Royalty Pharma Plc · NASDAQ:RPRX
Royalty Pharma — Merger or Acquisition (January 2025)
18 slides from Royalty Pharma's merger presentation, Jan 10, 2025
Slide 1: Royalty Pharma
ROYALTY PHARMA
Slide 2: Acquiring the External Manager – A Transformative Step in RP's Evolution
Acquiring the External Manager – A Transformative Step in RP’s Evolution January 10, 2025 2
Slide 3: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation relates to a proposed acquisition by Royalty Pharma plc (the “Company”) of its external manager, RP Management, LLC (the “Transaction”). The information set forth herein does not purport to be complete or to contain all of the in
Slide 4: Participants in the Solicitation
Participants in the Solicitation Royalty Pharma and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Royalty Pharma in connection with the Transaction under the rules of the SEC. Information about the interests of the direc
Slide 5: Key Highlights – Pablo Legorreta
Key Highlights Pablo Legorreta Founder & Chief Executive Officer 5
Slide 6: Next step in RP's evolution positions us for long-term success
Next step in RP’s evolution positions us for long-term success 1 2 3 Manager internalization Financial benefits Strategic benefits Royalty Pharma to become an integrated >$100m of annual cash savings in 2026 Strengthens alignment with shareholders, company by acquiring RP Management(1) growing to >$
Slide 7: Royalty Pharma has been externally managed since 1996
Royalty Pharma has been externally managed since 1996 Current structure Post-internalization structure Management fee ~6.5% of Portfolio Receipts(1) Integrated public company public private Significant cash savings Royalty Royalty Enhances returns Pharma plc Manager Pharma plc Strengthens alignment
Slide 8: Financial benefits from internalizing the Manager
Financial benefits from internalizing the Manager Benefits Cash savings are expected to be >$100m in 2026 and >$175m in 2030, compared to status quo, with cumulative savings of Savings >$1.6bn over ten years Financial Returns Extinguishment of the management fee enhances returns to shareholders on i
Slide 9: Strategic benefits from internalizing the Manager
Strategic benefits from internalizing the Manager Benefits Cash savings are expected to be >$100m in 2026 and >$175m in 2030, compared to status quo, with cumulative savings of Savings >$1.6bn over ten years Financial Returns Extinguishment of the management fee enhances returns to shareholders on i
Slide 10: Strengthening alignment with shareholders
Strengthening alignment with shareholders Transaction results in significantly greater portion of management compensation in equity Current Post-internalization Equity received from internalization vests over 5 years Cash 2026 estimated compensation mix(1) CEO Cash Equity Equity Vast majority of equ
Slide 11: Financials – Terrance Coyne
Financials Terrance Coyne Executive Vice President Chief Financial Officer 11
Slide 12: Internalization expected to result in significant cash savings
Internalization expected to result in significant cash savings Acquiring the Manager for ~$1.1bn total consideration Benefits include significant savings expected to grow over time Cumulative cash savings >$1.6bn and growing Consideration Amount Details Cash ~$100m(1) - Annual savings of >$175m Assu
Slide 13: Internalization savings drives increased Portfolio Cash Flow
Internalization savings drives increased Portfolio Cash Flow % Portfolio $ in millions FY 2024(1) Receipts Internalization impact Portfolio Receipts ~2,800 No impact Reduction to approximately 4-5% of Portfolio Receipts, compared to Payments for operating and professional costs (230-240) ~8.4% initi
Slide 14: New $3 billion share repurchase program
New $3 billion share repurchase program Royalty Pharma’s Royalty Pharma’scapital allocationframework capital allocation framework • Rigorous framework for capital allocation, weighing More attractive royalty opportunities the attractiveness of each option • Board authorized $3.0bn share repurchase p
Slide 15: Balancing acquiring royalties and increasing return of capital
Balancing acquiring royalties and increasing return of capital Capital Deployment Share repurchases Dividend • Capital Deployment guidance of $2.0- • Board authorized new $3bn share • Current dividend of $0.88 annually, $2.5bn per year repurchase program ~3.4% dividend yield • Target returns maintai
Slide 16: Conclusion – Pablo Legorreta
Conclusion Pablo Legorreta Founder & Chief Executive Officer 16
Slide 17: Internalizing the Manager is the next step in our evolution
Internalizing the Manager is the next step in our evolution Royalty Pharma evolution (1996 to present) Externally Integrated public managed company Expanded public investment company Ongoing scope business Fund Internalizing management company structure 1996 to 2003 2004 to 2011 2012 to 2020 2020 to
Slide 18: Footnotes
Footnotes 1) Portfolio Receipts is a key performance metric that represents our ability to generate cash from our portfolio investments, the primary source of capital that we can deploy to make new portfolio investments. Portfolio Receipts is defined as the sum of Royalty Receipts and Milestones and
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