Royalty Pharma (RPRX) investor relations material

Business overview and market position

• Largest buyer of biopharmaceutical royalties globally, with a 30-year track record and a $20+ billion market cap.

• Portfolio includes over 50 products, with $3.1 billion in expected receipts and $2.5 billion in cash flow for the year.

• Consistent unlevered IRRs in the mid-teens since IPO, with $14 billion deployed and $4 billion returned via buybacks.

• Focus on optimizing capital allocation and maintaining market leadership through evolving strategies.

• Operates as an evergreen, self-funding business model, reducing cost of capital and enabling long-term investments.

Investment approach and portfolio strategy

• Highly selective, reviewing 440 opportunities in 2024 but closing only eight deals, emphasizing product quality and importance.

• Invests across 60+ therapeutic areas, leveraging a generalist team and external experts for each transaction.

• Prefers high-conviction, late-stage (phase 3 or later) products, with about 40% of investments pre-approval.

• Flexible deal structures, including traditional and synthetic royalties, with synthetic royalties as a growing segment.

• Targets unlevered IRRs of high single to low double digits for approved products and teens for development-stage assets.

Innovation and competitive advantages

• Unique evergreen structure allows for efficient long-term royalty ownership, unmatched by fund-based competitors.

• Scale and history create significant barriers to entry for new competitors.

• Welcomes competition to foster a vibrant royalty marketplace but maintains multiple competitive advantages.

• Innovates on deal structures, as seen in the Revolution Medicines partnership, offering staged, flexible capital solutions.

• Positioned to benefit from industry fragmentation, global innovation, and new royalty creation, including China-related deals.