Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: Q4 2020 Financial Results
Royalty Pharma plc Q4 2020 Financial Results February 17, 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 Jim Reddoch EVP, Co-Head of Research and Investments & Chief Scientific Officer Royalty Acquisitions Marshall Urist EVP, Co-Head of Research and Investments Financial Results Terrance Coyne EVP, Chief Financial Officer Conclusio
Slide 5: Key Highlights - Pablo Legorreta
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: 2020 - A landmark year for Royalty Pharma
2020 - A landmark year for Royalty Pharma Successful IPO raising $1.9 billion in net primary proceeds Inaugural bond offering locking in low cost of debt and ~12 year weighted-average maturity Further expanded portfolio with eight announced acquisitions totaling $2.4 billion Strong full-year Adjuste
Slide 7: Delivering strong financial results in Q4 and FY 2020
Delivering strong financial results in Q4 and FY 2020 Adjusted Cash Receipts(1) Adjusted Cash Flow(1) ($ in millions) ($ in millions) 22%(2) 423 9%(2) Quarter/quarter 484 446 347 Q4 2019 Q4 2020 Q4 2019 Q4 2020 pro forma(2) pro forma(2) 15%(2) 1,483 1%(2) 1,290 1,776 1,800 Year/year FY 2019 FY 2020
Slide 8: Royalty Acquisitions
Royalty Acquisitions Jim Reddoch, PhD Executive Vice President Co-Head of Research and Investments, Chief Scientific Officer 8
Slide 9: 2020 was a record year for biopharma royalty funding
2020 was a record year for biopharma royalty funding Biopharma royalty market growth (1) Number of transactions Dollar value of transactions ($ in billions) 23 5.4 4.1 4.2 16 13 13 2.2 8 1.8 4 0.6 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Royalty Pharma responsible for ~one-third o
Slide 10: Announced $2.4 billion of royalty transactions in 2020
Announced $2.4 billion of royalty transactions in 2020 2020 Royalty Pharma investment activity > 265 initial reviews ~70 CDAs signed 50 in-depth reviews 38 proposals submitted Executed 8 transactions in 2020 for $2.4bn(1) Maintained strong financial discipline: ~3% of initial reviews resulted in an
Slide 11: 2020 transactions – transformative therapies across diverse TAs
2020 transactions – transformative therapies across diverse TAs Therapy Transaction Size 2025e Sales(1) $2.4bn Announced biopharma industry funding $94m $5,358m $220m $798m 12 Total therapies $255m $334m 3 Development-stage products at acquisition $650m CHF 2,260m $200m $1,461m 5 Areas of therapeuti
Slide 12: Royalty Acquisitions - Marshall Urist
Royalty Acquisitions Marshall Urist, MD, PhD Executive Vice President Co-Head of Research and Investments 12
Slide 13: Expanding portfolio with innovative, long duration therapies
Expanding portfolio with innovative, long duration therapies Recently announced royalty acquisitions Transaction size $125 million Up to $155 million(1) Royalty holder BioCryst Minerva Marketer BioCryst Johnson & Johnson Therapy Orladeyo (berotralstat) BCX9930 seltorexant Mechanism of action Plasma
Slide 14: Financial Results
Financial Results Terrance Coyne Executive Vice President Chief Financial Officer 14
Slide 15: Total Royalty Receipts grew 9% in Q4 and 2% in FY 2020
Total Royalty Receipts grew 9%(1) in Q4 and 2%(1) in FY 2020 Selected key products Q4 2020 FY 2020 Royalty Receipts Growth(1) Royalty Receipts Growth(1) ($ in millions) (% year/year) ($ in millions) (% year/year) CF Franchise 159 37 551 30 93 10 346 4 85 12 322 19 HIV Franchise 78 10 294 12 42 16 14
Slide 16: Strong Adjusted Cash Flow conversion in Q4 2020
Strong Adjusted Cash Flow conversion in Q4 2020 Q4 2020 Adjusted Cash Flow (Non-GAAP)(1) ($ in millions) 627 (143) 484 (50) $0.70/share(3) (2) (2) (1) (9) 423 Royalty Receipts Non-Controlling Adjusted Cash Operating and R&D Funding Interest, net Other Adjusted Cash Flow Interest Receipts Professiona
Slide 17: Strong balance sheet liquidity and growing dividend
Strong balance sheet liquidity and growing dividend Cash, cash equivalents & marketable securities ($ in millions) • $2.0 billion of cash, cash equivalents and As of December 31, 2020 marketable securities as of December 31, 1,483 -2,232 2020 • FY 2020 capital deployed of $2.2 billion • Quarterly di
Slide 18: Full-year 2021 guidance
Full-year 2021 guidance(1,2) Adjusted Cash Receipts: Operating & professional costs: $1,910 to $1,960 million approximately 9%-10% excluding new transactions(1,2) of Adjusted Cash Receipts(2) 1. See Slide 21 for definitions and for additional information regarding Royalty Pharma’s 2021 full-year fin
Slide 19: Increasing Adjusted Cash Receipts outlook for 2020-2025 CAGR
Increasing Adjusted Cash Receipts outlook for 2020-2025 CAGR(1,2) Adjusted Cash Receipts evolution, 2020-2025 ($ in millions) ILLUSTRATIVE 7-10% CAGR 2021-2025 royalty acquisitions • Targeting >$7bn in capital deployment from 2020-2025 • Maintain IRR targets $1,800 Portfolio as of year-end 2020 • Di
Slide 20: Conclusion
Conclusion Pablo Legorreta Founder & Chief Executive Officer 20
Slide 21: Footnotes
Footnotes 1) To aid in comparability, % changes have been calculated based on the three and twelve months ended December 31, 2019 figures 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 Comp
Slide 22: Appendix
Appendix ROYALTY PHARMA 22
Slide 23: Royalty Pharma has maintained ~60% overall share since 2012
Royalty Pharma has maintained ~60% overall share since 2012 Estimated royalty market size and share by transaction value, 2012-2020(1) Royalty Pharma Other Royalty Buyers ~$2bn ~$7bn ~$6bn ~$13bn 18% 42% 69% 93% 82% 58% 31% 7% <$100m $100m - $250m $250m - $500m >$500m 1. Internal estimates of histor
Slide 24: Delivering top and bottom-line growth
Delivering top and bottom-line growth Adjusted Cash Receipts(1,2) Adjusted Cash Flow(1,2) ($ in millions, year/year growth) ($ in millions, year/year growth) 1,800 (+1%) 1,483 (+15%) 536 536 484 423 462 472 446 384 394 421 369 347 373 382 309 298 250 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2
Slide 25: Distributions to non-controlling interest
Distributions to non-controlling interest Fourth quarter 2020 NCI as a Products % of Royalty Receipts • Royalty Pharma includes several non-controlling Cystic fibrosis franchise 17.6% interests in our financial statements. Tysabri 17.6% Imbruvica 17.6% • The largest of these impacting the non-GAAP H