Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: Q1 2023 Financial Results
Royalty Pharma plc Q1 2023 Financial Results May 9, 2023 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 Marshall Urist EVP, Head of Research & Investments Financial Results Terrance Coyne EVP, Chief Financial Officer Conclusion Pablo Legorreta Founder & Chief Executive Officer Pablo Legorreta Founder & Chief Execu
Slide 5: Key Highlights – Pablo Legorreta
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: Executing against our strategic objectives in Q1 2023
Executing against our strategic objectives in Q1 2023 1 2 3 4 Financial Capital allocation Positive portfolio Full-year performance progress guidance Adjusted Cash Receipts (“top- Transactions announced YTD Positive Phase 3 results for Adjusted Cash Receipts(1) line”)(1,2) +11% of up to $1.6bn(3) ($
Slide 7: Double-digit growth in Q1 2023
Double-digit growth in Q1 2023 Adjusted Cash Receipts(1) Adjusted EBITDA(1) Adjusted Cash Flow(1) ($ in millions) ($ in millions) ($ in millions) +87% reported Adjusted Cash Receipts(1) growth +88% reported Adjusted EBITDA(1) growth +165% reported Adjusted Cash Flow(1) growth 1,131 1,044 $100m upfro
Slide 8: Impressive track record of strong top-line growth since IPO
Impressive track record of strong top-line(1) growth since IPO Adjusted Cash Receipts(2) (year/year growth) +18% y/y growth +10% y/y growth Prior to (prior to accelerated Biohaven payments) Biohaven payments +11%(5) +15% +2% +12%(4) +24% +12% +37% +10% +9%(3) +3% +24%(3) +12%(3) Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 9: Existing portfolio powered ~11% growth despite LOEs and FX
Existing portfolio powered ~11% growth despite LOEs and FX Q1 2023 Adjusted Cash Receipts(1) ($ in millions) 0 +87% 0 ~+11% 475 1,131 605 (15-25) Series A fixed payment(2) (24) 111 656 592 Drivers: + Cystic Fibrosis + Trelegy + Evrysdi Headwinds: - Imbruvica - Tysabri Q1 2022 Royalty expiries(3) Bas
Slide 10: Portfolio Update – Marshall Urist
Portfolio Update Marshall Urist, MD, PhD Executive Vice President Head of Research & Investments 10
Slide 11: KarXT – exciting development-stage therapy for schizophrenia
KarXT – exciting development-stage therapy for schizophrenia KarXT consensus sales projections(4) ($ in billions) • Acquired PureTech’s royalty on Karuna’s KarXT for schizophrenia 5.1 ▪ $100 million upfront payment ▪ $400 million in potential regulatory and sales milestones ▪ Entitled to 3% royalty
Slide 12: Significant unmet need for new treatments in schizophrenia
Significant unmet need for new treatments in schizophrenia Majority of patients discontinue or cycle therapy(1) Invested in two exciting new mechanisms in development (Current pharmacological responses) 1 2 KarXT MK-8189 ~75% M1/M4 Mechanism PDE10A inhibitor muscarinic agonist ~50% Stage of Two posi
Slide 13: Selected investment themes of interest
Selected investment themes of interest Under-innovated New modalities Brain Targeted therapy large markets for new diseases disease beyond oncology e.g. migraine, schizophrenia, e.g. cell and gene e.g. mood disorders, e.g. cardiology (Lp(a), cardiology (Lp(a), HCM) therapy, gene editing schizophreni
Slide 14: Balanced royalty acquisition strategy
Balanced royalty acquisition strategy ~$21 billion in cumulative capital deployed Annual capital deployment ($ in billions) 100% $14 $12.5 IPO 59% average $8.6 for approved $0 0% 2012 2020 2021 2022 2023 2012 2020 2021 2022 2023 YTD YTD Approved Development-stage Approved Development-stage Capital d
Slide 15: Financial Results – Terrance Coyne
Financial Results Terrance Coyne Executive Vice President Chief Financial Officer 15
Slide 16: Strong growth in total royalty receipts in Q1 2023
Strong growth in total royalty receipts in Q1 2023 Selected products Q1 2023 Royalty receipts(1) Growth $ in millions % year/year milestone 475 n/a CF Franchise 217 7 86 -12 69 -21 50 3 48 n/a 44 1 32 12 18 91 16 21 Other (2) 170 -7 Total 1,223 72 CF: cystic fibrosis 1. Amounts may not add due to ro
Slide 17: Efficient model generates substantial cash flow to reinvest
Efficient model generates substantial cash flow to reinvest YoY % $ in millions (except per share amount) Q1 2023 change % ACR Comments Royalty receipts 1,223 72% Decline primarily reflects end of Januvia, Distributions to legacy non-controlling interests- royalty receipts -92 -14% Janumet and other
Slide 18: Significant financial capacity for future royalty acquisitions
Significant financial capacity for future royalty acquisitions Cash, cash equivalents & marketable securities ($ in millions) • $2.0bn of cash, cash equivalents and Adjusted EBITDA less marketable securities as of March 31, 2023 net interest = $977m • Capital deployed of $618m in Q1 2023 1,044 -67 -
Slide 19: Capital allocation strategy to drive shareholder value creation
Capital allocation strategy to drive shareholder value creation $20 billion in projected 2022-2026 capacity to reinvest and return to shareholders Royalty acquisitions Share repurchases $10-$12bn 5-year target(1) Up to $1bn (announced March 2023) • Announced ~$5.0bn since 2022 • Received shareholder
Slide 20: Full-year 2023 guidance
Full-year 2023 guidance(1,2) February 15, 2023(3) May 9, 2023 Comments Adjusted Cash Receipts (non-GAAP) • Strong portfolio performance, partially offset by Imbruvica weakness excluding transactions announced $2,375m - $2,475m $2,850m - $2,950m(4) • $475m Zavzpret milestone payment in 2023 subsequen
Slide 21: Underlying growth in 2023 driven by existing portfolio
Underlying growth in 2023 driven by existing portfolio Biohaven payment added $509m in ACR in 2022 Solid underlying ACR growth expected in 2023 ($458m accelerated payment; $52m Series A fixed payment) ($ in millions) ($ in millions) ILLUSTRATIVE ~+4% to +9% 0 underlying growth $2,789 Zavzpret Accele
Slide 22: Conclusion – Pablo Legorreta
Conclusion Pablo Legorreta Founder & Chief Executive Officer 22
Slide 23: A unique way to invest in biopharma
A unique way to invest in biopharma Large biopharma(1) Growth Maximizing 2020-2030 top-line(2) CAGR 10% or more(2) 4%(3) Scale Number of blockbusters(4) 15 9 Cost of capital Estimated WACC Mid-single digits Mid-single digits Post proof-of-concept to Pre-clinical to Risk Stage of development approved
Slide 24: Footnotes
Footnotes 1) To aid in comparability, quarter-over-quarter growth in 2020 is calculated based on pro forma 2019 results, 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, 2020 (
Slide 25: Appendix
Appendix ROYALTY PHARMA 25
Slide 26: Distributions to legacy non-controlling interests (NCI)
Distributions to legacy non-controlling interests (NCI) Products Q1 2023 NCI as a % of royalty receipts • Royalty Pharma includes several non-controlling Zavzpret milestone 0.0% interests in our financial statements. Cystic fibrosis franchise(1) 8.8% Tysabri 17.6% • The largest of these impacting th
Slide 27: Multiple important milestones expected in 2023
Multiple important milestones expected in 2023 2023 Select year-to-date and expected upcoming events Q1 Q2 Q3 Q4 Xtandi Phase 3 results for nmCSPC (EMBARK)(1) Cabometyx, Tecentriq Phase 3 results for RCC during or following ICI (CONTACT-03)(2) Tremfya Phase 3 results for ulcerative colitis(3) Tremfy
Slide 28: Potential royalties on ~35 projects in late-stage development
Potential royalties on ~35 projects in late-stage development Phase 2 Phase 3 Registration New molecular entity MK-8189 trontinemab aficamten pelacarsen olpasiran Schizophrenia Alzheimer’s disease oHCM Cardiovascular disease Cardiovascular disease tulmimetostat (CPI-0209) pelabresib ampreloxetine se