RPRX - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma Second Quarter 2020 Earnings Conference Call. I would now like to turn the call over to George Grofik, Senior Vice President, Head of Investor Relations and Communications. Please go ahead, sir.

George Grofik

Thank you, operator, and good morning and good afternoon to everyone on the call. us Royalty joining results. second for you to Pharma's review quarter Thank

X, to can this in known website unknown of slide to the this at would on On description You statements slides and page S-X, results call call contains of find that slide information you remind SEC I that refer materially. the uncertainties forward-looking Investors royaltypharma.com. I other presented like involve and differ the With factors. factors risks, risk X. with to these that Prospectus our that to for to file may a cause actual advance on our you please

financials. we Chief like are; Officer; Chris concluding Vice the join will discuss Officer. highlights the acquisitions. speakers after Lloyd the Research will I'd update session. remarks Pablo of review the session. to over and SVP, key Our call Q&A turn which And after the a recent also an Q&A Founder EVP, and Pablo, the With from Hite, and Investments; provide Pablo hold George Marshall call Marshall that, Financial Urist, Royalty on Chief will then to Chairman Terry Executive Pablo. today will and on quarter our will Coyne, Legorreta, Terry

Pablo Legorreta

approvals. financial expanded to double-digit successful and landmark as It’s and for our what next results you, Thank a the XXXX had raising bottom-line. adjusted we top regulatory same George. time, Royalty execute view us strong and renew on adjusted first as billion open truly phase Meanwhile, Pharma, well $X.X proceeds, our cash has continue growth positioning earnings very and we deliver year me At call we a important transactions been to portfolio of IPO a excellent in flow to pleasure royalty to our for company. growth. cash a net which our public receipts with

Bassler, governance Cathy and with of the Love. Engelbert, strengthened Board Bonnie Fernandez Ted appointments our Lastly, corporate we Henry

the appointees well our financial, huge strong important Their four to leadership. position choice of amount as IPO a Board our for major step build a of bring expertise continue be slide logical the scientific was as ecosystem. the Our On Royalty as funding of to we will R&D sciences new a as business life in and the the partner really Pharma for milestone X, business. across and guidance innovation next evolution

life important equity IPO as mission by Our to funder tools sciences be be provided well is of in markets our the will as mission. in the deepest the to the capital leading innovation and access

have now front, over In report am proud our receipts speaks taking in industry. extraordinary growth biopharma cash of tell some over a continue base magnitude growth XX% on flow. XX% to unique the to addition, as the I we adjusted cash with adjusted now on grow place acquisitions. exciting and earnings growth quarter in innovation the much we within mentioned as And call Marshall up financial strong performance. I us deliver will to about see of slide type broader you first our to X shareholder ecosystem as to to I recent you our time. currently the position with second in hand of well This growth

Marshall Urist

IPO deploy acquire term royalty. to over said slide of and to as our XX that you, On expected we capital at Thank of $X.X around longer per year afternoon everyone. time good may the Pablo, new morning the and to on we you billion good average recall,

deals Biohaven. of ranging transactions unique further in XXXX, the shown by IDHIFA for So These invest power most migraine the our model. have agreements risdiplam, for across collaboration truly two and announced the transactions are shows of are Royalty royalty already figure. which virology was billion Pharma and represented to Prevymis with investment from areas. four million new therapeutic far ability the that here, There in deals we this products transactions. two two and Most exceed is expanding $X.X to unique reflecting Biohaven The disease distinct recent to rare all cancer are with to our up from $XXX our

are we zavegepant. royalties additional million investing First, Nurtec to $XXX for up in and on royalty exchange

on payments We approvals are following also of eligible the funding zavegepant up times times of amount including in to X.X migraine. zavegepant regulatory to multiple of receive regulatory milestone approval a X.XX

true can by provide patients $XXX SMA its large commercial made option. oral With Biohaven Second, disease XXXX investment exciting is example we Royalty in in flexible believe efforts between collaboration. commercial preferred the will creating them important accelerate transaction effective of serve for investing win-win the launch that Nurtec. million giving and XXXX We a great creative are solution to for $XXX launch a this a for providing product with devastating funding that we million equity a partners Risdiplam, Pharma this an need an

this As may seen name on broad the you Friday product Evrysdi. approved with brand was given a and label have

deep With each is commercial diversified who to medicine of the an scores excited long area Terry. a continue marketer and us will capable front our remain in and over of our on list to by We highly represents of that Now a these of the would need, deal-by-deal a potential has the product of and IP royalties key I of our opportunities acquisitions. attractive That unique of high pipeline is patient optimizing to in add into each believe protection. hand already motivated duration the portfolio. a each to for has differentiated I detail our we each transactions without on too in criteria basis, getting we transformative highlight look that

Terry Coyne

Marshall. Thanks,

XXXX Let's move to basis. up a had slide total pro XX. XX% with a strong on quarter receipts QX We compared to royalty forma

include franchise of quarter. cystic slide: Slide XX% five largest the products to collaboration. can related One cash our to receipts mention fibrosis on one-time double-digit the you this in chart, particular, and translated distribution adjusted each Avillion our this strong royalties shows million products $XX very to on franchises strong top grew flow XX quarter. Royalty our As how from see this our point other In growth. delivered

aware, in cash flow second breast As adjusted When adjusted $XX reflecting on interests. earlier which XXXX of is in per key from modest non-GAAP interest basis. in reflect of pro flow compared was QX this cash an basis. IPO million XX% $X.XX Net on you adjusted receipts, model. we highlighting improved share. are amounted X.X% pro financial forma professional forma or of Ibrance resulted deducting part XX% expenses. cash This in non-controlling XXXX. decreased business cost of a the costs R&D us view after adjuvant receipts Adjusted which is metric cancer right, as and $XX cash million distributions from our growth strong for our to debt a operating equated to completion year's move leverage and This quarter arrive year we cash of nearly last funding our bottom-line XX%, $XXX of our we of of to million to funding margin the given adjusted earnings left in a receipts quarter at refinancing $XXX the million to

and cash slide proceeds on by refinancing billion. largely billion acquisitions, with of of the to total ended Royalty that finished our including $X.X debt flow movements and rated is net just equating balanced cash quarter the distributions sheet billion. proceeds of of Other securities driven billion IPO balance with and marketable June I $X.X $X.X cash We we debt other XX, out. at investment-grade adjusted debt described Looking mainly $X.X

is Our X.X%. current interest expense approximately

adjusted times slide pleased X.X EBITDA XX, very plan. and to on of my X.X slide, leverage gross EBITDA provide net on positioned our execute basis we are final with On together on times guidance. a Taken full-year you adjusted XXXX business with we're to a basis, well

$X.XX receipts costs our We the of be are be expect adjusted expected cash receipts. of adjusted to billion billion in and XX% to operating approximately $X.XX to cash range

like and is this future to as after on would today into any back portfolio date that not I closing Pablo the account hand for release. Importantly, of take comments. announced this transactions based the to his does With call guidance of our

Pablo Legorreta

in against we and Thanks, Terry. this the I of to strategic all delivering how together plan context want are it. bring our

business As we diversify which duration growth, continuously three main extend our we streams a further revenues the plan through to sustain and have of reminder, our portfolio.

share we leading continue seek a which of acquisitions First, royalty for is to expertise. approved products, available of capture will to traditional area our

select target late-stage funding. deals development will we of Second, and terms both direct in of royalty clinical R&D opportunities

acquirers And by in to in M&A nonstrategic slide acquiring momentum. summarizes XX% adjusted acquiring help magnitude we in with and gain When to strategy. with our partnering deals XX% growth, against select delivering pleased royalties executing cash or Third, think receipts even these am are we growth or of are double-digit order participate This the outright flow. about adjusted the how particularly companies companies, instances in by fund we royalties. cash growth very new in will we I

products. growth to also portfolio continue are grow we add diversifying the confident of We royalty the with successfully described. that can acquisitions Marshall our course, we’re and And, additional

we on our fibrosis products XX XX% As receipts. royalties only total and of have of royalty cystic than greater today, than is one more namely royalty

business quite lines, bottom simple we our this which diversification on model, Given is true and top is our believe unique. both

average. we of of the around XX a our years, life portfolio have industry maintained weighted average well-above Lastly,

and billion negative lymphoma, breast of from Nurtec successfully a in is Tazverik as we well our cancer, new the result estimated acquisitions. as of in follicular triple XXXX XXXX. executing migraine, capital With through and what royalty strategy final deliver $X help On of in approvals to our Trodelvy plan slide, an this FDA my as deploying in

goal than a and cost around from of average in at grow our rate receipts X% target business returns X% royalty at cash of weighted We our transactions. duration Our capital half for of existing is from XX portfolio and compound half long-term years. with to over period excess maintaining while more new our the coming a adjusted between

to rating. funding that, at heart George. I in life Q&A. open as unique our Pharma golden excited the the expect was am XXXX. call to you I as like Based founded on XX% to With the cash of Royalty adjusted flow dividends of future pay back maintain investment sciences would our I to when business around credit today this to about grade quarterly age and with Back dividend outlook the We innovation, initial in beginning of I $X.XX an of of position the and

George Grofik

we Pablo, you will Operator, call first the your up the please question? now take Thanks to questions. could and open

Operator

Meacham Our Instructions] Geoff from Bank question first of [Operator America. comes of

Your open. line is

Geoff Meacham

And future IRR for does a some or for assumptions IRR? Marshall that. or seems an deals you I portfolio, Terry congrats Thanks how orphan future look subject of policy area? is therapeutic Just for is consideration there the I thoughts to had know questions. had on for well, but competition. fit couple your at changing guys. growth a It IPO. your successful implicit much of disruption Hey are to then One just faster you I separate for curious assets your the but deals? environment on the it model driven, discount question Obviously the guys. like Pablo, and as inform or Thanks wanted get if categories

Pablo Legorreta

Thank and to you, hear you. Geoff, good

in expect respect all in me first returns of and So we the some slightly are that returns. low very expectations that line they they double-digit the of And think cases you expectations the some able high-single we in transactions have of much for we the at let what the when exceeding XX%. products. unapproved have even to recent transactions this look And for question, remind return products are, are return north approved year, close transactions your approved you we've on at actually that digit with to I if been and look the you

very So those to those you remember attractive, returns to we unlevered are returns. also have believe be that because

the are when its aspects in just on million of that, different sort the about launch. And to goes mid you then Nurtec, the a zavegepant are with mid fixed you transactions clinical count that the with at we royalties agreement, and unapproved of return we look return funding $XXX multiple For the looking funding have we the of high start teens. at payments. the investments, particularly excess the again, that Biohaven are zavegepant, combine And we because which excited very high-teens when low-double-digit when announced in zavegepant well you of actually transaction that they see both recent will of we of negotiated to course strong you to the where

very this So past. with, strong significant is the we tailwinds in discussed I is very we and that are And seeing. the thing biotech I execution things the we've the one attractive other are of needs obviously have, industry the driving what that think actually very is very will last that the pleased things that, in capital say we

So, to over him it let additional for Marshall me now turn provide perspectives. to

Marshall Urist

good and Geoff. Yes. Thanks, Pablo, morning,

your therapeutic most innovative patients product the focus focus on Geoff Royalty our of So always been and fit question has to find the strategy area. us. therapeutic everything better, it's we for our basis. and or for each necessarily impactful therapeutic areas in there drugs that, for or certain product-by-product where to Pharma, approach fit won't invest, And We on are not don't fit a areas

there approaching to certainly to are won't we or But technology on it where might that short we feel too as areas, alluded are along Now, that where product-by-product a we be competitors choose there really, basis. you are cycles participate. coming

like side you is on going with durable that forward the – durable feel done mentioned, that to opportunities going have therapeutic our exciting areas. across have be We model products we orphan in really there competitive advantages deals orphan but the as fit

Geoff Meacham

Okay. guys. Thanks

Operator

you. Thank

Our from next JPMorgan. with question Schott comes Chris

Your is line open.

Chris Schott

much so Thanks the questions. Great. for

on straight this seeing, And impact, of is The that maybe that recent I we Is finance first evolving question using one the that the deal, deal the transactions? Pharma of complex are Royalty And or and from are something we are there that royalties Is of terms was some you Thanks to success on the to evolution about unique we the the for IPO creative like seems we Biohaven a ceiling Company? think more stock potential think saw something kind broader the is then leverage seeing much. to just historically transactions about it is so how of structures. look model? at second should does equity my an leverage. when

Pablo Legorreta

Thanks, Chris. your first part I question. of will take the

unlevered. But launch will launch to over of during and the our launch XX% significant place and is growth unique strong transaction, structuring. So transaction this structure, good the Biohaven day the with probably Royalty And years. us attractive real over for to six a look you with one heard preferred of you That portion commercial And end that decades of more I and years million that Nurtec us been very million, has stock structuring with has very things believe as IPO, the creative different around has something ability obviously in on four about The something roadshow that structure exciting at part investing where transactions. in deal the has we and by next actually are Pharma here for the the royalties. feel to be very that be transaction then you terms support fund the our payments attractive $XXX solve the the we then was driven through they needs in over had return really capital in products. purchasing a But at us recent again very at then, of really if $XXX unique matters happened really and here. a there, we strong a PPC our invest ours going to that's expectations look And like of of marketed beginning then, funding the Nurtec. exactly for is investment, companies. the risdiplam. put much other need the creative royalty the we fairly of And PPC next to what was if are of plain-vanilla partners of what at, it's we meaningful attractive just receive components, There the

so is address really can leverage. of critical needs think now the Terry we response that to and in end at I over partners our the turn attractive investments being for question it about your will on very I continue make a attractive And creative to So products.

Terry Coyne

Yes. Hi, Chris.

maintain a our terms that in priority So it's for to clear been very us we of leverage, investment-grade rating. have

time little the a but -- quarter we attractive there. at the And from when X of think above to times time EBITDA. need way to want the bit I to but we need very a to leverage we clear to path about go debt that have to total ceiling a when find asset, have from So to finished delevering can royalty -- think is X.Xx we sort we we

But from and delevering had we So path I go debt think to way times debt in from us time that raised like total the for around were is X cystic we to clear the fibrosis royalties order the the investment-grade at to to very think there. to buy a XXXX, the really rating. important And about EBITDA in maintain to ceiling time. time which

bit it So rating a And X they we agencies, a well. little did that history so the we that point. above take of with have policy it times long at understand

equity the about In is it using think of waterfall. sort way terms of a for acquisitions I to think

lower business generates I new sheet on so lot investment-grade debt think at would that And of is the equity. So adding do then than and investments. cash while additional is much our use that cost will going think a rating. of Because to that debt for still we look equity. thing then are And always last we first balance we the next of cash the maintaining the after the cost be component

we business years. for that it, managed way the think way we actually the of XX kind last that's So about the the

Chris Schott

Great, Thank very you. helpful.

Operator

you. Thank

comes next with Steve Cowen. from Our Scala question

Your line is open.

Steve Scala

don't on of is Roche deal gate. it to deal but Pharma. below will believe necessarily well first very We influences competitors view influences thought then a great more Royalty quarter be was we Roche's solid Thank which due But sales, the the risdiplam of responsibility. royalties. and for priced risdiplam higher, social congratulations out you, And a demand which

this not, does in your how expectations? And price internal your forecast? if line So was then change with the

Pablo Legorreta

Sure. you Marshall, Thank question? take you. that can

Marshall Urist

absolutely. good Yes Pablo, Thanks, and Steve. morning,

any royalty, comfortable we all to So those. your and at with to scenarios many specifically are specific especially be very not on to price, question many the given see deal. different of this transaction across -- obviously any many, on we variables different And pricing Whenever we look any like where one on at through and know don't variety approval across preapproval investment we have respect going Evrysdi come get a look our Friday. the that were volume into and with is of well assumptions we to happy of or price, the

would I both it and patients Pharma. for the that also say excited approval and So remain about we having potential then seeing now for very priced, Royalty Evrysdi this product of the about

Steve Scala

Thank Okay. you.

Operator

you. Thank

Truist Our with next Gilbert question from comes Securities. George

line Your open. is

Gregg Gilbert

Good from ask Thanks. It's Gregg team. I Gilbert will morning Truist. questions. two

wondering much how a the us sure government then and estimate private U.S. pay? down industry, capital potential that's scrutinized I the up lumpy, had individually to within think tailwinds just per your U.S. structure, partners pay on best could to different work? the parts do world. on And the billion curious year was My And if frame you is given your your and how of way these relative into rest you more. to I'm for capital potentially coming if that's kind are tempted period, that. days? the their just exposures us of system. deployment, partially an U.S. you to versus will momentum election $X.X do in with Thanks. see you average it about new on the just in than second you if what be see more share is I you your And will heading realize exposure versus comment that First, be question your but about not put to of a

Pablo Legorreta

question. you the for Terry, the answer please Thanks question? can

Terry Coyne

sure. Yes,

industry. feel think capital Gregg with. in $X We strong very billion, terms put years. one feel least out a the off I the $X the of So five way XXXX. very guidance number really We're a deployment and billion comfortable point. the in We start this to pipeline that next good in investing the That's tailwinds we about at of over

that. And assets the think around that are types more opportunities I think of invest looking the the in come to things guidance look really we look right of I is feel very would period. multi-year and the over quality important with then, and than of sort investments over at it is the billion $X a fit if investing at But have invest opportunities we we absolutely five years. to deployment that we comfortable capital though the we given way

or announced we guess U.S. the have have total the -- So U.S., of so while multi-years. the visibility of acquisitions, of product of D Tysabri, XXXX, terms be but levels exposure is between we D. look over our again perfect but Part is question would under point And into XX% do your we we Part we've fall always that really we I sort don't it within largest out then breakdown about the Medicare don't is invested of at payers. always I U.S. Medicare $X.X Tysabri best XX% Part perfect other then to royalties. our would that in or largest of don't we billion different And our have visibility know what there, D our think that and would

marketers. questions just for refer to of to I that probably best the think So those it's types

Gregg Gilbert

you. Thank

Operator

Thank you.

comes question Stanley. with next Risinger Morgan from Our David

open. is line Your

David Risinger

you. recent Thank well. announcements and Good morning deal Great. on the Pablo as and congrats team

two questions. So I have

Difficulty]? that And Royalty of there on Pharma's [Technical just potential So I of you be you. was Thank high such obviously discuss and lots the biotech ability Are environment return second uncover opportunities Any investment pricing the to helpful. sort for deals hoping current deals? opportunities. could underappreciated would color

Pablo Legorreta

Marshall maybe the take the you catch And David. can Marshall, it question? don't we of all know question? I having of did all trouble were Sure. if hearing

Marshall Urist

first didn't Yes, the I get question. David,

up. maybe for us. you question it if the second And then broke summarize You could

hearing actually we trouble had it I unfortunately. think

David Risinger

Is this any better? Okay. My apologies.

Pablo Legorreta

better. much It’s

David Risinger

Okay. Great.

to opportunities And unique you prices you. Royalty uncover the returns to ahead then respect speaking zavegepant, creative to deals generate respect could with pricing Pharma's biotech Thank just generally transactions with discuss high with ability So assets Could like that? characterize are environment opportunities? you Nurtec, underappreciated like current second, for to high.

Pablo Legorreta

Marshall.

Marshall Urist

Absolutely.

I question couple we So in and potential where our I'll optimistic just your script, the out all the points. of very there, Dave first environment forward. doing the has transactions as outlined traditional royalties both creative. as of us, we bit for in This that year royalty well a is the going the busy year future about said been are traditional pipeline very Biohaven Like as then on deals on we're see make both and things the little more a a terms opportunities and

past So we we on – in environment us. definitely exciting even second the opportunities strong very has has it your biotech been think that of a finding attractive environment over period of that several this Royalty then would obviously excuse successful years. that And been the the Pharma is I for over longer and are exciting maybe biopharma time point finding even part make, question me, second And opportunities. very

to So think portfolio. in successful continuing have expand types we across environments, of our those been think I I

solving are that trying question deals to lot opportunities think of to something differently. the that be creating strongly, of do future. we we many and in in creative The I creative to development in with say believe we second support relates for always of is core creative there would going We week. pipeline in that Biohaven – about creative strategy think And our that our our terms structuring think that we do announced of and a think your or to like solutions to one commercialization partners be part either ways win-win ways problems And kind and if I to absolutely. last

hopefully question. that answers So your

Pablo Legorreta

come scarcity David, of to biotech completely environment than coming for example while terms model lot biotech’s in financing a different development competitive doing that know assets, pharma, Because generally business equity quite maybe products a end companies, a I one are product. those from late-stage big very very might a in perspective up is angle that is just from be of portion very you significant referring which and big we in biotech’s, would or given a the M&A, a competitive with our for are different cases which will – perspective. and licensing doing in provide is we the their take the with approved as here cases, for with the attractive you dilutive than products can and late-stage what a products environment attractive a and also less huge, deal we economics additional of in many in a

for can So think very is maybe competitive, speaks do well strength the it us, model. is honestly expensive it where deploying in I our different of M&A even licensing and environment and how is to And still an extremely really at capital. we

David Risinger

thank Great, you.

Operator

you. Thank

Our comes next UBS. from Jacob with question Navin

open. line Your is

Navin Jacob

on expect over That the actually two times Hi, have four On going understand in helpful be a commentary color you secondly, to then levered. are deals you'd that, following to that months future rate that a is that also how just threshold Wondering your question over any that leverage yes, under for up on on to level on won't way sort be that's wanted that go times the you thinking giving and loath understanding any you we deals how many details on provide of if And the far should as pipeline I discussions very based run if of but ongoing you would is XX just is of there minimum on leverage. color level, we next about. a around kind will gross level. that net be can of six number a helpful. be is that sort but to go ceiling I many as brewing. understand there there above? net

Pablo Legorreta

questions, both you please? Sure. can answer Terry

Terry Coyne

Sure.

pursue So always Because we how are basis. that lower is but I We we've looked be our as we looked specific specifics in and it's think, deploy than us balance we imagine, And to given, leverage time. the at way net to going opportunities. on challenging terms much reasons, have have substantially agencies very your leverage. there. the to over to though and number capital at gross get the on of keep of you the number so volatility to on then, always pipeline, on net deploy obviously the the the net do can you don't right -- question look into volatile. second time number we for it's cash to sheet the a the a a rating as way at that that's gross competitive agencies we want is on given But, than the that's the always it it, leverage net target much go over lower can -- investment gross for yes, gross leverage, rating want more and basis, it obviously typically the We capital it's always pipeline. though But

We’re difficult We this only happy. like really feel discussions accelerated have environment. the very through

royalties think, as royalties on or I about to pipeline. finance be think a a their already royalties more lot companies themselves, synthetic continue creating they passive that way whether selling to it -- own or using

we're unpredictable sort good for obviously, So on actually us, we're when going feel transact quite of the really having, it's but about things. discussions we it's to

really more can't provide we so, unfortunately. there, And specifics much

Navin Jacob

much. so Thanks

Operator

next from the And from question you. Evercore. Umer Thank Raffat comes

open. Your line now is

Umer Raffat

economics Pharma specifically there're much specific little so some on so but, strengths like maybe, that Thanks feel issues. obvious and Royalty drugs of focusing very more Look, a onto for obvious questions. is the Hi. the a There's of business clear, taking model. very and lot breakthrough my I

SEC big specific possibility cystic are was, which risk think XXXX, know, you if not a fibrosis. of on I asked to color the And not? to And from why question ask duration very And was I is of possible the and royalties saying, was TAMs my Vertex very Trikafta? give post the us because you whether could LOE agreement on tied definitively specifically TAMs tagged First, the responded to debate or instead there's to the yes, components the of on it TAM. tied tagged

my the the performance. nature some it fact reflective And cash I expenses very the makes flows of GAAP secondly, one expected Gap]? that statement So most currency of not one is that to some and that alignment is of on of maybe the number Royalty on to Pharma when [Audio report for that's of current a a that envision being Terry. the the you get of Gap] But with change first. non-GAAP path GAAP EPS know [Audio Terry, And instead quarter income SEC this nature is, novel of sort is doesn't revenues reporting question able the business. probably

Terry Coyne

So, yes.

Sorry.

Pablo Legorreta

ahead, questions? Why take two don't Go Terry. the you

Terry Coyne

Yes.

I unfortunately, know repeat your second if hear my you Umer, didn't please? I don't question. Could line, but it was it, So,

Umer Raffat

cash Royalty exactly is the the GAAP statement problem. doesn't for way deals as No revenues large of question most are flows the two the GAAP that as all novel reflective course well in that basically the are the income accounted period line, of My accounted are change things the expected being was, including caps, constructed of Terry, way for performance. method OpEx routine not those for, still Pharma is fact business the there in current etc. in But

Terry, sort a path, number? of a EPS of could non-GAAP cash instead with is enables Royalty number whereby EPS report to alignment SEC, you envision Pharma some could question it get a my which So

Terry Coyne

sure. Okay,

on you first So product. an mentioned Vertex -- question LOE the on your for

based the very So, and patents are to I been not tied the think, on royalties we’ve contracts. that’s clear that

that. So to say I anything can not we don't really simply It's other think than patents. tied

then as royalties. sales get long are we will of are that as royalty-bearing So there products

these have we financials, because as think is really did of cash focus the the what a share second as that’s looks measures, we’re case of are we we cash show and to slide full to that’s the in get deck, the business. at expect are Trikafta, of that going to on per your through we reflective in performing think, most On measures. management what We performance royalties that we I those how And on are question on they continue XXXX. So our metric we’re well what on. think happy pointed to we with what and that focused

continue is statement income the these SEC, statement. as forward measures think GAAP GAAP to going As the we will that don't discussions going And as cash-based with we far I is income adjusted to anticipate change. well. And that, provide the

Umer Raffat

Thank you.

Operator

from you. Instructions] Sachs. comes from Flynn Goldman Thank Terence our And question [Operator next

now Your open. line is

Terence Flynn

X Congrats Phase I two well. thanks from IPO the an And readout, questions. Good morning. taking as for important guys guess, omecamtiv the get upcoming Hi. Obviously is me. there. on you royalties

at you what evolving drew then or you you. market to how the Just level how this all wondering stakes? equity And those is you your and second do those you you selling fit? speak part of do about you would about, ultimately talked a -- equity think about, how asset. see Is stakes. on, high divesting this Thank if structure stakes? And What this have returns-based, that the can this where that is are think about. creative Obviously,

Pablo Legorreta

you And Thank the on equity Marshall, first for answer can question. question stakes. Terry, the you the take you can question.

Marshall Urist

Good on morning Thanks question Terence. Hi. the omecamtiv. Sure. for

a at So acting I products that the sure we speaking developed novel exciting exciting in high markets from directly has to-date. level is are as as think looking unmet is on for, omecamtiv, perspective. failure, very need. a cardiac been always I'm in Nothing lot science, muscle of extremely And on one, patient there where you just know, science heart with a

unmet large of new that status think drug. a haven't need. lot we and have in multi-blockbuster is be a truly There a is so for are what an very is there And of could that or area that heart interesting. And of something failure a blockbuster support also can and and obviously classes failure heart been a and available lot does And exciting really differentiated drugs market to that today. complement

all for check those us. fall. forward we the are this of did boxes results it And So, to looking

Terry Coyne

at Terence. we we is, position, question the on, -- our are royalties. look way The similar on it invest to we how And in equity

view we on, focused value. intrinsic are what as We

exceeded approaching, view certainly if intrinsic would position then what an or And that so, we value at selling equity was that, as time. positions, we think those about

Operator

that Legorreta, our closing turn remarks. session for back question-and-answer over the for Thank I'd you. like Pablo conference to to concludes today. And

Pablo Legorretab

thank and sharing Pharma. team ecosystem. we Royalty your and a My the Thank for interest in on in everyone forward, public leadership life progress funding as unique with to future role look about we And company. as Sure. sciences, you, the our our our build Operator. call to you, innovation you And I are excited tremendously

today. any feel With free please we Thank to reach will questions, have out George. you you. conclude that, follow-up If the call to,

Operator

today's participating you This Ladies and the may And for program. gentlemen, now you disconnect. does conference. in thank conclude

Royalty Pharma (RPRX) 12 Aug 202020 Q2 Earnings call transcript