- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma Third Quarter 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 XXXX third for results. you to Pharma's review quarter Thank

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

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

EVP, will Our the & Marshall after Executive and Financial of Urist, Head review financials. provide and Pablo the Research today which discuss Pablo a Chief the Coyne, will Founder key Officer; will and Marshall EVP, Terry Officer. call speakers Legorreta, update Terry on Chief Investments; are highlights portfolio

Chairman, our the I'd from Pablo. remarks also that, call Vice Hite, concluding Pablo, the Following will to Chris Q&A a we over hold turn And session. join will to like with session. Q&A

Pablo Legorreta

again our our portfolio sciences. our of quarter innovation am strong model. and everyone of our power call. Slide leading funder life business which another of delighted momentum underscore achievements third report And X strategy George. to a welcome I you, the quarter, the and summarizes as Thank strong the in financial execution on in to on

by in Soliqua benefit a line, flow, and solid cash from First, by the our last year. foreign headwinds by X%; and grew a we financial delivered of from exchange third Adjusted X%; received, milestone adjusted bottom XX%. performance one-time quarter line, EBITDA our cash significant despite adjusted top

Second, exciting deployment This future billion with Marshall demand including for funding reflects year-to-date, potential strong of an overall large Merck. this capital is royalty-based solutions. funding collaboration our R&D will announced have the with model biopharma later. we partnerships our on transactions rate expand More broadly, for innovative $X of and innovative

our Pharma. has accelerated portfolio. Third, Biohaven, we its which in Pfizer acquisition across resulted saw Royalty to creation positive of progress closed value

with and which a development large in certain portfolio entities many biotech We – projects new approximately development have molecular stage figures, deep XX stage companies. late rival impressive

QX reflects successful our Pfizer's with full-year Terry increase later, our details which payments, of largely for to Biohaven, compared most the will since of capital results. our but adjusted time you of XX% has resulting through X% from the acquisition growth to raising guidance one we're This XX% we at take of XX% acceleration been IPO. launch the cash our our commercial expect now Lastly, receipts. partnerships of

arrived to that a excludes continued our impact X% of remainder our in important little line, quarter, over top Adjusted non-GAAP I by at remind our In year. X%. of operating have two an royalties by deducting top approximately line. line. an our benefit that negative another growth perform exchange factors, of we delivered you our the can expenses the X, top headwind of would relating portfolio a overall quarter. slide growth. top the which to On you of quarter see is guidance had in make EBITDA foreign strong the in exceptionally we third is X% on financials estimate delivered Soliqua on more the investments had from one-time we detail. Without EBITDA our our any We $XX adjusted addition, In the professional impact and may million us, we we of milestones the grew line period. would with double-digit Furthermore, well. that prior measure Consistent operational potential for these also

Lastly, growth cash top third IPO impacted quarter, differences our quarter products the year's and adjusted in two the year-to-date, our through and our the impressive therapies HIV of cash despite stage business Few increase of market-leading bottom with We power biopharma which grew of track headwinds speaks deals. shows growth. peers such continually of and top our replenish to top size value-enhancing flow, still of third by record XXXX. to to our of X% XX%. our ending, significant ability lose the delivered two the in X including an of payments This royalties our June last receipts portfolio Slide their since in primarily particularly development our our This DPP-IV. could adjusted line, strong quarter. of demonstrate reflected line third growth in orphan impressive compared model

we as closed Royalty in tools, As equity funding providing our Biohaven, from debt and creation instances, perspective, purchases. accelerated cases, in highly launch partnerships for funding. needs. In and On critical bigger successful have each Pharma Immunomedics, I customized traditional have acquisition a royalties, resulted Pfizer's Pharma Biohaven, their all our BioCryst, and to equity approach was October, a picture commercial of of partner's about alongside used partner needs, broadly how these funding Cytokinetics, And across we portion we these to capital, funding I more become such a of to and wanted a variety Royalty look more biotechs. Biohaven mentioned on shareholders. in earlier, our talk which When expand value critical experience X, slide

resulting most biopharma includes validated the biotech shareholders, from a our variety such And For and on Royalty by capital, I This our will which should use believe cases, Pharma, that accelerated successful new biotechs our to on With of using certain will the we have royalties, that, partners future. acquisitions successful by development Immunomedics to their we the funding of larger be achieved to therapies royalties. and successful be generally investments in portfolio. by you we as Biohaven, the returns commercialization has for funding proven sources Marshall over update in the of our hand the for and model represent model, companies.

Marshall Urist

Thanks, Pablo.

think advantages important Merck. move large We to and The projected can biopharma development, XX. and funding future spend, next our opportunities to participate well collaboration years, offer exciting with announce Let's as large slide as the late large R&D over in biopharma We're see across trillion We're commercialization at Pharma, the to partnerships of a collaboration full will industry. here. opportunity should we has fund Pharma for trajectory R&D $X delighted serve clear. of cumulatively a to scale Royalty been initiative biopharma around Royalty the programs recent as the of biopharma, create five we funding structure for The Pharma are to R&D companies. true model this Revitalizing between clinical transactions Royalty partner able stage an for plenty world.

allowing provide spend set. In optimize addition opportunity capital we the their across the at to partner risk broadest to R&D scale, sharing, can

can the opportunity. In diligence in structure. creative independent validation we our be as And flexible consistently rigorous demonstrated, addition, our provides and of have we process

Xb our Merck. Phase Slide our Lastly, role unique summary, that an with XX million sciences up PDEXXA we're term details inhibitor development and to Royalty ecosystem. of the in partners oral built MK-XXXX, funding agreed the in has provides the co-fund collaboration Pharma long have enduring development clinical reflect schizophrenia. to In life $XXX provide relationships to for of

potential the care to Our highlights structure flexible comes with MK-XXXX excitement to alignment demonstrate with approach from standard similar safety partners. about pipeline this view has our the to differentiated profile. therapy The our that efficacy a this deal uniquely our of of

to Pharma Merck our Phase be The size with entitled Phase of to independent portfolio. as late decade on and of this important around $X.X many as will royalty de-risking now branded depth proceed to we our in diversity will return billion, if and think, worldwide following support Our US large an slide stream million payment. Royalty half and With On scaled decides annual pipeline, receive of companies. biotech $XX a be In can development and the back this breadth royalty of could program. milestone to I for represent of well agreed funding development. of upfront we approximately make development. Pharma the controlled schizophrenia to stage to the X our Pending investment ongoing on of provide additional randomized the an study, projects potential the largest beyond. million the XX as want royalties Xb the sales we MK-XXXX, expand option Royalty program. co-funding, well decision compares XX, stage this co-fund pay We Phase sales program to in look $XXX results towards to to an have We X on have

As you come. we years both although our medicines anticipate invest oncology diversity will our area to currently approved in can our grow development and therapeutic as around on projects. the pipeline, have We see of accounts we considerable pipeline half these in to for slide, stage continue in

clinical Moving the year. next and XX the for regulatory expected slide portfolio and over now events to our

X the The significant over disappointing. We otilimab Phase for have XXXX. a clinical were results of recent expected news remainder

with and the we including X hypertrophic aficamten the for year, potentially of cardiomyopathy, non-metastatic and, important disorder, major prostate from migraine prevention. in including However, zavegepant course, readouts in In immunotherapy seltorexant to for depressive anticipate programs, in transformative remainder we results up readouts in Alzheimer's. cancer, several anticipate from in XXXX, Cabometyx Phase Phase combination seven obstructive Xtandi X over of gantenerumab therapies

in of the to With decisions On in zavegepant in front, mission innovation present over that, XXXX, in positive Trodelvy lives. decision And on to science on I'll hormone the anticipate Terry. our failure. patient PTXXX of transform coming these expect in Omecamtiv we receptor migraine, FDA Many on milestones line FDA HERX to life deliver an in negative asthma cancer, it breast approval months. accelerating heart and hand intranasal in we the third regulatory opportunity on on

Terry Coyne

Marshall. Thanks,

royalty stable slide the receipts July. Trelegy broadly were cystic year-ago quarter the period. Xtandi, quarter Tremfya, to move which in included drivers third Growth acquired fibrosis we Let's royalty versus the in the XX. and in Total the franchise,

prior and Imbruvica partially weakness shown term business from be substantial the impact. of shows saw royalty Orladeyo. Trodelvy FX our Cabometyx, We Biohaven XX cash for this in Soliqua partnership, by the on These model not inhibitors, receipt factors also unfavorable the to slide, Evrysdi, efficient Slide end positive offset how our the contributions DPP-IV redeployed. period, the flow and were milestone from growth though and the generates Promacta,

of the is would to to with X%, Without compared at last after This arrived have milestone X%, the Soliqua receipts we low-double estimated us digits cash adjusted distributions while $XXX key aware, growth been we you're amounted the for a million deducting in exchange which growth year's interest. metric third for As payment, quarter, non-GAAP quarter. been growth of impact impact. foreign adjust if have the would non-controlling

down basis, operating As cash column, approximately the X% of professional moved X%. costs professional receipts. year-over-year we costs adjusted a by operating On were declined

we in As our quarter, reported with a in in X% top adjusted line. growth the EBITDA growth the consequence, consistent

on the enhancing for As measure to and $X.XX payments reflected business line, interest metrics the once been development which financial semi-annual paid then performance. $X.X of cash, Pablo EBITDA and When measure the received bottom ampreloxetine adjusted or This our share of model. occurs the adjusted funding $XX adjusted for again our billion items, value year-to-date. our business unsecured the cash which less and new into noted, third by million highlights quarter. the margin XX% million key offset has by efficiency After an our non-GAAP million three quarter approximately per and of generated generated of of first redeployed of notes, of by paid. net quarters, to payment Net on EBITDA think resulted we flow, we is of we we of for in third timing look $XX other which the the in cash in one upfront the interest cash important million $XX our stage business which non-GAAP flow an interest the adjusted the $XXX be us royalties,

move financial now and to slide XX Let's our position.

to adjusted we to billion. reinvest net EBITDA this Again, for continue future significant acquisitions. return business royalty shareholders. firepower less cash Year-to-date, the generates of the paid is generated maintain We $X.XX to or interest financial

received We $XXX $X.XX Shortly our of Pfizer's which on $X.X securities marketable as of and we have our September. quarter-end, as marketable to related cash would of million forma and on dividends to capital pro end the well million billion bring deployed the after $XXX cash distribution, billion $X.X at cash acquisitions royalty securities and billion. in bringing to net Biohaven, acquisition

Excluding debt to stands pro leverage X.X debt forma and our to net adjustment, this EBITDA EBITDA. X.X balance at sheet times times total

reminder, royalty acquisition of coupon that debt range. our average debt a to XXXX rate above on also or in target high-single XX% percentage fixed our is X%, I beyond. As digit in would returns compares around teens with which on matures the slightly note our the

strength financial we're feel our execute financial our cash now business be receipts On efficient We XXXX raising positioned the Given million This XXXX. and model, reflects $XXX guidance. between Biohaven raise we the and plan billion are adjusted received to in for we range slide October. accelerated and $X.XX our increase payment full-year business to XX% value guidance on XX, of create of well in in XX% we the shareholders. we $X.X billion largely $X.X in billion, over of delivered substantial an to expect

The from future practice, royalty as into at of end top essentially we other guidance of acquisitions. our and is our payments the any take on this line with guidance not based today underlying And those are consistent standard account our does QX unchanged portfolio earnings. described our

and to which cash lower adjusted our professional operating we Turning in operating of expect receipts costs, from our XXXX, to X% to approximately is for August. be payments X.X% guidance costs versus

is, higher our today's impressive our receipts base. model The of Our operating think, expected inflationary fixed relatively margin provided especially protection adjusted reflects cost by low environment. we both business in degree guidance cash cost unique the and

line half unchanged Starting XX, receipts graphic our strong to growth. with XXXX. Finally, the from our performance interest illustrative Imbruvica cash growth million, this of slide the the our is still full-year pushes our around left XXXX royalties end The DPP-IV expect royalty diversified for we behind to further portfolio expected provides expectation. Trelegy drill expected and On paid continue guidance. to to royalty in performance $XXX for from and top strong offset further down the want and second are is of pulls portfolio. prior The hand and the our raise be side, our partially addition I adjusted and in various HIV outlook on enhances streams

to impact $XX million XXXX noted, I As US to strength around key full-year around by of X%, million dollar or the to have expected growth continued $XX the full-year adversely compared against currencies to X% is XXXX. for

estimate the approximately regions exposure. cash representing the As of XX% adjusted that a our are of receipts portion we reminder, euro most our exposed outside to United ex-US with significant States, the

tremendous as diversified the guiding accelerated right want high-single exclude If low increasing you two maintaining to we top top headwinds. the portfolio. line believe side, see the To is, well can as model I relative guidance, payments, strength tightening top think, loss deliver We and are Biohaven the our to of after to XXXX royalty previous we XX% digit end the prior the on growth growth higher payments, this layering unique our line digit we with between end. Biohaven significant And of the hand low-double To modeling. and a highlight FX achievement range with help of factors streams, royalty our to your and the we're of XX%. close, a to in business speaks few to full-year our on

to to Pharma before heading to an constant the that, First, X% intranasal provide Pablo next I $XXX like Royalty expected to which optimistic with our PFUFA fourth not year. first from milestone exclude assuming for to result to of early zavegepant include guidance that impact we plan second, approximately quarter do this report XXXX back approval. quarter rates would we growth XXXX closing We guidance his would for plan comments. Pfizer's to hand foreign And million investments. With when in compared in while today's year. future in adversely full-year if XXXX, standard by contributions payment for we practice, approved, our into to exchange is guidance XXXX, next earnings will any accelerated XXXX X% call Consistent full-year XXXX are the remain

Pablo Legorreta

Thanks, Terry.

excellent momentum, on strong executing final the My updated we're May. XXXX. quarter track in of strong plan well deployment out slide against results So in another we're deliver shows business and we that to capital set

year, and to have our billion the to attractive of including So that announced at into the track compounding billion far puts marketers development growth in described Investor remaining important this we and brought potential in new caliber profile many medicines on deliver billion, highest detail blockbuster stage capital unapproved our $XX from our us transactions therapies we of significant five-year value well growth ranging to portfolio, achieving $XX The $X these leading industry. some with target deployment to the of Day. category

stage development couple of Trelegy your the deployed two-thirds take nicely pipeline With past year be that, very of the has the to approved our grown around while for deal. capital size therapies, Lastly, this over the given we'll been has we of questions. happy years,

George Grofik

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

Operator

Instructions]. [Operator

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

Geoff Meacham

it Just a gantenerumab, I quick time. impactful of not but over know if your ones. had the it's be in couple guidance, could pretty successful, royalties, On

do risk biologics? investing all how think perspective, a And The context? and cash discounting. question for term, how small potential the IRA planning or from of at about question longer policy you same a you look if is, second Royalty this inform does So when from how the is heavy a at molecule

Pablo Legorreta

answer question the and Marshall will the then question IRA. the Terry's on going to answer first

Terry Coyne

to not a lot taken work, term higher pretty guidance of that We're pretty as gantenerumab gantenerumab a know, conservative there's this the risk. figures, approach. data eager see it drug. to later But were optimistic reasons to long any did we've in that of We think be all nice it I a recognizing include it you could very But be our month. is selling pretty if

And like would to it would look that our guidance could I would look the I so, point, looks think something I be we it think incorporate we But selling that's we over data. we to time. at want see a then think to that – that obviously, big drugs, if into

Marshall Urist

three thinking your question so how I'd IRA, the on on we're make there For about it. points

to our ability and of that of think The IRA that immediately business flexible kind as to immediately investments new previously, to and I highlights first is, the about highlighted pivot we've this our think and respond model. our begin nature

really about So, execute we to to good feel in era of our the even ability continue the IRA.

is Second law this told exactly be in probably will of it chapters that will terms how there's evolve, still exactly implemented. be how to

investments watching our we being plays everyone have then that we're too IRA And versus said already finally, our and are quality thinking our molecules certainly add thesis scenarios. So I being all to alongside else planning said, portfolio through our things That how scenario to and strategy. consultants molecules new and you our think small on as high implications out. with that for and in said, innovation our learning the and remains as that started different wanting to really driver impacts looking large focus at of implement that the

Operator

Chris Goldman from comes Shibutani question next Sachs. Our with

Chris Shibutani

that? bit is there of it willing on Can that space? Xb, to in earlier And particular. be more thoughts sense comment you partnership your partnership that in stage get this of intersection? its the the categories terms this has development, seem that Are engage, CNS if little you large one is noting Phase to then pharmas point certain interested might a of cap secondly, therapeutic the as initial about I'm it that in Merck does that

Pablo Legorreta

question. your Chris and answer Marshall will actually

Marshall Urist

can on are areas I'll and Chris answer comment question second about people your that part then your and/or interested in. maybe first not the therapeutic of

a way of I I the early have the is great terms one which on MK-XXXX that data, think where to Phase fact in development. completely is and structured is made think its little investment question. contribution the we be development, the the an the the but that see then in things at it structure, earlier in Xb development at I that And is its that in of which once think efficacy, a time, this a the make the we And is past. the a typically that development, we the would have about we good highlights stage at understand profile, development stage product small made investments point, landscape we can safety, then

really So for we kind of problems first the think to they're matching it question. the I'll to solve trying with is your really and novel interesting to our pass part program But and partners. that structure Chris and of

Christopher Hite

and Chris, we've question, remarks, in on the number areas. therapeutic invested prepared area a I reference slide different therapeutic of to back Marshall's across the

are we And so, areas. agnostic to therapeutic

it be we what we're what I striving what their really to the them And I to with we they when with most therapeutic we As relates programs. for what we've and say is partner perceive them partner we think the interests way pharmaceutical in then want through, they to what decide companies, would And which done that's to on whether X, quite that be think important in structured contribute the went it is, that regard, to and to Phase to with deal, funding Marshall decide advance Phase need opt to or to our actually aligns X in whether only in not well. as just get to we Merck. here perceive we've

Operator

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

Hardik Parikh

is for Schott. Hardik in Parikh This Chris dialing

a is first follow to just on The IRA questions.

do still of for while you how focus versus clarity the on that areas? think looking is So, therapeutic your on other IRA, oncology impacts industry kind

Pablo Legorreta

that Marshall, question? why take don't you

Marshall Urist

I on has IRA. level, or would since therapeutic various our high a nothing our really early at about areas this the focus say, changed period in approach

earlier scenarios implications through, add innovation that our focused questions, but I to will identify said I think to really work that have the think and various to portfolio, be that products programs, as want really and I through to focus. exciting we remain in trying we for still, before, we're on with IRA and comfortable we are I I thinking as think we certainly, mentioned the the

Hardik Parikh

is, of question deal the of rate have The reflect to higher kind interest environment, in capital? changed terms the higher how cost second

Pablo Legorreta

Terry?

Terry Coyne

But certainly, ways a couple think It's that of there's dynamic. question. I to answer

the is opportunity set. First

we feel lot you we're certainly we And like the I super the able look know of to you macroenvironment. of is funnel seeing to the invest. things do we're that as think decide the seeing different think But selective top that we're when a at. I of broader benefits know, actually

there rate In the a certainly, some natural as by that's sort pressure environment sort higher higher we tick bit in would of would terms of upward well. that a up terms, is of driven rates, expect that returns our little

Operator

Our from comes with Scala question next Steven Cowen.

Steven Scala

two quarter. the on good Congratulations I have questions.

with in Regarding for this in X in for XXXX. was Merck the MK-XXXX Merck earlier. X at collaboration Phase And perhaps schizophrenia, Phase product

Why years. more five least development And that what is seem this so product than modest interest product. the It at life? been in has Merck would its long? patent remaining nothing in really So, has

you things And it remarks fact data only with you prepared leading result. has considered, the Secondly, doesn't need mention two large that the Between analyzed, in And that that one data the be the All be and data conclude a prepared. been to yet? honestly, is gantenerumab passing not confidence. the press to GRADUATE will and in been trials data the not then, days. released might definitive studies now pooled, Are XX are build gave presented RPRX? surprised and complex, presentation the has shared

Pablo Legorreta

Marshall, don't you why questions? take both

Marshall Urist

we product, what next in to – an product this our program being as really an profile the needed spent both structured time can we are way lot Phase Xb is, we they much And how we a potentially On of did, this the upfront, think XXXX, on and next this stage. this a larger product basis agreement questions then why like the working strategy and about us. with I product's understanding look like about were something comfortable asked diligence small the during potential. the mentioned when for head our what interesting and the product I provide we constitute that understand Merck, commercial got And with think the of that relatively ultimate that aligned into what would of our both and we interesting was that process of

You asked about life. patent

As core is Royalty really Pharma important to you IP diligence imagine, do. of what part might we and

So of it, in to comfortable post to Merck that you commercially life sufficient approval successful in that this patent product were is we be terms to a continue there to can assume invest runway for and

Pablo Legorreta

very to as that's you interject the in just to change But, ahead, what's and obviously happen data comment going a what over not pay I to the you the to. happened a we is exercise. attention important matters. And is really just what's is that, all that. wanted future. what historically, that, at but maybe most obviously, anyway, line here We with look Before of is go Marshall, level the past other… drug And to top history, make Things go know, straight of the gantenerumab, time. But development sort

Marshall Urist

part question gantenerumab. second the of And your on

we than seen be haven't to have. you first, more So, all anything clear,

are way don't trust together, the we as data way pattern necessarily put you the So I Roche We to eagerly the data fact process think well. the do it we'd put awaiting and and and be there and it. data it's what going interpret describe see in we're excited data the to be is going it. in right the to it out to the

I talked of about consistent. way talked fact of term the think it the in Terry think, I has in risk has the there is it the terms about long way our very projections we've been, there, that context

our product. about nice excited prospects even our be would portfolio. that we're our think for I are We're really about without here and on business no growth. call a this But excited really our excited. addition to So It change it, we

Operator

Flynn Morgan Stanley. Our with next from question comes Terence

Justin Phillips

for on Phillips Justin is This quarter. on Terence. Congrats the

us an remind one share view com for just me, Any perspective the for the and of likely is the AstraZeneca's outcome on ad you of PTXXX today. opportunity? hosting your commercial So, can FDA

Pablo Legorreta

for question Marshall, you. another

Marshall Urist

about PTXXX. asking for Thanks

So, the about I for ad with we that prospects the this think feel on the approval morning, one. and com really good data

for acting a a combination novel As reminder steroid everyone, a is and short beta first-in-class of a this agonist.

setting about. commercial on-demand exciting. the shortness really is of excited really or that a and asthma steroid when using is interesting one breath we're opportunity idea in The a patients feel So

I know largest markets that market, is is size that is asthma setting think the PTXXX $X we consensus this nearly infrastructure when of commercial you about excited of put together and the the opportunity. out one which are the in commercial we AstraZeneca's the by fact long for XXXX all billion really and enduring there,

so all profile see data. the The and we ad Phase efficacy the we've and to seen showed asthma we're really about there excited safety convincing benefit PTXXX out. today, very So, on com the trial exacerbation, X a play feel good

Operator

Our Baum next question with from Citi. comes Andrew

Andrew Baum

in the to one First Merck deal. relation

is therefore, to to addresses cap XXX-odd-million your ones this synthetic mid same think in you've didn't pharma going the I the X for less. believe IBRANCE just Phase going I guess deal to is the be and, still it, that, structure deal, concern investing as capital large that would the know of done and to Phase company I derisks X. assets be obviously the are well-capitalized outcome willing since arguably offer in the terms large, but wanted. with have up the a they're you worst the a inherently up the that you're pharma constraints doesn't PALLAS which royalty have first have

equivalent investing the That's the in for areas for returns again, all? at a any in terms So, other design into? XXX-odd-million, substantial where X to could just is, going allocating there motivations given do of the such the in a the question figure trials input which And Merck thinking you say and be you're that that the make in you you Phase asset, which you opportunities, question. are of about first non-core you indications as Royalty? part And think do potentially of assets have when costs? the does fertile second believe exactly your opt Or to have

Pablo Legorreta

then perspectives, views, comments actually that with few our views in our A the or I I'll to collaborations. It has they see about And then we use to and take it sort their our tend up that we how companies to of they and our comments own want on be them But think think whether comments clinical happened share they have not. the development, past these do development. to to clinical of in often and pass taken it's in kinds and Chris. passive

transaction the some started I from We're very comment, reference the kind The ago. being to was very novel. here. a IBRANCE time creative big we the which other quite you these And just are was quite financings making think, comment way of perspective, did, by picture

that we're takes among change excited So the because see to with behave. actually huge one Big say big Pharma. to we about collaborating for obviously companies they is an mentality potential in it how very us it and it's takes And that effort these time thing time. But

were balance their is cash something that they which lot A Merck. a try explain we sheet. with that cash, We we one did cash of to of go companies on a extent or benefits to of And and rich the in, the true. of totally lot have have that have these had management senior to lot to transaction talk to a mentioned you like they

more the and asset, is required in it's is shots investing sort amount goal. part total, about contribute bring by capital then deal, just this small them mitigation benefit to they billion. actually And million economics they're significant exercise for $XXX decision quite that, a that close which they It's on development very, about there drug a market, to in excited that this of and economics. required is to It's cash other about. XXs on their and for the to percentage of we're that collaborate the assets and the of excess get then, And gives significant going have very it's it this things mitigation. they're of by risk their other up $X.X bandwidth, asset, able the example, a the it small if that's to can a redeploy high the that us for portion P&L very can with not invest lack or math share In to driven do you it's essentially driven of at very So look in capital of frees And cash. capital realize of greater in not risk by of are One you several us. actually important. the other

very as to here sort them not XX, top your the bottom win of thing on to your say you is we key them, from with X, for you that top thing X, of one the say list. X we and really the years top XX we with go Now, to now, we is And what be want top we here, when be win important partner. often have these talk companies, us to to or collaborating projects, to working

on to of through not And on of go ones sort a we then and lot of things partner working your need So, top with you those, the lengths understanding didn't great and different cut. we make programs be us the this that you aspects we others. one this Chris, to that's company. question. often of really what want do or areas programs with conclude therapeutic that other lead talk But, the maybe is about to of that of top the And

Christopher Hite

they're Pablo on proceed Just question, allocation, a what question Phase their plans on do obviously to final to decision to and us second the and the we in, your opt with lot of to how going we Phase in But their just opt Phase schizophrenia going access think X to a gives we potential I or X was Xb we other understanding have around the which have data don't we're before Andrew, in. add program see to think to say, said, have of indications. And for their have comfort what dollars say on is. I a allocate that once

your to your that's second answer question. So

you as question that is add part trillion our And you've your pharma over the the partner as of to years. about XX profitable pharma spend first going on of to Analyst that launch to there's we drugs. asked, in next talked lot it over $X.X R&D Day, a Just seen, large

risk want with we that they other it we And is share pharmas. risk And way think most very happy their do in we share. can a so, to are on programs. And sharing large important to competitive risk

We're We than global of capital also pharmaceutical a out most cost have passive companies importantly. lower there.

we're United in JDC, as commercialization explained your So, second going seats in States on the of their demand question. rights to or I not the part XX/XX

with important the lot a up as to there's think share potential rights programs advantages committees to partner have of large important pharma us the JSE we rather another and in to world. most in sit than a they or markets thinking partnering So, where on pharma, the most about commercialization JDC committees

Operator

Umer Evercore ISI. comes Raffat question Next from with

Michael DiFiore

it's that's on terms in first for Two asking One, stage efficacy? funding, my Phase confidence DiFiore least with aside now, that quarter. question option at gives the unique in the product Mike some is fact from product? since it could But a Umer. the Merck their question. competitive provide especially now. interest. of in financing financing to here for Understand doesn't Congrats that, them $XX So MoA again, me. it's early been added color on be this high the this Any how is this aligned that's suggest, to safety, time well X Pharma's limbo deal. in on be for million in bigger for better product, confidence And for a Royalty This again, a again, upfront its later an Merck

Investor year-to-date capital you spending that Is the to this billion long-term question goals towards the level that were any that latter forecast Second the we thoughts should through average more Or may capital deployed $X of XXXX, in of more a industry the of decade? when previewed your billion of just, deployment fact nearly end is $X to $X Day cumulative it given as of and trillion thing billion spending? annual expect $X near-term kick in? that at

Pablo Legorreta

industry a that not sort more the right? later trial of the of first cost add trillions at the amounts more of of investment that I smaller things or stage cost Big if it's it's question and to think is dollars. with or the is capital, as of trials, then size for as the overall look that. can many commensurate at the fact initial capital but Marshall X in XX reflection you biotech the about Pharma, the the deployment Phase and the several fact the But And big the us whether So, huge look of you regarding the years, requires trial, initially of the Xb.

deals, to we deploy close – explained deployment a the yearly and add somewhere you to one-off confident and or And year us that will I've deals will on more As deployment more billion, of increase synthetic you we're billion, last large stable the past, basis, capital doing one larger, those see probably you hybrid another business billion we biotechs to a $X.X from and with one-offs year, those lot comes $X a then, between transactions if that the this are $X that royalties. one quite MorphoSys, with that with Trelegy our large that predictable, quite overall saw in And billion. feel with was $X allow that's meaningfully. capital saw that

billion to transactions but, larger billion of from have add having getting $X think want if will there so, three guided be also transactions. next years, one-off over if function we a those. collaboration, billion to period, the over us And And, of certainly, #X I year, I it's year those $X.X five the deployment, included over of and that $X anything go be that the larger to to several sort for will will billion we to add every to likely have on Chris, those the should time want transaction, happen and Marshall, on three know But, Merck maybe question. you five ahead. don't a capital anything please if you Merck

Marshall Urist

is important terms in done a structure. in of way. and This everyone, amounts think it's deal remind been very this this the has never the I before to novel involved, structure

to and the of our X I think scale in great Merck, the with we shoulder to the shoulder then upfront of So landed a in terms co-fund really place Phase commitment program.

product into program in read So, program together. the the about Phase more the know the structure. structure fund that I relative right product a I co-fund this and once this terms to to lot and right X, way to deal what's goes would of It's this don't confidence

program, the is excuse a large this terms of trial large – in Second, me, also Phase in Xb MK-XXXX, very a the mention, very in I is program. would

point. some us product this what to I give interesting And to going really that really we're clear is going data. that at So and know, is think,

about it how differentiated be. asked can you Finally,

think there, drugs all number the over and of is need even out therapy cycle alone, we still on I time. schizophrenia in off patients that know with there unmet

certainly know, certainly development potential need was is there would profile program obviously there XXXX. about what so, And that very further. fact of But for sight we're you that beyond on that, the the don't potential as go I lose Chris, And that thinking add? a I broad wouldn't much is could of mind options. our

Christopher Hite

I billion we we're add on capital since X billion IPO, we think upped deploying I about Day, to guess at over Analyst to I'd than years. feel really only $XX we've good capital. the and XXXX. greater how deployed that is deployment billion We the thing At $X $XX around the billion $X said

opportunity our is So we only feel like tracking set really well and we're expanding.

to opportunity the So super we're about excited capital. deploy

Operator

with from Greg question Truist. Our next comes Fraser

Gregory Fraser

the deal to seeing to of have to how markets access at that spectrum help in you're you if And in of any the then, deals, think royalty Curious debt? extent changes should landscape future about the we transactions debt competitive terms cost to fund potential the size? the end higher for of

Pablo Legorreta

then And question? Chris, maybe, you the competition? on want to question the take Terry, second

Christopher Hite

landscape. haven't we competitive change whole in the really seen big No, a

we the are space. largest the think I in player

We company. rated grade are an investment

own in generate. tremendous balance the markets cash our have access sheet to free we capital We capital our and and flow

comfortable sort environment of into the in actually we field market. synthetic just way of we're largest competition bond awareness access the think biopharma before, we convertible than capital, coming and rather royalties of raise the to So, welcome a quite of as sense mentioned can for the I the R&D or competing different funding the in that And and deals. just equity continuing

the within landscape. really we're we competitive where So happy stand

Pablo Legorreta

a we unknown with us going Royalty to Chris, it XXXX, going years company. a sort take excited benefits as it. for when XX in to of I were doing add decided also, of It from about operating XXXX. an did lot public was provide I'll in We private it very was thing Pharma of we think us. And

three bit at two capital were have cost than I operating Royalty we more than five as much stronger company perspective, least for of a from significantly. We ago. as years And think, been a In years. or our many my business a maybe much, I Pharma today declined see many, little has now ways, public

obviously we company, us more or many public management Just see as to so. can we public the gone really a to capital are and want I see they by on scale, today the made And that and us advantage we many is more a has visible, debt Chris XX% in side, and I a which because think probably have access be we how are companies' teams can being And who business like, who we down now, now a can partners in really And think it's them. do deepest world. the we given mentioned, companies important as how us greater market scale. to – have. it's good really, player also, strategic there's behave market, in the one with And and

very well vis-à-vis position other… think, strong which for have I we the is next strong. think been maybe, I really really a strong that But today really, the And the also, we years. the performance So things, competition. to grown, really several Terry, And team is has all the business able since teams those public, in went assemble over bodes of a

Terry Coyne

XXXX matures very of that a business debt XX% fund look low tool borrowing we're costs. to at the and would as beyond. But to acquisitions to business. in grow And a debt fund continue time, to markets the we and position over certainly, We're over time. in we our as to view we an that fortunate continue our cost the of will to important debt, On debt use tool

end of lot I financial around cash. think Biohaven the lot FDA a billion and great the We finished had quarter. a payment. of $X.X the thing is ad of at have We of the business flexibility. that The cash generates we

is nice firepower. capacity prepayable, $X.X debt a markets, which continue we leverage us we a revolver, gives and access a have revolver. But the and that it's to lot of billion can do have So, where we

of flexibility. lot a have market expect the investment we in and much to do we But continue over the access very be would grade we we at it the to we're that, at looking So, of bond the value time, that will And kind market. of looking at of acquisitions, it's also cost all context that dependent. the when we're moment. in for But deal capital business

Operator

Verma with UBS. comes last Ash from Our question

Ashwani Verma

standpoint? an the label is it get from are side, safety ad into your could headed to outcome next heart range whether On of month, a what omecamtiv kind mecarbil be view a of efficacy Appears a gets com where drug on efficacy wide like on what and we this it the change with less commercial or XX, opportunity or are population you guided PK all that if dosing? additional refractory potential require than qualifiers, the will a assuming of your whether recently includes fraction drug? And it And view on failure hospitalized. does ejection like for the what

Marshall Urist

com questions our and We've Cytokinetics. the terms go A then lot where in great on of those transaction partnership label with deal years Cytokinetics are had on a aficamten royalty on synthetic it really and ad great omecamtiv for might the probably this the initial over earlier year. our of and questions

and failure help been team, come. to ultimately the look think they've the potential But months who believe year ad we in on picture, We'll Cytokinetics com patients for in the date. to then what the PDUFA to and big happens executing the have forward we think severe does So, really product look next happens watching well. I really heart what this have out at

Operator

for the like over further turn closing There are to questions. remarks. to no call I'd Pablo Legorreta

Pablo Legorreta

And continuing Royalty you on your Thank operator. for to thank in interest everyone you, the call Pharma.

to questions, feel reach to out his George you any free follow-up have and If Grofik team. please

Operator

This concludes the program.

disconnect. great may a have day. You Everyone, now

Royalty Pharma (RPRX) 8 Nov 222022 Q3 Earnings call transcript