Royalty Pharma Plc · NASDAQ:RPRX
Royalty Pharma — Merger or Acquisition (October 2023)
27 slides from Royalty Pharma's merger presentation, Oct 19, 2023
Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: PTC Transaction
Royalty Pharma plc PTC Transaction Expanding our portfolio with a premier growth product October 19, 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 Highlights Pablo Legorreta Founder & Chief Executive Officer PTC partnership Chris Hite EVP, Vice Chairman Evrysdi – A premier growth product Marshall Urist EVP, Head of Research and Investments Financials Terrance Coyne EVP, Chief Financial Officer Conclusion Pablo Legorreta Founder & Chief
Slide 5: Key Highlights - Pablo Legorreta
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: Win-win solution for PTC and Royalty Pharma
Win-win solution for PTC and Royalty Pharma Rapid access to capital Additional Evrysdi Established blockbuster royalty interest Significant value for non-strategic Enhances long-term growth royalty Increases diversification Non-dilutive to equity capital Long duration royalty Strengthens balance she
Slide 7: Key messages
Key messages 1 2 3 Premier growth product Financially attractive Power of business model Evrysdi is marketed by Roche for the Transaction expected to deliver unlevered Unique ability to invest multiple times in treatment of spinal muscular atrophy IRR in the low double-digits with attractive the sam
Slide 8: Clear leader in blockbuster royalty transactions
Clear leader in blockbuster royalty transactions Royalty Transactions >$500m Market Share of Deals >$500m ($ in millions) (by count) Lead product Acquiror Post-IPO Transaction size Trikafta(1) 3,352 Tysabri 2,850 Trelegy(2) 1,650 Tremfya(3) 1,575 Evrysdi 1,500 Keytruda 1,297 Leqvio 1,150 5th largest
Slide 9: PTC Partnership - Chris Hite
PTC Partnership Chris Hite Executive Vice President Vice Chairman 9
Slide 10: July 2020 transaction – Evrysdi becoming a global leader in SMA
July 2020 transaction – Evrysdi becoming a global leader in SMA Evrysdi consensus sales evolution(3) ($ in millions) • July 2020 - Royalty Pharma acquired 43% of PTC’s royalty interest on Roche’s Evrysdi for spinal muscular atrophy 3,300 Consensus (current) $3.3bn Consensus (July 2020) $650m upfro
Slide 11: October 2023 transaction – strengthening partnership with PTC
October 2023 transaction – strengthening partnership with PTC Joint option structure: Creative structure provides RP and PTC added flexibility • Royalty Pharma acquires 67% of PTC’s remaining Evrysdi royalty(1) Upfront purchase price of $1.0bn PTC option to sell remaining RP to receive royalties
Slide 12: Repeat transactions highlight strength of Royalty Pharma
Repeat transactions highlight strength of Royalty Pharma aficamten, omecamtiv , BCX10013 Up to $2,150m total funding Up to $550m total funding Up to $325m total funding Up to ~$4,000m total funding 2x 2020, 2023 2x 2017, 2022 2x 2020, 2021 2x 2014, 2020 Fumapharm , Zavzpret Up to ~$835m total fundin
Slide 13: Evrysdi – A premier growth product
Evrysdi – A premier growth product Marshall Urist, MD, PhD Executive Vice President Head of Research & Investments 13
Slide 14: Our framework focuses on key product success factors
Our framework focuses on key product success factors Strong Significant impact Conviction in probability of Mission and Strong marketer and scientific on patients and/or clinical and regulatory success execution-oriented global commercial rationale caregivers for pre-approval programs management tea
Slide 15: Evrysdi – clearly aligned with product selection framework
Evrysdi – clearly aligned with product selection framework Royalty Pharma product selection framework Strong scientific rationale Treats underlying cause of SMA Maximizing Significant impact on patients/caregivers Convenient oral treatment for SMA Mission and execution-oriented management Roche is a
Slide 16: Financials - Terrance Coyne
Financials Terrance Coyne Executive Vice President Chief Financial Officer 16
Slide 17: Increased capital deployment given large funding opportunity
Increased capital deployment given large funding opportunity June 2020 IPO $3.4 billion 3-year average deployment(1) 7 deals/year Larger capital $1.8 billion deployment leads 3-year average deployment(1) to greater value $1.6 billion 6 deals/year creation and 3-year average deployment(1) predictable
Slide 18: Well positioned in evolving interest rate environment
Well positioned in evolving interest rate environment Existing capital structure Future investments Long duration, low-cost debt an underappreciated asset Higher risk-adjusted returns • Fixed weighted-average coupon of ~2.5% • Higher royalty return expectations in on $6.3bn of investment grade bonds
Slide 19: Well positioned to create value in changing market environments
Well positioned to create value in changing market environments Lower interest rates Higher interest rates (2012-2021) (2022-today) Returns above cost of capital remain attractive with spreads maintained ~7-8% Adstiladrin ~6% (1) (2) Cost of Debt: 5 - 7% Cost of Debt: 3 - 4.5% Cost of capital Value
Slide 20: Key Highlights - Pablo Legorreta
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 20
Slide 21: On track to meet or exceed 5-year capital deployment target
On track to meet or exceed 5-year capital deployment target Transactions announced in 2022 and 2023 5-year capital deployment target(1,2) (Announced value, since January 1, 2022) 12 $10-12bn target 10 Approved Announced value ($ in bn) 8 ~$7.3bn since Jan 2022 6 2022 2023 4 Development-stage aficamt
Slide 22: Footnotes
Footnotes Adjusted Cash Receipts is a measure calculated with inputs directly from the statements of cash flows and includes total royalty receipts: (i) Cash collections from royalty assets (financial assets and intangible assets), (ii) Other royalty cash collections, (iii) Distributions from equity
Slide 23: Appendix
Appendix ROYALTY PHARMA 23
Slide 24: PTC transaction – Evrysdi royalty rate and duration details
PTC transaction – Evrysdi royalty rate and duration details RP owns 100% of royalty under full option exercise PTC option RP option Date July 2020 October 2023 Total (October 2023) (December 31, 2025) (March 31, 2026) $1.65bn upfront Funding amount $650m upfront $1.0bn upfront Up to $500m Up to $250
Slide 25: Evrysdi expected to generate strong sales growth
Evrysdi expected to generate strong sales growth Evrysdi consensus sales estimates(1) ($ in millions) +9% 0 CAGR $3,256 $3,253 $3,144 $2,921 $2,735 $2,461 $2,101 $1,686 2023 2024 2025 2026 2027 2028 2029 2030 1. Visible Alpha Roche consensus. 25
Slide 26: Detailed modeling assumptions for Evrysdi royalties
Detailed modeling assumptions for Evrysdi royalties Royalties shown as they are accrued and do not reflect ACR(1); Cash royalty receipts are received on a one-quarter lag (3) Extrapolated Using Median Actuals Visible Alpha Mean Consensus Growth Rates of Available Brokers ($m) 2020 (2) 2021(2) 2022(2
Slide 27: Illustrative marginal cost of debt over time
Illustrative marginal cost of debt over time BBB corporate index yield as a proxy for Royalty Pharma BBB Index (1) 2022-Date: ~5 - 7% 7% Estimated Marginal Cost of Debt 9/2/2020: Refinanced existing term loan debt with $6.0bn senior unsecured notes carrying a weighted average coupon of 2.1% (2.4% yi
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