RPRX - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma Second Quarter 2021 Earnings Conference Call. I would now like to turn the call over to George Grofik, SVP, Head of Investor Relations and Communications. Please go ahead, sir.

George Grofik

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

can this website of to the at on You slides page call find the Investors royaltypharma.com. our

a information like to I that to statements refer of differ With XX-K may and description and our remind Moving cause I uncertainties known this on would you that, risks, the factors X, you contains to Slide involve SEC that risks. file materially. other advance presented unknown forward-looking actual in call to for to these with please that X. results Slide

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

Pablo Legorreta

second that the George, and in continued Pharma Royalty to report I call. our execute to strategy you, Thank well delighted welcome to the everyone am very against on quarter.

an issuance advantage. of strengthen We momentum year-to-date $X.X and with continue structure we billion, of to bottom deal competitive innovative strong our to We maintained transactions our despite bond double-digit capital growth completed exclusivity. deliver our expand line announced losses and

our over our prospects market you team. have we and cash bottom four adjusted be milestones competitive XX%. model of what financials to delivered in the spanning I we long-term guidance a With to cash over cash a strong we XXXX, have line market on acquisitions of In receipts XX% little to again detail. our light converted update adjusted raising Marshall based and our efficiency he over in the am sets where speak year. across flow position on And through since for XXXX. this X, The In our considered us X% more I innovative will to Royalty Royalty for puts guidance line to see funding of by to testament XX% great we you transactions, cash top continue have hand Royalty top-line grown momentum therapeutic our our for with strength to sustained our a portfolio. and performance hear back the you another and dynamics, rapidly and presentation, in excellent. adjusted business take position. we growing we an a be growth raised our and we're nine approach full-year together to quarter, our business X cash Slide bottom step On just XX year of second are Taken really a in in current deliver margin the the the out And position therapies. in for our adjusted can will and discusses IPO continued Jim as receipts announced course growth categories respectively. Slide June strong leadership business our this as billion that, particularly it have to period. a flow $X.X Terry year, when proud of speaks in achieved will as financial Meanwhile, our XXXX. These in

Jim Reddoch

Pablo, everyone. hello, Thank and you,

recently our have Slide XX, on seen acquired strong early of shown progress royalties. we As

slide, last we As since noticed the on IPO. $X.X deployed noted billion in our capital about -- as on

However, billion. since underlying of sales to the if around consensus And do while positively graphic royalties XXXX, beginning our the capital need our most underperforming. one returns, consensus reach our of time each right further on products recent and deployment only the the to to our we the with $X.X of very acquired not royalties. four is at acquisitions look encouraged consensus we targeted evolution The forecast and were a has to therapies the back outperform consensus here see evolved the deal little of we for shows Royalty outperforming estimates the

basis, relates And strength evaluate of medical areas hand breakthrough of royalties by pivot targeted we our it model agnostic, to midcap with royalties opportunity decade, to category through we over flow. While, it our a our trends. growing or potentially products that All each year had focus our therapeutic identify that last I'll speaks of is our business deals, type deliver as and rare portfolio we opportunity were we that, neurology. diseases, between and beginning royalty expected each and transaction, believe area at acquisitions at see existing deep next type unmet royalties. And MorphoSys case-by-case benefits well the competitive We at when important early we to and M&A quickly encouraged still with happening. look on days one-third to the to synthetic ability Pharma are divided and transformative the these added diligence of this Marshall. we definitely to due to two-thirds Slide since are XX therapies Royalty future can reminder, to the patient Around immunology acquisitions patients. high therapies enabling deal advantages so for significant our considerable are therapy for Through analyzes our we by XX% created need. been newly of unique where with category roughly and of generate areas new Royalty are of into Royalty innovations our balance a are portion a many these for the And is oncology, by where deal. a

Marshall Urist

Thank and afternoon to you, good Jim, and morning everyone.

our of have Let our opportunity. excited I'm in take want since that acquisitions of IPO me team to a acquire Pablo biggest which I echo public. this And Constellation now enabled Pharmaceuticals. MorphoSys to my that boldest minutes with Slide view since potential would at Royalty XX and was announced we time personal highlight provides transaction the a to highly busy as $X I and went described deliver what carefully tailored summary events. uniquely our we remains we with a the discuss new MorphoSys assessing transaction the very is funding and is up deal. scientific portfolio Pharma place to in just and a what transaction financial structure billion, technical, positioned the Royalty to couple upcoming a win-win to believe M&A add customized capabilities true in really about such of this

As upfront purchased a of billion and paid million MorphoSys to $XXX reminder, equity. we $X.XXX

attractive June approach up XXXX. of between we Phase agreed we rheumatoid on otilimab royalty an a GSK adjusted of Johnson. billion to Investor of by on development we outlook to towards sales opportunities data billion novel for to targeting Royalty provided end arthritis that pipeline. basis our rights event, to We At otilimab £X a peak under being Bonds. this, development $XXX four cash clinical, this, regulatory blockbuster and immunology receive will flow $XXX and provide Johnson marketed to stage in payments, Development Beyond leading streams to In we in Funding milestone royalty & Tremfya top the by commercial with in with to GMCSF cornerstone added On received six a return, non-risk million million expected note up £X a X GSK. the the

royalty. MorphoSys' a As XX% reminder, double-digit we acquired tiered of

and The cautiously Royalty data also favorable gantenerumab context clearly on optimistic portfolio. home deal, regulatory potentially broader which therapy upcoming upside as are rights we as a we the by is Since and environment this in the profile. potential at was the development best-in-class that offers Phase FDA approved indicating the liked well is Biogen's in for support agile Alzheimer's the the of MorphoSys more deal our for We opportunity receive Roche. will significant, X Alzheimer's, gantenerumab a announced therapies was

MorphoSys' of X% As to X.X% royalty. a acquired reminder we XX%

synthetic oncology Constellation, and created collaborative myelofibrosis is in being also mainly assessed assets on We CP-XXXX, which several setting. royalties two from for oncology

payment receive roughly risk will return XX% generate fixed profile and X.Xx Lastly, the mitigates on the of fixed IRR we're multiple Bonds. unlevered payments, Funding a Development which to These the entitled stable deal.

and breadth a ability XX the for execute a underscores role XX clinical of regulatory capabilities Our that forward. out the funding next our upcoming expected events months and business to sets are portfolio. XX major in complex as our unique our going see Slide transaction to such months which the we over opportunity M&A,

When the Phase potentially look for ulcerative zavegepant breast as particularly PTXXX Phase we in X in XXXX, very X and clinical well important for in we Looking out balance readouts, Trodelvy among readouts, X, several results for and Crohn's otilimab Alzheimer's, results colitis X HR we to in intranasal Tremfya gantenerumab as cancer. into for of positive in data pivotal arthritis XXXX, rheumatoid several results Gilead in the Biohaven's in asthma, others. AstraZeneca's results including migraine, have the trial Phase meaningful expect

of well regulatory development will of next to the add expansion NURTEC approved could to Turning in approaching I cancer, in And over our and regulatory prevention summary, of as FDA cash we're ODT significantly to these our outlook six the the Terry. and the positive, XX over a it portfolio. long-term support XX-year in decisions, Trodelvy In label milestones for Trikafta olds. hand if the migraine the that, in clinical With many flow. CF of adjusted include urothelial past to as quarter, to number continued to months

Terry Coyne

Thanks, Marshall.

royalties the receipts with our we Slide to quarter HIV from calls. cystic in Cabometyx. a XX. period were move Let's factors by addition drivers with from payments offset provided new than ago of decline Biohaven of Growth Royalty receipts consistent earnings included slightly quarter were These first more our franchise. together commentary largely in as on year such Total the ahead franchise the the and largest positive fibrosis Royalty XX%

quarter generally As largely cash reporting a adjusted dynamics performance Slide to you in in quarter. royalties next that the season. quarter. one recent shows rear have strong the quarter, seen in actual flow reverse many as receipts a are translated and will the biopharma softer reported first our from our reminder, Royalty These booked how second companies XX

at and noted as arrive quarter to deducting emtricitabine us, royalties we a amounted the a As key you're to from with with along interest fact from million adjusted X% earlier. similar equated quarter to minimis representing This aware, last is associated quarter; we the adjusted million due for line move declined X% interest. The in year's like receipts $X $XXX Truvada $XX costs XXXX incur did we compared the non-controlling When of of percentage products quarter after de ratio that to have exclusivity. interest larger NCI NCI Net in of a reflected growth the was not metric note first left our declined billion non-GAAP which in to second as this X% the Pablo of unsecured cash receipts operating and professional loss semi-annual XXXX. quarter. right fourth payment with with offering cash

reminder, billion first line underscoring Slide strengthen our the per adjusted debt debt offering after first how offering $X of again an cash or issuance, payment we in rates. After model. through $XX maturities our This will continue With of adjusted $X.XX extended of quarter the the to in we million resulted approximately quarter. majority a bottom of billion from our July. in and million were end does to interest not raised sheet flow with other third in of of $X.X margin innovative expected $XXX beyond the traunches, This earnings shows cash that XXXX. the items quarter million flow balance payment leverage XXXX next our $X.X for As the strong interest reflect which semi-annual be two XXXX very attractive XXXX recent XX share. an XX.X% and our the debt the at business profile plus in

side see how hand compares of debt right the can total our profile you biopharma with peers. the favorably our slide, On

million $XXX our bond, to are at the which We in the we form underscores issued are pleased social of corporate and a bonds of particularly responsibility. ESG commitment

diseases. the that will health residual diseases social towards research such and/or we and in you framework This social in the as bond to our November as the by acquired our over quarter as similar we in can billion social deals from WHO XX, other also and year. were with position well of inflows promotes On bond included applied linked as to marketable retroactively Slide change well Royalty to the orphan Cash by interest innovation underserved two scientific adjusted broadly Specifically the net of is be limited over franchise million. Foundation offset of CF flow CF as done in the million cash $XXX $X acquisitions defined years SDGs UN the and the hence as diseases, prior proceeds offering see areas as distributions, top enhanced the cash from and in by six basis. of on last months bond on three period and securities innovation. $XXX wellbeing, a inflows were The royalty XXXX. to can the and we go that such funding nine, at which end ended $XXX deployed the the million These dividends the

adjust currently debt I these transaction billion marketable would securities debt. and MorphoSys we Following just times And on our X and X factors, quarter $X.X basis pro just investment in cash performance EBITDA basis. leverage the billion. over grade If the times we forma have a is for end, $X.X the described. closed total have offering a We been and net approximately EBITDA our on

untapped generation innovation. strong Slide us of uniquely believe with on our position liquidity facility, along us a we demonstrates gives revolving balance, cash credit why plan. business cash billion strong business leaves are execute fund $X.X Our and the to we positioned to XX well-positioned our

to have acquisitions. to we Royalty fund First, access deep capital debt

compares since billion billion example, to at For announced. deals $X.X XXXX, debt in have we've raised attractive we $X.X the in which rates

third, with high-single-digit addition royalty, teens can amplify duration quarter the milestone of in our average of returns of profile at range, XXXX previous with full-year well from maturity And to our considerably on shareholders. cash of conservative particularly to therapies related at adjusted franchise percentage depending around driven overlooked, We our our strength was our the CF an us at while final expect type, debt our lowest the our aligned was XX in another Tremfya by receipts coupon with power profile to years. Royalty guidance. strong have with we the leverage, and our this XX as we new to occur the million of one-time We launched increase in average target that by Tysabri our providing compares also approximately Second, returns $X.XX Around transaction a we of out X.XX%. attractive as of billion delivering recently the buy billion, debt assets, increase guidance. consistently payment be increase [indiscernible]. of My cost Around of quarter holders. $X.XX the to to previously expected equity performance portfolio Soliqua structure the now a the $XXX by was which range We which driven to half is a with capital to the returns believe sets XXXX. of from driven is million slide capital the strength $XX to

XX% XXXX at adjusted is adjusted analyst the we guidance of delivered above the mid-point X% represents the our and billion receipt at new IPO. to $X.X receipt cash between where growth XX% in over time stood consensus cash for Our of around

Turning to costs, is receipts, of guidance. be to X% we to operating these versus adjusted expect our unchanged cash approximately prior XX% which

this year, in receipts the around due X% our expenses. of the half a a first bit While have the been implies timing our of cash half our step-up in operating of of adjusted costs various to guidance second

paid interest XXXX unchanged $XXX million. at our for is Lastly, guidance

between $XXX first semi XXXX, net split will billion not Our recent million, line increase quarter. paid third interest our interest to in payments the but with in fairly and will offering approximately debt net $X.X evenly interest XXXX impact

be payments to quarter. Although the in skewed XXXX, slightly first the will

future that that, Second back fourth his Pablo to the based of quarters for any with of established acquisitions. minimis note to practice, account this as you expected XXXX hand and are to guidance comments. not closing and our de In call line is our With portfolio on like have does into payments. today I'd take should

Pablo Legorreta

Thanks, Terry.

in reiterating has how XXXX. Let that pleased business by our with me progressed close first extremely I'm

guidance. financial performance strong delivered our raising have We full-year

We which have to demonstrated our positions the in royalty compete same innovative continued partners. own for to to we biopharma solutions us growing And our that structure, market. innovative approach funding find have capital

strong by have has past we that market And year. over and volume captured value growing momentum majority Our the XX% of share in the value.

identify ecosystem Over Looking want activity fundamental of two of past the pace around this our ahead, years opportunities prior or to Royalty for On the $X.X of tailwind Royalty attractive increased about and my significant growth which the slide, billion biopharma and importantly, the continued from advance to opportunities. have for five deal eight strong final look over positions the also capital run announced capital deployed the maintained $XX On well over with a XXXX. capital we of have we of based biopharma in we the total of in a consistently $X.X on $X billion across our per of of going billion ahead to the year deployment. couple foreseeable put to the $XX past acceptance I indicated next us long-term really to when the our powerful billion year, to billion public, pace of to deployment supporting the deployed history, It Since us we rate deliver above at speaks years strong us. ability growth pace funding deals future we This deployed to This in our XXXX, trend have slides, start through strong to consistent our in awareness deliver XXXX that total of well and to fund puts $X rapid expect we this the previously need perspective. continue deployed funding capital step for billion value years. and and the demonstrates back back we scientific Up growth, transactions. innovation. and over in shareholders. a

enables effect estimates, level in later, In on that and to is our on to cash results $X graphic we growth royalty Furthermore, of compounding powerful billion attractive us top business royalties products five capital new Back very each open portfolio flows, to top of translate in expected existing second deliver the and value $XXX years enhancing of to deploy years and continue our average. believe shows about sales business, of and grow call this and in that, receipts The the cash long-term growth. $XXX as and about we're pipeline excited to of words, million deployment George. biopharma. leading how five This as actual shows our We remain franchises. result an later. Q&A. on drive current consensus layer receipts, estimated million to significant With based would other ever expertise every our capital new we is is to approximately diversify as and year scale you, streams adding flow like tier I expect to to the cash on

George Grofik

Thanks, Pablo.

call We take please your Operator, questions. will question. first open now the for the

Operator

Schott Morgan. Our with comes from first question Chris J.P.

Your is open. line

Chris Schott

much great. for the Hi, so Thanks questions.

me. for two Just

between is the you've about we the a the guess, an then, question, attractive even about Royalty know success to there levels, launch that past. in able this Genmab you the to market importantly think year a triple approval the out? cognition And that since it is that First about elaborate you that if can product know is disagreement plays communicating or don't Thanks a And of cognitive Because do the going royalty probably ahead to you longer-term stream, opportunity in in in my little have get see new resolution see implications a that would parties but we'll market? I on what what is do that the this something different your companies the we for deal, until to like an advancing, the clarity thoughts the on the talked this, Is about key how But with I if Vertex think pathway? of agreement, we'll be interpreting and to for so with when for guidelines something or just with maybe this your Alzheimer's the much. for things see development the talked seem the data meaningful mean royalties. benefit does you your be to are that, I next extent second approved? wait really slightly new bit

Pablo Legorreta

on to to your a -- first then you to I'll about question topics Terry ask Thanks, will on and Chris. touch Marshall? Good regarding Marshall Sure. of related the Alzheimer's. take and the lot question And hear I CF.

Marshall Urist

Yes. morning. Hey Thanks. Pablo. Chris, good

certainly chance happened, and watching to NCD we're I but everyone, liked thought to best a view everyone, an robust and interest and watching since our announced it's to MorphoSys with I wanted observing designed trial develops, active to cognition as what into year transaction really the and large, just gantenerumab. on we certainly we give gantenerumab next So about like industry your really we come had what's that's happening on clinical succeed. a is it's about gantenerumab Alzheimer's been question Roche the our sometime And everything how we in And very area this been our program agile -- remind home the launch. in think market

is call and the way Roche year. So on think I this same their commented at as they

we data data how about said, and -- optimistic market show are to cautiously see this So I and how we like we're year, think, the next going develops. those what

we said the that to excited So in we portfolio. have are like

Terry Coyne

just to the we We end And that. Yes. combo. a triple the on on scenario of on with on rate so of royalty the that triple up royalty sort is which rates see don't Chris, Vertex through, question a your low-single-digit walk all, first new new developing, in

to X%. will capital the on the the royalties new our royalty First, bring rate triple on

triple and the that rate X%. our the and royalty simply very Kalydeco would we've been Second believe is to that here. new position on We Kalydeco about bring deuterated clear

see But the to just to rate safety and this on if can't comment bearing we a and an efficacy. I have remember really it's also extremely of sort bar we component, third On just it's Trikafta wait and take point. step think at one back; that -- at we'll sets for what have high to royalty that

we very a the on have to the has lot Phase of be to enroll the patient CF already views the the commented decade. others was a data, unlikely if many And that we at think triple small we now the pointed the well years, when share have many X by offer And that of are trials that's saw does patients who to of I market Trikafta. that on will obviously transformed meaningful that And nothing week will succeed, Vertex to in Trikafta. recent served many the it this But new triple learn These numbers. does come to population completely looked before for it's going has market; a a non-inferiority new data. the with have will years out require a is patients. suggest These improvement endpoints. over times experience the large five drug disease on over of middle also trials Trikafta. We've is triple XX new there

legal dispute important we're contributor will question is So your rights pathway, too resolution to we It's our for that now really CF defend contract. our strategy all be franchise a over sure the in On make right the early under the that there. obviously those clause get contract, there really long-term. into an to on we and would business reasons, any resolution our confident the potential

Pablo Legorreta

of a potential for expressed our that just saying the many about it's talked our Chris, to issues going by from color. so Personally impact I'll reasons overblown royalties. to comments I'd but investors add like that to already with analysts I'm concern have perspective, Terry and believe add some, some just concern from some Terry's Pharma start I some Royalty CF to

take what triple we a is So If look couple really here, then to of on of might which just XXXX. thinking take we're follow-up timelines, at going are this to enroll, probably in develop patients. critical trial of to XX-week thinking and years that a

years, FDA likely we're XXXX, be data trial the So years, takes to through approval. file It go more three talking XXXX, completed. so time three to about XXXX. to two Then

an So we're a one potential We're be going issue with And conceding then launch. late talking about mid-XXXX, super that obviously, for XXXX comfortable. bit not Kalydeco. there's to we're

have to think for bought the interest following very us very this been investment. XXXX. We investment, this made or lot ahead thorough an and around of that the of analysis incredibly fact last actually everything just and invested investment also we time level this residual when a we've in more long You we year since a gave additional the did a million which XXX confidence significant make of to go some

And figures what what will we Pharma if bigger, billion. that latter of much, have $X.X Royalty we revenues $XXX be estimates some on analysts the you have think our portfolio XXXX, a in much just somewhere is smaller launch then, the based if CF XXXX, that's think, analysts today, is XXXX And by to the we then considering And projected, for around today, going the investment and billion went in in about million traction, plus of get numbers, not which revenue, of you know, more of there we're adding adds happen, this revenue by analysts what projected our there in deployed the to capital through our decade. we're of So top-line. much may to have looking this shortfall, every small dollars when be we're a at anything. very top-line. as probably more shortfall active But look have at just just what half revenue, of and thinking to is think for it

we're of at our So the be, billion, somewhere might billion maybe end looking something $X decade, the by $X probably in of we where $X to now if the north revenue think billion, of more.

top-line. So couple about if really to is we're potential dollars, one couple it of a the million shortfall you hundred asset a percentage immaterial, of a talking think in points

why an patents concepts think, maybe mention I clinical has this I whether cetera. study that's like here. just has uncertainty, et overblown. of in think competition, This couple to is results, So I'd is And summary, it a that been important issue industry

growth. focusing So in which with the the on the model we role last Pharma unique of years, is that industry play this predictable showed XXXX, And million high later. bigger X every in around billion business diversified a the We've we portfolio and for attractive year-and-a-half. our in my five over average misses slide cash the the transactions receipts one very any deployed a assets over with and adjusted one product billion highly of context, most the industry, our just since Royalty resulted again any such years really this business of issue in announced $XXX strength of beginning in some past to in that makes put an picture, five

what's set prospects. our, And we year-and-a-half, our But that that have confident a or assumptions. so come went us if And project out on growth by we're of think no team myself the think saying a after business year every I I long-term in there's opportunity we to among public public, and happen is just big. to we finish conservative capital future, think billions I into deploy year. a now, we our realize to that, the this tried it's I'll going So feeling with offering, why this we just looking continue important with question as to pretty that's for

I wanted year-out business. portfolio So our the to That myself, share extend product we sorry diversifying revenue single therapies that our I'm you. growing driver important year-in our but to misses most our I with portfolio any views in enough to add make in just sure about this base. concerns and and of

Operator

Harrison next Morgan with Matthew Our from comes question Stanley.

open. Your line is

Unidentified Analyst

thanks Hi, Matthew. on question. for is the This taking Charlie for

of close is a leverage years. Just kind terms think more out seems given it the wanting how or about in And to I that to $X greater think you. of next in coming I than kind about current XXXX. that that now that terms long-term about through transaction potentially taking quite doing also But guidance you're exceeding coming to Thank think you're large just down that of your existing the large by X, know you're over grading know trying transaction bit. in How investment maintain like more years. of and that thinking like you're the billion of few right

Pablo Legorreta

Sure, thanks Terry, for you question? please question. can this take the

Terry Coyne

sure. Yes,

yes, feel our pursue we very, to the Royalty years. deals in very continue confident over So, ability coming to large

billion a the add flow grows. then flows, that we de-lever on And $X.X EBITDA balance we're throws as business can lot cash well. then cash cash obviously have just going when of over bring products the leverage naturally of sheet. we as And And time in off to have We cash.

confident very opportunity We ahead that about feel the very, trajectory, So we feel target in original they're look of opportunities set of we're something very feel Pablo like obviously, we'll the update us, ahead mentioned, with long-term metrics, opportunity the good is us. in ahead good related. very really because the we about And and we the confident tracking feel that gave, as we very, of business all well-positioned set. we're update to well very that target the other guidance

Operator

Thank you.

Our comes question America. from of next Meacham Bank Geoff with

Your line is open.

Bill Maughan

This morning. is on good Meacham. for Geoff Hi, Bill Maughan

you looks through sort what believe just Can the kind misheard, but I what you feel for be social in And from for balance investment the it wanted bonds. mentioned, of seeing social exactly years. is CF the can to the a me, past intent we my correct terms of little sheet? those So the and means color of that like bonds, I Thanks. to plan retroactively just for walk logistically kind on question that from what of if applied be on more that on those might few

Pablo Legorreta

think look, the And will Sure. think, I Thanks Terry answer I But we again it. be question. how creative this and innovative. for highlights can

of Company and use that normal I think Second Sciences very issue we advantage ended cost up there attractive And to new instrument issue fund could And bonds. was bonds. just it, that took realized we're bonds this the to being Life than we a lower to business. with moved social the able quickly we

you want do to? Terry, So

Terry Coyne

social mean, the they role back think sure. unique on published bonds our industry. sort of but our play we this that the really a Yes, we they I and highlight I taking website, bond in social framework that step

fund to for to industry, to go can recycle and the help cure permanent So disease. like Fibrosis in how Cystic capital we Foundation, into of mission the to find terms their attempt back places a for this

would would them where scholarships UCLA research into XXXX, back going back proceeds deals that with eligible and we Foundation deal. So The medical that and the were types the be gave funding that of CF be sort that. like things of funding that in did deal we

could Annual going of how until terms that's an be it we not that funds are ultimately and will retroactively, saying it's but how we're provide in exactly happen, applied to the allocated. that So Report

also allocated. in how attempt And impact of metrics of Annual so were were show how those the and the be we those disclosed would funds sort would Report to And that funds allocated.

Operator

Steve Our Scala question with comes Cowen. next from

Your line is open.

Steve Scala

will success have on congratulations $XX two quarter? outsized Can you seems the its performance modest really executed million a the QX and Soliqua Soliqua been Sanofi, quarter. you Thank be milestone versus discuss milestone for well I that another on sales. has so questions. the booked in

Thank the maybe us you've in royalty I'm tell of I version But at if how molecular which curious can apologize and shuttle then to a if gantenerumab, milestone understanding brain you calculated. also our that the separate curious I'm covers secondly, on past. this is and least you. So distinct gantenerumab the entity. addressed And is

Pablo Legorreta

going related gantenerumab. Marshall is milestone the then on the address to Soliqua your Terry question answer Thank question. you will question to the for and first

Terry Coyne

Yes.

was So it on milestone. a Soliqua, commercial

we on were we forecast that to But now that We haven't the gotten happen it's conservative obviously we in than that it little specific it we previously those but XXXX into is would be of got, XXXX going not of haven't any are there. event. and more a specifics, threshold something any sort

Steve Scala

tell on milestones Soliqua should anticipate? you can we And that there us are future

Terry Coyne

probably factor. now, they did will That's heads we to have So think when give quarter. a to going ahead but We that on that this our milestones guidance going we're I portfolio. you extent about we're to do it we'll that anticipate time the talk that a we receipts, going that. think that other try not to But right that affect milestones cash best I -- in give try specific do come up adjusted into that's year, of to a particular something's the aware we we'll to why be

Marshall Urist

the And question version. hey Steve, morning. Thanks on the good brain shuttle for

version any royalty the but more have MorphoSys included. it beyond details not gantenerumab So gotten brain yes, that Roche, fact shuttle is is it included in yes and agreement between into on we the of the

Operator

Our Flynn question next Goldman with comes from Sachs. Terence

Your line is open.

Terence Flynn

for of your sustainability the you're Thanks about I just on deployment a capital your and above Great. on taking or some give lumasiran Pablo, me, reversion that to of the run the that kind of over had And I time? second about you we mean rate. XX how questions. Maybe Slide us run rate. historical talked views kind think recent data. as Should then for lot go-forward guess, Dicerna's Two expect you've tracking relates do question

Thank Just wondering opportunity peak you're stream. that royalty for thinking changes how the Oxlumo you. about if your

Pablo Legorreta

for the questions. Thank you

thinking a the But actually how think, investors said, near Terry on as come to future, as of metrics. we said, I of out in our we're in as new decided conservatively. I actually to update company, think analysts and I So guide probably several

after experience opportunity the the going is about And years question of even things set year there's to are much think a the than ago. public, thought with that we Now following. bigger just think no I

in owners when or looked really if market back XX, on side about the But really fund, a those you to teams research. boards, of royalties it to fund an companies companies, think royalty them structures up business. use market effort monetizing hospitals years to look It of like to their hard Page the that case fund five universities R&D, open was attractiveness to case lot consider -- and to not of get to ago, on it of our educate to XX in what fund the of the start work mainstream. buildings, I to charts, at of to also So was their to the the was royalty-based actually fund management structures

changed I things about how today has Hite in boardrooms got that a what and win-win more about that started to brings become think I lot has think do And the a and talked situation. lot how acceptance on a companies with greater much how mainstream. we partnership there's Chris

at lot to in So to the maybe and Chris, want mentality mainstream. a becoming the add how boardrooms more change a is bit little you this

Chris Hite

of I'd say for and level and are suites the only there I with the -- launches they R&D, recently ways board the really Thanks, at shift Yes. where you the executive for been as Pablo. financing, a really Thanks question, is has saw Terence. right. M&A. MorphoSys -- looking most and not commercial CFO Pablo alternative mind at but

suites level. our these And innovate, set within so now as through I to we've innovations think to been going of these and the boards take and bonds, continued both stage it's a willingness the commercial advantage forward, those we innovations at just support. accept bondings, accepted M&A very development just executive our within just tremendous given see -- board of these at to funding, innovation opportunities And these

Pablo Legorreta

I billion and So in what we're XXXX, mean, investing look finish, a to at I plus. happened rate just think XXXX $X maybe at XXXX, of

about judge But should near-term talk you I of in the business. as your that we'll hope question. So back I the said, how answers to come metrics our

Marshall Urist

at more platform like the than like really in Great. out And a said we Terence, that hey to partnered really time, question building And we then products be our To for disease the data it's excited morning. Alnylam the look to the with relative good around your rare themselves expectation Dicerna, different. on world. company a Dicerna distinguishing similar were Oxlumo

expectations. more was And out for our consistent so a less data with disappointing patients then And Dicerna page X the PHX there. certainly or in

of down the benefit watch, were result specifically things we'll the likely the think think of I their I to what decision PHX think was But lines I So accrue will a and think over in slow certainly -- Oxlumo partner, we will the to long-term. overall, expecting. to continue find along commercial certainly I

Operator

question next ISI. Our with from comes Evercore Umer Raffat

Your line open. is

Umer Raffat

on Hi may. guys, my for two much wanted touch I if question. I thanks so things taking to up

is commercial about B. that versus to also could opportunity, think to donanemab of to as of of that only opportunity same And about important competitors, the prospects how and Alzheimer's Part is not questions First, the pool gantenerumab gantenerumab like, not I into you the but is the sort one the how to potential is aducanumab. peak as tapping my what and to subcutaneous peer guess referring one. important look that I is I'm the question your modeling think

of one is the questions its I the have deuterated matter that had Kalydeco patent, of how guess, I having that is presumably you breakthrough of I walk guess to as file because and own well, also was the it biomarker, where decision And approvals based and have as mentioned, not Thank they does us seen if we've related. then about same kind legally think of matter the of been because Kalydeco. structure the you Terry, composition Kalydeco points make designation would could own on And Secondly, you data been if your space in Roche's one some time idea technically the composition case some deuterated prior for is different. finally, have a thoughts with molecules I've and on not biomarker deuterated gantenerumab which through not patent, their all you. the the related this

Pablo Legorreta

Sure.

of us, So Marshall us important take on to reflect I One one we're that's plays going on I we're that my for about the going of that, is about going play and a as thing reality comments actually and out. timeframes Umer. then And today. thinking out, revenues, but long to Alzheimer's more is CF to diversified about the very but as if long question Terry to that, get I about highlighted will become business talking this thing that's is grows, that about first just -- what's take this your think bit is is was very today to CF. of and been overblown answer the a why our yes, it's it CF to And lot impact, people, I quarter a think also think relatively focus is bigger, many has just

Marshall anyway, So through Alzheimer's goes question. the maybe

Marshall Urist

sure. Yes,

Umer, hey, morning. So good

good two question. So

I of little product. a of the -- and So a on subcue having think not and of a how impact look might story. different payer about I lot different like at structures your different gantenerumab, time, think talk because question the Part and the a at bit B scenarios look we a first how we There, different commercial

from different, think our flavors market be a has Alzheimer's time optimize is Roche of opportunity I and think in I to volume the think that delivery is -- subcue big think certain advantages I lots parts over feeling inherent of just so and that. perspective the will there's and going for and the we

regardless this for backup well, opportunities products other products subcue market players pipeline point think at we've and either that think for for I as as multiple develops, subcue exploring we I looking about in well, also there's room players. as And large with I just delivery. or So a opportunity or out; current think this also the seen and market talk

are think I the market. of serve and of clear different will and So parts that the clearly delivery advantages advantages

our Roche of second listened that Roche a view Your program. to near-term. And recently on was with and you really think pretty the It's Roche's same program; on large breakthrough gantenerumab it the We did question I accrued made dovetail comments development designation. does that comments overall fully guys this. data's

they short still that also decision, that potentially ways that that, they so what And they said, accelerate but sounds their biomarkers, of on from sounds think sounds I the it looking can -- key like accelerate was at even can in that regulatory me process. filing like Roche to are

So for next is gantenerumab year. data the coming

forward activities regulatory they can looking those doing process. do and then the near-term, accelerate push pretty and everything to we're to that So

Terry Coyne

our on we legal And this can't get Kalydeco, and deuterated us are curious we question about investors then, our position on on totally very but at time. in deuterated why what that your really Umer, Kalydeco, around confidence understand gives analysts into strategy

Pablo Legorreta

going focus I going play vastly because nothing. noise. outperforming, out job, trying on there's do else interest to this are I'm and real maybe something near-term years. positives. that that by I it irrelevant, a going didn't a good then, whole it's thing deuterated Umer, five is non-deuterated the near-term be to to Kalydeco, noise. now a And of is perspective maybe right significant try lot to versus That a and it's we CF, in express the it. to franchise near-term noise personally in people again. view noise, was going is a and but really I'm I to XX on add What have very not And focus should This as --

just what on for really be Pharma nothing, driving fact growth So I is important. way going future add. which going resolved that's that's anyway, noise. that focus what a be should But a something to not it's I the honestly want that's And it's and said, Royalty attractive paying lot is as really be to that to less very out the when people this to, attention in that's,

Operator

Baum comes next Citi. question from with Our Andrew

Your line is open.

Andrew Baum

you. Thank of A couple questions please.

the IPO. Firstly, since your stock underperformed has

what You need consensus don't allocation, executed forecast. But at based on that. you said in ROIC capital tell to and yet you terms consensus you upgrades, outlined, least completely as of you've on the

drug -- it's previous want some addressed or the your to about think that the there base? And pricing discussion concerns investors you've Is fibrosis that's finally, first question. I interested subcue are Now on of healthcare indicated Imbruvica. B investors U.S. you what whether from are second you to think concerned Part your So thanks. the the pricing do more I'm the durability make relation of I credit. competition, us reimbursement could you is CF? sure which At is versus about drug. drug future but keeping that from the to remind expectation they duration Roche construct? Is the with question it name, to intend know to driven Part away Royalty that's on investor all under IP then you're given just for cystic even the is Neulasta B D So Many in Medicare similar by valuation overhang the gantenerumab, a there's definition seek consistent bisecting it concerns other emerging factors or exposed being legislation, as overblown.

Pablo Legorreta

do you is then amounts innovation think And one terms of nobody an the very in industries that which industry, of most in exciting is of the this unique, we the requires in planet of have position and capital. industry huge very of terms a scale, when terms we the I'll you. stock. these on matter deliver where just industry, Pharma the that that -- Maybe Pharma of about by matters of noise the about I become about say I'll of your really the fundamentals things said, is, comments question has making initially add funders the really some picture I is Royalty making don't the this creative performance to in companies. long-term is be in can we one long-term, would can terms are the can over what our innovative of What Thank in that, big And many about performance partner start -- business Royalty creativity, and very of patient do of Sure. that what there of to that investments which most near-term. as

those of extremely are our business opportunities. that all attributes well that other of So growing advantage take has has opportunities, growing peer of a us position things and to set no of set it rapidly

unique investors other on. think And I on. about investors I things really Royalty quite reflect So I be that's Pharma are should focusing that think what think there's that should

but So it's for And there's growth the polarized. of sort investment our huge huge, very among a industry, community. it's interesting, in appetite such

that You companies. do very obviously single grow fast, have very product biotechs risky,

grow mid-single-digit at very work growing things the lost. then is unique there's their often, much X% And rate bigger and out multiples And a but X%, is in of that investments, of in than sciences. life at grow that are X%. really side, often capable about investors other the lot Royalty we much the that Pharma on to faster the the a make X%, don't money what's work bigger Sometimes companies well on out few things a and companies of ones you so bigger have

we the think at faster they teens. ones growth much looking And And like but -- at mid-single-digits, the predictable for really should is acquisitions be the of again, have that more very very of that is diversified had duration seen we we growth, about can of growth have underlying growth provides, the unusual. an this and our of mid-teens. in that the the look to the can. the importantly, think Road the the I because Royalty to growing Show to diversified downside, mining I attention exciting growth, growth, we have in there at very growth, diversity growth. adds growth with that such investors very unique that And Pharma investors the years of you've unusual, a we're have the that our growth year, the this then is couple so that we and thing base, And growth. things. three with Manager is is So grow that's good And it's standout industry. of revenue have our and have business attributes deliver diversity we grew portfolio I that which that I than very added in the think can much during have with growth to have to we unique Marshall, we high, durable paying our those very, growth which They three growth, growth and things we talked and

Marshall Urist

think at Yes, pointing it We subcue gantenerumab, did I scenarios it for lot different referenced, was thanks Andrew. in yes, -- Pablo, out. we so look a On like Like question. I Umer's of it hi, access from look and terms perspective. scenarios if might a over physician payer and what that changes in how those and and products different change or of might like administered mixes time

absolutely, through might more think it we different particularly that question Terry, And out. on Andrew thought time. had and one to, over So how if Imbruvica. pointing I for kind evolve And wanted you of thanks profiles

Terry Coyne

Yes.

said XXXX we expect through that on the that what to through we run So XXXX. royalty Imbruvica is

with various any of product more additional been Obviously in there's terms different patent XXXX specific. scenarios play XXXX. but said can haven't or we've patents, through that We extensions out

Operator

question with Greg Our Truist comes Securities. from next Fraser

open. is line Your

Greg Fraser

taking for and the folks, morning, questions. Good thanks

of agnostic any drugs where are generally royalties payments particular areas broad You're therapeutic curious high to But you area; would I'm have that many portfolio are of interest on of in point a if you that there transacted. events out areas. any haven't then my baked the you Thank question the yet you. you milestone or guidance. to are slides? tied second on the laid there clinical is that And in that Are regulatory in

Pablo Legorreta

can this Jim, you take please question?

Jim Reddoch

and some is just immunology inflammatory TNFs and approach new rheumatoid areas, we've I than such Yes. a we're totally areas to on, understanding earlier areas. I I golden tractability the that that success arthritis. as immunology to sort of that we of has have and good us already in by But to lot which add. existing new than I otilimab, many provides that and mean, a area such before arthritis treating investments mean, of even was targets for areas think work Marshall for may science age the rheumatoid example, been of start in new that can us question allowing go mentioned I related of think, open enabled can a out therapeutic it better had up really a JAKs broader to

opening still to keep or drug I in hard do areas. So are And modalities. there's other hard we treat eye even some new maybe that area want to lupus think and up, to previously also a lot -- to to we an

and a products moving lot one associated really engineered have come but potentially three So are there certainly royalties two have technologies them. with investments highly in that cell interesting therapy usually they of because gene royalties, so with that or we area, those are therapy, or that forward not made

understanding the a lot opportunities, the we're we've of a in because fields diseases, past. made do general, in those But more closely. where and even think following really is areas to investments up and in I really it's improvement lot opening there these there of So

Marshall Urist

And I then on this question just the your million $XX that the the for milestone the year is that mentioned. in guidance, only milestone included guidance that's Soliqua

was $XXX So million had nice quarter impact. we guidance XXX of were in happy that very -- from around and Soliqua that of our a raise a around we significant the

Pablo Legorreta

the question. we'll Operator, next take

Operator

comes Tigress Financial. with Ivan question from Feinseth last Our

if is unmute. muted, is open. telephone line your please Your Ivan,

Ivan Feinseth

you impact? for presence and ongoing and the taking what -- do my biggest on see and strategy and and M&A the progress. results question you that detail you some could breakthroughs Thank Yes. where you happening congratulations great give make pipeline funding Can your into areas feel you your do

Pablo Legorreta

point, Sure, developing think the than What about M&A thanks And exciting I was that is to one one of of well-positioned M&A. is, a for companies us whole is of question. to opening we open beginning. a lot Chris the I the for what's that with of I more is just markets. deal a been we've the really the me because has ago And think really a bit a that one that I at question. just and think a as Chris work as his that things has announced great phases, partnering bit answer from year different right this very And through gone of how in is where And through midcap Royalty has But past up. this unique so attractive life why would think Chris, know, bankers in put has us for midcap us. also companies, on you generation. Pharma the say is past top in And always sciences M&A don’t mid-sized the of sciences been just light provide very I've markets the transactions happened that experience drive I MorphoSys talked that history not in with joined but I opening up perspective you that of think in with M&A could of on some very M&A kind of the markets one perspective, and life this? your for -- But we've

Chris Hite

the for thanks agree and I Ivan. Pablo, Thanks, question, with sure. Sure, Pablo.

looking much as been seller's time, is it's it's at for that in main would companies cases. of going to drug, sell a I clear one been one stock really Directors a to, is midcap the there's of a sometimes how really most approval to very not really It's of think difficult for maybe recent very that's in to And a of all if cash you think a acquiring over you're two which rather back has the company or if the but the stock lack development midcap Board And space. to drug deal perform. M&A reason, value company. stage difficult opposed sometimes

bank lack so yet can do a space companies that deal. been is that has upfront example think going M&A the a through do a provide reason, profitable we the Marshall MorphoSys through M&A that companies, can get funding funding And I company stage that's just And of unwilling -- We acquiring and comfortable a midcap a provide forward. been existing obviously provide cash proven So for to board can how to a actually unwilling advance a see showed funding, there's flow. which and we and hadn't development M&A all equity currency, the synthetic have would huge for royalties. the by banks, of can opportunity And typically product, funds and whether is and lend to that the the a are to MorphoSys to great the us. the ways, that cash track the opposed slide record don't of went cash just cash M&A as but in royalties, an how great as that deal approved investment, target many midcap Constellation use that company's it's really

a see huge we forward. So this going opportunity for

Ivan Feinseth

Thanks. And now we success. should go in

Pablo Legorreta

the at have I biotech, often research, product that don't together. to not that fit it's is when and have think you other diversified just companies that they're common many products they about thing doing look this think if

assets that multiple MorphoSys. look actually at is example. MorphoSys really royalties that very value create company think royalties, great in. for This going have is not but were had attractive but can of you are one is a And I if to So that other value, non-core come we might company a that driver of driver the what often then happens growth, product where

but flow create doesn’t For collecting is MorphoSys interesting, it cash value.

assets XX to royalties of have of not just company going MorphoSys the by realized company years he those to transformed and he this of boldness create will with admire royalties for You his overnight value MorphoSys. how a those us, develop. assets for And X, CEO value create company was how with and setting partnering the he that can are acquiring that over the really collecting that completely

this are So are there, partner industry are companies to that going the you and the that of like them help we of and perfect face MorphoSys their can this, they and situations I out the thousands think situation a we it'll but when win-win take initiatives. everyone. I strategic and right great did is a example for it obviously thing achieve And think think time, created

Pablo Legorreta

George to you questions, our that call. share continuing please Grofik you with spending for time free today Royalty have to thank and there your on And I progress the and my of our team out that everyone us you continued saying all and end I'll and to for and look in Terry. reach interest But call feel if any finish to you Pharma. anyway, forward on Bye. I'll just Thank by just with

Operator

the gentlemen, this and conference. Ladies does conclude

may great You disconnect. now have Everyone day. a

Royalty Pharma (RPRX) 11 Aug 212021 Q2 Earnings call transcript