Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: Q2 2021 Financial Results
Royalty Pharma plc Q2 2021 Financial Results August 11, 2021 2
Slide 3: Forward Looking Statements & Non-GAAP Financial Information
Forward Looking Statements & Non-GAAP Financial Information This presentation has been prepared by Royalty Pharma plc (the “Company”), is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities. The information set forth herein do
Slide 4: Agenda
Agenda Key Highlights Pablo Legorreta Founder & Chief Executive Officer Portfolio Update Jim Reddoch EVP, Co-Head of Research and Investments & Chief Scientific Officer Acquisitions & Events Marshall Urist EVP, Co-Head of Research and Investments Financial Results Terrance Coyne EVP, Chief Financial
Slide 5: Key Highlights
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: Q2 2021 – Executing against our strategy
Q2 2021 – Executing against our strategy Double-digit bottom-line growth; modest top-line growth(1) despite losses of exclusivity Strong deal momentum with YTD transactions announced of $2.8bn(2) ($2.1bn upfront) New bond offering(3) enhances capital structure and expands competitive advantage Raisi
Slide 7: Q2 2021 – Solid financial performance
Q2 2021 – Solid financial performance Adjusted Cash Receipts(1) Adjusted Cash Flow(1,2) ($ in millions) ($ in millions) +3% 475 462 429 +16% $0.71/share 369 $0.61/share Q2 2020 Q2 2021 Q2 2020 Q2 2021 1. See slide 26 for definitions. Refer to Royalty Pharma’s Current Report on Form 8-K dated August
Slide 8: Significant accomplishments in first year as a public company
Significant accomplishments in first year as a public company Milestones since June 2020 initial public offering Across $4.7 billion 9 4 in announced transactions transactions executed therapeutic categories(1) Across 85% 25% 17 therapies Adjusted Cash Flow(2) Adjusted Cash Flow(2) margin LTM(3) gro
Slide 9: Portfolio Update
Portfolio Update Jim Reddoch, PhD Executive Vice President Co-Head of Research and Investments, Chief Scientific Officer 9
Slide 10: Strong early performance of recent royalty acquisitions
Strong early performance of recent royalty acquisitions Deal activity since Jan 2020 Consensus(1) sales evolution since deal announcement 2025e consensus 2025e consensus Announced transactions: $5.3 billion Therapy Marketer acquisition date current Trend(2) Takeda $4,530m(3) $6,080m(3) Merck $453m $
Slide 11: Transactions span multiple TAs and demonstrate breadth of funding capabilities
Transactions span multiple TAs and demonstrate breadth of funding capabilities Therapeutic areas (since January 2020) Type of royalty deal (since January 2020) (by number of therapies acquired) (by number of therapies acquired) Infectious disease Immunology 5% Oncology 20% 15% Synthetic royalties 30
Slide 12: Acquisitions & Events
Acquisitions & Events Marshall Urist, MD, PhD Executive Vice President Co-Head of Research and Investments 12
Slide 13: MorphoSys transaction – providing a complete funding solution
MorphoSys transaction – providing a complete funding solution Upfront cash payment Milestone payments Development Funding Bonds Equity purchase $1.425 billion Up to $150 million Up to $350 million $100 million paid to MorphoSys of clinical, regulatory and with flexibility to draw over purchased at t
Slide 14: Important upcoming events over next 12-18 months
Important upcoming events over next 12-18 months Select year-to-date and expected upcoming events 2021 2022 Q2 Q3 Q4 FY Cabometyx 1L HCC top-line results (COSMIC 312)(1) PFS met, OS trend at interim; will discuss with FDA Cabometyx Phase 1b mCRPC ORR results (COSMIC 021)(2) Results to be discussed w
Slide 15: Financial Results
Financial Results Terrance Coyne Executive Vice President Chief Financial Officer 15
Slide 16: Total royalty receipts in Q2 2021 similar to prior year period
Total royalty receipts in Q2 2021 similar to prior year period Selected products Q2 2021 Royalty receipts(1) Growth $ in millions % year/year CF Franchise 156 15 92 0 87 7 DPP-IV Franchise 39 13 Other DPP-IVs 36 5 32 21 HIV Franchise 29 -56 Other 116 1 Total 588 0 1. Amounts may not add due to round
Slide 17: Modest top-line growth and lower expenses driving double-digit bottom-line increase
Modest top-line growth and lower expenses driving double-digit bottom-line increase Q2 2021 Adjusted Cash Flow (non-GAAP)(1) ($ in millions, except per share amount) 588 (112) $0.71/share(2) 475 (40) (3) 1 (5) 429 Royalty receipts Non-controlling Adjusted Cash Operating and R&D funding Interest, net
Slide 18: Innovative debt issuance further strengthens balance sheet
Innovative debt issuance further strengthens balance sheet Royalty Pharma debt profile vs. biopharma peers(1) • Issued $1.3 billion of notes in July 2021 at lower coupon than August 2020 bonds despite Treasury rate increase Weighted Average Coupon Weighted Average Maturity ▪ $600 million 2.15% 10-ye
Slide 19: Significant financial flexibility to drive new royalty acquisitions
Significant financial flexibility to drive new royalty acquisitions Cash, cash equivalents & marketable securities ($ in millions) • $2.0 billion of cash, cash equivalents and marketable securities as of June 30, 2021 -719 838 • Capital deployed of $198 million in Q2 2021 100 -226 • Pro forma(1) cas
Slide 20: Expanding our competitive advantage in funding innovation
Expanding our competitive advantage in funding innovation Deep access to debt capital for Debt maturity profile aligns with Conservative leverage amplifies royalty acquisitions portfolio duration returns to shareholders (2020 to 2021 YTD) Unlevered return targets ~14 years 13.3 years $5.3bn Teens %
Slide 21: Raising full-year 2021 guidance
Raising full-year 2021 guidance(1,2) August May Comments • Strong portfolio performance Adjusted Cash Receipts $2,080m - $2,120m $1,940 - $1,980m • Tremfya royalty addition excluding new transactions(1,2) (+16% to +18% yr/yr) (+8% to +10% yr/yr) • $37m one-time Soliqua payment in Q3 2021(3) 9% - 10%
Slide 22: Conclusion
Conclusion Pablo Legorreta Founder & Chief Executive Officer 22
Slide 23: Strong momentum in biopharma royalty market since IPO
Strong momentum in biopharma royalty market since IPO Number of royalty transactions Transaction value +73% +73% 26 $6.2bn 15 $3.6bn June 2020 June 2021 June 2020 June 2021 (LTM)(1) (LTM)(2) (LTM)(1) (LTM)(2) 1. Last Twelve Months defined as Q3 2019 through Q2 2020. 23 2. Last Twelve Months defined
Slide 24: Expanding opportunity set for biopharmaceutical royalties
Expanding opportunity set for biopharmaceutical royalties Capital deployment tracking History of consistent capital deployment ahead of >$7bn(1) 2020-2025 target 8 18.1 >$7bn target Cumulative Capital deployed ($ in bn) $13bn in capital 6 Capital deployed ($ in bn) deployed over 8 years 5.3 4 2 5.1
Slide 25: Unique business model continuously replenishes portfolio, powering long-term growth
Unique business model continuously replenishes portfolio, powering long-term growth Capital deployed per year Annual 5-year forward royalty receipts(1) Annual 5-year forward royalty receipts per $1bn deployed(1,2) 3 ($ in billions) 600 ($ in millions) 400 ($ in millions) 2 Average: 400 ~$1.8bn Avera
Slide 26: Footnotes
Footnotes 1) To aid in comparability, figures for each fiscal quarter in 2019 are presented on an unaudited pro forma basis, which adjusts certain cash flow line items as if Royalty Pharma’s Reorganization Transactions (as described in the Company’s final prospectus filed with the SEC on June 17, 20
Slide 27: Appendix
Appendix ROYALTY PHARMA 27
Slide 28: Delivering top- and bottom-line growth
Delivering top- and bottom-line growth Adjusted Cash Receipts(1) Adjusted Cash Flow(1) ($ in millions) ($ in millions) 536 536 524 484 475 423 429 462 472 409 446 384 394 421 369 382 347 373 309 298 250 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 pro forma 2020 2021 2019 pro for
Slide 29: Distributions to non-controlling interest (NCI)
Distributions to non-controlling interest (NCI) Second quarter 2021 NCI as a Products % of total royalty receipts Cystic fibrosis franchise(1) 17.6% • Royalty Pharma includes several non-controlling Tysabri 17.6% interests in our financial statements. Imbruvica 17.6% • The largest of these impacting