Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Royalty Pharma First 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 first for results. you to Pharma’s review quarter Thank

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

file on are Moving statements. to to with SEC that refer currently and statements presented you update results information may XX-K unknown forward-looking I forward-looking differ would risks, risks. this we statements from contains other our description involve to any remind cause factors call that you in a forward-looking that available X. and statements. these to based the of no Slide I Pharma, to for like information known obligation assume such to these uncertainties All Royalty materially and actual on

Non-GAAP on used will The press to help non-GAAP our the understand website. are our be release GAAP you earnings financial provided in performance. reconciliations available financial measures to

that, And with Slide X. please advance to

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

Pablo, concluding by we will Chris a Following be from we Q&A remarks joined Chairman. Hite, hold will session when EVP, Vice

to call Pablo. With I’d over turn to that, the like

Pablo Legorreta

report a as to of welcome and strategy George, Sciences. and funder start to everyone delighted on strong you, Innovation to I as Thank on leading call. we the XXXX a our deliver Life am

model. strong highlights of first financial quarter, X power in again achievements business the and our the summarizes Slide our momentum our and portfolio which

also XX%. and prior will to receipts, performance. the by grew discuss I by grew All slide. cash on the the we cash flow were Adjusted Adjusted strong our related Biohaven which metrics XX%. by First, payments, next XX%, strong top-line adjusted delivered EBITDA

payments in including million and repurchase program $X.X believe to up royalty billion. additional Second, of compelling of up acquire a announced $X value, represents. million intend up of stock on capital share position $XXX an personally share given to to the upfront to billion allocation, we Pharma the also I multiyear Royalty I $XX

our blockbusters therapies, and We three the new we exciting Spinraza, blockbusters added strengthened estimates. which therapies, future SMA KarXT, pelacarsen both the development including portfolio. royalty stage on Third, are potential consensus of and

a study. the medicines our with in Additionally, were positive FDA, by a the had three for and approved potential expansion EMBARK portfolio Phase X Xtandi label readout

receipts. reaffirming Fourth, we full increased are guidance our cash adjusted for year

the reflects X% of underlying between based our guidance current guidance Consistent is our of our acquisitions and growth portfolio year. future prior any expected payments. benefit Our with X% this not does standard include on the and from to Biohaven our portfolio related practice,

more in financials XX% we growth detail. see payments. in X, top-line related to On Biohaven the our our if delivered increase the can growth XX% Slide prior you We payments and includes

million XXXX, fixed Zavzpret $XX the the year payments period nonrecurring milestone of as reminder, million in Biohaven received here $XXX received the related the from are a As same approval as well migraine, Pfizer March in for items major ago. following we were the a

we for quarter exchange payment. to professional EBITDA top-line. costs prior is Adjusted operating minus non-GAAP the by an which around payments for X% and Consistent arrived at by minus impacting Biohaven payments this in from Foreign a to us, by measure EBITDA is related to our with in the the important and our our represent XX% continued X% headwind top-line, quarter. our top-line grew divesting XX%, adjusted including

payments to upfront and in in the substantial this to cash year. also million the development the the the Biohaven related Cytokinetics quarter our bottom payments flow, in increase reflected grew quarter stage payment. line $XXX XX% Lastly, our including adjusted XXX%, prior prior by and The milestone

shows double-digit consistently our since successfully first including in IPO X June in strategy. quarter. impressive the record of against our Slide our XXXX, execute growth ability track growth and to top-line strong This of our reflects our

to X into related X% Trelegy represented The dynamics model a the dive to the base show top-line top-line the provides growth drive acquisition again to and Royalty quarter compounding before the impact our portfolio allow of a and of underscore strong to underlying replenish in performance the the payments. together of in and performance tranching various combined moving [ph] strong in into quarter to range. our our business deeper power Slide XX% us our expirations the our Biohaven once headwind growth to growth. business parts. royalties the The deliver unique of taking account X%

to With you to that, portfolio. will update it hand on over I Marshall our

Marshall Urist

Pablo. Thanks,

the discuss next our perspective broader on few to I On want portfolio recent and our in strategy. schizophrenia slides, to a provide transactions also to approach

on Last the for treatment is to million acquisition strong agonist potential commercial and of X% of positive above the outflows and million modeling oral for to is annual with $X vast muscarinic payment X threshold this provide billion require disease. of Karuna’s on will $XXX psychosis we in receive KarXT. delighted context the sales announce a majority transaction. schizophrenia. in X% KarXT regulatory a Alzheimer’s This in we for return $XXX this and milestones Phase trials sales The In potential upfront royalty performance. milestones development royalty the in month, an some of up were novel approximately of PureTech’s two very KarXT to also for

new – Phase profile only did program, results of positive in adverse reductions events the of the medications, associated and Our sustained some and those especially weight negative with encouraging, in regarding including excitement very symptoms but clinical typically by significant including gain, importantly, schizophrenia, need early somnolence stage schizophrenia. and was Not this symptoms. of the tolerability current development novel the trials EMERGENT-X about extrapyramidal common driven EMERGENT-X medicine therapies for and demonstrate is two and X studies, the the

to compound with results, third consensus submit Based by the to exciting the street on rising these drug this of has application the in billion FDA recognized of new sales plan a XXXX. projections certainly profile to quarter $X The year. this strong Karuna

XX on expands schizophrenia. for new need unmet significant treatments the Slide in

need hand and can current you left not respond about to to half this have treatment taken unacceptable patients challenges see treatment underscores only When together effects. therapy new months, three quarters with do for third side, which partial close or within patients that the of disease, this the side of a particular in of On suffer results the approaches. a improvement discontinuing approximately XX

Each subject KarXT so as medications invested profile have are offers to highlighted, we two of and novel differentiated clinical current potentially notably a on just I why MK-XXXX. is tolerability. a by between marketed a Pharma in already mechanisms most X results from and reported arises excited unique MK-XXXX action This through PDEXXA positive Royalty has KarXT, Merck. Phase Xb in royalty is to will and approval, and collaboration potential FDA Phase from where inhibitor be Karuna a

unique Taken together, this multiple potential same another the see illustration invest in ability our transform the we category to is for of where therapies patient lives. to in innovation

of selected last a our on to Investor concept Day year returns XX we showed interest. themes that investment at Slide

consistent Our these the two with are investments schizophrenia of in category themes.

industry-focused the large Schizophrenia under-innovated that is of price of MK-XXXX believe potential to benefits complex under-innovated less with to large patient great population. and a specialty markets been populations KarXT and bring towards patients markets a example is shift points. in difficult-to-treat first market, is explore smaller The given where important we arguably and there the higher this could and

cases. with many effective Schizophrenia sits we for this scope treatment options in believe brain in innovation addition, In limited disease heterogeneous category. has tremendous squarely

development on perspective Lastly, opportunities. strategy. acquisition XX, a and This deployed balanced Slide since on I between to long-term XXXX shows we our our approved how provide data want capital have stage royalty

since left-hand in in the XXXX the the have billion development you that see approved products. of of in started capital we investing in stage investments side, been majority On approximately deployed, $XX the therapies

can the our of On products also part percentage deployed towards side, but nature aggregate variability on in on business, of skewed see capital. the average total annually that exhibited significant basis, in approved an has XX% been at the opportunistic you annual has reflecting right-hand

So partner while levels has choice the between in innovation a our fund royalty strong not and stage, us agnostic allowed – growth. investing market and returns approach funding have approved to maintaining of target of balanced way while therapeutic area to in and the us we do investment development position long-term

With over Terry. to that, I’ll hand

Terry Coyne

Marshall. Thanks,

Total Slide XX. to in the versus the receipts move grew quarter first period. ago royalty Let’s XX% year

in payment, together Trelegy Excluding each of million payments royalty, royalty strong the The Biohaven Tremfya fibrosis related last July. the contributions growth the which milestone franchise, X%. Zavzpret approximately we cystic the from grew acquired reflects magnitude and with quarter, $XXX receipts

slide, Orladeyo. not particularly from Evrysdi and Cabometyx saw from growing on contributions also shown other and Trodelvy this We royalty medicines and

weakness DPP-IV and the These Airsupra. AstraZeneca’s loss we a partially in received to related by the lesser were to by a FX $XX by offset Imbruvica of Tysabri extent, the payment million and impact. factors Lastly, positive adverse royalties

Slide how efficient XX redeployed. flow substantial our model business cash to generates be shows

in As XX% non-controlling year’s to amounted key at interests. a $X.X This receipts which you’re quarter. distributions or first is arrived aware, quarter non-GAAP of for deducting last metric cash growth the after adjusted us, to compared we billion with

growth to prior the related Biohaven of As the noted would been Pablo XX% payments, impact earlier, quarter. in have

column, the cash the and were quarter. down in professional X% approximately move we operating receipts adjusted of As costs

by the adjusted quarter, When our growth of we EBITDA to look with we paid. As cash EBITDA interest in generated net be we XX% think growth. new into the less business redeployed to value-enhancing consequence, a the reported in adjusted relatively top-line consistent royalties,

not whereas to our interest position the strong million development of quarters. payment the given first received semiannual Net interest included included milestone the prior stage $XX from benefited balance paid interest our we and payments million a on the figure have sheet, occur We in of billion funding and $XXX cash in which the million the related upfront the in quarter, notes, rates. timing which unsecured reflected did third in for $XX year This quarter payments higher period of Cytokinetics. on $X.X

As amounted margin adjusted the a to in $XXX of an million quarter. and consequence, efficiency resulted of adjusted bottom highlights for again XX%, which our once $X.XX business cash and receipts grew EBITDA line cash faster than model. share This the significantly adjusted per flow adjusted or cash our flow,

position. now and XX financial our move Let’s Slide to

acquisitions for dividends. strong cash capital well million We around maintain first that was continue on $XXX billion royalty $X we and as firepower increased the as royalty offset quarter, acquisitions. $XXX the more future of end financial deployed securities the cash to This of at on marketable little our over million flow by a generation over March. significant quarter, to so our In than

total X.X times Our the at times of debt-to-EBITDA leverage at a net quarter stood comfortable end the and X.X debt-to-EBITDA.

high the on highlighted, coupon percentage our in to is As fixed returns single-digit average above range. teens our slightly the rate to royalty I have on compares which debt X%, previously target acquisitions

In or addition, debt beyond. our XXXX in of around matures XX%

together, Based plan believe for shareholders. Taken value our continue efficient competitive cost debt our ability business maturity and our strength a we execute our business for to to our on we that advantage confident business. model, remain capital and profile represent in create financial durable on and of

want capital. to allocation capacity outlined of expect that how period to around On Slide we a over of our five-year XX, a our creation. I value to last shareholder At to you strategy this of and and billion debt through we capital Investor cash we $XX generation Day access drive have combination expect remind our May,

$XX invested slide, billion As billion acquisitions capital our deployed you this royalty can on majority – of value-enhancing see period. will of be the a with to over $XX the target on

ahead of this having to In many fact, up a announced XXXX. billion of aware, in bit we of as are are running transactions schedule, you $X

a when focus to to authorized allocation and industry multiyear price positions, remain buyback which on with powerful is shareholder up of tailwinds returns. compelling robust capital billion, to highly to Furthermore, a see capital drive our and market in balance value given appropriate, active. and focus to our transaction the shareholders continues of this royalty we combination share repurchases. program Recently, dividends share acquisitions efficient our our the primary We through of pipeline $X aim the and on a reflection Board share to returning in our

returns strategy, this confident significant continue strong capital in mission are allocation creating on deliver life and innovation we will By generating value. to sciences our of shareholder executing accelerating against we while

XX full Slide our guidance. XXXX provides financial year

billion in billion, milestone outlook of provided to we We expect range $X.XX of be to $X.XX following receipts receipt the March the in with cash adjusted raised consistent payment. Zavzpret the

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

operating our to Turning costs.

XXXX, in to X% operating adjusted expect receipts cash approximately be previous with and costs line We to payments X% for professional in of guidance.

is of our environment. We $XXX impressive believe to today’s business interest year that XXXX with in in cash and protection received which in million account is for expected payable by model to margin the first full to the paid minimis This Similarly, inflationary continue pattern degree quarter. around into provided million unique be amounts take QX. de follow established not the balance, quarterly QX on does was interest and our still $XX

You $XX expense company’s thus milestone adjusted second we payment will million in should year. stage This payment Cytokinetics development cardiomyopathy. to on guidance non-obstructive also this XXXX Aficamten that a of the make recorded as of trial of pivotal be in million $XX the and their half reduce note initiating cash a expect based to hypertrophic funding flow

by one the aware, we receive are by quarter, lagged sales live one sales royalties you product quarter. of many as Lastly,

the other the have be reset at there would compared is same beginning our second second to XXXX. Accordingly, with tends lower in to potential in business, than increase receipts to expect to quarter the some quarters and of quarter to and throughout and be seasonality largest of the typically first the year several slightly the we higher cash tends the Additionally, royalties the year. year, which tiered, Therefore, the in be are quarter quarter adjusted higher. our

My receipts and sets illustrative, out is Starting we XXXX. $XXX cash these for for which brings payments left further drills guidance. have the hand to comparison graphic final due receipts our faced pushes with side, down The for XXXX in various but payment, underlying the pulls the outlook adjusted our behind received XXXX. slide the we base million a $X.XX high related Adjusting base cash adjusted Biohaven billion. of of to on

we from adjusted Biohaven, start royalties. On base the offset in Tremfya weakness, be reflected X% expect this of which year, the by X% we prior growth the to and underlying our guidance. which a on by we receipt to have driven franchise, anticipate right of Trelegy if CF we full losses exclusivity the believe the Imbruvica Partially and to cash year side, of DPP-IV conservatively we

also We three royalties. contribution of expect quarters a Spinraza modest from

expected Using As headwind payment, Zavzpret, the $X.XX $XXX mentioned to milestone earlier, FX modest include does are all of not payment minus future a any to is to increased top-line U.S. exchange minus rates, of billion X%. benefit today’s dollar growth this on billion. $X.XX reaffirming we million represent together, Putting acquisitions. this of X% the relatively including our guidance

to hand Pablo like call the to would I his for that, With back closing comments.

Pablo Legorreta

Terry. Thanks,

close how excellent full guidance strongly me well to up sets strategy. execute to Let on saying our the our deliver by and our continue pleased start XXXX. for to I against to am with us This year

why To XX, way would Starting Pharma’s unique a to finish business offers Royalty like Slide to growth. in with highlight on I biopharma. invest model

with or to our at of announced which Day, deliver decade, we of we this CAGR a expect large compares than As more XX% Investor top-line biopharma. consensus for over more X% expectations

we the scale average with to the of small offer nine relatively companies. an large in benefits a head compared blockbuster of medicines exposure as XX count, with for terms being Despite biopharma company of

capital a generally before stage investments We similar of thereby clinical avoiding high risk preclinical early-stage do for tend lower compounds. as have low to clinical the invest our therapies cost failure in be and of rate we not development proof-of-concept,

biopharma, are of and debate. and precise delivered investments acquisitions you R&D double-digit productivity have are unable as with the our – on for rate and comparison we the returns attractive an consistently We return a provide while of on open our low know, to industry large

ownership the Royalty which large than is executive team named but than X%. not biopharma our cap around yield And company, our aligned for ownership interest The significantly a shareholder XX%, ownership management higher in is is which with for X% the peers. biopharma. fully officers offer of Pharma least, less with of also management last compares high We large to

consider However, employees higher Board, around department when is all and of areas we XX%. ownership even at the

with unique, profile biopharma business and industry. a compared Taken powerful the offers together, a Pharma to believe I model attractive growth very Royalty when truly return

to we would happy take that, your With be questions.

George Grofik

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

Operator

Sachs. Chris from comes from of the The line go first ahead. Shibutani question Goldman Chris,

Chris Shibutani

you update. very morning. the Appreciate Good Thank much.

You that, – royalties. is that XX%? the the commercial the terms in XX%, stage a Do the reflected development you, And that is do across and historically, balance you’ve between roughly feel landscape. funnel you talked balance the correct one about the of that for talked all about you screening different

know et to And themes, innovation for you in the I taking some in of that which ask these investment large cetera, part terms selected particular, diseases, that towards question risk. type and there’s I skew some development areas about talked sort TAMs, but of neurologic in where of underinvestment more were

And neurodegeneration as hypothesis team’s what you the we area, can you. some in opportunity that move mentioned, potential thoughts love where are there. Thank continues that disease but then a amyloid thoughts sort your of you the realm and forward view beta you Do your relatedly, Alzheimer’s get disease, comment as Alzheimer’s for to for news recently in how on outlook incremental we had are, particular, there I’d the on to opportunity. see

Pablo Legorreta

Chris. you, a Thanks, This is question Marshall. for

Marshall Urist

Okay, great. good Chris, Hi, morning.

there. basic there were three think I questions

our balance to see stage feel our yielded The the And system I XX, balance to comfortable patients, portfolio. think development on of sense has as Slide to continue going and medical therapy. approved we’re that the focus those, and really can to that on first overall a approved finding feel therapies highlighted, make to physicians, versus for focus in our stage you that we here we are development in important strategy was And our overall, really how be confident overall on do we’ve as about portfolio. continues the and of to how

we’ll we prosecute strategy we’ll have where comfortable think, to continue I continue overall, been. really that – feel we as with and and we are So to

that overall couple suggest a do be of And more reasons. there the stage. say focus The on overall, a was, of that second we themes to that question I’d development highlighted no there’ll for

one we prepared is look as at are themes that remarks, aren’t we of how overall the think I day-to-day necessarily but they front in interest, I the – these opportunities us. investment said as themes in of driving

we that themes to about. to just these interesting, but So really they the that and are on are stay we’re strategy that themes, talked going really think I are focused continue

there’s are large that the on And I think yes, like themes. investments – was another investments. areas investment, the An large market, these other category. in certainly, made, large less therapies been at investment made we’ve pharma, where we felt made leading same approved this under-innovated of examples with in by some development-stage still very would a had be consistent where we therapy time, where still there and when there Trelegy was and here we’ve But a this area

as So just example. an

part and is going in make category. and opportunities that was be all The your been that to of something sense the to looks about Alzheimer’s have patients, success like it looking there they think therapies there We an we’re potential as continues third and multiple area question It’s exciting disease. for see monitoring great for we’re to us. that for

Chris Shibutani

Great. Thank you.

Operator

next One of moment Schott Chris question. go The the ahead. the for Chris, JPMorgan. comes from next line question of

Chris Schott

guess, given prolonged you of elaborate needs potential the or funding kind I partners, bit doing? in the some having with specifically, changing have the thinking environment? kind environment. on the partners I for structures another and is at much the type changed deals challenges conversation you’re that you’re the a about just of of had just biotech you’re so And objectives I Thanks guess, guess, the I all deals of of of way tone these Great. one the, just questions. on can the of you the

is And landscape. then the of about competitive just second the that piece

you. the guess competitive seeing is hand, rates, that you’re what So, of on of kind that experienced? arena seemingly thought biopharma higher on partner well. other acquire I assets Or of than Thank the might you hand, targeting years the to have of as – but ago? one interest you’ve more either involvement about same a looking largely of you like different two some verticals Are three or the in large-cap with maybe kind kind as names

Pablo Legorreta

that Chris address Chris. Hite, Thanks, can question.

Chris Hite

your Thanks for question, Chris.

royalty gone last the which tone, how the I On up, – good one quarterly pretty how talked since number on our initial slides we XXXX. at first as reviews some think, the – about and market is the call, XX% just quarter growing our have shipped

So the of in of XXXX XXXX growing of value markets tenfold of in right is now. of capital markets biopharma environment transactions. course, royalty that number With the of challenging for since the a deals, backdrop number six-fold backdrop, since sense a as the and dollar

part our And XXXX, we of in I has to little sets. mind, the in and transactions. number led XXXX think extraordinarily robust, in markets still opportunity of what that’s keep increase But bit in a capital of the announced were lots and

the continue So one opportunity, very that selective market a we but see of do. we the in be to of to which tone we’re deals is lot going the in

I’d see the I first guess competitive. then we relates again, how it once to And competition, question. are question, the deals So, answer some that’s as second

the are of hasn’t on deals the environment is marketplace of changed not. the overall The really land. growing This growing. biopharma in nature Some a backdrop competition

marketplace dominate especially continue larger We the transactions. that greater than XX% on with share, to

we our capital. of see competitive welcome advantages, our capital there. a especially So growing with competition. access feel But We It’s certainly to confident and certainly our very cost we environment. around

Pablo Legorreta

advantages but we increased I think have our since ways, we public can many about more in talk competitive went later. even that

Chris Schott

much. so Thanks Great.

Operator

comes the moment from go One next the Steve, line ahead. Steve next question question. Cowen. The for from Scala of please

Steve Scala

questions. have I two you. Thank

the a the First, respiratory to or overall commitment in in could chronic GSK a after entering space future? it GSK’s cough of reflect a either Is this few positive could example positive that Trelegy there assume recent ago is future have that. any respiratory negative way. seems contract – in to I years be stipulations the on refocusing impact royalties of deemphasizing adjustments on

size is And the worth Secondly, number thought this; I developing, has I that Royalty can like Thank two, exposure is reasons for not the you. think come no across have most you’re the or the convinced tell you’ve on obesity. opportunities or three, three market obesity? terms; factor opportunities; the might that one, which of prominent of wondering it I’m again. can molecules think are if is been that you given three there of involved quickly those asked but to market. asking not be you not you Pharma are us this I how before, in

Pablo Legorreta

Good questions. you those? why Steve. Sure, Marshall, don’t take

Marshall Urist

Sure. Thanks, Steve. Good morning.

So thanks and that. on Trelegy, highlighting GSK for

We GSK like are excited respiratory don’t There’s to to disease medicine see which out, nothing focusing anything on general and point something cough, you question. to category. with think an is excited on the chronic is see that. their contract interesting in market. specific focus as your And with I to the consistent respect answer there’s

Although, just couple I highlight things. of would a

that we get GSK’s market and highlighted a is question really on Trelegy The product a diligence we like thing in GSK’s we company about. is example that And large, real a overall, back, our a investment commitment with is of process. little the and category little a bit and growing really – interests where that and aligned leader, important and sense they’re first over – get It’s really was are that, products really as as – I did investment step types and a But a on excited unfocused a by is, it’s attracting a good part great think of get in Trelegy excited into of when kind taking our of of diligence a of that’s part previous evaluation about. under-innovated the GSK on there. and

time. I obesity, of factors category of there, On on. apply the three there. where for partner, our for the of apply thanks to a a think going And a to continue for questions. us, win-win right I an that lot interest right looking as for the for It approach at up find our we’ll and your thanks there kind same you with strategy can apply get exciting agree the for looking well. without same bringing we’ll to space the such continue we opportunities of involved ranking is with opportunities same But that –

Steve Scala

Thank you.

Operator

from Terence, Terence moment next Stanley. please question. go line The your One for the ahead. from question of next Morgan comes Flynn

Terence Flynn

good one a potential questions. there Hi, is Tremfya immunology morning. for in larger royalty been your streams me growing Maybe new and of interest drugs Thanks on this have I’d here. taking for the oral say,

the or do implications And X Maybe, inhibitors entry an how [ph] oral potentially think the so you as you of this Type Marshall, see market about of IL-XX? the evolving?

And then deal on of for of the just over out that any the Chris, follow-up how cite, of backlog Maybe flow year. metrics year? could you. versus the one this terms playing is you course in more kind year last Thank

Marshall Urist

Maybe can can Chris I one, comment and question. second start the first Sure. on the on

behind best just again, it as Trelegy with this. touched excited the part well some of themes we the in that marketers So same really, world excited as on a why the really really medicine that portfolio we we’re on Janssen to are Tremfya is of have a of the and as about in one having

Tremfya IBD, Tremfya’s about the of think the physicians’ the future. in together excited – the label their think putting commercially of – both market, terms position both I really into expansion of the strength the I position, dosing efficacy convenience, their minds, we’re incredible

We are the orals. following entry of

the this has choice As patient need the we’ve unmet just a and seen historically, find that’s space for And to underestimated products here. new view overall. interesting and our need had for roles really given capacity

are on really in the the, still space. the injectables that categories some things of as and on going we’re as excited we’re interesting Tremfya think about well really oral of I the both –

that’s So overall Chris and there, deal view our the flow. can talk about

Chris Hite

Yes. Sure.

the targets which in describe over can be our any and given in year deal employment as period. past, volatile, we flow a to – multiyear is why the predict So stated we hard is capital

and $X.X in And was front. just executed your of which million of transaction head. year, value transaction would keep $X.X upfront. of obviously, up you announced value year, $X back encourage billion I billion of was to in But we billion $XXX So, this the last which that announced already we’ve

great off So, we year. a we’re feel to

and opportunities than opportunities, [ph] we year, over X% Last transactions. XXX we less resulted actually in looked of those at

environment, we we’ve might about it’s And very five robust. you over $XX the that’s our capital a to years. small are The next raised guidance about And opportunity actually percentage billion set. is that why $XX our imagine, billion transact upon. extraordinarily excited deployments extraordinarily So as and talked the we

that. with comfortable very We’re

royalty everything the So, we’re sense of backdrop XXXX, about the overall as I really in of mentioned, tenfold and set our growing, of think is the opportunity sort excited ticking itself, since pipeline. really I the market

Operator

next Geoff go Bank your of for moment ahead. of Meacham question. of One line America. next The from the Geoff, question comes please

Susan Chor

This Good is Susan on Geoff. morning. for

broader First, valuations better? guys the this you environment getting the of M&A in relatively M&A asset have seen Have high. year with and just uptick lot an a been question. a seen We’ve valuations deals

then far? beyond just about new Can us question has tell more a the dominant markets. on you migraine of really just two, research within been what’s anti-CRPs, from interest migraines and And under-innovated so assets and which our

Pablo Legorreta

the Thanks question Susan. for

more returns And when look company. we’re it’s components in looking in very the other when different those than Regarding financial-driven returns. note based seeking. in companies, we are royalties. obviously, royalties, past, on are to positive at we’re of forward the the some When respects, very M&A, we’re markets, there’s case, is companies other I strategic a think attractive pricing it’s are the a acquiring of metrics covered where right? in different deals when we we’ve investing acquires and important always And And our – company that of with metrics different analysis sort acquiring there use

and acquirer that the But opportunities acquire to many selling is of been has because and transactions the it’s to royalty present thing assets once potentially this I they for acquired strategic company that the activity other mention exciting M&A in that noncore happening see more been is there’s interested the us past fall in since would all do in category.

working with looking also We’re them acquisitions their more at capital with acquirers us when with partner potential deploy and acquisitions, them make efficient. to to they’re for side-by-side

for it And Marshall the then turn migraine to maybe I’ll over question.

Marshall Urist

of keep in are mind mind, still the really I that managed. or continue is in impact a thing migraine the really rollout important Sure. early things Great the Overall, But their in our I one. think question to migraine things the innings earlier ability is inhibitors to and in how CGRP are in to really their and interesting monitor. programs think we

be able see globally prescriber really are great them do for still So, as into it years dominant inhibitors well. continue to what penetrate broaden happens the will how the watch and I CGRP the And also Pfizer come, we’re to in and think to to AbbVie excited base to class that. and triptan the

the focus our stages. – and that’s real right now, we’ll – happening follow in think development that’s what’s continue I So to the earlier mind on in

Susan Chor

you. Thank

Operator

One for next moment question. your

ISI. question next go line Raffat Umer, the from of Umer Evercore please Your comes of ahead.

Mike DiFiore

respect DiFiore ingredient. This taking moiety the CMS documents versus is the much Umer. so the Mike Two active for my IRA, for call out With for to active terms me. in question. Thanks specifically guidance

same considered biologic it molecule As biologic same be single qualifying single single-source small small be moiety i.e., with active respectively pertains will products the molecule and products, the source. with whereby to products And identifying, drugs, ingredient drug considered source. active will

are to then similarly, drugs? fixed-dose but said, Airsupra? that biologic as Trelegy, the invest linked documents reformulated willingness And bodes Thank and Ellipta what guidance how products to thoughts on All for this such And separately, combination you. your influence this? in on thoughts does your royalties your CMS

Pablo Legorreta

Sure. Marshall, this you take question? do

Marshall Urist

Sure. Mike. Yes. Thanks. morning. Hey, Good

questions two So there.

versus first and the with to talked IRA. – That’s think, moiety have that something advisers follow active that on to question. I external as we use continue all the we we active consultants ingredient

that of in terms some have well You guys done as there issue. interesting work defining

something we to continue So it’s follow.

strength I – as implemented this about model are. learn will overall is business though, be important IRA we as era, think in how we the an our new which our things, IRA overall which is it point of highlights our

and process which that, I As fits how scenarios with well part that about are look our terms a we all for in is, the talked is can think, implement really really looking we’ve potential and our we to the in are at investment through we scenario-based exposure that through work that at every us, has become, right of and it of project, and – core now approach of as IRA, what work before. what

expectation, bit individual kind was – of which we’ll are fixed and combinations, those IRA clear world seems an they little have more considered perspective. that own On a think their our kind clock considered with products, from are I of consistent of that the dose there, kind

and I to to outside with all advisers to our the that’s the continue by who learnings we’re it continuing said, process view. Like IRA. So follow use all we confer the new

Mike DiFiore

Great. Thank you.

Operator

One Ash moment UBS. comes the from for line Verma your last of question. question The of next

ahead. please Ash, go

Ash Verma

Hi, good question. morning. Thanks taking for my

on M&A. angle different a the just So

royalties do with the directly with for think in view, And by you the M&A targeting is deal-making strategic them at assets to environment your biotech Do wholly-owned as unencumbered route the like these prefer trying them kind you assets of economics. look route? with acquirers for the your companies. competes royalty So the monetize

be into agreements And health want might they before royalty to if eventually? Thanks. to sell get so and biotech

Pablo Legorreta

not we part your to you the your listen our for being always clearly. of question. Thank our But really to question on first heads were side, able taking

microphone here don’t something, I if sorry. or to just know So, was to you close start maybe the I can understand, but

Ash Verma

sense like No – worries the the M&A the route strategic here, to royalty with – for these them the companies, a kind think wide, monetize get to want why be so if you’re sell. you they is with you royalty? biotech trying do with that competes the directly asset a do like deals trying do Yes. I’m you with of acquirers, think that’s eventually when exit What companies assets to them making royalty arrangement biotech they unencumbered route? getting prefer into And might the hesitant if

Pablo Legorreta

don’t you take why question? Chris, the

Chris Hite

showing find developed the number because we process the right? of royalties that’s you we slide year with profits or nature getting such Yes. Sure. these Thanks, that’s in last that in. the think history, I is every the associated however our are just actually the – that I that there covered oftentimes just mean, question. that speaking, universe with And just Ash, pharmaceutical pharmaceuticals – this associated product want fragmented a Analyst and partnerships nature that. the a the royalty just with of partnership the Day to products live and Generally or R&D there’s universe, universe of the for days

pharmaceutical companies come product are. that the with economics acquisitions a are when most at are product. company, And looking whatever of they an has so of acquiring encumbered modeling And the

very regular at they’re just when they’re large looking a to for that’s target that. way and used pharma So

Biohaven side is former deals so those both the companies And the we a part that – the and pharma ended just person we we as with talk in. being obviously, that And acquired. and royalties large transactions representing of where But way universe have they think it’s they a on who did Immunomedics just up both of banking had it’s lot about to. the live

something transaction And so do that it’s us M&A, on really not a really to company side. prevents that royalty the a and it’s not something prevents with

our environment a So to the doesn’t it chill prevent M&A and business flow either. not it’s

Ash Verma

All right. Thank you.

Operator

it At Pablo this comments. to back time, like I’d for over turn to further

Pablo Legorreta

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

have If reach please to free any Thank you George. feel out to follow-up you. questions,

Operator

the does today’s in This program. Thank conference. participation you conclude for your

disconnect. You may now

Royalty Pharma (RPRX) 9 May 232023 Q1 Earnings call transcript