Royalty Pharma Plc · NASDAQ:RPRX
Royalty Pharma — Q2 2023 Earnings Presentation
29 slides from Royalty Pharma's earnings presentation, Aug 8, 2023
Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: Q2 2023 Financial Results
Royalty Pharma plc Q2 2023 Financial Results August 8, 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
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: Executing against our strategic objectives in Q2 2023
Executing against our strategic objectives in Q2 2023 1 2 3 Financial performance Capital allocation Raising full-year guidance Prior to Biohaven payment: Transactions announced YTD of up to Adjusted Cash Receipts(1) expected to be $1.7bn(3) ($659m upfront) $2,900m to $2,975m excluding future • Adju
Slide 7: Solid financial performance in Q2 2023
Solid financial performance in Q2 2023 Adjusted Cash Receipts(1) Adjusted EBITDA(1) Adjusted Cash Flow(1) ($ in millions) ($ in millions) ($ in millions) +4% reported Adjusted Cash Receipts(1) growth +4% reported Adjusted EBITDA(1) growth +6% reported Adjusted Cash Flow(1) growth 545 +7% +9% 512 498
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% +10% +9% YTD (prior to accelerated Biohaven payments) (prior to Biohaven) +11%(5) +15% +2% +12%(4) +24% +12% +7%(6) +37% +10% +9%(3) +3% +24%(3) +12%(3) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 9: Portfolio Update
Portfolio Update Marshall Urist, MD, PhD Executive Vice President Head of Research & Investments 9
Slide 10: Well positioned to manage potential IRA impact
Well positioned to manage potential IRA impact 2026 estimated Adjusted Cash Receipts(2) • Portfolio drugs likely to be impacted under IRA(1) Low-single digit % impact Part D: Xtandi (2026), Imbruvica (2026/2027), Trelegy (2027) Part B: Unlikely to have meaningful exposure • Expect low-single dig
Slide 11: Financial Results
Financial Results Terrance Coyne Executive Vice President Chief Financial Officer 11
Slide 12: Stable total royalty receipts in Q2 2023
Stable total royalty receipts in Q2 2023 Selected products Q2 2023 Royalty receipts(1) Growth $ in millions % year/year CF Franchise 206 13 84 -9 63 -22 (2) 40 -22 39 12 37 n/a 22 21 15 18 13 60 13 n/a 9 52 (3) Other 96 -34 Total 637 1 CF: cystic fibrosis 1. Amounts may not add due to rounding. 2. X
Slide 13: Existing portfolio powered ~7% growth despite LOEs and FX
Existing portfolio powered ~7% growth despite LOEs and FX Q2 2023 Adjusted Cash Receipts(1) ($ in millions) 0 ~+4% 0 ~+7% 524 13 (5-15) Series A fixed payment(2) (24) 54 545 Driver: 511 + Spinraza Drivers: + Cystic Fibrosis + Trelegy + Evrysdi Headwinds: - Imbruvica - Tysabri - Xtandi Q2 2022 Royalt
Slide 14: Efficient model generates substantial cash flow to reinvest
Efficient model generates substantial cash flow to reinvest YoY % $ in millions (except per share amount) Q2 2023 change % ACR Comments Royalty receipts 637 1% Decline primarily reflects end of Januvia, Distributions to legacy non-controlling interests- royalty receipts -92 -15% Janumet and other DP
Slide 15: Significant financial capacity for future royalty acquisitions
Significant financial capacity for future royalty acquisitions Cash, cash equivalents & marketable securities ($ in millions) Adjusted EBITDA less • $2.2bn of cash, cash equivalents and net interest = $1,493m marketable securities as of June 30, 2023 1,542 -49 -682 • Repurchased $185m (~6m shares) t
Slide 16: Raising full-year 2023 guidance
Raising full-year 2023 guidance(1,2) May 9, 2023 August 8, 2023 Comments • Strong portfolio performance, partially offset Adjusted Cash Receipts (non-GAAP) by Imbruvica weakness excluding transactions announced $2,850m - $2,950m $2,900m - $2,975m • $475m Zavzpret milestone in Q1 2023 subsequent to A
Slide 17: 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 ~+6% to +10% 0 underlying growth $2,900-$2,975 Zavzpre
Slide 18: Addressing investor questions on cystic fibrosis royalties
Addressing investor questions on cystic fibrosis royalties Vertex’s new CF triple combination therapy 1 2 3 4 What is the What is the What is the What is the impact royalty rate? duration of uptake? on growth of Vertex’s the royalty? CF franchise? 5 6 What amount of What are the ACR is potentially i
Slide 19: CF to remain important contributor regardless of triple scenario
CF to remain important contributor regardless of triple scenario See Appendix slide 27 for details Triple Combination Scenarios Components Blended Royalty(1) 2030 Franchise Sales 2030 ACR from CF(3) Duration(4) Status quo elexacaftor ivacaftor tezacaftor ~9% ~$11.5bn ~$900m 2037 Vertex consensus(2)
Slide 20: Long-term growth powered by consistent portfolio refreshment
Long-term growth powered by consistent portfolio refreshment Adjusted Cash Receipts evolution through 2030(1) Continued execution on strategy (2030 growth target provided at May 2022 Investor Day) Power of business model 10%+ 0 CAGR • Transactions since 2020 expected to add ~$1bn in ACR by 2025 Futu
Slide 21: Conclusion
Conclusion Pablo Legorreta Founder & Chief Executive Officer 21
Slide 22: Advancing Royalty Pharma's role in the biopharma ecosystem
Advancing Royalty Pharma’s role in the biopharma ecosystem 3rd annual Accelerating Bio-Innovation (ABI) conference - June 2023 attendance 76 CEOs, founders Gathering of 280 life science leaders at MIT RP + MIT logo w/circle 80 academics/scientists Discussions on translational sciences, drug developm
Slide 23: Three-year anniversary of IPO – significant accomplishments
Three-year anniversary of IPO – significant accomplishments 2020 Today Increase Adjusted Cash Receipts(1) $1.8bn ~$2.5bn / ~$2.9bn ~35% / ~60% Growth 2020-2025 ACR CAGR outlook(2) 6-9% 11-14% >65% Announced deal value (prior 3 years) $3.7bn $10bn ~3x Capital deployment 5-year capital deployment targ
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 Q2 2023 NCI as a % of 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% Xtandi 17.6% • The largest of these impact
Slide 27: Detailed calculation assumptions for CF triple scenarios
Detailed calculation assumptions for CF triple scenarios Scenarios Product Blended Royalty(1) Sales Split Franchise Sales Royalty Receipts NCI % 2030 ACR from CF(3) Status quo (Trikafta Only) ~9% 100% ~$11.5bn(2) ~$1,050m (13%) ~$900m Trikafta ~9% 50% New CF Triple ~8% 50% $13bn+ ~$1,100m (13%) ~$95
Slide 28: Important milestones expected over next 12-18 months
Important milestones expected over next 12-18 months 2023 2024 Select year-to-date and expected upcoming events Q2 Q3 Q4 Tremfya Phase 3 results for ulcerative colitis(1) Tremfya Phase 3 results for Crohn’s disease(2) Cabometyx, Opdivo, Yervoy Phase 3 OS results for 1L renal cell carcinoma (COSMIC 3
Slide 29: 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