Royalty Pharma Plc · NASDAQ:RPRX
Royalty Pharma — Q2 2020 Earnings Presentation
23 slides from Royalty Pharma's earnings presentation, Aug 12, 2020
Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: Q2 2020 Financial Results
Royalty Pharma plc Q2 2020 Financial Results August 12, 2020 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 Royalty Acquisitions Marshall Urist SVP, Research & Investments Financial Results Terrance Coyne EVP, Chief Financial Officer Conclusion Pablo Legorreta Founder & Chief Executive Officer Pablo Legorreta Founder & Chief Executive
Slide 5: Key Highlights - Pablo Legorreta
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: 2020 has been a landmark year for Royalty Pharma
2020 has been a landmark year for Royalty Pharma Successful IPO raising $1.9 billion in net primary proceeds Strong financial results delivering double-digit top and bottom line growth(1) in Q2 2020 Further expanded portfolio with new royalty acquisitions and product approvals Strengthened corporate
Slide 7: IPO is a major milestone positioning us to extend our leadership
IPO is a major milestone positioning us to extend our leadership Ongoing Business with Expanded Publicly Traded Company Equity Only Ongoing Business Investment Scope H2 2020 Onwards 1996 to 2003 2004 to 2011 2012 to H1 2020 1.0 2.0 3.0 4.0 ~60% >40% Market share by total royalty acquisitions (1) >25
Slide 8: Strong Q2 2020 financial results
Strong Q2 2020 financial results Adjusted Cash Receipts(1,2) Adjusted Cash Flow(1,2) ($ in millions) ($ in millions) 462 +24%(3) 462 373 369 373 +47%(3) 250 Q2 2019 Q2 2020 Q2 2019 Q2 2020 pro forma(3) pro forma (3) 1. See slide 20 for definitions 2. Refer to Royalty Pharma’s Current Report on Form
Slide 9: Royalty Acquisitions - Marshall Urist
Royalty Acquisitions Marshall Urist, MD, PhD Senior Vice President Research and Investments 9
Slide 10: Recent royalty acquisitions continue business momentum
Recent royalty acquisitions continue business momentum Biohaven CGRP funding PTC royalty on Evrysdi Agios royalty on IDHIFA AiCuris royalty on Prevymis Transaction size Up to $450 million(1) $650 million $255 million $220 million Royalty Holder Biohaven PTC Agios AiCuris Indications Migraine(2) SMA
Slide 11: Financial Results - Terrance Coyne
Financial Results Terrance Coyne Executive Vice President Chief Financial Officer 11
Slide 12: Total Royalty Receipts growth of 20% in Q2 2020
Total Royalty Receipts growth of 20%(1) in Q2 2020 Selected Products Q2 2020 Royalty Receipts Growth $ in millions % year/year CF Franchise 136 59 93 13 82 23 HIV Franchise 65 24 34 26 DPP-IV Franchise 35 -15 27 38 Other 114 2 Amounts may not add due to rounding 1. Growth on Q2 2019 pro forma basis
Slide 13: Strong Adjusted Cash Flow margin in Q2 2020
Strong Adjusted Cash Flow margin in Q2 2020 Q2 2020 Adjusted Cash Flow (Non-GAAP)(1,2) 585 (123) 462 (44) $0.61/share(3) (6) (31) (12) 369 Royalty Receipts Non-Controlling Adjusted Cash Operating and R&D Funding Interest, net Other Adjusted Cash Flow Interest Receipts Professional Costs (non-GAAP) %
Slide 14: Balance sheet well positioned to drive new royalty acquisitions
Balance sheet well positioned to drive new royalty acquisitions Cash, cash equivalents & marketable securities: H1 2020 evolution ($ in millions) • Net IPO proceeds of $1,918 million As of June 30, 2020 666 2,787 • $2,787 million of cash, cash equivalents and marketable securities as of June 30, 202
Slide 15: FY 2020 guidance
FY 2020 guidance(1,2) Adjusted Cash Receipts: Operating & professional costs: $1,720 to $1,760 million approximately 10% ex-new transactions of Adjusted Cash Receipts 1. See Slide 20 for definitions and for additional information regarding Royalty Pharma’s 2020 financial guidance 2. This guidance as
Slide 16: Conclusion - Pablo Legorreta
Conclusion Pablo Legorreta Founder & Chief Executive Officer 16
Slide 17: Our clear strategic plan to continue growth
Our clear strategic plan to continue growth Approved Late-Stage M&A therapies Development Select examples Select examples Select examples Acquire royalties on market- Acquire royalties on late-stage Acquire royalties through M&A leading approved therapies therapies with strong PoC data transactions
Slide 18: Q2 2020 - Strong growth and continued execution on strategy
Q2 2020 - Strong growth and continued execution on strategy Q2 2020 milestones • Adjusted Cash Receipts growth of +24% year/year on pro forma basis Magnitude • Adjusted Cash Flow growth of +47% year/year on pro forma basis • Royalty acquisitions on IDHIFA, Prevymis and Evrysdi further diversify port
Slide 19: Capital deployment strategy expected to drive long-term growth
Capital deployment strategy expected to drive long-term growth Adjusted Cash Receipts Long-Term Goals Capital Allocation Objectives 6% to 9% CAGR >$7Bn in total acquisitions over the next 5 years Including New − Returns in excess of our cost of capital Products − Weighted average portfolio duratio
Slide 20: Footnotes
Footnotes 1) To aid in comparability, % changes have been calculated based on the three months ended June 30, 2019 figures presented on an unaudited pro forma basis, which adjusts certain cash flow line items as if Royalty Pharma’s Reorganization Transactions (as described in the Company’s final pro
Slide 21: Appendix
Appendix ROYALTY PHARMA 21
Slide 22: Steadily increasing top and bottom line growth
Steadily increasing top and bottom line growth Adjusted Cash Receipts(1,2,3) Adjusted Cash Flow(1,2,3) ($ in millions, year/year growth) ($ in millions, year/year growth) 536 +24% 462 446 421 +47% 386 384 373 382 369 347 536 309 298 250 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2019 pro forma 2020 2019 pr
Slide 23: Distributions to non-controlling interest
Distributions to non-controlling interest Q2 2020 NCI as a Royalty % of Royalty Receipts • Royalty Pharma includes several non-controlling Cystic fibrosis franchise 17.6% interests in our financial statements. Tysabri 17.6% • The largest of these is an ~17.6% interest in HIV franchise 34.1% substant