | 45,252 | 360 |
Swap collateral posted | 0 | (26,670) |
Swap termination payments | (35,448) | 0 |
Distributions from non-consolidated affiliates | 31,840 | 14,059 |
Development-stage funding payments - ongoing | (13,415) | (44,448) |
Payments for operating and professional costs | (69,985) | (47,144) |
Interest paid | (83,431) | (130,265) |
Net cash provided by operating activities | 960,108 | 769,777 |
Cash flows from investing activities: | ||
Distributions from non-consolidated affiliates | 15,084 | 0 |
Purchases of available for sale debt securities | 0 | (125,117) |
Purchase of equity securities | (50,000) | 0 |
Proceeds from available for sale debt securities | 0 | 150,000 |
Purchase of marketable securities | (637,235) | 0 |
Proceeds from sales and maturities of marketable securities | 353,717 | 0 |
Investments in non-consolidated affiliates | (29,262) | (18,684) |
Acquisitions of financial royalty assets | (574,620) | (1,231,736) |
Milestone payments | 0 | (250,000) |
Net cash used in investing activities | (922,316) | (1,475,537) |
Cash flows from financing activities: | ||
Distributions to shareholders/unitholders | (285,355) | (396,049) |
Distributions to non-controlling interest | (284,546) | (77,858) |
Distributions to non-controlling interest- other | (28,055) | 0 |
Contributions from non-controlling interest- acquisitions | 17,359 | 0 |
Contributions from non-controlling interest- R&D | 5,114 | 0 |
Contributions from non-controlling interest- other | 12,625 | 0 |
Scheduled repayments of long-term debt | (94,200) | (147,000) |
Repayments of long-term debt | (5,170,396) | 0 |
Proceeds from issuance of long-term debt | 6,040,000 | 0 |
Debt issuance costs and other | (8,819) | 0 |
Purchase of treasury interests | 0 | (4,228) |
Proceeds from issuance of ordinary shares upon initial public offering, net of offering costs | 1,918,229 | 0 |
Net cash provided by/(used in) financing activities | 2,121,956 | (625,135) |
Net change in cash and cash equivalents | 2,159,748 | (1,330,895) |
Cash and cash equivalents, beginning of period | 283,682 | 1,924,211 |
Cash and cash equivalents, end of period | $ 2,443,430 | $ 593,316 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Non-printing) | Jun. 30, 2020$ / sharesshares | Jun. 30, 2020£ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2019£ / sharesshares |
Deferred stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 | ||
Deferred stock, issued (in shares) | 294,176,000 | 294,176,000 | 0 | 0 |
Deferred stock, outstanding (in shares) | 294,176,000 | 294,176,000 | 0 | 0 |
Common Class A | ||||
Common stock, par value (in dollars/pounds per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, issued (in shares) | 365,899,000 | 365,899,000 | 0 | 0 |
Common stock, outstanding (in shares) | 365,899,235 | 365,899,235 | 0 | 0 |
Common Class B | ||||
Common stock, par value (in dollars/pounds per share) | $ / shares | $ 0.000001 | $ 0.000001 | ||
Common stock, issued (in shares) | 241,207,000 | 241,207,000 | 0 | 0 |
Common stock, outstanding (in shares) | 241,207,425 | 241,207,425 | 0 | 0 |
Class R Redeemable Stock | ||||
Common stock, par value (in dollars/pounds per share) | £ / shares | £ 1 | £ 1 | ||
Common stock, issued (in shares) | 50,000 | 50,000 | 0 | 0 |
Common stock, outstanding (in shares) | 50,000 | 50,000 | 0 | 0 |
Organization and Purpose
Organization and Purpose | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Purpose | Organization and Purpose Royalty Pharma plc is a newly formed English public limited company incorporated under the laws of England and Wales created for the purpose of consolidating our predecessor entities and facilitating the initial public offering (the "IPO” or the "Offering”) of our Class A ordinary shares that was completed in June 2020 (discussed below). Following our IPO, we operate and control the business affairs of Royalty Pharma Holdings Ltd. (“RP Holdings”), a private limited company incorporated under the laws of England and Wales and U.K. tax resident. Through our controlling ownership of RP Holdings’ Class A ordinary shares (the “RP Holdings Class A Interests”) and RP Holdings' Class B ordinary shares (the “RP Holdings Class B Interests”), we conduct our business through RP Holdings and its subsidiaries and include RP Holdings and its subsidiaries in our condensed consolidated financial statements. RP Holdings is the sole owner of Royalty Pharma Investments 2019 ICAV, which is an Irish collective asset management entity formed to facilitate our Exchange Offer Transactions (defined below), and is the successor to Royalty Pharma Investments, an Irish Unit Trust (“Old RPI”), for accounting and financial reporting purposes. RP Holdings is owned directly by RPI US Partners 2019, LP, a Delaware limited partnership, RPI International Holdings 2019, LP, (together, the “Continuing Investors Partnerships”), and Royalty Pharma plc. Old RPI is a unit trust established in August 2011 under the laws of Ireland and authorized by the Central Bank of Ireland pursuant to the Unit Trusts Act, 1990. Prior to the Exchange Offer Transactions, Old RPI was owned by various partnerships (the “Legacy Investors Partnerships”). “Royalty Pharma,” “Royalty Pharma Investments,” “RPI,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma plc and its subsidiaries on a consolidated basis. After the consummation of the Reorganization Transactions (defined below) and before the consummation of the Offering, “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Royalty Pharma Investments 2019 ICAV. Prior to the Reorganization Transactions, “Royalty Pharma,” the “Company,” “we,” “us” and “our” refer to Old RPI. We are the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry. We fund innovation in the biopharmaceutical industry both directly and indirectly—directly when we partner with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties, and indirectly when we acquire existing royalties from the original innovators. We acquire royalties in a variety of ways that can be tailored to the needs of our partners. We classify our acquisitions according to the following structures: Third-party Royalties - A royalty is the contractual right to a percentage of top-line sales from a licensee’s use of a product, technology or intellectual property. The majority of our current portfolio consists of royalties that had been previously created by other parties prior to our acquisition. Synthetic / Hybrid Royalties - A synthetic royalty is the contractual right to a percentage of top-line sales created by the developer and/or marketer of a therapy in exchange for funding. In many of our synthetic royalty acquisitions, we also make investments in the public equity of the company, where the main value driver of the company is the product on which we concurrently acquired a royalty. R&D Funding - We fund R&D, typically for large biopharmaceutical companies, in exchange for future royalties and/or milestones if the product or indication we are funding is approved. Acquisitions of Companies - We acquire royalties in connection with M&A transactions, often from the buyers of biopharmaceutical companies when they dispose of the non-strategic assets of the target company following the closing of the acquisition. We also seek to partner with companies to acquire other biopharmaceutical companies that own significant royalties. We may also seek to acquire biopharmaceutical companies that have significant royalties or where we can create royalties in subsequent transactions. RP Management, LLC (the “Manager”), a Delaware limited liability company, is an external adviser which is responsible for the management of Royalty Pharma. RP Management (Ireland) Ltd. (“RP Ireland”), is the manager of Old RPI and equivalent to the board of directors of a company or general partner of a partnership and is responsible for the day to day operations of Old RPI. Its functions can be delegated to third parties. RP Ireland delegated responsibility for investment management of Old RPI to its parent company, the Manager, in accordance with the investment objectives and policies of Old RPI. Reorganization Transactions In connection with our IPO, we consummated an exchange offer on February 11, 2020 (the “Exchange Date”). Through the exchange offer, investors representing 82% of the aggregate limited partnership in the Legacy Investors Partnerships, exchanged their limited partnership interests in the Legacy Investors Partnerships for limited partnership interests in the Continuing Investors Partnerships. The exchange offer transaction together with (i) the concurrent incurrence of indebtedness under our new credit facility and (ii) the issuance of additional interests in Continuing Investors Partnerships to satisfy performance payments payable in respect of assets acquired prior to the date of the IPO are referred to as the “Exchange Offer Transactions.” As a result of the Exchange Offer Transactions, we own, through our wholly-owned subsidiary RPI 2019 Intermediate Finance Trust, a Delaware statutory trust (“RPI Intermediate FT”), an 82% economic interest in Old RPI. Through our 82% indirect ownership of Old RPI, we are legally entitled to 82% of the economics of Old RPI’s wholly-owned subsidiaries, RPI Finance Trust, a Delaware statutory trust (“RPIFT”) and RPI Acquisitions (Ireland), Limited (“RPI Acquisitions”), an Irish private limited company, and 66% of Royalty Pharma Collection Trust, a Delaware statutory trust (“RPCT”). The remaining 34% of RPCT is owned by the Legacy Investors Partnerships and Royalty Pharma Select Finance Trust, a Delaware statutory trust (“RPSFT”), which is wholly owned by Royalty Pharma Select, an Irish Unit trust (“RPS”). From the Exchange Date until the expiration of the Legacy Investors Partnerships’ investment period on June 30, 2020 (the “Legacy Date”), the Legacy Investors Partnerships were offered to participate proportionately in any investment made by Old RPI. Following the Legacy Date, Old RPI has ceased making new investments and each of Old RPI and the Legacy Investors Partnerships became legacy entities. Following the Legacy Date, we will make new investments through our subsidiaries (together with RPI, the “RPI Group”), including RPI Intermediate FT. As part of the Exchange Offer Transactions, the Legacy Investors Partnerships and RPI Intermediate FT entered into new credit facilities in the amount of $1.3 billion and $6.0 billion, respectively, the proceeds of which were used to repay the $6.3 billion outstanding debt of RPIFT and, in the case of RPI Intermediate FT, will also be used to fund future investments. As part of the new credit facilities, RPI Intermediate FT repaid $5.2 billion, its pro rata portion of RPIFT’s outstanding debt and accrued interest. RPIFT also terminated all outstanding interest rate swaps in connection with the debt refinancing. Prior to, and as a condition precedent to the closing of the IPO, various reorganization transactions became effective, including the following: • the Exchange Offer Transactions (as described above); and • the execution of a new management agreement with the Manager (the "New Management Agreement"). We refer to these transactions collectively as the “Reorganization Transactions.” As Old RPI is our predecessor for financial reporting purposes, we have recorded Old RPI’s assets and liabilities at the carrying value reflected on Old RPI's balance sheet as of the Exchange Date. The references in the following notes for the periods prior to the Exchange Date refer to the financial results of Old RPI for the same periods. June 2020 IPO Our IPO was completed on June 18, 2020, whereby we issued 89,333,920 shares of Class A ordinary shares at a price to the public of $28.00 per share, of which 71,652,250 and 17,681,670 shares were offered by the Company and selling shareholders, respectively. The number of Class A ordinary shares issued at closing included the exercise in full of the underwriters’ option to purchase 11,652,250 additional Class A ordinary shares from the Company. The Company received net proceeds of approximately $1.9 billion from the IPO after deducting underwriting discounts and commissions of approximately $86.3 million. The Class A ordinary shares began trading on the Nasdaq Global Select Market under the ticker symbol “RPRX” on June 16, 2020. We used the net proceeds from the IPO to acquire the RP Holdings Class A Interests shortly after completion of the Offering. As a result, we own 100% of RP Holdings Class A Interests. In connection with the IPO, pursuant to agreements with the Continuing Investors Partnerships, certain of the Continuing Investors agreed to exchange, upon consummation of the IPO, interests in the Continuing Investors Partnerships represented by their ownership of 294,175,555 RP Holdings Class B Interests into an aggregate of 294,175,555 Class A ordinary shares of the Company. Following the exchange, Royalty Pharma plc indirectly owns 294,175,555 RP Holdings Class B Interests. The remaining investors in the Continuing Investors Partnerships who did not elect to exchange into Class A ordinary shares hold 241,207,425 newly issued Class B ordinary shares of Royalty Pharma. As a result, the Continuing Investors Partnerships hold a number of our Class B shares equal to the number of RP Holdings Class B Interests indirectly held by them at such time which are exchangeable for Class A ordinary shares of Royalty Pharma plc. Our Class B shares will not be publicly traded and holders of Class B shares only have limited rights to receive a distribution equal to their nominal value upon a liquidation, dissolution or winding up of the Company. However, the RP Holdings Class B Interests will be entitled to dividends and distributions from |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of preparation and use of estimates The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under U.S. GAAP. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2019, included in the Company’s final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended on June 17, 2020 (“the Prospectus”). The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The current outbreak of the novel coronavirus, or COVID-19, could materially and adversely affect our results of operations, financial condition and cash flows. The full extent of the impact due to the COVID-19 pandemic will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact. Given the uncertainty around the extent and timing of the potential future spread or mitigation efforts related to the current outbreak of COVID-19, the financial impact cannot be reasonably estimated at this time. Actual results may differ from those estimates. The results for the interim periods are not necessarily indicative of results for the full year. Basis of consolidation The unaudited condensed consolidated financial statements include the accounts of Royalty Pharma as well as its majority-owned and controlled subsidiaries. We hold interests in variable interest entities where we have assessed that we are not the primary beneficiary and therefore do not consolidate these entities. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net (income)/loss attributable to non-controlling interest in our unaudited condensed consolidated statements of comprehensive income equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. Following management’s determination that a high degree of common ownership existed in RPI both before and after the Exchange Date, RPI recognized Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. Prior to the Exchange Offer Transactions, our only historical non-controlling interest was attributable to a de minimis interest in RPCT held by RPSFT. As a result of the Exchange Offer Transactions in February 2020, a new non-controlling interest was created related to the Legacy Investors Partnerships' ownership of approximately 18% in Old RPI. As a result of the IPO in June 2020, two new non-controlling interests were created: 1) a non-controlling interest related to the Continuing Investors Partnerships' ownership of approximately 40% in RP Holdings through their ownership of the RP Holdings Class B Interests, and 2) a non-controlling interest attributable to the RP Holdings Class C Special Interest held by EPA Holdings, an affiliate of the Manager. Income will not be allocated to the latter non-controlling interest until certain conditions are met, which we do not expect to occur for several years. All intercompany transactions and balances have been eliminated in consolidation. Concentrations of credit risk Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, financial royalty assets, receivables, and derivatives. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents, and marketable securities balances at June 30, 2020 and December 31, 2019 were held with State Street Bank and Trust, Deutsche Bank, Merrill Lynch, Pierce, Fenner & Smith, and Bank of America, N.A. Our primary operating accounts significantly exceed the FDIC limits. The majority of our royalty assets and receivables arise from contractual royalty agreements that entitle the Company to royalties on the sales of underlying biopharmaceutical products in the United States, Europe and the rest of the world, with concentrations of credit risk limited due to the broad range of marketers responsible for paying royalties to us and the variety of geographies from which our royalties on product sales are derived. The marketers paying us royalties on these products do not always provide, and are not necessarily required to provide, the breakdown of product sales by geography. The products in which we hold royalties are marketed by leading industry participants, including, among others, Abbott, AbbVie, Amgen, Bristol-Myers Squibb, Celgene, Gilead Sciences, Johnson & Johnson, Lilly, Merck & Co., Pfizer, Novartis, Biogen-Idec, Roche/ Genentech, and Vertex. Vertex, as the marketer and payor of our royalties on the cystic fibrosis franchise products, accounted for 27% and 17% of our current portion of Financial royalty assets as of June 30, 2020 and December 31, 2019, respectively. Recently adopted and issued accounting standards Upon the January 1, 2020 adoption of ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), we recorded a cumulative adjustment to Retained earnings of $192.7 million to recognize an allowance for current expected credit losses on the portion of our portfolio of financial royalty assets that is subject to credit risk. Significant Accounting Policies There have been no changes to the Company’s significant accounting policies described in our 2019 audited consolidated financial statements included in the Prospectus that have had a material impact on the Company’s unaudited condensed consolidated financial statements and related notes, other than those noted below. Allowance for current expected credit losses As a result of adopting ASU 2016-13, we now recognize an allowance for current expected credit losses on the portion of our portfolio of financial royalty assets that is subject to credit risk. The credit loss allowance is estimated using the probability of default and loss given default methods. The credit rating, which is primarily based on publicly available data and updated on a quarterly basis, is the primary credit quality indicator used to determine the probability of default of the marketers responsible for paying our royalties and resulting loss given default. Current expected credit loss allowance is presented net within the non-current portion of Financial royalty assets, net on the condensed consolidated balance sheets. Any subsequent movement in the allowance for credit losses is recorded as part of the Provision for changes in expected future cash flows from financial royalty assets on the condensed consolidated statements of comprehensive income. Refer to Note 7 for further information. Earnings per share Basic earnings per share (“EPS”) is computed by dividing net income attributable to Royalty Pharma plc by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Royalty Pharma plc, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares and restricted stock units (“RSU”) issued under our 2020 Independent Director Equity Incentive Plan. We use the “if-converted” method to determine the potentially dilutive effect of Class B ordinary shares, and the treasury stock method to determine the potentially dilutive effect of the unvested RSUs. There were no shares of Class A or Class B ordinary shares outstanding prior to June 16, 2020; therefore, no earnings per share information has been presented for any period prior to that date. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial InstrumentsFair value measurements The summary below presents information about our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, and the valuation techniques we utilized to determine such fair value. • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Our level 1 assets consist of equity securities with readily determinable fair values and money market funds. • Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Our level 2 assets generally include marketable securities, warrants, derivatives, available for sale debt securities, and our interest rate swap contracts, which may be in an asset or liability position. • Level 3: Prices or valuation that requires inputs that are both significant to the fair value measurement and unobservable. Our level 3 assets historically consisted of our investment in the Biohaven Preferred Shares. See Note 5 for a description of our investment in the Biohaven Preferred Shares. For financial instruments which are carried at fair value, the level in the fair value hierarchy is based on the lowest level of inputs that is significant to the fair value measurement in its entirety. Fair value hierarchy The following is a summary of the inputs used to value our financial assets and liabilities measured at fair value as of June 30, 2020 and December 31, 2019: As of June 30, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents Money market funds $ 143,859 $ — $ — $ 143,859 Commercial paper — 107,889 — 107,889 Certificates of deposit — 14,010 — 14,010 Marketable securities U.S. government securities — 42,994 — 42,994 Corporate debt securities — 38,698 — 38,698 Certificates of deposit — 261,987 — 261,987 Available for sale debt securities — 28,500 — 28,500 Total current assets $ 143,859 $ 494,078 $ — $ 637,937 Equity securities 477,185 — — 477,185 Available for sale debt securities — 162,454 — 162,454 Warrants (1) — 14,717 — 14,717 Total non-current assets $ 477,185 $ 177,171 $ — $ 654,356 (1) Related to Epizyme transaction as described in Note 4 and recorded in the non-current asset portion of Derivative financial instruments in the condensed consolidated balance sheet as of June 30, 2020. As of December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents Money market funds $ 222,296 $ — $ — $ 222,296 Commercial paper — 21,502 — 21,502 Certificates of deposit — 20,011 — 20,011 Marketable securities U.S. government securities — 12,877 — 12,877 Certificates of deposit — 44,095 — 44,095 Total current assets $ 222,296 $ 98,485 $ — $ 320,781 Equity securities 380,756 — — 380,756 Available for sale debt securities — — 131,280 131,280 Warrants (1) — 30,815 — 30,815 Forward purchase contract (1) — 11,500 — 11,500 Total non-current assets $ 380,756 $ 42,315 $ 131,280 $ 554,351 Liabilities: Interest rate swaps — (9,215) — (9,215) Total current liabilities $ — $ (9,215) $ — $ (9,215) Interest rate swaps — (18,902) — (18,902) Total non-current liabilities $ — $ (18,902) $ — $ (18,902) (1) Related to Epizyme warrants and put option as described in Note 4 and recorded in the non-current asset portion of Derivative financial instruments in the condensed consolidated balance sheet as of December 31, 2019. The table presented below summarizes the change in the carrying value of level 3 financial instruments, which related entirely to the investment in Biohaven Preferred Shares (discussed below) for the three and six months ended June 30, 2020 and 2019. For the three months ended June 30, 2020 June 30, 2019 (in thousands) Available for sale debt securities Balance at the beginning of the period $ — $ — Purchases — 125,121 Change in unrealized movement — 2,939 Balance at the end of the period $ — $ 128,060 For the six months ended June 30, 2020 June 30, 2019 (in thousands) Available for sale debt securities Balance at the beginning of the period $ 131,280 $ — Purchases — 125,121 Change in unrealized movement 52,725 2,939 Transfer to level 2 (184,005) — Balance at the end of the period $ — $ 128,060 Valuation inputs Below is a discussion of the valuation inputs used for financial instruments classified as level 2 and level 3 measurements in the fair value hierarchy. Investment in Biohaven Preferred Shares The fair value of the Biohaven Preferred Shares at June 30, 2020 was based on the defined cash flow from the achievement of certain contractual terms, namely the February 2020 approval by the United States Food and Drug Administration (“FDA”) of Nurtec ODT (rimegepant), which resulted in a payment due to Royalty Pharma of two times (2x) the original purchase price of the Series A Preferred Shares payable in equal quarterly installments following FDA approval and starting one-year after FDA approval, through December 31, 2024. The fixed payment amount of $250.0 million results in nominal quarterly payments of $15.6 million over this period. Using Biohaven's weighted average cost of capital of 11.1% obtained from a publicly available third party source, management arrived at a fair value of $191.0 million at June 30, 2020 for the Biohaven Preferred Shares, which are recorded as Available for sale debt securities (see Note 5) and classified as a level 2 measurement at this date for the reasons noted above. The fair value of the Biohaven Preferred Shares at December 31, 2019 was determined based on significant inputs that were not observable in the market, referred to as level 3 inputs. The valuation was performed using a Black-Derman-Troy (“BDT”) lattice model, which takes into account the purchase terms and various probability-weighted redemption and payback scenarios that impact the return on investment. Key inputs to the BDT model included, most notably, the probability (1) of Biohaven’s pipeline product, rimegepant, being approved by the FDA by specific dates, (2) of a Change of Control event by specific dates, and (3) that Biohaven will elect to redeem the Preferred Shares for a lump sum payment as opposed to payback over time. Probabilities for the above considerations were developed by our Research team, who have significant healthcare and finance expertise to make such assessments. The most critical assumption that impacted the valuation of our Biohaven Preferred Shares at December 31, 2019 was the probability that rimegepant would be approved by the FDA. If the probability that such FDA approval occurs were reduced by 20%, the value of our Biohaven Preferred Shares would not change materially at December 31, 2019. Assumptions used in the valuation model as of December 31, 2019 included the following significant unobservable inputs: • Change of Control probability on a quarterly basis (0%) • Likelihood of FDA approval (0%-86%) • Likelihood of FDA approval at the end of any given quarter by December 31, 2024 (Range: 0%-59%). Other financial instruments We use a third party pricing service for level 2 inputs used to value cash equivalents and short term investments, which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information. Warrants are valued using a Black-Scholes option pricing model which considers observable and unobservable inputs. Level 2 derivative instruments are typically valued using counterparty confirmations, LIBOR yield curves and credit valuation adjustments. Financial assets not measured at fair value Financial royalty assets are measured and carried on the condensed consolidated balance sheets at amortized cost using the effective interest method. The current portion of financial royalty assets approximates fair value. The fair value of financial royalty assets is calculated by management using the forecasted royalty payments we expect to receive based on the projected product sales for all royalty bearing products as estimated by sell-side equity research analysts. These projected future royalty payments by asset are then discounted to a present value using appropriate individual discount rates. The fair value of our financial royalty assets is classified as level 3 within the fair value hierarchy since it is determined based upon inputs that are both significant and unobservable. Estimated fair values based on level 3 inputs and related carrying values for the non-current portion of our financial royalty assets as of June 30, 2020 and December 31, 2019 are presented below. (in thousands) June 30, 2020 December 31, 2019 Fair value Carrying value, net Fair value Carrying value, net Financial royalty assets, net $ 17,024,285 $ 11,169,857 $ 16,501,819 $ 10,842,052 |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments We have historically managed the impact of foreign currency exchange rate and interest rate risk through various financial instruments, including derivative instruments such as interest rate swap contracts and foreign currency forward contracts. Our policy is to use derivatives strategically to hedge existing interest rate exposure and to minimize volatility in cash flow arising from our exposure to interest rate risk and foreign currency risk. We may also acquire other financial instruments that are classified as derivatives. We do not enter into derivative instruments for trading or speculative purposes. Interest rate swaps As of June 30, 2020, we do not hold any interest rate swap contracts. In connection with the Exchange Offer Transactions described in Note 1, RPIFT terminated all outstanding interest rate swaps in February 2020. We paid $35.4 million to terminate our swaps and reclaimed $45.3 million of collateral that was held by the respective counterparties. As of December 31, 2019, RPIFT held interest rate swap contracts to effectively convert a portion of its floating-rate debt to a fixed basis. The notional values and fixed rates payable on the swap contracts are shown in the table below. Notional Value Fixed Rate Maturity Date $600 2.019 % November 9, 2020 $250 2.094 % March 27, 2023 $500 2.029 % March 27, 2023 $250 2.113 % March 27, 2023 $500 2.129 % March 27, 2023 We do not apply hedge accounting and recognize all movement in fair value through earnings. All outstanding interest rate swaps were terminated in February 2020; therefore, there were no related unrealized gains or losses during the three months ended June 30, 2020. During the three months ended June 30, 2019 we recorded in earnings unrealized losses of $39.4 million on interest rate swaps in the condensed consolidated statements of comprehensive income. During the six months ended June 30, 2020 and 2019 we recorded in earnings unrealized losses of $10.9 million and $65.3 million, respectively, on interest rate swaps in the condensed consolidated statements of comprehensive income. The fair value of the swaps at December 31, 2019 was a net liability of $28.1 million (a current liability of $9.2 million and a non-current liability of $18.9 million) and included within Derivative financial instruments on the condensed consolidated balance sheets. RPIFT had master International Swaps and Derivatives Association (“ISDA”) agreements in place with its derivative instrument counterparties which provide for final close out netting with counterparties for all positions in the case of default or termination of the ISDA agreement. Under these agreements, RPIFT has set-off rights with the same counterparty but elected not to offset such derivative instrument fair values in the condensed consolidated balance sheets. RPIFT generally had executed a Credit Support Annex (“CSA”) under the ISDA it maintains with each of its over-the-counter (“OTC”) derivative counterparties that requires both posting and accepting collateral either in the form of cash or high-quality securities. These CSAs are bilateral agreements that require collateral postings by the party “out-of-the-money” or in a net derivative liability position. Various thresholds for the amount and timing of collateralization of net liability positions are applicable. RPIFT elected not to offset fair value amounts of any outstanding derivatives against the fair value amounts recognized for the related cash collateral receivable or payable that arise from those derivative instruments on the condensed consolidated balance sheets. Only the swaps maturing in 2023 had collateral requirements. At December 31, 2019, RPIFT had a receivable of $45.6 million in cash collateral previously posted to trade counterparties, which was recorded in Other assets on the condensed consolidated balance sheets. At December 31, 2019, RPIFT did not have the obligation to return any cash collateral to counterparties, as it did not hold any cash collateral at that date. Epizyme put option and warrant In November 2019, RPIFT made an equity investment in Epizyme Inc. (“Epizyme”) of $100.0 million. Under the terms of its agreement with Epizyme, RPIFT made an upfront payment of $100.0 million for (1) shares of Epizyme common stock, (2) a warrant to purchase an additional 2.5 million shares of Epizyme common stock at $20 per share over a three Epizyme notified the Company of its intention to exercise the put option on December 31, 2019. As a result, we recorded a forward purchase contract equal to the difference between the market value and exercise price of $11.5 million in the non-current asset portion of Derivative financial instruments on the consolidated balance sheet at December 31, 2019. The exercise of the put option was settled in February 2020. The warrant was recognized at fair value of $14.7 million and $30.8 million within the non-current asset portion of Derivative financial instruments on the condensed consolidated balance sheet at June 30, 2020 and December 31, 2019, respectively. We recorded an unrealized gain on derivative contracts of $0.6 million and an unrealized loss on derivative contracts of $16.1 million related to the change in fair value on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2020, respectively. Biohaven written put option We determined there was a derivative associated with the Second Tranche of the Biohaven Preferred Share Agreement that was entered into in April 2019. The derivative related to Biohaven’s option, exercisable within 12 months from when the NDA for Nurtec ODT was accepted by the FDA for Priority Review, to require Royalty Pharma to purchase up to an additional $75.0 million of Preferred Shares (the “Second Tranche”) at the same price and on the same terms as the First Tranche, in one or more transactions of no less than $25.0 million. As of June 30, 2020 and December 31, 2019, management determined that the value of the Second Tranche written put option was immaterial, and therefore no liability has been recognized on the condensed consolidated balance sheets at this time. See Note 5 for a description of our investment in the Biohaven Preferred Shares. Summary of derivatives and reclassifications The tables below summarize the change in fair value of the derivatives for the three and six months ended June 30, 2020 and 2019, and the line items within the condensed consolidated statements of comprehensive income where the gains/(losses) on these derivatives are recorded. For the three months ended Condensed Consolidated Statement of Comprehensive Income location June 30, 2020 June 30, 2019 Derivatives in hedging relationships (1) (in thousands) Interest Rate Swaps: Amount of loss reclassified from AOCI into income $ — $ (1,602) Unrealized gain/loss on derivative contracts Change in fair value of interest rate swaps — (8,011) Unrealized gain/loss on derivative contracts Interest income — 3,115 Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps — (29,801) Unrealized gain/loss on derivative contracts Interest income — 1,479 Interest expense Warrant: Change in fair value of warrant 647 — Unrealized gain/loss on derivative contracts For the six months ended Condensed Consolidated Statement of Comprehensive Income location June 30, 2020 June 30, 2019 Derivatives in hedging relationships (1) (in thousands) Interest Rate Swaps: Amount of loss reclassified from AOCI into income $ (4,066) $ (3,189) Unrealized gain/loss on derivative contracts Change in fair value of interest rate swaps 73 (14,307) Unrealized gain/loss on derivative contracts Interest (expense)/income (114) 6,888 Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps (6,908) (47,758) Unrealized gain/loss on derivative contracts Interest (expense)/income (408) 3,032 Interest expense Warrant: Change in fair value of warrant (16,097) — Unrealized gain/loss on derivative contracts Forward purchase contract: Change in fair value of forward purchase contract (5,800) — Unrealized gain/loss on derivative contracts |
Available for Sale Debt Securit
Available for Sale Debt Securities | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for Sale Debt Securities | Available for Sale Debt Securities A summary of our available for sale debt securities recorded at fair value is shown below as of June 30, 2020 and December 31, 2019: Cost Unrealized gains Fair Value (1) As of June 30, 2020 (in thousands) Biohaven preferred shares $ 125,121 $ 65,833 $ 190,954 Total available for sale debt securities $ 125,121 $ 65,833 $ 190,954 As of December 31, 2019 Biohaven preferred shares $ 125,121 $ 6,159 $ 131,280 Total available for sale debt securities $ 125,121 $ 6,159 $ 131,280 (1) As of June 30, 2020, $28.5 million and $162.5 million are recorded as the current and non-current asset portion of Available for sale debt securities , respectively, in the condensed consolidated balance sheet. The entire balance of the Biohaven Preferred Shares was recorded as a non-current asset as of December 31, 2019. Available for sale debt securities (Biohaven Preferred Shares) On April 5, 2019, RPIFT funded the purchase of 2,495 Series A Preferred Shares from Biohaven Pharmaceutical Holding Company Ltd (“Biohaven”) at a price of $50,100.00 per preferred share, for a total of $125.0 million, pursuant to the Preferred Share Agreement. Pursuant to the Preferred Share Agreement, Biohaven may issue and sell to RPIFT, and RPIFT will purchase from Biohaven, the Second Tranche of up to $75.0 million in the aggregate (and no less than $25.0 million at each additional closing) of additional Series A Preferred Shares subject to the acceptance by the FDA of both New Drug Applications (“NDAs”) with respect to the tablet formulation of rimegepant and the orally disintegrating tablet formulation of rimegepant. As a condition for the issuance of the Second Tranche, one NDA must be accepted under the priority review designation pathway. The issuance of the Second Tranche is subject to customary closing conditions and is entirely at Biohaven's option. The Series A Preferred Shares provided RPIFT with the right to require Biohaven to redeem its shares under the following circumstances: • If a Change of Control is announced on or before October 5, 2019, Biohaven has the option to redeem the Series A Preferred Shares for one point five times (1.5 x) the original purchase price of the Series A Preferred Shares upon the closing of the Change of Control. If Biohaven does not elect to redeem the Series A Preferred Shares for 1.5x the original purchase price at the closing of Change of Control, then Biohaven is required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in equal quarterly installments following closing of the Change of Control through December 31, 2024. • If a Change of Control is announced after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, Biohaven must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024. • If an NDA for rimegepant is not approved by December 31, 2021, RPIFT has the option at any time thereafter to require Biohaven to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares. • If no Change of Control has been announced, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, Biohaven must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii) rimegepant is not approved by December 31, 2024, Biohaven must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024. • Biohaven may redeem the Series A Preferred Shares at its option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024. In the event that Biohaven defaults on any obligation to redeem Series A Preferred Shares when required, the redemption amount shall accrue interest at the rate of eighteen percent (18%) per annum. If any such default continues for at least one year, RPIFT will be entitled to convert, subject to certain limitations, such Series A Preferred Shares into common shares, with no waiver of its redemption rights. • Under all circumstances, the Series A Preferred Shares are required to be redeemed by Biohaven by December 31, 2024. Nurtec ODT (rimegepant) was approved by the FDA in February 2020, which results in a payment due to Royalty Pharma of two times (2x) the original purchase price of the Series A Preferred Shares payable in equal quarterly installments following approval and starting one-year after approval, through December 31, 2024. Refer to Note 3 for discussion of the valuation of our Investment in the Biohaven Preferred Shares. |
Financial Royalty Assets, Net
Financial Royalty Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Financial Royalty Assets, Net | Financial Royalty Assets, Net Financial royalty assets, net consist of contractual rights to cash flows relating to royalty payments derived from the sales of patent-protected biopharmaceutical products that entitle the Company and its subsidiaries to receive a portion of income from the sale of those products by unrelated companies. The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current portion of royalty assets classified as financial assets at June 30, 2020 and December 31, 2019 are as follows. June 30, 2020 Estimated royalty duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) Net carrying value (d) (in thousands) Cystic fibrosis franchise (b) $ 4,692,567 $ (98,381) $ 4,594,186 Tysabri (c) 2,065,179 (34,353) 2,030,826 Imbruvica 2029 1,368,322 (31,543) 1,336,779 Xtandi 2028 1,174,247 (219,405) 954,842 Promacta 2026 740,543 (8,924) 731,619 Tazverik 2036 346,902 — 346,902 Other 2019- 2036 2,502,483 (499,455) 2,003,028 Total $ 12,890,243 $ (892,061) $ 11,998,182 Less: Cumulative allowance for credit losses (Note 7) (301,388) Total financial royalty assets, net $ 11,696,794 a) Dates shown are based on the patent duration or management’s best estimate of the date through which the Company will be entitled to royalties. Royalty durations can change due to the grant of additional patents, the invalidation of patents, and other reasons. b) The estimated duration for the Cystic fibrosis franchise is based on the patent expiration date for Trikafta, a franchise product which was approved in the US in October 2019. Management estimates that the most material patents provide protection through 2037. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term. d) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7 for additional information. December 31, 2019 Estimated royalty duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) Net carrying value (in thousands) Cystic fibrosis franchise (d) (b) $ 4,639,045 $ — $ 4,639,045 Tysabri (c) 2,131,272 (71,789) 2,059,483 Imbruvica 2029 1,332,077 — 1,332,077 Xtandi 2028 1,193,918 (332,624) 861,294 Promacta 2026 776,555 — 776,555 Crysvita 2032 321,234 — 321,234 Other 2019-2036 1,768,929 (464,005) 1,304,924 Total $ 12,163,030 $ (868,418) $ 11,294,612 a) Dates shown are based on the patent duration or management’s best estimate of the date through which the Company will be entitled to royalties. Royalty duration can change due to the grant of additional patents, the invalidation of patents, and other reasons. b) The estimated duration for the Cystic fibrosis franchise is based on the patent expiration date for Trikafta, a franchise product which was approved in the US in October 2019. Management estimates that the most material patents provide protection through 2037. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term which is periodically reviewed by the management. d) The Vertex triple combination therapy, Trikafta, was approved by the FDA in October 2019. Sell-side equity research analysts’ consensus forecasts increased due to expected sales of the newly approved Cystic fibrosis franchise product and resulted in a reversal of the entire cumulative allowance for changes in expected cash flows in the fourth quarter of 2019 related to this royalty asset. Cystic fibrosis franchise clawback In November 2019, Vertex announced that it reached an agreement with the French Authorities for a national reimbursement deal for Orkambi. As a result, management expected a reduction to royalty receipts in 2020 of approximately $35.0 million to $45.0 million, to reflect a true up related to prior periods where we collected royalties on French sales of Orkambi at a higher selling price. We recognized a reduction to the current portion of Royalty assets, net - financial asset of $41.0 million as of December 31, 2019. Upon receipt of the royalty payment in the first quarter of 2020, we did not recognize any material adjustments related to our clawback estimate. |
Cumulative Allowance for Change
Cumulative Allowance for Changes in Expected Cash Flows from Financial Royalty Assets | 6 Months Ended |
Jun. 30, 2020 | |
Credit Loss [Abstract] | |
Cumulative Allowance for Changes in Expected Cash Flows from Financial Royalty Assets | Cumulative Allowance for Changes in Expected Cash Flows from Financial Royalty Assets The Cumulative allowance and the Provision for changes in expected future cash flows from financial royalty assets includes the following activities: • the movement in the Cumulative allowance for changes in expected future cash flows, and • the movement in the allowance for current expected credit losses; both are presented net within the non-current portion of Financial royalty assets, net on the condensed consolidated balance sheets. Upon the January 1, 2020 adoption of ASU 2016-13 Refer to Note 2 for further information. The following table sets forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the allowance for credit losses, as of the dates indicated: (in thousands) Activity for the period Balance at December 31, 2019 $ (868,418) Cumulative adjustment for adoption of ASU 2016-13 (192,705) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (289,587) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 262,980 Reversal of cumulative allowance (a) 2,964 Current period provision for credit losses (108,683) Balance at June 30, 2020 $ (1,193,449) (a) Relates to amounts reversed out of the allowance at the end of a royalty asset's life to bring the account balance to zero. Reversals solely impact the asset account and allowance account, there is no impact on the condensed consolidated statements of comprehensive income. |
Intangible Royalty Assets, Net
Intangible Royalty Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Royalty Assets, Net | Intangible Royalty Assets, Net The following schedules of the intangible royalty interests present the cost, accumulated amortization and net carrying value as of June 30, 2020 and December 31, 2019. As of June 30, 2020 Cost Accumulated amortization Net carrying value (in thousands) DPP-IV Inhibitors $ 606,216 $ 565,958 $ 40,258 Total intangible royalty assets $ 606,216 $ 565,958 $ 40,258 As of December 31, 2019 Cost Accumulated amortization Net carrying value (in thousands) DPP-IV Inhibitors $ 606,216 $ 554,492 $ 51,724 Total intangible royalty assets $ 606,216 $ 554,492 $ 51,724 The patents associated with the royalty interests classified as intangible assets terminate at various dates up to 2022. The weighted average remaining life of the royalty interests classified as intangible assets is 1.75 years. The projected amortization expense is $11.6 million, $23.0 million, and $5.7 million in the remainder of 2020, 2021 and 2022, respectively. Our revenue is tied to underlying patent protected sales of other DPP-IV products of various licensees. Such revenue from royalty assets is earned from sales occurring primarily in the US and Europe; however, we do not have the ability to |
Non-Consolidated Affiliates
Non-Consolidated Affiliates | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Non-Consolidated Affiliates | Non-Consolidated Affiliates The Legacy SLP Interest In connection with the Exchange Offer, we acquired a special limited partnership interest in the Legacy Investors Partnerships (the “Legacy SLP Interest”) valued at $303.7 million in exchange for issuing shares in the Company. As a result, we became a special limited partner in the Legacy Investors Partnerships. The Legacy SLP Interest entitles us to the equivalent of performance distribution payments that would have been paid to the general partner of the Legacy Investors Partnerships and an income allocation on a similar basis. Our income allocation is equal to the general partner’s former contractual rights to the income of the Legacy Investors Partnerships. The Legacy SLP Interest is treated as an equity method investment as our Manager is also the Manager of the Legacy Investors Partnerships and has the ability to exercise significant influence. As the Legacy Investors Partnerships are no longer participating in investment opportunities after June 30, 2020, the value of the Legacy SLP Interest is expected to decline over time. The Legacy Investors Partnerships own a non-controlling interest in Old RPI. The income allocation from the Legacy SLP Interest is based on an estimate as the Legacy Investors Partnerships are private partnerships that report on a lag. Management's estimate of equity in earnings from the Legacy SLP Interest for the current period will be updated for actuals in the subsequent period. During the three months ended June 30, 2020, we received cash distributions of $5.3 million from the Legacy Investors Partnerships and recorded an income allocation of $20.2 million within Equity in (earnings)/loss of non-consolidated affiliates . During the six months ended June 30, 2020, we received cash distributions of $12.2 million and recorded an income allocation of $23.4 million within Equity in (earnings)/loss of non-consolidated affiliates . The Avillion Entities We account for our partnership interests in Avillion Financing I, LP (“Avillion I”) and BAv Financing II, LP (“Avillion II”, or, together, the “Avillion Entities”) as equity method investments because RPIFT has the ability to exercise significant influence over the entities. On December 19, 2017, the Avillion Entities announced that the FDA approved a supplemental New Drug Application for Pfizer’s BOSULIF® (bosutinib). Avillion I is eligible to receive fixed payments from Pfizer based on this approval. Subsequent to the asset sale, the only operations of Avillion I are the collection of cash and unwinding of discount on the series of fixed annual payments due from Pfizer. We received distributions of $13.4 million and $14.1 million from Avillion I during the six months ended June 30, 2020 and 2019, respectively, in connection with Avillion I’s receipt of the fixed annual payments due under its co-development agreement with Pfizer. In March 2017 RPIFT entered into an agreement to invest approximately $15.0 million to fund approximately 50% of the costs of a phase II clinical trial for the use of Merck KGaA’s anti-IL 17 nanobody M1095 (the “Merck Asset”) for the treatment of psoriasis in exchange for certain milestone and royalty payments. In May 2018 RPIFT entered into an additional agreement to invest up to $105.0 million in Avillion II over multiple years to fund approximately 44% of the costs of Phase II and III clinical trials to advance Pearl Therapeutics, Inc.'s product PT-027 (the “AZ Asset”) through a global clinical development program for the treatment of asthma in exchange for a series of deferred payments and success-based milestones. In December 2019, the Avillion II agreement was amended to increase RPIFT’s funding commitment by an additional $4.0 million in respect of the Merck Asset, for a total funding cap of $19.0 million. We received a distribution of $21.3 million from Avillion II in respect of the Merck Asset, for which development has ceased, during the three months ended June 30, 2020. RPIFT had $41.5 million and $70.8 million of unfunded commitments related to the Avillion Entities as of June 30, 2020 and December 31, 2019, respectively. Our maximum exposure to loss at any particular reporting date is limited to the current carrying value of the investment plus the unfunded commitments. |
Research and Development Fundin
Research and Development Funding Expense | 6 Months Ended |
Jun. 30, 2020 | |
Research and Development [Abstract] | |
Research and Development Funding Expense | Research and Development Funding Expense During the six months ended June 30, 2020 we did not enter into any new R&D funding arrangements. R&D funding expense incurred in the first six months of 2020 related to ongoing development stage funding payments, primarily under our Sanofi agreement. R&D funding expense in 2019 primarily related to funding agreements with both Sanofi and Pfizer. We completed our funding commitments in the fourth quarter of 2019 under our agreement with Pfizer. We recognized $5.3 million and $12.4 million of R&D funding expense for the three and six months ended June 30, 2020, respectively under our Sanofi agreement. We recognized $21.5 million of R&D funding expense during the three months ended June 30, 2019, of which $3.1 million and $17.8 million related to our funding agreements with Sanofi and Pfizer, respectively. We recognized $44.4 million of R&D funding expense during the six months ended June 30, 2019, of which $7.1 million and $36.3 million related to our funding agreements with Sanofi and Pfizer, respectively. As of June 30, 2020 we have a remaining commitment of $21.0 million related to an R&D funding agreement with Sanofi. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings New Senior Secured Credit Facilities On February 11, 2020, in connection with the Exchange Offer Transactions (as discussed in Note 1) and using funds contributed by RPI Intermediate FT and the Legacy Investors Partnerships, RPIFT repaid its outstanding debt and accrued interest, and terminated all outstanding interest rate swaps. RPI Intermediate FT, as borrower, entered into a term loan credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, the lenders party thereto from time to time and the other parties thereto. The new senior secured credit facilities contained in the Credit Agreement consist of a term loan A (“Tranche A-1”) and term loan B (“Tranche B-1”) in the amounts of $3.20 billion and $2.84 billion, respectively. Tranche A-1 has an interest rate of 1.50% above LIBOR and matures in February 2025. Tranche B-1 has an interest rate of 1.75% above LIBOR and matures in February 2027. The Credit Agreement contains covenants that, among other things, restrict our ability to make certain distributions, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates or make investments. The Credit Agreement also contains customary events of default. We may voluntarily prepay in whole or in part the outstanding principal amounts of term loans under our Credit Agreement at any time prior to the maturity dates, with certain voluntary prepayments that may be subject to a customary prepayment premium governed by the Credit Agreement. Financial Covenants The Credit Agreement contains financial covenants requiring us to maintain (i) a Consolidated Leverage Ratio at or below 4.00 to 1.00 (or at or below 4.50 to 1:00 following a Qualifying Material Acquisition) of Consolidated Funded Debt to Consolidated EBITDA (each as defined and calculated with the ratio level calculated with further adjustments as set forth in the Credit Agreement) and (ii) a Consolidated Coverage Ratio at or above 2.50 to 1.00 of Consolidated EBITDA minus Consolidated Capital Expenditures to Consolidated Charges (each as defined and calculated with further adjustments as set forth in the Credit Agreement). RPI Intermediate FT was in compliance with these covenants at June 30, 2020. Our borrowings at June 30, 2020 and December 31, 2019 consisted of the following: (in thousands) Maturity Spread over LIBOR (1) June 30, 2020 December 31, 2019 New RPI Intermediate FT Senior Secured Credit Facilities: Term Loan A Facility Tranche A-1 2/2025 150 bps $ 3,120,000 $ — Term Loan B Facility Tranche B-1 2/2027 175 bps 2,825,800 — RPIFT Senior Secured Credit Facilities: Term Loan B Facility Tranche B-6 3/2023 200 bps — 4,123,000 Term Loan A Facility Tranche A-4 5/2022 150 bps — 2,150,000 Loan issuance costs (3,929) (1,691) Original issue discount (30,023) (33,187) Total value of senior secured debt (2) 5,911,848 6,238,122 Less: Current portion of long-term debt (182,226) (281,984) Total long-term debt $ 5,729,622 $ 5,956,138 (1) Borrowings under our senior secured credit facilities bear interest at a rate equal to LIBOR plus an applicable margin. (2) The carrying value of our long term debt, including the current portion, approximates its fair value. Amortization of Term Loans As of June 30, 2020, we are required to repay the term loans under the Credit Agreement over the next five years and thereafter as follows: (in thousands) Term loan amortization Year Tranche A-1 Tranche B-1 Total Remainder of 2020 $ 80,000 $ 14,200 $ 94,200 2021 160,000 28,400 188,400 2022 160,000 28,400 188,400 2023 160,000 28,400 188,400 2024 160,000 28,400 188,400 Thereafter 2,400,000 2,698,000 5,098,000 Total (1) $ 3,120,000 $ 2,825,800 $ 5,945,800 (1) Excludes discount on long-term debt of $30.0 million and loan issuance costs of $3.9 million, which are amortized through interest expense over the life of the underlying debt obligations. RPIFT Senior Secured Credit Facilities (the “Old Credit Facility”) The Old Credit Facility was repaid in full in February 2020 in connection with the Exchange Offer. As of December 31, 2019, RPIFT’s Loan Facility included two term loans, Term Loan A and Term Loan B. Tranche A-4 required annual amortization of 5.9% per year and tranche B-6 required annual amortization of 3.2% per year. The Old Credit Facility was secured by a grant by RPIFT of a security interest in substantially all of its personal property and a grant by RPCT of a security interest in RPIFT’s share (80%) of all amounts on deposit in the Collection Trust Account. The Old Credit Facility contained the following covenants measured quarterly: (i) maximum total leverage ratio of 4:00 to 1:00; (ii) debt coverage ratio of greater than 3.50 to 1.00. RPIFT was in compliance with these covenants at December 31, 2019. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' EquityCapital structure Following the completion of our IPO as discussed in Note 1, there have been no changes in our capital structure. As of June 30, 2020, we have outstanding 365,899,235 Class A ordinary shares and 241,207,425 Class B ordinary shares. In addition, we have in issue 50,000 Class R redeemable shares, which do not entitle the holder to voting or dividend rights. The purpose of the Class R redeemable shares was to ensure Royalty Pharma Limited had sufficient sterling denominated share capital at the time it was re-registered as a public limited company to Royalty Pharma plc, as required by the U.K. Companies Act. The Class R redeemable shares may be redeemed at the Company's option in the future. Any such redemption would be at the nominal value of £1 each. RP Holdings Class B Interests are exchangeable on a one-for-one basis for our Class A ordinary shares pursuant to an Exchange Agreement entered into by us, RP Holdings, the Continuing Investors Partnerships, RPI International Partners 2019, LP and EPA Holdings that governs the exchange of RP Holdings Class B Interests held by the Continuing International Investors Partnership for Class A ordinary shares. Each such exchange also results in the re-designation of the same number of our Class B ordinary share as a deferred share. As of June 30, 2020, we have outstanding deferred shares of 294,175,555. Non-controlling interests In the prior year periods, the only non-controlling interest related to RPSFT for which the related movements are presented in the historical statements of changes in shareholders' equity. The net change in the balance of our four non-controlling interests for the three and six months ended June 30, 2020 is as follows. (in thousands) RPSFT Legacy Investors Partnerships Continuing Investors Partnership (1) EPA Holdings Total March 31, 2020 $ 31,563 $ 1,971,212 $ — $ — $ 2,002,775 Contributions — 6,691 — — 6,691 Distributions (25,270) (99,581) — — (124,851) Net income prior to IPO 17,225 89,962 — — 107,187 Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity — (750) 2,433,848 — 2,433,098 Issuance of Class A shares sold in initial public offering, net of offering costs — — 758,590 — 758,590 Net income subsequent to IPO 3,400 17,755 31,560 — 52,715 Other comprehensive income: Change in unrealized movement on available for sale debt securities — 1,222 402 — 1,624 June 30, 2020 $ 26,918 $ 1,986,511 $ 3,224,400 $ — $ 5,237,829 (1) Related to the Continuing Investors Partnerships' ownership of approximately 40% in RP Holdings through their ownership of the RP Holdings Class B Interests. (in thousands) RPSFT Legacy Investors Partnerships Continuing Investors Partnership (1) EPA Holdings Total December 31, 2019 $ 35,883 $ — $ — $ — $ 35,883 Contributions — 1,140,319 — — 1,140,319 Transfer of interests — 1,037,161 — — 1,037,161 Distributions (54,516) (321,760) — — (376,276) Net income prior to IPO 42,151 102,892 — — 145,043 Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity — (750) 2,433,848 — 2,433,098 Issuance of Class A shares sold in initial public offering, net of offering costs — — 758,590 — 758,590 Net income subsequent to IPO 3,400 17,755 31,560 — 52,715 Other comprehensive income: Change in unrealized movement on available for sale debt securities — 10,894 402 — 11,296 June 30, 2020 $ 26,918 $ 1,986,511 $ 3,224,400 $ — $ 5,237,829 (1) Related to the Continuing Investors Partnerships' ownership of approximately 40% in RP Holdings through their ownership of the RP Holdings Class B Interests. 2020 Independent Director Equity Incentive Plan In June 2020, our 2020 Independent Director Equity Incentive Plan (“2020 Equity Incentive Plan”) was approved and became effective on June 15, 2020. Under the 2020 Equity Incentive Plan, 800,000 shares of our Class A ordinary shares have been reserved for future issuance. Restricted Stock Units Activity In connection with the IPO, we granted a total of 71,430 fully-vested shares with a grant date fair value of $50.90 per share under the provisions of our 2020 Equity Incentive Plan to two directors in recognition of their extensive past services to the Old RPI board and continued service on our board. Additionally, we granted a total of approximately 39,000 RSUs to independent directors that will vest in the second quarter of 2021. Compensation expense is amortized on a straight-line basis over the requisite service period. There were no share based awards in periods prior to the IPO. Share based compensation We recognized share based compensation of approximately $3.7 million which is recorded as part of the General and administrative expenses in the condensed consolidated statement of comprehensive income for the three and six months ended June 30, 2020. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per ShareBasic earnings per share ("EPS") is computed by dividing net income attributable to Royalty Pharma plc by the weighted average number of Class A shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Royalty Pharma plc, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares and unvested RSUs issued under our 2020 Independent Director Equity Incentive Plan. We use the “if-converted” method to determine the potentially dilutive effect of our Class B ordinary shares, and the treasury stock method to determine the potentially dilutive effect of the unvested RSUs. Prior to the IPO, our capital structure included unitholder interests and shareholder interests. We analyzed the calculation of earnings per interest unit for periods prior to the IPO and determined that the resultant values would not be meaningful to the users of these unaudited condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the three and six months ended June 30, 2019. Our Class B ordinary shares. Class R redeemable shares and deferred shares do not share in the earnings or losses attributable to Royalty Pharma plc and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B ordinary shares, Class R redeemable shares and deferred shares under the two-class method has not been presented. Our Class B ordinary shares are, however, considered potentially dilutive shares of Class A ordinary shares because shares of Class B ordinary shares, together with the related RP Holdings Class B Interests, are exchangeable into shares of Class A ordinary shares on a one-for-one basis. Class B ordinary shares was evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive. The basic and diluted earnings per share period for the three and six months ended June 30, 2020, represents only the period from June 16, 2020 to June 30, 2020, which represents the period wherein we had outstanding Class A ordinary shares. We have 607.1 million fully diluted Class A share outstanding as of June 30, 2020. The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A ordinary shares. (in thousands, except per share amounts) Three months ended June 30, 2020 Six months ended June 30, 2020 Basic net income per share: Numerator Consolidated net income $ 601,976 $ 711,072 Less: net income attributable to Continuing Investors Partnerships prior to the offering (1) 408,602 479,842 Less: net income attributable to non-controlling interest - Class B subsequent to the offering 31,560 31,560 Less: net income attributable to non-controlling interest - Legacy Investors Partnerships and RPSFT 128,342 166,198 Net income attributable to Royalty Pharma plc $ 33,472 $ 33,472 Denominator Weighted-average shares of Class A ordinary outstanding - basic 353,979 353,979 Earnings per share of Class A common stock - basic $ 0.09 $ 0.09 Diluted net income per share: Numerator Net income attributable to Royalty Pharma plc $ 33,472 $ 33,472 Denominator Weighted-average shares of Class A ordinary outstanding - basic 353,979 353,979 Dilutive effect of unvested restricted units 1 1 Weighted-average shares of Class A ordinary shares outstanding - diluted 353,980 353,980 Earnings per share of Class A ordinary shares - diluted $ 0.09 $ 0.09 (1) Reflected as net income attributable to controlling interest on the unaudited condensed consolidated statement of comprehensive income |
Indirect Cash Flow
Indirect Cash Flow | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Indirect Cash Flow | Indirect Cash Flow Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below. (in thousands) For the six months ended 2020 2019 Cash flow from operating activities: Consolidated net income $ 711,072 $ 574,864 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Provision for changes in expected cash flows from financial royalty assets 135,290 22,177 Amortization of intangible assets 11,466 12,332 Amortization of loan issuance and discount on long-term debt 4,340 5,964 Unrealized loss on derivative contracts 32,798 65,254 Unrealized gain on equity securities (40,729) (16,944) Equity in (earnings)/loss of non-consolidated affiliates (20,218) 13,673 Distributions from non-consolidated affiliates 31,840 14,059 Loss on extinguishment of debt 5,405 — Share based compensation 3,740 — Other 3,398 289 (Increase)/decrease in operating assets: Financial royalty assets (937,021) (799,161) Cash collected on financial royalty assets 1,003,504 895,150 Available for sale debt securities — (150,000) Accrued royalty receivable 1,218 (600) Other receivables — 150,000 Other royalty income receivable 2,094 5,670 Other current assets (12,634) 4,171 Other assets 45,635 (26,352) Increase/(decrease) in operating liabilities: Accounts payable and accrued expenses 13,862 (769) Derivative financial instruments (34,952) — Net cash provided by operating activities $ 960,108 $ 769,777 Non-cash investing and financing activities are summarized below. (in thousands) For the six months ended 2020 2019 Supplemental schedule of non-cash investing / financing activities: Contribution of investment in Legacy Investors Partnerships (1) $ 303,679 $ — Settlement of Epizyme forward purchase contract (2) 5,700 — Accrued purchase obligation - Tazverik (3) 220,000 — Repayments of long-term debt by contributions from non-controlling interest (4) 1,103,774 — Accrued purchase obligation 1,610 — Accrued capitalized offering costs (5) 8,897 — (1) See Note 9 (2) See Note 4 (3) See Note 17 (4) Related to the pro rata portion of RPIFT's outstanding debt repaid by the Legacy Investors Partnerships (5) Related to capitalized offering costs incurred in connection with our IPO that have not been paid |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Comprehensive income is comprised of net income and other comprehensive income/(loss). We include unrealized gains and losses on available for sale debt securities and unrealized gains/(losses) on the interest rate swaps that were designated as cash flow hedges in other comprehensive income/(loss). Changes in accumulated other comprehensive income/(loss) by component are as follows: Unrealized gain/(loss) on available for sale debt securities Unrealized gain/(loss) on interest rate swaps Total Accumulated Other Comprehensive Income/(Loss) (in thousands) Balance at December 31, 2019 $ 6,159 $ (4,066) $ 2,093 Reclassifications to income — 4,066 4,066 Activity for the period 48,378 — 48,378 Reclassifications to NCI (24,022) — (24,022) Balance at June 30, 2020 $ 30,515 $ — $ 30,515 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Manager The Manager is an affiliate of RP Ireland, is the Administrator of RPIFT and RPI 2019 Intermediate Finance Trust ("RPI Intermediate FT") and is the investment manager for RPI. The sole member of the Manager holds an interest in the Company and serves as the Company’s Chief Executive Officer and Chairman of the Board, and as a director on the board of RP Holdings. Historically, the Manager received Operating and Personnel Payments payable in equal quarterly installments and increasing by 5% annually on a compounded basis under the terms of its management agreement with Old RPI and the Legacy Investors Partnerships. RP Ireland receives an annual management fee payable in advance by Old RPI in equal quarterly installments under terms of the Limited Partnership Agreements of the Legacy Investors Partnerships. Operating and Personnel Payments incurred during the three and six months ended June 30, 2019 were $15.0 million and $30.0 million, respectively and were recognized within General and administrative expenses on the condensed consolidated statements of comprehensive income. In connection with the Exchange Offer Transactions (discussed in Note 1), the Manager has entered into new management agreements with RPI and its subsidiaries, the Continuing Investors Partnerships, and with the Legacy Investors Partnerships. Pursuant to the new management agreements, RPI pays quarterly Operating and Personnel Payments in respect of operating and personnel expenses to the Manager or its affiliates equal to 6.5% of the Adjusted Cash Receipts (as defined therein) for such quarter and 0.25% of the GAAP value of our security investments as of the end of such quarter. The Operating and Personnel Payment for Old RPI, an obligation of the Legacy Investors Partnerships as a non-controlling interest in Old RPI and for which the expense is reflected in our income statement, is payable in equal quarterly installments and increases by 5% annually on a compounded basis. Operating and Personnel Payments incurred during the three and six months ended June 30, 2020 were $27.6 million and $47.3 million, respectively. Royalty Distribution Payable The Royalty distribution payable to affiliates of $122.8 million at June 30, 2020 includes the following: (1) $96.2 million of royalty receipts due from Old RPI to RPI Intermediate FT in connection with the Legacy Investors Partnerships' non-controlling interest in Old RPI that arose in the Reorganization Transactions, and (2) $26.6 million of royalty receipts due from RPCT to RP Select Finance Trust in connection with its non-controlling interest in RPCT. The Royalty distribution payable to affiliates of $31.0 million at December 31, 2019 represents royalty receipts due from RPCT to RPSFT. The accrual is recorded based on estimated royalty receipts for the period, which are derived from estimates generated from analyst consensus forecasts for each product, and will be collected one quarter in arrears, and is payable to the non-controlling interest owners under the terms of collection account control agreements whereby RPCT and Old RPI are required to disperse royalty receipts collected to the minority owners in proportion to their ownership interests. Acquisition from Epizyme Inc. In November 2019, in connection with an equity investment in Epizyme Inc. of $100.0 million made by RPIFT, Pablo Legorreta, Royalty Pharma’s CEO, was appointed as a director of Epizyme, for which he will receive compensation in cash and shares, all of which will be contributed to the Manager and used to reduce costs and expenses which would otherwise be billed to the Company or its affiliates. Acquisition from Bristol-Myers Squibb In November 2017, RPI Acquisition entered into a Purchase Agreement with Bristol-Myers Squibb (“BMS”) to acquire from BMS a percentage of its future royalties on worldwide sales of Onglyza, Farxiga, and related diabetes products marketed by AstraZeneca. We agreed to make payments to BMS based on sales of the products over the eight quarters beginning with the first quarter of 2018 in exchange for a high single-digit royalty on worldwide sales of the products from 2020 through 2025. On December 8, 2017, RPI Acquisitions entered into a purchase, sale and assignment agreement with a wholly owned subsidiary of BioPharma Credit PLC (LSE: BPCR, “BPCR”), an affiliate of RPI. BPCR is a related entity due to the sole member of the investment manager having significant influence over both entities. Under the terms of the Assignment Agreement, RPI Acquisitions assigned the benefit of 50% of the payment stream acquired from BMS to BPCR in consideration for BPCR meeting 50% of the funding obligations owed to BMS under the Purchase Agreement. We began making installment payments to BMS during the second quarter of 2018. Upon transfer of funds from BPCR to RPI Acquisitions to meet the quarterly funding obligation to BMS, RPI Acquisitions derecognizes 50% of the financial royalty asset. Cash received from BPCR in respect of each funding obligation equals the carrying amount of the assigned transfer of interest, therefore no gain or loss is recognized upon the transfer. The financial royalty asset of $159.6 million and $150.3 million included in financial royalty assets, net on the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively, represents only the Company's right to the future payment streams acquired from BMS. Our funding was completed in the first quarter of 2020. We have funded a cumulative amount of $162.4 million, net of the assignment. We began to recognize income from the BMS asset when our installment funding obligation was completed and we received our first royalty payment on the BMS asset in the second quarter of 2020. Other transactions During the three and six months ended June 30, 2020, the Company reimbursed Pablo Legorreta, Royalty Pharma’s CEO, approximately $1.0 million for the cost of purchasing and donating ventilators to hospitals on behalf of Royalty Pharma. During the year ended December 31, 2019, RPIFT acquired 27,210 limited partnership interests in an affiliate of, and an equity method investor in, Old RPI and RPIFT, whose only substantive operations are its investment in Old RPI. The total investment of $4.3 million is recorded as treasury interests, of which $2.1 million is held by non-controlling interests in the consolidated balance sheet as of June 30, 2020. Based on its ownership percentage of Royalty Pharma Investments 2019 ICAV relative to the Company, each Continuing Investor Partnership pays a pro rata portion of any costs and expenses in connection with the contemplation of, formation of, listing and ongoing operation of the Company and any subsidiary of the Company, including any third-party expenses of managing the Company and any subsidiary of the Company, such as accounting, audit, legal, reporting, compliance, administration (including directors’ fees), financial advisory, consulting, investor relations, and insurance expenses relating to the affairs of the Company and any subsidiary of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of its business, we may enter into contracts or agreements that contain customary indemnifications relating to such things as confidentiality agreements and representations as to corporate existence and authority to enter into contracts. The maximum exposure under such agreements is indeterminable until a claim, if any, is made. However, no such claims have been made against Royalty Pharma to date and we believe that the likelihood of such proceedings taking place in the future is remote. In November 2019, RPIFT agreed to pay $330.0 million to purchase Eisai’s royalties on future worldwide sales of Tazverik (tazemetostat), a novel targeted therapy in late-stage clinical development that was approved by the FDA in January 2020 for epithelioid sarcoma, and with the potential to be approved in several cancer indications. Under the terms of its agreement with Eisai, RPIFT acquired Eisai’s future worldwide royalties on net sales by Epizyme of Tazverik outside of Japan, for an upfront payment of $110.0 million plus up to an additional $220.0 million for the remainder of the royalty upon FDA approval of Tazverik for certain indications. The FDA approval of Tazverik in January 2020 triggered our obligation to fund the second $110.0 million tranche in November 2020. In June 2020, the FDA approval of additional indications of Tazverik triggered our obligation to fund the final $110.0 million tranche in November 2021. The second and the final $110.0 million tranches are recorded in the current and long-term liabilities on the condensed consolidated balance sheet at June 30, 2020, respectively. We have commitments to advance funds to counterparties through our contingent funding of the Second Tranche of Biohaven Preferred Shares, our investment in the Avillion Entities, and research and development arrangements. Please refer to Notes 4, 9, and 10, respectively, for details of these arrangements. We also have requirements to make Operating and Personnel Payments over the life of the management agreement as described in Note 16, which are variable and based on projected cash receipts. Legal Proceedings We are a party to various legal actions. The most significant of these are described below. Unless otherwise noted, it is not possible to determine the outcome of these matters, and we cannot reasonably estimate the maximum potential exposure or the range of possible loss. We did not have any material accruals for the matter described below in our condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019. In December 2015, Boehringer Ingelheim International GmBH (“BI”) notified Royalty Pharma that (a) BI had revised its interpretation of the license agreement between BI and Royalty Pharma, (b) as a result BI believed that it had overpaid royalties on sales of Tradjenta, Jentadueto and Glyxambi, the DPP-IVs, for periods prior to 2015 by €7.7 million, and (c) BI was seeking a refund in that amount. Management does not agree with BI’s interpretation of the license agreement and has had extensive discussions with BI in an effort to reach an amicable settlement of this dispute. On January 21, 2019, RPCT filed a lawsuit in England against BI seeking recovery of €23.1 million in underpaid royalties. We intend to pursue this claim vigorously, but there can be no assurance that we will prevail in this dispute. Due to the uncertainty at this time, we have not accrued any amounts related to this matter and any legal costs will be expensed as incurred. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In July 2020, we acquired a royalty on risdiplam, a development-stage product candidate for the treatment of spinal muscular atrophy (SMA) from PTC Therapeutics, Inc., in exchange for an upfront payment of $650 million. In August 2020, we entered into an expanded agreement with Biohaven Pharmaceuticals for up to $450 million to fund the development of zavegepant and the commercialization of Nurtec ODT. Biohaven will receive a $150 million upfront payment and an additional $100 million payment upon the start of the oral zavegepant phase 3 program in exchange for a royalty on Nurtec ODT and zavegepant and success-based milestone payments based on zavegepant regulatory approvals. We will also provide further support for the ongoing launch of Nurtec ODT through the purchase of committed, non-contingent Commercial Launch Preferred Equity for a total of $200 million payable between 2021 and 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of preparation | The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under U.S. GAAP. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2019, included in the Company’s final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended on June 17, 2020 (“the Prospectus”). |
Use of estimates | The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The current outbreak of the novel coronavirus, or COVID-19, could materially and adversely affect our results of operations, financial condition and cash flows. The full extent of the impact due to the COVID-19 pandemic will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact. Given the uncertainty around the extent and timing of the potential future spread or mitigation efforts related to the current outbreak of COVID-19, the financial impact cannot be reasonably estimated at this time. Actual results may differ from those estimates. The results for the interim periods are not necessarily indicative of results for the full year. |
Basis of consolidation | The unaudited condensed consolidated financial statements include the accounts of Royalty Pharma as well as its majority-owned and controlled subsidiaries. We hold interests in variable interest entities where we have assessed that we are not the primary beneficiary and therefore do not consolidate these entities. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net (income)/loss attributable to non-controlling interest in our unaudited condensed consolidated statements of comprehensive income equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. Following management’s determination that a high degree of common ownership existed in RPI both before and after the Exchange Date, RPI recognized Old RPI’s assets and liabilities at the carrying value reflected on Old RPI’s balance sheet as of the Exchange Date. |
Concentrations of credit risk | Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, financial royalty assets, receivables, and derivatives. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds are needed for operations. Our cash and cash equivalents, and marketable securities balances at June 30, 2020 and December 31, 2019 were held with State Street Bank and Trust, Deutsche Bank, Merrill Lynch, Pierce, Fenner & Smith, and Bank of America, N.A. Our primary operating accounts significantly exceed the FDIC limits.The majority of our royalty assets and receivables arise from contractual royalty agreements that entitle the Company to royalties on the sales of underlying biopharmaceutical products in the United States, Europe and the rest of the world, with concentrations of credit risk limited due to the broad range of marketers responsible for paying royalties to us and the variety of geographies from which our royalties on product sales are derived. The marketers paying us royalties on these products do not always provide, and are not necessarily required to provide, the breakdown of product sales by geography. |
Recently adopted and issued accounting standards | Upon the January 1, 2020 adoption of ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Allowance for current expected credit losses | As a result of adopting ASU 2016-13, we now recognize an allowance for current expected credit losses on the portion of our portfolio of financial royalty assets that is subject to credit risk. The credit loss allowance is estimated using the probability of default and loss given default methods. The credit rating, which is primarily based on publicly available data and updated on a quarterly basis, is the primary credit quality indicator used to determine the probability of default of the marketers responsible for paying our royalties and resulting loss given default. Current expected credit loss allowance is presented net within the non-current portion of Financial royalty assets, net on the condensed consolidated balance sheets. Any subsequent movement in the allowance for credit losses is recorded as part of the Provision for changes in expected future cash flows from financial royalty assets on the condensed consolidated statements of comprehensive income. |
Earnings per share | Basic earnings per share (“EPS”) is computed by dividing net income attributable to Royalty Pharma plc by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Royalty Pharma plc, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares and restricted stock units (“RSU”) issued under our 2020 Independent Director Equity Incentive Plan. We use the “if-converted” method to determine the potentially dilutive effect of Class B ordinary shares, and the treasury stock method to determine the potentially dilutive effect of the unvested RSUs. |
Fair value measurements | The summary below presents information about our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, and the valuation techniques we utilized to determine such fair value. • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Our level 1 assets consist of equity securities with readily determinable fair values and money market funds. • Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Our level 2 assets generally include marketable securities, warrants, derivatives, available for sale debt securities, and our interest rate swap contracts, which may be in an asset or liability position. • Level 3: Prices or valuation that requires inputs that are both significant to the fair value measurement and unobservable. Our level 3 assets historically consisted of our investment in the Biohaven Preferred Shares. See Note 5 for a description of our investment in the Biohaven Preferred Shares. For financial instruments which are carried at fair value, the level in the fair value hierarchy is based on the lowest level of inputs that is significant to the fair value measurement in its entirety. |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy | The following is a summary of the inputs used to value our financial assets and liabilities measured at fair value as of June 30, 2020 and December 31, 2019: As of June 30, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents Money market funds $ 143,859 $ — $ — $ 143,859 Commercial paper — 107,889 — 107,889 Certificates of deposit — 14,010 — 14,010 Marketable securities U.S. government securities — 42,994 — 42,994 Corporate debt securities — 38,698 — 38,698 Certificates of deposit — 261,987 — 261,987 Available for sale debt securities — 28,500 — 28,500 Total current assets $ 143,859 $ 494,078 $ — $ 637,937 Equity securities 477,185 — — 477,185 Available for sale debt securities — 162,454 — 162,454 Warrants (1) — 14,717 — 14,717 Total non-current assets $ 477,185 $ 177,171 $ — $ 654,356 (1) Related to Epizyme transaction as described in Note 4 and recorded in the non-current asset portion of Derivative financial instruments in the condensed consolidated balance sheet as of June 30, 2020. As of December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents Money market funds $ 222,296 $ — $ — $ 222,296 Commercial paper — 21,502 — 21,502 Certificates of deposit — 20,011 — 20,011 Marketable securities U.S. government securities — 12,877 — 12,877 Certificates of deposit — 44,095 — 44,095 Total current assets $ 222,296 $ 98,485 $ — $ 320,781 Equity securities 380,756 — — 380,756 Available for sale debt securities — — 131,280 131,280 Warrants (1) — 30,815 — 30,815 Forward purchase contract (1) — 11,500 — 11,500 Total non-current assets $ 380,756 $ 42,315 $ 131,280 $ 554,351 Liabilities: Interest rate swaps — (9,215) — (9,215) Total current liabilities $ — $ (9,215) $ — $ (9,215) Interest rate swaps — (18,902) — (18,902) Total non-current liabilities $ — $ (18,902) $ — $ (18,902) (1) Related to Epizyme warrants and put option as described in Note 4 and recorded in the non-current asset portion of Derivative financial instruments in the condensed consolidated balance sheet as of December 31, 2019. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table presented below summarizes the change in the carrying value of level 3 financial instruments, which related entirely to the investment in Biohaven Preferred Shares (discussed below) for the three and six months ended June 30, 2020 and 2019. For the three months ended June 30, 2020 June 30, 2019 (in thousands) Available for sale debt securities Balance at the beginning of the period $ — $ — Purchases — 125,121 Change in unrealized movement — 2,939 Balance at the end of the period $ — $ 128,060 For the six months ended June 30, 2020 June 30, 2019 (in thousands) Available for sale debt securities Balance at the beginning of the period $ 131,280 $ — Purchases — 125,121 Change in unrealized movement 52,725 2,939 Transfer to level 2 (184,005) — Balance at the end of the period $ — $ 128,060 |
Fair Value Disclosure of Asset and Liability Not Measured at Fair Value | Estimated fair values based on level 3 inputs and related carrying values for the non-current portion of our financial royalty assets as of June 30, 2020 and December 31, 2019 are presented below. (in thousands) June 30, 2020 December 31, 2019 Fair value Carrying value, net Fair value Carrying value, net Financial royalty assets, net $ 17,024,285 $ 11,169,857 $ 16,501,819 $ 10,842,052 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Values and Fixed Rates | The notional values and fixed rates payable on the swap contracts are shown in the table below. Notional Value Fixed Rate Maturity Date $600 2.019 % November 9, 2020 $250 2.094 % March 27, 2023 $500 2.029 % March 27, 2023 $250 2.113 % March 27, 2023 $500 2.129 % March 27, 2023 |
Summary of Derivatives and Reclassifications | The tables below summarize the change in fair value of the derivatives for the three and six months ended June 30, 2020 and 2019, and the line items within the condensed consolidated statements of comprehensive income where the gains/(losses) on these derivatives are recorded. For the three months ended Condensed Consolidated Statement of Comprehensive Income location June 30, 2020 June 30, 2019 Derivatives in hedging relationships (1) (in thousands) Interest Rate Swaps: Amount of loss reclassified from AOCI into income $ — $ (1,602) Unrealized gain/loss on derivative contracts Change in fair value of interest rate swaps — (8,011) Unrealized gain/loss on derivative contracts Interest income — 3,115 Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps — (29,801) Unrealized gain/loss on derivative contracts Interest income — 1,479 Interest expense Warrant: Change in fair value of warrant 647 — Unrealized gain/loss on derivative contracts For the six months ended Condensed Consolidated Statement of Comprehensive Income location June 30, 2020 June 30, 2019 Derivatives in hedging relationships (1) (in thousands) Interest Rate Swaps: Amount of loss reclassified from AOCI into income $ (4,066) $ (3,189) Unrealized gain/loss on derivative contracts Change in fair value of interest rate swaps 73 (14,307) Unrealized gain/loss on derivative contracts Interest (expense)/income (114) 6,888 Interest expense Derivatives not designated as hedging instruments Interest Rate Swaps: Change in fair value of interest rate swaps (6,908) (47,758) Unrealized gain/loss on derivative contracts Interest (expense)/income (408) 3,032 Interest expense Warrant: Change in fair value of warrant (16,097) — Unrealized gain/loss on derivative contracts Forward purchase contract: Change in fair value of forward purchase contract (5,800) — Unrealized gain/loss on derivative contracts |
Available for Sale Debt Secur_2
Available for Sale Debt Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available for Sale Debt Securities | A summary of our available for sale debt securities recorded at fair value is shown below as of June 30, 2020 and December 31, 2019: Cost Unrealized gains Fair Value (1) As of June 30, 2020 (in thousands) Biohaven preferred shares $ 125,121 $ 65,833 $ 190,954 Total available for sale debt securities $ 125,121 $ 65,833 $ 190,954 As of December 31, 2019 Biohaven preferred shares $ 125,121 $ 6,159 $ 131,280 Total available for sale debt securities $ 125,121 $ 6,159 $ 131,280 (1) As of June 30, 2020, $28.5 million and $162.5 million are recorded as the current and non-current asset portion of Available for sale debt securities , respectively, in the condensed consolidated balance sheet. The entire balance of the Biohaven Preferred Shares was recorded as a non-current asset as of December 31, 2019. |
Financial Royalty Assets, Net (
Financial Royalty Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Summary of Financial Royalty Assets, Net | The gross carrying value, cumulative allowance for changes in expected cash flows, exclusive of the allowance for credit losses, and net carrying value for the current and non-current portion of royalty assets classified as financial assets at June 30, 2020 and December 31, 2019 are as follows. June 30, 2020 Estimated royalty duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) Net carrying value (d) (in thousands) Cystic fibrosis franchise (b) $ 4,692,567 $ (98,381) $ 4,594,186 Tysabri (c) 2,065,179 (34,353) 2,030,826 Imbruvica 2029 1,368,322 (31,543) 1,336,779 Xtandi 2028 1,174,247 (219,405) 954,842 Promacta 2026 740,543 (8,924) 731,619 Tazverik 2036 346,902 — 346,902 Other 2019- 2036 2,502,483 (499,455) 2,003,028 Total $ 12,890,243 $ (892,061) $ 11,998,182 Less: Cumulative allowance for credit losses (Note 7) (301,388) Total financial royalty assets, net $ 11,696,794 a) Dates shown are based on the patent duration or management’s best estimate of the date through which the Company will be entitled to royalties. Royalty durations can change due to the grant of additional patents, the invalidation of patents, and other reasons. b) The estimated duration for the Cystic fibrosis franchise is based on the patent expiration date for Trikafta, a franchise product which was approved in the US in October 2019. Management estimates that the most material patents provide protection through 2037. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term. d) The net carrying value by asset is presented before the allowance for credit losses. Refer to Note 7 for additional information. December 31, 2019 Estimated royalty duration (a) Gross carrying value Cumulative allowance for changes in expected cash flows (Note 7) Net carrying value (in thousands) Cystic fibrosis franchise (d) (b) $ 4,639,045 $ — $ 4,639,045 Tysabri (c) 2,131,272 (71,789) 2,059,483 Imbruvica 2029 1,332,077 — 1,332,077 Xtandi 2028 1,193,918 (332,624) 861,294 Promacta 2026 776,555 — 776,555 Crysvita 2032 321,234 — 321,234 Other 2019-2036 1,768,929 (464,005) 1,304,924 Total $ 12,163,030 $ (868,418) $ 11,294,612 a) Dates shown are based on the patent duration or management’s best estimate of the date through which the Company will be entitled to royalties. Royalty duration can change due to the grant of additional patents, the invalidation of patents, and other reasons. b) The estimated duration for the Cystic fibrosis franchise is based on the patent expiration date for Trikafta, a franchise product which was approved in the US in October 2019. Management estimates that the most material patents provide protection through 2037. c) Under terms of the agreement, RPIFT acquired a perpetual royalty on net sales of Tysabri. Management has applied an end date of 2031 for purposes of accreting income over the royalty term which is periodically reviewed by the management. d) The Vertex triple combination therapy, Trikafta, was approved by the FDA in October 2019. Sell-side equity research analysts’ consensus forecasts increased due to expected sales of the newly approved Cystic fibrosis franchise product and resulted in a reversal of the entire cumulative allowance for changes in expected cash flows in the fourth quarter of 2019 related to this royalty asset. |
Cumulative Allowance for Chan_2
Cumulative Allowance for Changes in Expected Cash Flows from Financial Royalty Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Credit Loss [Abstract] | |
Schedule of Cumulative Allowance for Changes in Expected Cash Flows | The following table sets forth the activity in the cumulative allowance for changes in expected cash flows from financial royalty assets, inclusive of the allowance for credit losses, as of the dates indicated: (in thousands) Activity for the period Balance at December 31, 2019 $ (868,418) Cumulative adjustment for adoption of ASU 2016-13 (192,705) Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets (289,587) Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets 262,980 Reversal of cumulative allowance (a) 2,964 Current period provision for credit losses (108,683) Balance at June 30, 2020 $ (1,193,449) (a) Relates to amounts reversed out of the allowance at the end of a royalty asset's life to bring the account balance to zero. Reversals solely impact the asset account and allowance account, there is no impact on the condensed consolidated statements of comprehensive income. |
Intangible Royalty Assets, Net
Intangible Royalty Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Royalty Interests | The following schedules of the intangible royalty interests present the cost, accumulated amortization and net carrying value as of June 30, 2020 and December 31, 2019. As of June 30, 2020 Cost Accumulated amortization Net carrying value (in thousands) DPP-IV Inhibitors $ 606,216 $ 565,958 $ 40,258 Total intangible royalty assets $ 606,216 $ 565,958 $ 40,258 As of December 31, 2019 Cost Accumulated amortization Net carrying value (in thousands) DPP-IV Inhibitors $ 606,216 $ 554,492 $ 51,724 Total intangible royalty assets $ 606,216 $ 554,492 $ 51,724 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | Our borrowings at June 30, 2020 and December 31, 2019 consisted of the following: (in thousands) Maturity Spread over LIBOR (1) June 30, 2020 December 31, 2019 New RPI Intermediate FT Senior Secured Credit Facilities: Term Loan A Facility Tranche A-1 2/2025 150 bps $ 3,120,000 $ — Term Loan B Facility Tranche B-1 2/2027 175 bps 2,825,800 — RPIFT Senior Secured Credit Facilities: Term Loan B Facility Tranche B-6 3/2023 200 bps — 4,123,000 Term Loan A Facility Tranche A-4 5/2022 150 bps — 2,150,000 Loan issuance costs (3,929) (1,691) Original issue discount (30,023) (33,187) Total value of senior secured debt (2) 5,911,848 6,238,122 Less: Current portion of long-term debt (182,226) (281,984) Total long-term debt $ 5,729,622 $ 5,956,138 (1) Borrowings under our senior secured credit facilities bear interest at a rate equal to LIBOR plus an applicable margin. (2) The carrying value of our long term debt, including the current portion, approximates its fair value. |
Schedule of Repayments of Debt by Year | As of June 30, 2020, we are required to repay the term loans under the Credit Agreement over the next five years and thereafter as follows: (in thousands) Term loan amortization Year Tranche A-1 Tranche B-1 Total Remainder of 2020 $ 80,000 $ 14,200 $ 94,200 2021 160,000 28,400 188,400 2022 160,000 28,400 188,400 2023 160,000 28,400 188,400 2024 160,000 28,400 188,400 Thereafter 2,400,000 2,698,000 5,098,000 Total (1) $ 3,120,000 $ 2,825,800 $ 5,945,800 (1) Excludes discount on long-term debt of $30.0 million and loan issuance costs of $3.9 million, which are amortized through interest expense over the life of the underlying debt obligations. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Balance Of Non-controlling Interests | The net change in the balance of our four non-controlling interests for the three and six months ended June 30, 2020 is as follows. (in thousands) RPSFT Legacy Investors Partnerships Continuing Investors Partnership (1) EPA Holdings Total March 31, 2020 $ 31,563 $ 1,971,212 $ — $ — $ 2,002,775 Contributions — 6,691 — — 6,691 Distributions (25,270) (99,581) — — (124,851) Net income prior to IPO 17,225 89,962 — — 107,187 Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity — (750) 2,433,848 — 2,433,098 Issuance of Class A shares sold in initial public offering, net of offering costs — — 758,590 — 758,590 Net income subsequent to IPO 3,400 17,755 31,560 — 52,715 Other comprehensive income: Change in unrealized movement on available for sale debt securities — 1,222 402 — 1,624 June 30, 2020 $ 26,918 $ 1,986,511 $ 3,224,400 $ — $ 5,237,829 (1) Related to the Continuing Investors Partnerships' ownership of approximately 40% in RP Holdings through their ownership of the RP Holdings Class B Interests. (in thousands) RPSFT Legacy Investors Partnerships Continuing Investors Partnership (1) EPA Holdings Total December 31, 2019 $ 35,883 $ — $ — $ — $ 35,883 Contributions — 1,140,319 — — 1,140,319 Transfer of interests — 1,037,161 — — 1,037,161 Distributions (54,516) (321,760) — — (376,276) Net income prior to IPO 42,151 102,892 — — 145,043 Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity — (750) 2,433,848 — 2,433,098 Issuance of Class A shares sold in initial public offering, net of offering costs — — 758,590 — 758,590 Net income subsequent to IPO 3,400 17,755 31,560 — 52,715 Other comprehensive income: Change in unrealized movement on available for sale debt securities — 10,894 402 — 11,296 June 30, 2020 $ 26,918 $ 1,986,511 $ 3,224,400 $ — $ 5,237,829 (1) Related to the Continuing Investors Partnerships' ownership of approximately 40% in RP Holdings through their ownership of the RP Holdings Class B Interests. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A ordinary shares. (in thousands, except per share amounts) Three months ended June 30, 2020 Six months ended June 30, 2020 Basic net income per share: Numerator Consolidated net income $ 601,976 $ 711,072 Less: net income attributable to Continuing Investors Partnerships prior to the offering (1) 408,602 479,842 Less: net income attributable to non-controlling interest - Class B subsequent to the offering 31,560 31,560 Less: net income attributable to non-controlling interest - Legacy Investors Partnerships and RPSFT 128,342 166,198 Net income attributable to Royalty Pharma plc $ 33,472 $ 33,472 Denominator Weighted-average shares of Class A ordinary outstanding - basic 353,979 353,979 Earnings per share of Class A common stock - basic $ 0.09 $ 0.09 Diluted net income per share: Numerator Net income attributable to Royalty Pharma plc $ 33,472 $ 33,472 Denominator Weighted-average shares of Class A ordinary outstanding - basic 353,979 353,979 Dilutive effect of unvested restricted units 1 1 Weighted-average shares of Class A ordinary shares outstanding - diluted 353,980 353,980 Earnings per share of Class A ordinary shares - diluted $ 0.09 $ 0.09 (1) Reflected as net income attributable to controlling interest on the unaudited condensed consolidated statement of comprehensive income |
Indirect Cash Flow (Tables)
Indirect Cash Flow (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below. (in thousands) For the six months ended 2020 2019 Cash flow from operating activities: Consolidated net income $ 711,072 $ 574,864 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Provision for changes in expected cash flows from financial royalty assets 135,290 22,177 Amortization of intangible assets 11,466 12,332 Amortization of loan issuance and discount on long-term debt 4,340 5,964 Unrealized loss on derivative contracts 32,798 65,254 Unrealized gain on equity securities (40,729) (16,944) Equity in (earnings)/loss of non-consolidated affiliates (20,218) 13,673 Distributions from non-consolidated affiliates 31,840 14,059 Loss on extinguishment of debt 5,405 — Share based compensation 3,740 — Other 3,398 289 (Increase)/decrease in operating assets: Financial royalty assets (937,021) (799,161) Cash collected on financial royalty assets 1,003,504 895,150 Available for sale debt securities — (150,000) Accrued royalty receivable 1,218 (600) Other receivables — 150,000 Other royalty income receivable 2,094 5,670 Other current assets (12,634) 4,171 Other assets 45,635 (26,352) Increase/(decrease) in operating liabilities: Accounts payable and accrued expenses 13,862 (769) Derivative financial instruments (34,952) — Net cash provided by operating activities $ 960,108 $ 769,777 Non-cash investing and financing activities are summarized below. (in thousands) For the six months ended 2020 2019 Supplemental schedule of non-cash investing / financing activities: Contribution of investment in Legacy Investors Partnerships (1) $ 303,679 $ — Settlement of Epizyme forward purchase contract (2) 5,700 — Accrued purchase obligation - Tazverik (3) 220,000 — Repayments of long-term debt by contributions from non-controlling interest (4) 1,103,774 — Accrued purchase obligation 1,610 — Accrued capitalized offering costs (5) 8,897 — (1) See Note 9 (2) See Note 4 (3) See Note 17 (4) Related to the pro rata portion of RPIFT's outstanding debt repaid by the Legacy Investors Partnerships (5) Related to capitalized offering costs incurred in connection with our IPO that have not been paid |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income/(loss) by component are as follows: Unrealized gain/(loss) on available for sale debt securities Unrealized gain/(loss) on interest rate swaps Total Accumulated Other Comprehensive Income/(Loss) (in thousands) Balance at December 31, 2019 $ 6,159 $ (4,066) $ 2,093 Reclassifications to income — 4,066 4,066 Activity for the period 48,378 — 48,378 Reclassifications to NCI (24,022) — (24,022) Balance at June 30, 2020 $ 30,515 $ — $ 30,515 |
Organization and Purpose (Detai
Organization and Purpose (Details) - USD ($) | Jun. 18, 2020 | Feb. 11, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Feb. 29, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Repayments of outstanding debt | $ 5,170,396,000 | $ 0 | ||||
Senior Secured Debt | Old Credit Facility | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Repayments of outstanding debt | $ 6,300,000,000 | |||||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
New line of credit facility | 3,200,000,000 | $ 3,120,000,000 | 3,120,000,000 | |||
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
New line of credit facility | $ 2,840,000,000 | $ 2,825,800,000 | $ 2,825,800,000 | |||
RPCT | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Ownership percentage (as a percent) | 66.00% | |||||
Legacy Investors Partnerships | Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
New line of credit facility | $ 1,300,000,000 | |||||
Legacy Investors Partnerships | Old RPI | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Noncontrolling interest (percentage) | 18.00% | |||||
RPSFT | RPCT | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Noncontrolling interest (percentage) | 34.00% | |||||
RPI Intermediate FT | Senior Secured Debt | RPIFT Senior Secured Credit Facilities | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Repayments of outstanding debt | $ 5,200,000,000 | |||||
RPI Intermediate FT | Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
New line of credit facility | $ 6,000,000,000 | |||||
Exchange Offer Transaction | Old RPI | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Ownership percentage (as a percent) | 82.00% | |||||
Exchange Offer Transaction | Legacy Investors Partnerships | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Exchange offering, ownership percentage | 82.00% | |||||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of stock, consideration received | $ 1,900,000,000 | |||||
Underwriting discounts and commissions | $ (86,300,000) | |||||
Ownership percentage following IPO | 100.00% | |||||
IPO | Common Class A | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued (in shares) | 89,333,920 | |||||
Sale of stock, price per share (in dollars per share) | $ 28 | |||||
IPO - Shares From Company | Common Class A | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued (in shares) | 71,652,250 | |||||
IPO - Shares From Selling Shareholders | Common Class A | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued (in shares) | 17,681,670 | |||||
Underwriters' Option | Common Class A | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued (in shares) | 11,652,250 | |||||
Public Stock Offering - Continuing Investors Partnerships Interests | Common Class A | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares available to convert (in shares) | 294,175,555 | |||||
Public Stock Offering - Continuing Investors Partnerships Interests | Common Class B | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares available to convert (in shares) | 294,175,555 | |||||
Number of shares converted (in shares) | 241,207,425 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2020USD ($)partnership | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Feb. 29, 2020 | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Number of noncontrolling interests created | partnership | 2 | ||||||
Accounting standards update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Shareholders' equity | $ 9,394,961 | $ 6,141,438 | $ 7,162,693 | $ 4,653,214 | $ 4,705,337 | $ 4,552,079 | |
Cumulative Effect, Period of Adoption, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Shareholders' equity | (192,705) | ||||||
Accumulated Other Comprehensive Income/(Loss) | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Shareholders' equity | 30,515 | 2,093 | 49,212 | (4,127) | (8,668) | (10,255) | |
Retained Earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Shareholders' equity | $ 1,571,399 | 2,825,212 | $ 2,561,971 | $ 1,339,061 | $ 1,385,728 | $ 1,215,953 | |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Shareholders' equity | $ (192,705) | ||||||
Customer Concentration Risk | Current portion of Financial royalty assets | Vertex | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Concentration risk (as a percent) | 27.00% | 17.00% | |||||
Legacy Investors Partnerships | Old RPI | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Noncontrolling interest (percentage) | 18.00% | ||||||
Continuing Investors Partnerships | RP Holdings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Noncontrolling interest (percentage) | 40.00% |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Marketable securities | $ 343,679 | $ 56,972 |
Available for sale debt securities | 28,500 | 0 |
Equity securities | 477,185 | 380,756 |
Available for sale debt securities | 162,454 | 131,280 |
Liabilities: | ||
Interest rate swaps | 0 | (9,215) |
Interest rate swaps | 0 | (18,902) |
Fair Value, Recurring | ||
Assets: | ||
Available for sale debt securities | 28,500 | |
Total current assets | 637,937 | 320,781 |
Equity securities | 477,185 | 380,756 |
Available for sale debt securities | 162,454 | 131,280 |
Total non-current assets | 654,356 | 554,351 |
Liabilities: | ||
Total current liabilities | (9,215) | |
Total non-current liabilities | (18,902) | |
Fair Value, Recurring | Certificates of Deposit | ||
Assets: | ||
Marketable securities | 261,987 | 44,095 |
Fair Value, Recurring | US Government Debt Securities | ||
Assets: | ||
Marketable securities | 42,994 | 12,877 |
Fair Value, Recurring | Corporate Debt Securities | ||
Assets: | ||
Marketable securities | 38,698 | |
Fair Value, Recurring | Warrant | ||
Assets: | ||
Warrants | 14,717 | 30,815 |
Fair Value, Recurring | Forward Contracts | ||
Assets: | ||
Warrants | 11,500 | |
Fair Value, Recurring | Interest Rate Swap | ||
Liabilities: | ||
Interest rate swaps | (9,215) | |
Interest rate swaps | (18,902) | |
Level 1 | Fair Value, Recurring | ||
Assets: | ||
Available for sale debt securities | 0 | |
Total current assets | 143,859 | 222,296 |
Equity securities | 477,185 | 380,756 |
Available for sale debt securities | 0 | 0 |
Total non-current assets | 477,185 | 380,756 |
Liabilities: | ||
Total current liabilities | 0 | |
Total non-current liabilities | 0 | |
Level 1 | Fair Value, Recurring | Certificates of Deposit | ||
Assets: | ||
Marketable securities | 0 | 0 |
Level 1 | Fair Value, Recurring | US Government Debt Securities | ||
Assets: | ||
Marketable securities | 0 | 0 |
Level 1 | Fair Value, Recurring | Corporate Debt Securities | ||
Assets: | ||
Marketable securities | 0 | |
Level 1 | Fair Value, Recurring | Warrant | ||
Assets: | ||
Warrants | 0 | 0 |
Level 1 | Fair Value, Recurring | Forward Contracts | ||
Assets: | ||
Warrants | 0 | |
Level 1 | Fair Value, Recurring | Interest Rate Swap | ||
Liabilities: | ||
Interest rate swaps | 0 | |
Interest rate swaps | 0 | |
Level 2 | Fair Value, Recurring | ||
Assets: | ||
Available for sale debt securities | 28,500 | |
Total current assets | 494,078 | 98,485 |
Equity securities | 0 | 0 |
Available for sale debt securities | 162,454 | 0 |
Total non-current assets | 177,171 | 42,315 |
Liabilities: | ||
Total current liabilities | (9,215) | |
Total non-current liabilities | (18,902) | |
Level 2 | Fair Value, Recurring | Certificates of Deposit | ||
Assets: | ||
Marketable securities | 261,987 | 44,095 |
Level 2 | Fair Value, Recurring | US Government Debt Securities | ||
Assets: | ||
Marketable securities | 42,994 | 12,877 |
Level 2 | Fair Value, Recurring | Corporate Debt Securities | ||
Assets: | ||
Marketable securities | 38,698 | |
Level 2 | Fair Value, Recurring | Warrant | ||
Assets: | ||
Warrants | 14,717 | 30,815 |
Level 2 | Fair Value, Recurring | Forward Contracts | ||
Assets: | ||
Warrants | 11,500 | |
Level 2 | Fair Value, Recurring | Interest Rate Swap | ||
Liabilities: | ||
Interest rate swaps | (9,215) | |
Interest rate swaps | (18,902) | |
Level 3 | Fair Value, Recurring | ||
Assets: | ||
Available for sale debt securities | 0 | |
Total current assets | 0 | 0 |
Equity securities | 0 | 0 |
Available for sale debt securities | 0 | 131,280 |
Total non-current assets | 0 | 131,280 |
Liabilities: | ||
Total current liabilities | 0 | |
Total non-current liabilities | 0 | |
Level 3 | Fair Value, Recurring | Certificates of Deposit | ||
Assets: | ||
Marketable securities | 0 | 0 |
Level 3 | Fair Value, Recurring | US Government Debt Securities | ||
Assets: | ||
Marketable securities | 0 | 0 |
Level 3 | Fair Value, Recurring | Corporate Debt Securities | ||
Assets: | ||
Marketable securities | 0 | |
Level 3 | Fair Value, Recurring | Warrant | ||
Assets: | ||
Warrants | 0 | 0 |
Level 3 | Fair Value, Recurring | Forward Contracts | ||
Assets: | ||
Warrants | 0 | |
Level 3 | Fair Value, Recurring | Interest Rate Swap | ||
Liabilities: | ||
Interest rate swaps | 0 | |
Interest rate swaps | 0 | |
Money Market Funds | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 143,859 | 222,296 |
Money Market Funds | Level 1 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 143,859 | 222,296 |
Money Market Funds | Level 2 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Money Market Funds | Level 3 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Commercial Paper | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 107,889 | 21,502 |
Commercial Paper | Level 1 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Commercial Paper | Level 2 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 107,889 | 21,502 |
Commercial Paper | Level 3 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Certificates of Deposit | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 14,010 | 20,011 |
Certificates of Deposit | Level 1 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Certificates of Deposit | Level 2 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | 14,010 | 20,011 |
Certificates of Deposit | Level 3 | Fair Value, Recurring | ||
Assets: | ||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Summary of Change in Carrying Value of Level 3 Financial Instruments (Details) - Available-for-sale Securities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of the period | $ 0 | $ 0 | $ 131,280 | $ 0 |
Purchases | 0 | 125,121 | 0 | 125,121 |
Change in unrealized movement | 0 | 2,939 | 52,725 | 2,939 |
Transfer to level 2 | (184,005) | 0 | ||
Balance at the end of the period | $ 0 | $ 128,060 | $ 0 | $ 128,060 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Narrative (Details) $ in Thousands | Apr. 05, 2019 | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Available for sale debt securities | $ 190,954 | $ 131,280 | |
Change Of Control Probability | Level 3 | Valuation Technique, Black-Derman-Troy | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Measurement input, percentage (as a percent) | 0 | ||
Minimum | Likelihood of FDA Approval | Level 3 | Valuation Technique, Black-Derman-Troy | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Measurement input, percentage (as a percent) | 0 | ||
Minimum | Likelihood of FDA Approval At End Of Any Given Quarter By 2024 | Level 3 | Valuation Technique, Black-Derman-Troy | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Measurement input, percentage (as a percent) | 0 | ||
Maximum | Likelihood of FDA Approval | Level 3 | Valuation Technique, Black-Derman-Troy | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Measurement input, percentage (as a percent) | 0.86 | ||
Maximum | Likelihood of FDA Approval At End Of Any Given Quarter By 2024 | Level 3 | Valuation Technique, Black-Derman-Troy | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Measurement input, percentage (as a percent) | 0.59 | ||
Preferred Shares | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Redemption price, percentage | 200.00% | ||
Preferred shares, fixed payment amount | 250,000 | ||
Preferred shares, quarterly payments | $ 15,600 | ||
Preferred shares, weighted average cost of capital | 11.10% | ||
Available for sale debt securities | $ 190,954 | $ 131,280 | |
Percent of possibility of FDA approval, reduction | 20.00% | ||
Preferred Shares | Redemption, Period One | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Redemption price, percentage | 150.00% | ||
Preferred Shares | Maximum | Redemption, Period One | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Redemption price, percentage | 200.00% |
Fair Value Measurements and F_6
Fair Value Measurements and Financial Instruments - Schedule of Estimated Fair Values Based on Level 3 Inputs (Details) - Level 3 - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Estimate of Fair Value Measurement | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Financial royalty assets, net | $ 17,024,285 | $ 16,501,819 |
Reported Value Measurement | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Financial royalty assets, net | $ 11,169,857 | $ 10,842,052 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) | Apr. 05, 2019 | Nov. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Swap termination payments | $ (35,448,000) | $ 0 | |||||
Swap collateral received | 45,252,000 | 360,000 | |||||
Unrealized (gain)/loss on derivative contracts | (32,798,000) | (65,254,000) | |||||
Derivative liability, current | $ 0 | 0 | $ 9,215,000 | ||||
Derivative liability, noncurrent | 0 | 0 | 18,902,000 | ||||
Other assets | 0 | 0 | 45,635,000 | ||||
Investments in non-consolidated affiliates | 430,296,000 | 430,296,000 | 124,061,000 | ||||
Derivative financial instruments | 14,717,000 | 14,717,000 | 42,315,000 | ||||
Preferred Shares | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative instrument, exercise period (in months) | 12 months | ||||||
Additional issuance, purchase price, maximum | $ 75,000,000 | ||||||
Additional issuance, purchase price, minimum | $ 25,000,000 | ||||||
Epizyme Common Stock Warrant | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Warrants to purchase additional shares (in shares) | 2,500,000 | ||||||
Equity Investment In Epizyme Inc. | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Investments in non-consolidated affiliates | $ 100,000,000 | ||||||
Equity securities | 100,000,000 | ||||||
Upfront payment for equity investment | $ 100,000,000 | ||||||
Equity Investment In Epizyme Inc. | Epizyme Common Stock Warrant | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Exercise price of warrant (in dollars per share) | $ 20 | ||||||
Term of warrant (in years) | 3 years | ||||||
Equity Investment In Epizyme Inc. | Put Option | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Put option, term (in months) | 18 months | ||||||
Put option to sell additional common stock | $ 50,000,000 | ||||||
Put option, selling price, maximum (in dollars per share) | $ 20 | ||||||
Interest Rate Swap | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Unrealized (gain)/loss on derivative contracts | 0 | $ (39,400,000) | (10,900,000) | $ (65,300,000) | |||
Derivative liability | 28,100,000 | ||||||
Derivative liability, current | 9,200,000 | ||||||
Derivative liability, noncurrent | 18,900,000 | ||||||
Forward Contracts | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative liability, noncurrent | 11,500,000 | ||||||
Warrant | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Unrealized (gain)/loss on derivative contracts | 600,000 | (16,100,000) | |||||
Derivative financial instruments | $ 14,700,000 | $ 14,700,000 | $ 30,800,000 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Notional Values and Fixed Rates (Details) | Dec. 31, 2019USD ($) |
Interest Rate Swap, Due November 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 600,000,000 |
Fixed Rate (as a percent) | 2.019% |
Interest Rate Swap, Due March 2023 - 1 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 250,000,000 |
Fixed Rate (as a percent) | 2.094% |
Interest Rate Swap, Due March 2023 - 2 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 500,000,000 |
Fixed Rate (as a percent) | 2.029% |
Interest Rate Swap, Due March 2023 - 3 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 250,000,000 |
Fixed Rate (as a percent) | 2.113% |
Interest Rate Swap, Due March 2023 - 4 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Value (in millions) | $ 500,000,000 |
Fixed Rate (as a percent) | 2.129% |
Derivative Instruments - Summar
Derivative Instruments - Summary of Derivatives and Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest Rate Swap | Gain (Loss) on Derivative Instruments | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivatives not designated as hedging instruments | $ 0 | $ (29,801) | $ (6,908) | $ (47,758) |
Interest Rate Swap | Gain (Loss) on Derivative Instruments | Designated as Hedging Instrument | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of loss reclassified from AOCI into income | 0 | (1,602) | (4,066) | (3,189) |
Interest rate swaps | 0 | (8,011) | 73 | (14,307) |
Interest Rate Swap | Interest Expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivatives not designated as hedging instruments | 0 | 1,479 | (408) | 3,032 |
Interest Rate Swap | Interest Expense | Designated as Hedging Instrument | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Interest rate swaps | 0 | 3,115 | (114) | 6,888 |
Warrant | Gain (Loss) on Derivative Instruments | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivatives not designated as hedging instruments | $ 647 | $ 0 | (16,097) | 0 |
Forward Contracts | Gain (Loss) on Derivative Instruments | Not Designated as Hedging Instrument | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Change in fair value of derivative contracts | $ (5,800) | $ 0 |
Available for Sale Debt Secur_3
Available for Sale Debt Securities - Summary of Available for Sale Debt Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | $ 125,121 | $ 125,121 |
Unrealized gains | 65,833 | 6,159 |
Fair Value | 190,954 | 131,280 |
Available for sale debt securities, current | 28,500 | 0 |
Available for sale debt securities, noncurrent | 162,454 | 131,280 |
Preferred Shares | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | 125,121 | 125,121 |
Unrealized gains | 65,833 | 6,159 |
Fair Value | $ 190,954 | $ 131,280 |
Available for Sale Debt Secur_4
Available for Sale Debt Securities - Narrative (Details) - USD ($) | Apr. 05, 2019 | Feb. 29, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||||
Purchase of available for sale debt securities | $ 125,000,000 | $ 0 | $ 125,117,000 | |
Preferred Shares | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Number of shares purchased (in shares) | 2,495 | |||
Price per share (in USD per share) | $ 50,100 | |||
Additional issuance, purchase price, maximum | $ 75,000,000 | |||
Additional issuance, purchase price, minimum | $ 25,000,000 | |||
Redemption price, percentage | 200.00% | |||
Redemption default, interest rate | 18.00% | |||
Redemption default, threshold period | 1 year | |||
Percentage redeemed | 200.00% | |||
Preferred Shares | Redemption, Period One | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Redemption price, percentage | 150.00% | |||
Preferred Shares | Redemption, Period One | Maximum | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Redemption price, percentage | 200.00% | |||
Preferred Shares | Redemption, Period Two | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Redemption price, percentage | 200.00% | |||
Preferred Shares | Redemption, Period Three | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Redemption price, percentage | 120.00% | |||
Preferred Shares | Redemption, Period Four | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Redemption price, percentage | 200.00% |
Financial Royalty Assets, Net -
Financial Royalty Assets, Net - Summary of Financial Royalty Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | $ 12,890,243 | $ 12,163,030 |
Cumulative allowance for changes in expected cash flows | (892,061) | |
Net carrying value, before cumulative allowance for credit losses | 11,998,182 | |
Cumulative allowance for credit losses | (301,388) | |
Cumulative allowance for changes in expected cash flows | (1,193,449) | (868,418) |
Net carrying value | 11,696,794 | 11,294,612 |
Cystic fibrosis franchise | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 4,692,567 | 4,639,045 |
Cumulative allowance for changes in expected cash flows | (98,381) | |
Net carrying value, before cumulative allowance for credit losses | 4,594,186 | |
Cumulative allowance for changes in expected cash flows | 0 | |
Net carrying value | 4,639,045 | |
Tysabri | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 2,065,179 | 2,131,272 |
Cumulative allowance for changes in expected cash flows | (34,353) | |
Net carrying value, before cumulative allowance for credit losses | 2,030,826 | |
Cumulative allowance for changes in expected cash flows | (71,789) | |
Net carrying value | 2,059,483 | |
Imbruvica | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 1,368,322 | 1,332,077 |
Cumulative allowance for changes in expected cash flows | (31,543) | |
Net carrying value, before cumulative allowance for credit losses | 1,336,779 | |
Cumulative allowance for changes in expected cash flows | 0 | |
Net carrying value | 1,332,077 | |
Xtandi | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 1,174,247 | 1,193,918 |
Cumulative allowance for changes in expected cash flows | (219,405) | |
Net carrying value, before cumulative allowance for credit losses | 954,842 | |
Cumulative allowance for changes in expected cash flows | (332,624) | |
Net carrying value | 861,294 | |
Promacta | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 740,543 | 776,555 |
Cumulative allowance for changes in expected cash flows | (8,924) | |
Net carrying value, before cumulative allowance for credit losses | 731,619 | |
Cumulative allowance for changes in expected cash flows | 0 | |
Net carrying value | 776,555 | |
Tazverik | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 346,902 | |
Cumulative allowance for changes in expected cash flows | 0 | |
Net carrying value, before cumulative allowance for credit losses | 346,902 | |
Crysvita | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 321,234 | |
Cumulative allowance for changes in expected cash flows | 0 | |
Net carrying value | 321,234 | |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross carrying value | 2,502,483 | 1,768,929 |
Cumulative allowance for changes in expected cash flows | (499,455) | |
Net carrying value, before cumulative allowance for credit losses | $ 2,003,028 | |
Cumulative allowance for changes in expected cash flows | (464,005) | |
Net carrying value | $ 1,304,924 |
Financial Royalty Assets, Net_2
Financial Royalty Assets, Net - Narrative (Details) - Cystic fibrosis franchise - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Nov. 30, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reduction in financial royalty assets | $ 41 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected reduction in royalty receipts | $ 35 | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Expected reduction in royalty receipts | $ 45 |
Cumulative Allowance for Chan_3
Cumulative Allowance for Changes in Expected Cash Flows from Financial Royalty Assets - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Accounting standards update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||
Shareholders' equity | $ 9,394,961 | $ 7,162,693 | $ 6,141,438 | $ 4,653,214 | $ 4,705,337 | $ 4,552,079 |
Retained Earnings | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Shareholders' equity | $ 1,571,399 | $ 2,561,971 | 2,825,212 | $ 1,339,061 | $ 1,385,728 | $ 1,215,953 |
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Shareholders' equity | (192,705) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Shareholders' equity | $ (192,705) |
Cumulative Allowance for Chan_4
Cumulative Allowance for Changes in Expected Cash Flows from Financial Royalty Assets - Schedule of Cumulative Allowance for Changes in Expected Cash Flows (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Beginning balance | $ (868,418) |
Increases to the cumulative allowance for changes in expected cash flows from financial royalty assets | (289,587) |
Decreases to the cumulative allowance for changes in expected cash flows from financial royalty assets | 262,980 |
Reversal of cumulative allowance | 2,964 |
Current period provision for credit losses | (108,683) |
Ending balance | (1,193,449) |
Cumulative Effect, Period of Adoption, Adjustment | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Beginning balance | $ (192,705) |
Intangible Royalty Assets, Ne_2
Intangible Royalty Assets, Net - Schedule of Intangible Royalty Interests (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 606,216 | $ 606,216 |
Accumulated amortization | 565,958 | 554,492 |
Net carrying value | 40,258 | 51,724 |
DPP-IV Inhibitors | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 606,216 | 606,216 |
Accumulated amortization | 565,958 | 554,492 |
Net carrying value | $ 40,258 | $ 51,724 |
Intangible Royalty Assets, Ne_3
Intangible Royalty Assets, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue Benchmark | Individual Licensees Concentration List | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Individual licensees exceeding 10% or more of revenue (as a percent) | 96.00% | 92.00% | 95.00% | 91.00% |
DPP-IV Inhibitors | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite lived intangible assets, useful life | 1 year 9 months | |||
Projected amortization expense, 2020 | $ 11.6 | $ 11.6 | ||
Projected amortization expense, 2021 | 23 | 23 | ||
Projected amortization expense, 2022 | $ 5.7 | $ 5.7 |
Non-Consolidated Affiliates (De
Non-Consolidated Affiliates (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Feb. 11, 2020 | May 31, 2018 | Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Investments in non-consolidated affiliates | $ 124,061 | $ 430,296 | $ 430,296 | |||||
Distributions from non-consolidated affiliates | 15,084 | $ 0 | ||||||
Equity in income (loss) of non-consolidated affiliates | 29,292 | $ (8,144) | 20,218 | (13,673) | ||||
Distributions from non-consolidated affiliates | 31,840 | 14,059 | ||||||
Avillion II | Merck Asset - Phase II Clinical Trial | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Other commitment | 19,000 | 19,000 | $ 15,000 | |||||
Other commitments, percentage of costs (as a percent) | 50.00% | |||||||
Increase in funding commitment | 4,000 | |||||||
Avillion II | AZ Asset - Phase II and Phase III Clinical Trial | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Other commitment | $ 105,000 | |||||||
Other commitments, percentage of costs (as a percent) | 44.00% | |||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Legacy Investors Partnerships | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Investments in non-consolidated affiliates | $ 303,700 | |||||||
Distributions from non-consolidated affiliates | 5,300 | 12,200 | ||||||
Equity in income (loss) of non-consolidated affiliates | 20,200 | 23,400 | ||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Avillion I | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributions from non-consolidated affiliates | 13,400 | $ 14,100 | ||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Avillion II | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributions from non-consolidated affiliates | 21,300 | |||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Avillion Entities | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity method investment, unfunded commitments | $ 70,800 | $ 41,500 | $ 41,500 |
Research and Development Fund_2
Research and Development Funding Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development funding expense | $ 5,776 | $ 21,457 | $ 13,415 | $ 44,448 |
Funding Agreements With Sanofi | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development funding expense | 5,300 | 3,100 | 12,400 | 7,100 |
Remaining commitment for R&D funding agreement | $ 21,000 | $ 21,000 | ||
Funding Agreements With Pfizer | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development funding expense | $ 17,800 | $ 36,300 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - Senior Secured Debt | Feb. 11, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($)partnership |
RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 3,200,000,000 | $ 3,120,000,000 | |
RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.50% | 1.50% | |
RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 2,840,000,000 | $ 2,825,800,000 | |
RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.75% | 1.75% | |
RPI Intermediate FT Senior Secured Credit Facilities | |||
Debt Instrument [Line Items] | |||
Maximum consolidated leverage ratio | 4 | ||
Maximum consolidated leverage ratio following qualifying material acquisition | 4.50 | ||
Minimum consolidated coverage ratio | 2.50 | ||
RPIFT Senior Secured Credit Facilities | |||
Debt Instrument [Line Items] | |||
Number of instruments held | partnership | 2 | ||
Collateral as a percentage of the collection trust account | 80.00% | ||
Maximum total leverage ratio | 4 | ||
Minimum debt coverage ratio | 3.50 | ||
RPIFT Senior Secured Credit Facilities - Tranche A-4 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 2,150,000,000 | ||
Amortization rate (percentage) | 5.90% | ||
RPIFT Senior Secured Credit Facilities - Tranche A-4 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.50% | ||
RPIFT Senior Secured Credit Facilities - Tranche B-6 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 4,123,000,000 | ||
Amortization rate (percentage) | 3.20% | ||
RPIFT Senior Secured Credit Facilities - Tranche B-6 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 2.00% |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) | Feb. 11, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Less: Current portion of long-term debt | $ (182,226,000) | $ (281,984,000) | |
Total long-term debt | 5,729,622,000 | 5,956,138,000 | |
Senior Secured Debt | |||
Debt Instrument [Line Items] | |||
Loan issuance costs | (3,929,000) | (1,691,000) | |
Original issue discount | (30,023,000) | (33,187,000) | |
Total value of senior secured debt | 5,911,848,000 | 6,238,122,000 | |
Less: Current portion of long-term debt | (182,226,000) | (281,984,000) | |
Total long-term debt | 5,729,622,000 | 5,956,138,000 | |
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 3,200,000,000 | $ 3,120,000,000 | |
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.50% | 1.50% | |
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 2,840,000,000 | $ 2,825,800,000 | |
Senior Secured Debt | RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.75% | 1.75% | |
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 4,123,000,000 | ||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche B-6 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 2.00% | ||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | |||
Debt Instrument [Line Items] | |||
New line of credit facility | $ 2,150,000,000 | ||
Senior Secured Debt | RPIFT Senior Secured Credit Facilities - Tranche A-4 | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percentage) | 1.50% |
Borrowings - Schedule of Repaym
Borrowings - Schedule of Repayments of Debt by Year (Details) - Senior Secured Debt - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Loan issuance costs | $ 3,929 | $ 1,691 |
Original issue discount | 30,023 | $ 33,187 |
RPI Intermediate FT Senior Secured Credit Facilities - Tranche A-1 | ||
Debt Instrument [Line Items] | ||
Remainder of 2020 | 80,000 | |
2021 | 160,000 | |
2022 | 160,000 | |
2023 | 160,000 | |
2024 | 160,000 | |
Thereafter | 2,400,000 | |
Long-term debt, gross | 3,120,000 | |
RPI Intermediate FT Senior Secured Credit Facilities - Tranche B-1 | ||
Debt Instrument [Line Items] | ||
Remainder of 2020 | 14,200 | |
2021 | 28,400 | |
2022 | 28,400 | |
2023 | 28,400 | |
2024 | 28,400 | |
Thereafter | 2,698,000 | |
Long-term debt, gross | 2,825,800 | |
RPI Intermediate FT Senior Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Remainder of 2020 | 94,200 | |
2021 | 188,400 | |
2022 | 188,400 | |
2023 | 188,400 | |
2024 | 188,400 | |
Thereafter | 5,098,000 | |
Long-term debt, gross | 5,945,800 | |
Loan issuance costs | 3,900 | |
Original issue discount | $ 30,000 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) | Jun. 18, 2020director$ / sharesshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020€ / sharesshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Mar. 31, 2020shares | Dec. 31, 2019shares |
Class of Stock [Line Items] | ||||||||
Share based compensation | $ | $ 3,700,000 | $ 0 | $ 3,700,000 | $ 0 | ||||
Deferred Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Shares, outstanding (in shares) | 294,175,555 | 294,175,555 | 294,175,555 | 0 | 0 | |||
Restricted Stock Units (RSUs) | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted stock granted during period (in shares) | 71,430 | 39,000 | ||||||
Restricted stock units, grant date fair value (in dollars per share) | $ / shares | $ 50.90 | |||||||
Number of directors who received RSUs | director | 2 | |||||||
Common Class A | ||||||||
Class of Stock [Line Items] | ||||||||
Common shares outstanding | 365,899,235 | 365,899,235 | 365,899,235 | 0 | ||||
Shares issued | 365,899,000 | 365,899,000 | 365,899,000 | 0 | ||||
Common Class A | 2020 Equity Incentive Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | 800,000 | 800,000 | 800,000 | |||||
Common Class B | ||||||||
Class of Stock [Line Items] | ||||||||
Common shares outstanding | 241,207,425 | 241,207,425 | 241,207,425 | 0 | ||||
Shares issued | 241,207,000 | 241,207,000 | 241,207,000 | 0 | ||||
Class R Redeemable Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common shares outstanding | 50,000 | 50,000 | 50,000 | 0 | ||||
Shares issued | 50,000 | 50,000 | 50,000 | 0 | ||||
Shares, outstanding (in shares) | 50,000 | 50,000 | 50,000 | |||||
Redeemable stock, redemption price (in euros per share) | € / shares | € 1 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Noncontrolling Interests (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 17, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 17, 2020 | Jun. 30, 2019 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Beginning balance | $ 7,162,693 | $ 7,162,693 | $ 4,705,337 | $ 6,141,438 | $ 6,141,438 | $ 4,552,079 | |
Contributions | 6,691 | 1,447,965 | |||||
Transfer of interests | 0 | ||||||
Distributions | (296,483) | (233,533) | (689,684) | (475,629) | |||
Net income (loss) | $ 86,187 | 601,976 | 515,789 | 178,770 | 711,072 | 624,885 | 574,864 |
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | (1) | (1) | |||||
Issuance of Class A shares sold in initial public offering, net of offering costs | 1,909,332 | 1,909,332 | |||||
Change in unrealized movement on available for sale debt securities | 6,949 | 2,939 | 59,674 | 2,939 | |||
Ending balance | $ 9,394,961 | $ 9,394,961 | 4,653,214 | $ 9,394,961 | 4,653,214 | ||
RP Holdings | Continuing Investors Partnerships | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Noncontrolling interest (percentage) | 40.00% | 40.00% | 40.00% | ||||
Non-Controlling Interest | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Beginning balance | $ 2,002,775 | 2,002,775 | 48,088 | $ 35,883 | 35,883 | 63,865 | |
Contributions | 6,691 | 1,140,319 | |||||
Transfer of interests | 1,037,161 | ||||||
Distributions | (124,851) | (35,153) | (376,276) | (79,580) | |||
Net income (loss) | $ 52,715 | 107,187 | 27,057 | 145,043 | 55,707 | ||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | 2,433,098 | 2,433,098 | |||||
Issuance of Class A shares sold in initial public offering, net of offering costs | 758,590 | 758,590 | |||||
Change in unrealized movement on available for sale debt securities | 1,624 | 11,296 | |||||
Ending balance | 5,237,829 | 5,237,829 | $ 39,992 | 5,237,829 | $ 39,992 | ||
Non-Controlling Interest | RPSFT | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Beginning balance | 31,563 | 31,563 | 35,883 | 35,883 | |||
Distributions | (25,270) | (54,516) | |||||
Net income (loss) | 3,400 | 17,225 | 42,151 | ||||
Ending balance | 26,918 | 26,918 | 26,918 | ||||
Non-Controlling Interest | Legacy Investors Partnerships | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Beginning balance | 1,971,212 | 1,971,212 | 0 | 0 | |||
Contributions | 6,691 | 1,140,319 | |||||
Transfer of interests | 1,037,161 | ||||||
Distributions | (99,581) | (321,760) | |||||
Net income (loss) | 17,755 | 89,962 | 102,892 | ||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | (750) | (750) | |||||
Change in unrealized movement on available for sale debt securities | 1,222 | 10,894 | |||||
Ending balance | 1,986,511 | 1,986,511 | 1,986,511 | ||||
Non-Controlling Interest | Continuing Investors Partnerships | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Beginning balance | 0 | 0 | 0 | 0 | |||
Distributions | 0 | 0 | |||||
Net income (loss) | 31,560 | ||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | 2,433,848 | 2,433,848 | |||||
Issuance of Class A shares sold in initial public offering, net of offering costs | 758,590 | 758,590 | |||||
Change in unrealized movement on available for sale debt securities | 402 | 402 | |||||
Ending balance | 3,224,400 | 3,224,400 | 3,224,400 | ||||
Non-Controlling Interest | EPA Holdings | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||||
Beginning balance | 0 | $ 0 | 0 | $ 0 | |||
Ending balance | $ 0 | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 17, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 17, 2020 | Jun. 30, 2019 | |
Numerator | ||||||||
Net income (loss) | $ 86,187 | $ 601,976 | $ 515,789 | $ 178,770 | $ 711,072 | $ 624,885 | $ 574,864 | |
Less: net income attributable to Continuing Investors Partnerships prior to the offering | 408,602 | 479,842 | ||||||
Less: net income attributable to non-controlling interest | 159,902 | $ 27,057 | 197,758 | $ 55,707 | ||||
Net income attributable to Royalty Pharma plc | $ 33,472 | $ 33,472 | ||||||
Denominator | ||||||||
Basic (in shares) | [1] | 353,979,000 | 353,979,000 | |||||
Basic (in dollars per share) | [1] | $ 0.09 | $ 0.09 | |||||
Numerator | ||||||||
Net income attributable to Royalty Pharma plc | $ 33,472 | $ 33,472 | ||||||
Denominator | ||||||||
Dilutive effect of unvested restricted units (in shares) | 1,000 | 1,000 | ||||||
Diluted (in shares) | [1] | 353,980,000 | 353,980,000 | |||||
Diluted (in dollars per share) | [1] | $ 0.09 | $ 0.09 | |||||
Common Class A | ||||||||
Denominator | ||||||||
Diluted (in shares) | 607,100,000 | |||||||
Class B Holders | ||||||||
Numerator | ||||||||
Less: net income attributable to non-controlling interest | $ 31,560 | $ 31,560 | ||||||
Legacy Investors Partnerships and RPSFT | ||||||||
Numerator | ||||||||
Less: net income attributable to non-controlling interest | $ 128,342 | $ 166,198 | ||||||
[1] | Represents earnings per share of Class A ordinary shares and weighted-average Class A ordinary shares outstanding for the period from June 16, 2020 through June 30, 2020, the period following our initial public offering (see Note 13). |
Indirect Cash Flow (Details)
Indirect Cash Flow (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 17, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 17, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||||||||
Net income (loss) | $ 86,187 | $ 601,976 | $ 515,789 | $ 178,770 | $ 711,072 | $ 624,885 | $ 574,864 | |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||||||
Provision for changes in expected cash flows from financial royalty assets | 47,278 | 72,210 | 135,290 | 22,177 | ||||
Amortization of intangible assets | 5,733 | 5,733 | 11,466 | 12,332 | ||||
Amortization of loan issuance and discount on long-term debt | 4,340 | 5,964 | ||||||
Unrealized loss on derivative contracts | 32,798 | 65,254 | ||||||
Unrealized gain on equity securities | (193,895) | 36,800 | (40,729) | (16,944) | ||||
Equity in (earnings)/loss of non-consolidated affiliates | $ (29,292) | $ 8,144 | (20,218) | 13,673 | ||||
Distributions from non-consolidated affiliates | 31,840 | 14,059 | ||||||
Loss on extinguishment of debt | 5,405 | 0 | ||||||
Share based compensation | 3,740 | 0 | ||||||
Other | 3,398 | 289 | ||||||
(Increase)/decrease in operating assets: | ||||||||
Financial royalty assets | (937,021) | (799,161) | ||||||
Cash collected on financial royalty assets | 1,003,504 | 895,150 | ||||||
Available for sale debt securities | 0 | (150,000) | ||||||
Accrued royalty receivable | 1,218 | (600) | ||||||
Other receivables | 0 | 150,000 | ||||||
Other royalty income receivable | 2,094 | 5,670 | ||||||
Other current assets | (12,634) | 4,171 | ||||||
Other assets | 45,635 | (26,352) | ||||||
Increase/(decrease) in operating liabilities: | ||||||||
Accounts payable and accrued expenses | 13,862 | (769) | ||||||
Derivative financial instruments | (34,952) | 0 | ||||||
Net cash provided by operating activities | 960,108 | 769,777 | ||||||
Supplemental schedule of non-cash investing / financing activities: | ||||||||
Contribution of investment in Legacy Investors Partnerships | [1] | 303,679 | 0 | |||||
Settlement of Epizyme forward purchase contract | [2] | 5,700 | 0 | |||||
Accrued purchase obligation - Tazverik | [3] | 220,000 | 0 | |||||
Repayments of long-term debt by contributions from non-controlling interest | [4] | 1,103,774 | 0 | |||||
Accrued purchase obligation | 1,610 | 0 | ||||||
Accrued capitalized offering costs | [5] | $ 8,897 | $ 0 | |||||
[1] | See Note 9 | |||||||
[2] | See Note 4 | |||||||
[3] | See Note 17 | |||||||
[4] | Related to the pro rata portion of RPIFT's outstanding debt repaid by the Legacy Investors Partnerships | |||||||
[5] | Related to capitalized offering costs incurred in connection with our IPO that have not been paid |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Reclassifications to income | $ 4,066 |
Activity for the period | 48,378 |
Reclassifications to NCI | (24,022) |
Unrealized gain/(loss) on available for sale debt securities | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | 6,159 |
Reclassifications to income | 0 |
Activity for the period | 48,378 |
Reclassifications to NCI | (24,022) |
Ending balance | 30,515 |
Unrealized gain/(loss) on interest rate swaps | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | (4,066) |
Reclassifications to income | 4,066 |
Activity for the period | 0 |
Reclassifications to NCI | 0 |
Ending balance | 0 |
Total Accumulated Other Comprehensive Income/(Loss) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | 2,093 |
Ending balance | $ 30,515 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Dec. 08, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Nov. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||||||||||
Royalty distribution payable to affiliates | $ 122,771 | $ 122,771 | $ 31,041 | |||||||
Investments in non-consolidated affiliates | 430,296 | 430,296 | 124,061 | |||||||
Financial royalty asset, net | 11,696,794 | 11,696,794 | 11,294,612 | |||||||
Purchase of treasury interests | $ (1,901) | $ (4,228) | ||||||||
Shareholders' equity | 9,394,961 | 4,653,214 | 9,394,961 | 4,653,214 | 6,141,438 | $ 7,162,693 | $ 4,705,337 | $ 4,552,079 | ||
Equity Investment In Epizyme Inc. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Investments in non-consolidated affiliates | $ 100,000 | |||||||||
Treasury Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Purchase of treasury interests | (1,901) | (4,228) | ||||||||
Effect of exchange by Continuing Investors of Class B shares for Class A shares and reallocation of historical equity | 2,100 | |||||||||
Shareholders' equity | (2,119) | (4,228) | (2,119) | (4,228) | (4,266) | 4,266 | (2,327) | 0 | ||
Non-Controlling Interest | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Shareholders' equity | 5,237,829 | 39,992 | $ 5,237,829 | 39,992 | 35,883 | $ 2,002,775 | $ 48,088 | $ 63,865 | ||
The Manager | Former Operating and Personnel Payments | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Increase in quarterly installment payments (as a percent) | 5.00% | |||||||||
Operating and personnel payments incurred | $ 15,000 | $ 30,000 | ||||||||
The Manager | Operating and Personnel Payments | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Increase in quarterly installment payments (as a percent) | 5.00% | |||||||||
Operating and personnel payments incurred | $ 27,600 | $ 47,300 | ||||||||
Quarterly payments to affiliates, percent of adjusted cash receipts (as a percent) | 6.50% | 6.50% | ||||||||
Quarterly payments to affiliates, percent of security investment (as a percent) | 0.25% | 0.25% | ||||||||
Affiliated Entity | Royalty Distribution Payable to RPI Intermediate FT | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Royalty distribution payable to affiliates | $ 96,200 | $ 96,200 | ||||||||
Affiliated Entity | Royalty Distribution Payable to RP Select Finance Trust | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Royalty distribution payable to affiliates | 26,600 | 26,600 | ||||||||
Affiliated Entity | Assignment Agreement - Benefit of Payment Stream | Bristol-Myers Squibb | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party, rate (as a percent) | 50.00% | |||||||||
Affiliated Entity | Assignment Agreement - Funding Obligations | Bristol-Myers Squibb | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party, rate (as a percent) | 50.00% | |||||||||
Financial royalty asset, net | 159,600 | 159,600 | $ 150,300 | |||||||
Cumulative funding amount | 162,400 | $ 162,400 | ||||||||
Affiliated Entity | Acquisition Of Limited Partnership Interests In Affiliate | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of limited partnership interest acquired (in shares) | 27,210 | |||||||||
Pablo Legorreta | Purchasing And Donating Ventilators | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amount paid to CEO | $ 1,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Millions, $ in Millions | Jan. 21, 2019EUR (€) | Nov. 30, 2021USD ($) | Nov. 30, 2020USD ($) | Jan. 31, 2020USD ($) | Nov. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2015EUR (€) |
Purchase Of Eisai Royalties | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Payment for purchase of royalties | $ 330 | ||||||
Purchase commitment, upfront payment | $ 110 | ||||||
Purchase commitment, additional payments | $ 220 | $ 110 | |||||
Refund For Overpayment Of Royalties | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Estimated overpayment of royalties | € | € 7.7 | ||||||
Damages sought | € | € 23.1 | ||||||
Forecast | Purchase Of Eisai Royalties | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Purchase commitment, additional payments | $ 110 | $ 110 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Subsequent Event [Line Items] | ||||
Upfront payment for financial royalty assets | $ 574,620 | $ 1,231,736 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Upfront payment for financial royalty assets | $ 650,000 | |||
Subsequent Event | Funding Agreement With Biohaven Pharmaceuticals | ||||
Subsequent Event [Line Items] | ||||
Payment for purchase of royalties | $ 450,000 | |||
Purchase commitment, upfront payment | 150,000 | |||
Purchase commitment, additional payments | 100,000 | |||
Purchase commitment, purchase of committed, non-contingent Commercial Launch Preferred Equity payable | $ 200,000 |
Uncategorized Items - rprx-2020
Label | Element | Value |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ 408,602,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 479,842,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ 33,472,000 |