RPRX - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma Fourth Quarter 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. good everyone and the morning good afternoon on to call. And review for results. fourth joining you Royalty us XXXX Thank year to Pharma's full quarter and

can our website results royaltypharma.com. our call release the at the slides on of to this You earnings page Investors find press and with

are help materially presented to involve factors non-GAAP we press Slide to our differ known description financial financial our statements. refer results risks, statements and Royalty Non-GAAP release GAAP other on obligation information you All to performance. and may will on that, I The would such call cause available Pharma Slide assume contains please used to be the understand remind you these like forward-looking of with unknown forward-looking these measures Moving this and in to forward-looking earnings that X. you available actual our on I advance risks. XX-K With to a to information that to the based X. statements. reconciliations in from statements currently no that uncertainties update for provided SEC to file are website. any

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

Pablo Legorreta

financial of our summarizing begin report execution performance Slide delighted I in in Thank to And accomplishments the business. call. am Pharma. many I the underscore On year on George. which another by by you, Royalty our everyone strong to X, and like XXXX, momentum robust welcome to would strategic

First, XXXX. growth line and XX% top delivered of bottom-line growth for of we strong XX%

strengthened sheet social addition, which commitment billion to reflects bond included In social balance a which through our financing, $X.X bond, corporate we responsibility. a our

announced During at billion were we total, and announced $X approximately have transactions the were deploying year, of we $X.X five in ahead beginning with transactions of we that deals, in XXXX. billion the capital already In the XXXX IPO. $X well across target active billion communicated our of our time we of by of since

We the continue past we benefit strong and as our ever. modes is over the established from have business as years, competitive XX to

XX% value, XXXX a As a result, the we share the market based leader Royalty funding internal in our of estimates. with transactions on by in remain

updates compound growth Importantly, deals $XXX number, is greater top contribute XXXX upside our from for as biopharma. growth lead the positive encouraged for our will look and therapies. picking our portfolio, of industry AstraZeneca's in many In this we the line. record cash in therapies expect additional completed X positive across Biohaven's flow, of in readouts our line to and adjusted on and single tremendous a delivered that than approvals receipts, our the more to XX% are bottom top When unique adjusted in little cash Slide our see quarter, an optimistic we layer portfolio can and a On detail. unique an We line for you our we asthma PTXXX ability our track for value-enhancing in XXXX highlights drive year, saw In patient million number over benchmarks, more XX% recent potential with development-stage with ultimately doubled royalties Zavegepant by in is financials we we aspect progress. and line through to compared our think really migraine, especially impressive benefit. development-stage of the model, winners, than clinical with growth We acquisitions. at are of XXXX we which truly fourth and also business to

growth to line IPO year, at XX% XXXX, growth strong as puts in XXXX, June allowed line a expertise, drive growth growth year top and Terry business. double-digit we're as at we to tremendous well. momentum deliver The the when life performance For testament heart the shows deep speak delivered discusses Slide since By leveraging X replenish full XX% the strong which sciences power our noted, is guidance. of to leading strong our financial has us bottom our innovation, our our able underlying strong double-digit he a and and line. funding as a This of of bottom-line track record compounding in at the consecutive consistently the very position deliver of quarters us portfolio in will to seven another returns. position of our top to

delivered XXXX, expiring this bottom-line our base speaks source This to breadth and our of fourth accounted driver teens royalties, we franchise from and expands X top three The the of digested royalties in the growth momentum line by our XX% growth. XX% top point. accounted total quarters in the recent of was royalty existing and business receipts our and the which largest on royalty primary around strength Importantly, for transactions. XXXX, HIV performance Slide strong far of of high and for our portfolio growth. of still XXXX, in

to of last impact in easily we New HIV player strength unique and Cabometyx illustration the of about makes sciences. Royalty absorbed mainly double in largely year. expires beginning Pharma negative growth were points of points, the the on XXX our the XXXX This from from Tremfya, Oxlumo. great organic growth, our had by XXX what Of Royalty growth basis the portfolio, franchise is a added guided portfolio. note, life initially a diversified basis we a achieved at existing rate XX% of transactions but about addition of

through losses proven you of biopharma the value-enhancing to sets ability to other royalty Royalty our With hand from update to with acquisitions Our Jim and constantly that, truly over portfolio diversify companies. I us royalties apart on grow will portfolio.

Jim Reddoch

proposals past Thank our evaluation And a development shows of to in you, We've Pablo. hello, well-established funnel XXXX. on investment excellent I our you believe Slide resulting we most sourcing, founding. the over agreements we have be XX what Today, opportunities. resulted returns This since spend our submitted. XXXX, couple we over generated diligence XXX the around in a on on portfolio process only sees us potential and promising had want has reviewed everyone. In updating XX to minutes confidentiality that in execute the the signed XX and year. transactions, transaction of

eleven around innovation This reviews highly resulted the and team. we research upfront. X% reviewed IPO. of Since conducted transactions executing including ultimately billion of announced $X deployment of capabilities our $X.X capital $X the or total by XX%. capital across the therapies selective at approach the explains initial strong those and us to our of and Slide our time reflects we demands has XX of initially shows increased of our of billion are of running increasing billion, XXXX, and by number five ahead we growth in disciplined which Our life approximately for to a the value why science investments for team the target XXXX, fund pipeline,

has increased Over we reviews over XX%. period, the conducted same the also number of in-depth

XXXX active. XX. resulted continue to has Executing a process, executed in substantial between highly clear and third this strategy, opportunities, diligence pipeline broaden value we turn to Following today, the our our a as than greater Slide XXXX. stand is increase continues and And our in Please portfolio. we to of transactions present one

each of $X.X of to in forecast two have Over announced companies, are of on were that can the blockbusters innovations XX areas therapies, business breakthrough are case-by-case development strength of on areas. focus be medical projected either of new the and at bringing happening. These total therapies time medicines transactions agnostic consensus model or the our five XXXX. evaluate quickly is past traditional basis eight to categories so to span we that we We unique where opportunity therapeutic our we Unlike based through pivot nine are stage modalities. billion, years, therapeutic and currently acquisition these sales a a biopharma

transactions these with expected are than therapies. top million from consensus using to our Importantly, to $XXX XXXX add line development-stage the potential upside more estimates in

of receipts for Marshall over our cash now adjusted year unique XXXX to acquisitions. billion, our our full consistently replenish with ability and compares to royalty turn it to will portfolio. highlights $X.X I our this discuss context, For

Marshall Urist

Jim. Thanks, morning. And good

believe exceeded and the the transactions we increasing our of consensus forecast acquired, development-stage of percentages. performance the process. development-stage the during with development earlier in our approved our this been Since the therapies our encouraging. XX, since sales the have and the look therapies of are many two reminder, that while to acquisition assessment stage. regulatory investing Pablo success at half careful have royalties reflects future. pivotal diligence If early around in on approved also here approved have are the Street recent the has on clinical readouts and by pillars expected industry XX% majority is opportunity increases key date commercial recently benchmarks. The picture portfolio investments substantial double-digit Among very As strategic decisions have than progressed We well, a in mentioned both been to seen or rate Slide our XXXX, therapies in our have in XX% more of near therapies. we

$X In invested therapies development-stage to XXXX. since in fact, billion we've close

XX% we our a approval value investments, number Excluding on therapies in approval investments. of the based XX% rate development, a of and based rate have a still on

investments due solutions of the funding to flexible, up has share XX% past in at recognized cases been rising were provide latest time. by supporting and a to new Slide so expand of million-plus we Biohaven, bringing since impacts partner. fund solutions them month, of disease transactions to acquire our enabled their reflects our to and Cytokinetics. slide biotech cardiomyopathy. providing we rare migraine our have partnership share accelerate our This commercialization to providing medicine a the disease unique partners, million their different. overall strong with $XXX in terms therapy. deep to XXX,XXX for examples to to journey, the deals But progress. financial XX U.S. innovative over aficamten, in the their needs this growth founding. our timely tailoring solutions XX, our capital forecast market the Slide is royalty our patients, innovation to new This a and were This is This since the the for in our multiple lives that to hypertrophic their of consensus of able of XX% and long-standing in both around in our of scale tailoring the for based launch range In In funding, joined people in-pipeline in access over through on nearly Moving each, process medicines potential we internal our and and we performance made biopharma, royalty BioCryst markets focus many by our to up experience part example years case, for partner that of for promising Last agreed serious $XXX to illustrates win-win our in capital. gives development candidates estimates do in how on two on decade, ability transactions to in

therapeutic for designation Our benefits diligence has of and start In be patient significant this blockbuster XX already billion and that to positive Bristol's seen area potential M&A clinical on summary, has sales portfolio. and highlights X data, Slide Phase has very which that MyoKardia. a planned pivotal XXXX with events aficamten the breakthrough Aficamten year. the our was a FDA quarter. deliver based milestone-rich $XX is expected acquisition looks trials to to regulatory in significant indicates

depression; cancer, hormone in third-line Tremfya anticipate including and for in a we in Roche’s results GSK’s and metastatic therapies, breast BioHaven’s gantenerumab of in Importantly, cancer; in results with renal, transformative combination Gilead’s IO, Trodelvy prevention ulcerative from rheumatoid Alzheimer’s, zavegepant; X number otilimab arthritis. therapies, and potentially oral Cabometyx in colitis, receptor-positive lung in Phase migraine prostate potentially seltorexant J&J’s

decision on of On in first XXXX, a the filing a the rimegepant European in half the PTXXX would we and in regulatory regulatory Vydura, highlight for name of asthma European front, Biohaven’s brand over outlook. these to long-term migraine, Terry. me growth the Many could is ODT With which commercial Nurtec our to opportunities major in U.S. add significantly milestones let of that, hand and represent

Terry Coyne

Marshall. Thanks,

versus move drivers Slide for full XXXX fourth well and grew from our XX% receipts Growth the as year-ago Biohaven, fibrosis and to cystic XX. in the as included royalty Let’s Tremfya. year quarter on royalty the quarter periods. in payments Total respective X% fourth new

full significant from contributions saw the also and we Promacta, Tysabri. For growth year, Imbruvica

contribution As to the these loss positive of royalty more legacy shows Slide from term translated receipts strong how royalty Pablo adjusted described, ended. as offset our the HIV our flow. factors franchise cash XX than

adjusted we XX% fourth non-GAAP compared year arrived for you’re in a receipts interests. ago which key to quarter, cash is aware, deducting million This amounted of As growth at metric the with quarter. $XXX after us, the non-controlling

receipts operating move professional with XX%. full and the costs up adjusted For billion, X% adjusted XXXX each approximately cash were our period, the When we $X.X guidance. to year, for cash equated receipts consistent down column of

for our XXXX IPO costs similar of to paid our costs minimis billion about interest offering. the associated the interest timing bond inaugural number and XXXX broadly fourth in payments one-time offering Net of was quarter, low a with note funding remained payments unsecured at $X semiannual professional $XXX and de year in operating the included for were to restructuring, XXXX. R&D Ongoing as a This last full XXXX. related Our level. year reflects the million

the a per As adjusted other year. items, financial $XXX for payments billion line year. $X.X $X.XX for first in and the share or per our and third are in million $X.XX or share quarters full these resulted After cash this quarter bottom the our fourth flow, of of reminder,

well distributions. of interest of full our referenced. the billion the semiannual continue strong in maintain financial we $XXX $X.X payments margin business translates cash margin The quarter million of to firepower. the on acquisitions I which this $XXX an royalty cash adjusted that underscores as financial timing million On model. adjusted on during leverage We just of flow in XX.X% year, and For our XX%, – higher as the reflects deployed to flow Slide capital XX, XXXX dividends fourth

and of bond at result, given added of is flow generation a December, issuance proceeds of As from and our marketable slightly our billion position cash $X.X securities we the above which cash at end strong XXXX. in end July, our the

at EBITDA net leverage EBITDA stands a and on basis a X.X Our X.X times times on basis. total

We X%, with returns single competitive which on coupon acquisitions our our teens reminder, slightly range. in capital As is durable royalty our to believe debt a of is the average high above digits this target compares on business. a cost the percentage advantage for

execute and our dividend. to our feel This to full continue business reflected for financial value month XX% our We very slide is XXXX increase last about provides our the My a announcement plan of create ability in quarterly in good guidance. shareholders. on year confidence final

performance HIV the billion approximately which the the our as of of receipts cash the billion, of the to receive in in the $X.XXX underlying royalty over of We in in end the expect X% $X.X the term billion portfolio, strong DPP-IV range outlook $X.X increase second adjusted XXXX. we an as of be to reflects by the This impact expected we the well offset to royalties on X% XXXX. March, delivered loss of will franchise quarter receipts for residual royalty partially of last royalty

into take based acquisitions. of Importantly, as and guidance is and today practice, does consistent account standard our our with royalty future not on portfolio this any

rates. cash million result $XX we we U.S. X% receipts this guidance to our to from Our also million current based euro the FX that estimate by on if to And is in headwind adjusted year. today’s this were strengthen dollar a the against would $XX note would levels,

operating ratio. Turning cost our to

closing Pablo July cash associated full X% that, which Net of for paid to on to XXXX, to similar XXXX, XXXX. call. interest adjusted approximately I back to in receipts With XXXX his expect comments. to for the our is We expected third reflecting in net with would quarter year million, is the offering hand bond this call be interest $XXX be earnings around signaled the I as like

Pablo Legorreta

Thanks, Terry.

seen pleased you funding year plays Let and truly a the I our of believe Pharma expect our perspective, innovation, me another performance If saying to heart close deliver XXXX. guidance, take in as have sciences by longer-term have in how XXXX. outstanding from And strong with age am better. prospects a I of I Royalty the at role life golden never unique our looked we

we're Our coupled compelling number highlights XXXX. excited more XX potential competitive advantages of attractive potential is capital unprecedented their model fueling the since for that long-term. over with partner tripled the compounding growth with And and significant our give reasons the on IPOs growth namely future, Slide need business us industry. to about has deliver so biotech in of one this, the companies journeys. The innovation, an than to biotech the

This us opportunity a that, I We we Investor the scheduled which research are than long-term targets. to Layering that companies capital formations questions. our your take course, biopharma needs. to in outlook On happy have management. massive which have and to and Our for will deployment execute of would objectives, against. you further questions Day, in my of Slide May we royalty now set over updated be funding we’re if can unprofitable I with trillion growth today’s creates detailed for $X for capital the to XX, the delighted more we and expected shows Pharma, will interact would And confident Royalty opportunity decade. XX. a have expenses discussion will ask plenty our our for operating include join increase additional team company plan of next be officially Inaugural With

George Grofik

Operator, question. questions. take to call the now We'll up please open your first

Operator

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

open. is line Your

Geoff Meacham

Good Hey morning. guys.

current a and on to environment its few. get implications. your the I want got thoughts macro Just

then Terry. I rate question, maybe year your like change Pablo. for question for things or at So all deal assumptions is guess, the the pace Is And increases first flow on of ratios? this second

have so headwinds recent low at financing cash really multiples not whether many abate. going pretty are You IPOs – and are clear that the it's trading to

the make IPOs? shift of so to much. is you I valuation of risk does some sense more to it but does And the stage question guardrails, earlier recent stage? outweigh so some lower kind the Thanks know have of guys earlier

Pablo Legorreta

Terry? Sure.

Terry Coyne

Yes.

locked increases of business. the rate we So the terms we've Pharma's we're in potential very been in a rates balance Royalty like impact I our everyone the we average watching maturity think in. macro on debt good sheet Geoff, be of at have lucky yes, us from if – for years. for around year which I is dozen a and would times say environment, debt matures weighted a with I that, pretty XX% mean, of our very plans attractive XXXX beyond, and current And obviously perspective, this to in position over – a

deal seeing In terms we’re it how opportunities think of a of right flow, could – lot impact it’s I now.

has I – time. more companies as as market at where these well. as think been if a to trend hurt more it and attractive ways royalties anything, view as way doesn’t think are backdrop – And equity that I an momentum that accelerating the we of take this their But things kind certainly looking businesses. fund

of in and our years. We’re the the productive a couple next very happy of year hopefully, pipeline. And with can this be discussions productive level

Pablo Legorreta

an what adding, which provided, So perspective environment. Terry to interesting already adding Geoff, the on morning, is macro good

always communicated way fact not But something forward, in a focus and going which strategic think see Royalty the maybe investors just investments. going you very in terms with into the share the we significant Pharma approach our that earlier-stage open-minded in like to we’ve been things. is going you to to in past, I us I’d shift you’re has of

notions sitting really with team We looking have decades, essentially of the approach come way down open not piece paper, that's we it opportunity management listening maybe told any include a have or transaction blank or a involved story, want we that at understand we some things, not. in may things pre-conceived the that with have than And mind, cases; we – sort may a ideas, an to and bit what of teams, for to to something the in then if and to are the it decide to their done with it's past. trying earlier carrying get

a our I billion to per big think a picture $X – company, $X Geoff, company deploying which perspective, from is billion year.

$X billion, deploying the billion. us was year in of excess $X in year last seen prior it You've

actually we could met $XX where earlier, to fund think us there actually X. but one that in case. make we an royalty agreement mention if And that no trial to And be do is and earlier company make investments, the commitment earlier-stage way will scale million question I'll in For mainstream. there actually the with In million, the probably products already fund that in founded already actually milestones past investment for is to I with that thing other a an done us, a stage where and small we we've become the $XXX trials. appropriate, that an later-stage was certain the Phase were is totally has funding

have you strong obviously, out wanting with underlying growth, conditions trends of that fund to Terry And the market companies that. as accelerate very current royalties. pointed So

see going something few adding to quarter companies people team, so. excited help we're our So and to a investments you, or that also in at out do that that's very to you're also to Geoff. what the new Royalty are research and us next very selectively Pharma and to is going us reach members Thank

Geoff Meacham

guys. Thanks

Operator

Thank you.

Evercore Our comes ISI. from question with Raffat Umer next

is open. line Your

Mike DiFiore

is this taking so Guys, in much DiFiore question. for Umer. Thanks my Hi. Mike for

gantenerumab. multibillion-dollar Just think gantenerumab Prior had you opportunity. one a NCD, guys I on be to could said that the

update on color of there's if be know Thank I that the of in any potential proposal, if lines, couldn't, gantenerumab? now would So Also, great? brain could be here. thinking shuttle offer you you. along said [indiscernible] you those to structure the you royalty get greater light any updated but

Pablo Legorreta

you take don't why Marshall, question? this

Marshall Urist

Absolutely. the Hi, Mike. for Good morning question. thanks and

one. that to parts two So

we've to anything I our think in we be gantenerumab, changes – – discussed the had potential think you we've we the don't before seen product. discussion a view is that that. on that has guys of this NCD with multibillion-dollar So

of take is helping is Royalty of kind product what Just how a in great to step of Pablo that gantenerumab back, we part portfolio. some the and, portfolio came exactly the in I and think, that a Pharma we themes joined think through terms – talked and companies some their the gantenerumab did, solve of about problems, the exactly the that's of with

think trials a to I a your you we original gantenerumab trial – was could marketer that or picture, that well-designed thesis make sort of had product though question, this still reflect two bigger design and answer that our around really the big best thinking on product. profile

informed of by safety multiple consistent data and once conversation these the efficacy there a ultimately fast readouts gantenerumab, picture we other and you from potentially I think long-term. I sets the discussion this I the class, think debate, drugs be forward when think to is going of months really full year, the products in had XX the out now will you've for have that drive

all want following Aduhelm what this see shows, developments be. determine with this we that's but going of ultimately and is think next we're we certainly, what class So interest, to to really, data the to going with crop

second shuttle. your was think the brain on I question just of part

shuttle is under shuttle – that the a gantenerumab that brain is agreement. product either is brain So royalty-bearing

said, It it right? trial so X be And royalty-bearing just it Like early, I Phase think, ultimately us. is a we've is recently. entering, to would

as that potentially portfolio as have So but a be go to of long the part way excited to well. there, we'll

Mike DiFiore

you. Thank Great.

Operator

Thank you. Thank you.

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

Your open. is line

Chris Schott

for question. much so the Thanks Great.

me. for two Just

this you billion levels, Should for It up. capital overall of the as say, obviously well $X industry the deployment needs a capital are saw capital level time on deployment? in about like IPO. at they've the normal let's trended thinking So the XXXX seems higher new gave ranges we Royalty? we be for above Just of

You're able past. than to diligence the more

the second So think just of coming there, the thoughts. in submitted back I your but just answer the interested slides you And to, last you thing I think, proposals was may XX presented, year. be yes one

transactions. executed You five

or those ability other companies being just somebody and royalties Thanks color some on maybe last to favorable year, these conditions bit on with favorable a color about equity or there Were is the that might we transactions where – valuation sellers the any those done financing? that market think revisit so of valuation existed an would much. Just changing, companies little an of less as did bit more additions have so little else Or for be a XX. appreciated?

Pablo Legorreta

course. Of

going deployment. to answer And Terry look think about we at capital we Jim analyze question some the the that the can deals the detail. on and in first do So is of why guidance I deals about we talk don't

Terry Coyne

And to done lot right wait I patient And deeper though throughout cash May. and encouraged Analyst the does we're So that our certainly, we've deployment able do going levels we've in question, more by this, opportunity over deployment. that that Chris, the deals deploying been like think to we've – to the We're history. be years. well years tracking on detail we're last where been capital that able unpack we the encouraging. how consistent we it than been in at ahead very that ago. do of been the uneven, did the the very think to greater a feel that I we – clear we've of recognize couple And guidance five the we that and we feel This It then going really is tend does something, Day say we've really be builds, our for can we're and have years would And with us, tried and and is to going or to deployment, capital be originally gave years our there's I create there's to – opportunities. at capital the we significant be IPO. more now for it of XX time where investors. market are

the at just describe So and say opportunity that would tuned, really try I event. to stay we'll

Jim Reddoch

sort that's question Hey. say about of by is it's address that or of they're what and – past. years XXXX another would the similar in past possibilities. pretty of Chris groups I between the where has number smaller happens in number done different three proposals your executed kind the to it the to than competitors transactions. It's our One was a been group. of

requires times after of for we was And yet. sometimes then segment hasn't transaction, it And hasn't we seeing – a the been the see been end Another comfortable diligence, asset just proposal is with the which didn't times transaction a there totally that third got where just get or where the deep the and diligence. deep into group us diligence. to a

there's time to a get sometimes some of continuing those to a So of some to transaction. lead because are need – kind

the past. sort So seen of submitted it's that proposals pretty have similar executed transition groupings we transactions as to the in from to

Chris Schott

Thanks much. Great. so

Operator

you. Thank

Our next comes from Cowen. question Scala with Steve

open. is line Your

Steve Scala

Thank is you. and then questions. One bigger two picture. mechanical is I have one

So If impact foresee Thank a this of unique the question. be apparently, opportunities, assets. could then this past similar similar companies I So quarter but you. are, case, all the the pediatric seen in business? its biotech The Pablo, of Januvia have sustained not these to that bigger royalties and for many foresee half in you in there Some is – that's second of the garner picture or question half? is from risks? would on your Pharma the half circumstances? year. question be this probably commentators exclusivity second could also will mechanical second situations Is tough How the will does career. is in payment think situation? contracted? could during devaluation how this were Or sales I the second Royalty mechanical different this is, biotech Or in how one for contemplate the markets your

Pablo Legorreta

first do you take Terry, the Sure. want question? to

Terry Coyne

Yes.

last Janumet cutoff certainly quarter. pediatric So kind certainty unique. that the in end and contract for we it March, that's a there know many acquire and in we was the paid hard the second we question, case in and to be date on ends of – will instances, exclusivity. that the There's sort contract our of tends But and do payment up every why so being with in be Januvia in of XXX% royalty Januvia

Steve Scala

Okay.

Pablo Legorreta

ahead. – the Regarding go

Steve Scala

Can just I follow-up.

or – does when will – ends quarter through So patent that end? But the actually when I in July. payment will second the know be actually actually through or July. payment June in the don't

Terry Coyne

Yes.

on will payment on quarter sales second the based through March. be So royalties

the was this this situation so a in is where a there was – And date unique contract. a

Steve Scala

Okay. you. Thank

Pablo Legorreta

Yes.

nothing I Regarding more was market. in – been two question a graph there’s a the four some like two or through recently – downturns was very where or had five it’s down. XX% year, strong some one of other of very, down. a that since like at result approached this there’s I have prolonged times. very it biotech think even And maybe your need your is a But occur, have up looking and these of been trend – that, downturns In we case, one years, significant keep underlying downturns. I that about I we’ve XXXX new, as the biotech the mind. think XX% are part performance honestly, I XX we to the XXXX. downturns in indexes that have think And market period mean of over in the actually and since

many So that depending many what that’s think a Royalty survive, is case point going period try to And come. they be really get look I going for fact of Pharma just through will we to you sciences, going there’s this the many, so health there’s human that what And through for question. new the And may needs. keep in because been the I just now amazing – mainstream, than that human trend on we’re think, public be so gems actually the super medical of to diseases really in the for thank the of And royalties growth. it a that yes, the that is XX, good, very, in little human that we here way secular bodes telling strong companies with to excited that at, for we’re to are actually to in to think I’m XX%, position to that innovation decades think to understanding all in mind in But now space. we’re are funding. long-term have these is unmet us And itself you And the IRR at solving to to years funded biology, address opened XX% have trend, always end the approaches somewhere future I be is find have, – addressing many job I to promising And is – up were were about is of may with life the those our investing which I cutting-edge the the of many of or advances just network you multiple very Royalty to disease. that went be up early visible and going – And our that think raise now. what actually but and of Pharma. incredible fact many that more that in money. maybe exist of market – definitely got the approaches past. companies ahead thing now a so The

interesting this I exciting and reflect that’s to really perspective. ups the downs think biotech. But on it’s my industry of really

Steve Scala

Thank you.

Operator

you. Thank

comes Our Stanley. with from Harrison next Morgan question Matthew

is open. line Your

Charlie Chen

This for is the Matthew. three have Charlie for Thanks questions. on questions. taking I

that street the the Thank rating? could you. potentially potential is to for the the the additional question in your while mavacamten read-through have you, your still is or – expectation my first of and stage the debt final maintaining versus are on market investment-grade the Bristol-Myers of projection ratio is, take discrepancy us on your my you view, you second opportunity. development in aficamten And which can biggest terms that label And internal you have that the between leverage question projections? then assets The remind

Pablo Legorreta

Yes. Sure. Marshall answer should question. the

gantenerumab. perspective, excited older an is own can that of but my that one for a from just treatment obviously, it’s one I’m people, huge think product risk Alzheimer’s. for effective the biggest And need the very about very I there, affecting given that problems also there’s is be big, very,

to But So Marshall, go ahead. me. that’s exciting

Marshall Urist

events built a how bit differently, just this the exciting look is additions deck, seeing from it your effect cumulative really is portfolio a think our part And portfolio, I remarks portfolio. the over we’re little if I in not part which this is the of lot necessarily steady we we XXXX growth the how while I think think about this on few we years. a the And our of that Sure. thing core just question as interesting think a our in prepared Charlie, you have of last development-stage continue covered year. think about have of XX, disciplined remarks, I to the an which to the to we striking result reason is really have And of hope flow we Slide focused prepared really the development-stage is on its I interesting like is. the that show as and that’s events it business,

breadth events step areas, If of you this you mechanisms, when look just look the for incredibly team take a the year. together of type at put at different we all milestones back have, the the therapeutic it’s and really different broad what has

date, On more therapy $X think They come. product probably that. about seem certainly your see confidence I can of aficamten, a about product. cardiology year the this of how the It’s therapy mavacamten the to in the excited then. really label when think, on a question excited like. there, So, and we wave has and ground. Bristol, We’ll to with And portfolio, this I think Talked I to plays I are think off it the looks aficamten. little unrisk-adjusted and and targeted label – see going – I team see peak to comes get it on in this think innovation like like part continue we billion We’ll hopefully excited with what this the and the discuss comment exciting to to was But Cytokinetics targeted new what sales. expressed we’re is a events out, the new PDUFA and second early talked we’re years exciting have in build about out. is think launched importantly, area. in we to year and a do we new we’ll

the So, I’ll Terry for leverage. think to on question pass for – it I

Pablo Legorreta

looking what? had when that Lyrica HIV/AIDS really a gave we obviously of value go value Atripla really have good an what’s that have of some the some think went to milestones. perspective of that at model ahead. you milestones Terry, and products, most a on other HUMIRA Guess approved add business Pharma are some and then pharma the a is ourselves I reflect tells would the capture, would this – that point psoriasis drivers. over always investors they then But products good right? we is public differentiate of decades just news answer way is see the also what attractive Marshall think years drivers you, I that of find openness a back exciting ago, significant was Royalty like could me to Slide as investors Pharma, I the the flow biotech. and XX, if I constantly invest. within investment look big our is And what many lot Let where trying lot XX with what think we would or make to I if past, last interesting for so ago, the that. you’re the portfolio. very stock, or there our going look a was indications was lot it felt different look the company We to value like to So, on because and and attractive slide have it’s just years given But two to biotech with Truvada could so to we about drivers, things of in In from able to getting the today investments with on Royalty that five of this the We of that industry the going an have we’re a really Pharma at see of as Royalty the unique similar best in Quad. many

Terry Coyne

Yes.

committed leverage investment-grade remain rating. our to So credit question; we on the

in of of debt-to-EBITDA total four with year to And three the over finished we’ve the XX times. years. this we band last X.X so And times kind operated

path band. that really to de-levering acquisition right the can We’re go we for four from clear very we comfortable in – there. where where a see We above see operating

So we and financial it. lot a see opportunity advantage of we like we flexibility the to think about do take that’s us. that how of we of firepower I And have think front in feel

Charlie Chen

Thank you.

Operator

we question Fraser from you. Truist Securities. Greg Thank have And a with

line open. Your is

Greg Fraser

questions. taking the for Great. Thanks

then your also the updated haven’t while growth to exceeds intact? a into strong Investor outlook you Day? Are XXXX, long-term particularly deployment large Or payments and milestone in year notable Is that something growth question You factored any guidance XXXX. long-term waiting the at the update And by you’re there your on quick a are is still capital outlook that margin. that range? a had target

Terry Coyne

So, I’ll this. take those

of this into to in we point, this material we’re see So in year, no. to something up Day. And that there. And our that and we We in those answer things terms anything targets going – in guidance. one outlook, factor you that’s sort any long-term any try The would Investor of heads the thinking see growth our don’t our update a of terms at did then latest our is onetime try forecasts. if we give to at milestones

Greg Fraser

Great. you. Thank

Operator

back call And closing the turn to this I'm time. showing to no further questions remarks. Legorreta at for I’d Pablo like

Pablo Legorreta

continuing on Sure. continuing Royalty thank the My to Pharma. progress look team call everyone with and for operator, to to interest I our you and you. Thank forward you, in your share

of any please just to in that Investor to May. our George. have free we I out you will follow-up questions, Inaugural all say Day you during to feel If really see reach hope And

to today. deeper dive discussed the in be with that topics we’ve We’re a share many of take you going to and really excited

hope Pharma, again thank and you in So, interest May. you Royalty see for in to your

Operator

today’s Thank conference you participating. call. concludes This for

You disconnect. now may

Royalty Pharma (RPRX) 15 Feb 222021 Q4 Earnings call transcript