8-K
Royalty Pharma plc (RPRX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2025
Royalty Pharma plc
(Exact Name of Registrant as Specified in its Charter)
| England and Wales | 001-39329 | 98-1535773 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (I.R.S.<br>Identification No.) | 110 East 59th Street | ||
| --- | --- | ||||
| New York, New York | 10022 | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 883-0200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Ordinary Shares, par value $0.0001 per share | RPRX | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 5, 2025, Royalty Pharma plc issued a press release announcing its financial results for the quarter ended September 30, 2025. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press release issued by Royalty Pharma plc, dated November 5, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ROYALTY PHARMA PLC | |||
|---|---|---|---|
| Date: November 5, 2025 | By: | /s/ Terrance Coyne | |
| Terrance Coyne | |||
| Chief Financial Officer |
RPRX-2025.09.30 RP plc Press-Release
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ROYALTY PHARMA REPORTS THIRD QUARTER 2025 RESULTS
•Portfolio Receipts growth of 11% to $814 million; Royalty Receipts growth of 11%
•Net cash provided by operating activities of $703 million
•Raised full year 2025 guidance: Portfolio Receipts expected to be $3,200 to $3,250 million
NEW YORK, NY, November 5, 2025 - Royalty Pharma plc (Nasdaq: RPRX) today reported financial results for the third
quarter of 2025 and raised full year 2025 guidance for Portfolio Receipts.
“We delivered strong third quarter 2025 results, raised our full year guidance and are on track to deliver another year of
double-digit top-line growth,” said Pablo Legorreta, Royalty Pharma’s founder and Chief Executive Officer. “In addition, we
had an especially active past few months for deals, expanding our portfolio with three innovative therapies and increasing
our Capital Deployment to $2.0 billion for the year. Furthermore, we hosted our Investor Day in September, where we
highlighted the rapid growth in the royalty market, the powerful competitive advantages that underscore our leadership,
our sustainable and attractive returns and our goal to be the premier capital allocator in life sciences with consistent,
compounding growth.”
Double-digit growth in Royalty Receipts and Portfolio Receipts
•Royalty Receipts grew 11% to $811 million in the third quarter of 2025, primarily driven by Voranigo, Tremfya and
the cystic fibrosis franchise.
•Portfolio Receipts increased by 11% to $814 million.
Significant Capital Deployment in recent months strengthens portfolio
•Acquired a royalty on Amgen's Imdelltra for up to $950 million; entered into a funding agreement on obexelimab
with Zenas BioPharma for up to $300 million; and acquired a royalty on Alnylam's Amvuttra for $310 million.
•Repurchased four million Class A ordinary shares for $152 million in the third quarter, with total share repurchases
of $1.2 billion in the first nine months of 2025.
Positive clinical and regulatory updates across royalty portfolio
•Revolution Medicines' daraxonrasib: positive initial data in first-line metastatic pancreatic cancer supporting
Phase 3 initiation in the fourth quarter of 2025; FDA awarded Commissioner's National Priority Voucher with goal
of accelerating development and review.
•Roche's trontinemab: initiated the Phase 3 program for Alzheimer's disease.
Raising financial guidance for full year 2025 (excludes contribution from future transactions)
•Royalty Pharma expects 2025 Portfolio Receipts to be between $3,200 million and $3,250 million (previously
$3,050 million to $3,150 million), representing expected growth of 14% to 16% (previously 9% to 12%).
Financial & Liquidity Summary
| Three Months Ended September 30, | |||
|---|---|---|---|
| (unaudited) | |||
| ($ and shares in millions) | 2025 | 2024 | Change |
| Portfolio Receipts | 814 | 735 | 11% |
| Net cash provided by operating activities | 703 | 704 | (0)% |
| Adjusted EBITDA (non-GAAP)* | 779 | 679 | 15% |
| Portfolio Cash Flow (non-GAAP)* | 657 | 617 | 6% |
| Weighted average Class A ordinary shares outstanding - diluted | 560 | 593 | (6)% |
*See “Liquidity and Capital Resources” section. Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures calculated in accordance with
the credit agreement.
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Portfolio Receipts Highlights
| Three Months Ended September 30, | ||||
|---|---|---|---|---|
| ( in millions) | 2025 | 2024 | Change | |
| Products: | Therapeutic Area: | |||
| Cystic fibrosis franchise | Rare disease | 222 | 207 | 7% |
| Trelegy | Respiratory | 96 | 91 | 6% |
| Tysabri | Neuroscience | 68 | 68 | (0)% |
| Evrysdi | Rare disease | 52 | 48 | 8% |
| Xtandi | Cancer | 50 | 43 | 15% |
| Tremfya | Immunology | 49 | 34 | 44% |
| Imbruvica | Cancer | 41 | 46 | (11)% |
| Promacta | Hematology | 38 | 42 | (9)% |
| Voranigo | Cancer | 33 | — | n/a |
| Cabometyx/Cometriq | Cancer | 21 | 19 | 15% |
| Spinraza | Rare disease | 14 | 14 | (4)% |
| Erleada | Cancer | 12 | 10 | 23% |
| Trodelvy | Cancer | 12 | 11 | 6% |
| Other products(5) | 102 | 98 | 3% | |
| Royalty Receipts | 811 | 732 | 11% | |
| Milestones and other contractual receipts | 3 | 3 | 0% | |
| Portfolio Receipts | 814 | 735 | 11% |
All values are in US Dollars.
Amounts shown in the table may not add due to rounding.
Royalty Receipts was $811 million in the third quarter of 2025, an increase of 11% compared to $732 million in the third
quarter of 2024. The increase was primarily driven by Voranigo, Tremfya and the cystic fibrosis franchise.
Portfolio Receipts was $814 million in the third quarter of 2025, an increase of 11% compared to $735 million in the third
quarter of 2024, primarily driven by the same Royalty Receipts increases noted above.
Liquidity and Capital Resources
Royalty Pharma’s liquidity and capital resources are summarized below:
As of September 30, 2025, Royalty Pharma had cash and cash equivalents of $939 million and total debt with principal
value of $9.2 billion, primarily comprised of $8.8 billion of unsecured notes with a weighted average duration of
approximately 13 years and an attractive weighted-average cost of debt of 3.75%. This outstanding total debt includes $2.0
billion of senior unsecured notes (2025 Notes) issued in September 2025 with a weighted average coupon rate of 5.16%.
Additionally, Royalty Pharma repaid $1.0 billion of senior unsecured notes upon maturity in August 2025.
In January 2025, Royalty Pharma announced a new share repurchase program under which it may repurchase up to $3.0
billion of its Class A ordinary shares. Royalty Pharma repurchased approximately four million Class A ordinary shares for
$152 million in the third quarter and 35 million shares for $1.2 billion for the first nine months of 2025. The weighted-
average number of diluted Class A ordinary shares outstanding for the third quarter of 2025 was 560 million as compared
to 593 million for the third quarter of 2024.
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Liquidity Summary
| Three Months Ended September 30, | ||
|---|---|---|
| (unaudited) | ||
| ($ in millions) | 2025 | 2024 |
| Portfolio Receipts | 814 | 735 |
| Payments for operating and professional costs | (34) | (55) |
| Adjusted EBITDA (non-GAAP) | 779 | 679 |
| Interest paid, net | (123) | (62) |
| Portfolio Cash Flow (non-GAAP) | 657 | 617 |
Amounts may not add due to rounding.
•Adjusted EBITDA (non-GAAP) was $779 million in the third quarter of 2025. Adjusted EBITDA is calculated as
Portfolio Receipts minus payments for operating and professional costs.
•Portfolio Cash Flow (non-GAAP) was $657 million in the third quarter of 2025. Portfolio Cash Flow is calculated as
Adjusted EBITDA minus interest paid or received, net. This measure reflects the cash generated by Royalty
Pharma’s business that can be redeployed into value-enhancing royalty acquisitions, used to repay debt, returned
to shareholders through dividends or share purchases, or utilized for other discretionary investments.
Refer to Table 4 for Royalty Pharma’s reconciliation of each non-GAAP measure to the most directly comparable GAAP
financial measure, net cash provided by operating activities.
Capital Deployment reflects cash payments during the period for new and previously announced transactions. Capital
Deployment was $1.0 billion in the third quarter of 2025, consisting primarily of upfront payments for the Imdelltra and
obexelimab funding agreements (see 'Royalty Transactions') and research and development funding for litifilimab. Capital
Deployment for the first nine months of 2025 amounted to $1.7 billion.
The table below details Capital Deployment by category:
Capital Deployment
| Three Months Ended<br><br>September 30, | Nine Months Ended<br><br>September 30, | |||
|---|---|---|---|---|
| (unaudited) | (unaudited) | |||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 |
| Purchases of available for sale debt securities | — | — | (75) | (150) |
| Acquisitions of financial royalty assets | (962) | (1,195) | (964) | (2,009) |
| Acquisitions of other financial assets | — | — | — | (18) |
| Development-stage funding payments | (51) | (1) | (402) | (2) |
| Milestone payments | — | — | (269) | (50) |
| Investments in equity method investees | — | — | — | (11) |
| Contributions from legacy non-controlling interests - R&D | (0) | 0 | 0 | 1 |
| Capital Deployment | (1,013) | (1,195) | (1,709) | (2,239) |
Amounts may not add due to rounding.
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Royalty Transactions
During 2025, Royalty Pharma has announced new transactions of up to $3.8 billion. The announced transactions amount
reflects the entire amount of capital committed for new transactions year to date, including potential future milestones.
Recent transactions include:
•In November 2025, Royalty Pharma acquired a royalty interest in Alnylam's Amvuttra from Blackstone for $310
million. Amvuttra is an approved RNAi therapeutic for the treatment of transthyretin (TTR) amyloidosis with
cardiomyopathy and for hereditary TTR amyloidosis with polyneuropathy.
•In September 2025, Royalty Pharma acquired a synthetic royalty on obexelimab from Zenas BioPharma for an
upfront payment of $75 million and up to $225 million in milestone payments contingent on the achievements of
certain clinical and regulatory events. Obexelimab is in Phase 3 development for the treatment of immunoglobulin
G4-related disease and in Phase 2 development for relapsing multiple sclerosis and systemic lupus erythematosus.
•In August 2025, Royalty Pharma acquired a royalty interest in Amgen's Imdelltra from BeOne Medicines for an
upfront payment of $885 million. BeOne Medicines has the option to sell to Royalty Pharma additional royalties on
Imdelltra for up to $65 million within twelve months from the acquisition date. Imdelltra is approved for the
treatment of extensive-stage small cell lung cancer.
The information in this section should be read together with Royalty Pharma’s reports and documents filed with the SEC at
www.sec.gov and the reader is also encouraged to review all other press releases and information available in the Investors
section of Royalty Pharma’s website at www.royaltypharma.com.
Key Developments Relating to the Portfolio
The key developments related to Royalty Pharma’s royalty interests are discussed below based on disclosures from the
marketers of the products.
| litifilimab | In October 2025, Biogen announced that both litifilimab Phase 3 studies for systemic lupus<br><br>erythematosus are fully enrolled with expected data readout for both studies now<br><br>accelerated to the second half of 2026. |
|---|---|
| obexelimab | In October 2025, Zenas BioPharma announced positive results from the Phase 2 trial of<br><br>obexelimab in relapsing multiple sclerosis, which demonstrated a highly statistically<br><br>significant 95% relative reduction in new gadolinium (Gd)-enhancing T1 lesions over week 8<br><br>and week 12 compared with placebo. Zenas anticipates reporting 24-week data in relapsing<br><br>multiple sclerosis in the first quarter of 2026. |
| trontinemab | In September 2025, Roche announced that it initiated its Phase 3 program for trontinemab<br><br>in early symptomatic Alzheimer's disease. Additionally, Roche announced plans to initiate a<br><br>Phase 3 study in preclinical Alzheimer's disease, in people at high risk of cognitive decline. |
| Airsupra | In September 2025, AstraZeneca announced that the FDA approved a supplemental New<br><br>Drug Application (sNDA) for Airsupra to reflect the statistically significant severe<br><br>exacerbation risk reduction in patients with mild asthma compared to albuterol. |
| daraxonrasib | In September 2025, Revolution Medicines announced positive Phase 1 results from its<br><br>clinical trials evaluating daraxonrasib as a monotherapy and daraxonrasib in combination<br><br>with chemotherapy in first-line (1L) metastatic pancreatic ductal adenocarcinoma (PDAC).<br><br>These data support Revolution Medicines’ plan to initiate a Phase 3 trial for daraxonrasib in<br><br>1L metastatic PDAC in the fourth quarter of 2025. In October 2025, the FDA granted a non-<br><br>transferrable voucher for daraxonrasib under the Commissioner's National Priority Voucher<br><br>(CNPV) pilot program, which accelerates review times to 1-2 months. |
| Skytrofa | In July 2025, Ascendis announced the FDA approved Skytrofa for the once-weekly treatment<br><br>of adults with growth hormone deficiency. |
| Cabometyx | In July 2025, Ipsen announced that the European Commission (EC) approved Cabometyx for<br><br>previously treated advanced neuroendocrine tumors. |
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| deucrictibant | In July 2025, Pharvaris announced that it anticipates topline data for the Phase 3 study<br><br>(RAPIDe-3) evaluating deucrictibant for the on-demand treatment of hereditary angioedema<br><br>attacks in the fourth quarter of 2025 and, pending positive data, expects to submit a New<br><br>Drug Application (NDA) to the FDA in the first half of 2026. |
|---|---|
| CF Franchise | In July 2025, Vertex announced that the EC approved Alyftrek for people with cystic fibrosis<br><br>ages 6 years and older who have at least one non-class I mutation in the cystic fibrosis<br><br>transmembrane conductance regulator (CFTR) gene. |
2025 Financial Outlook
Royalty Pharma has provided guidance for full year 2025, excluding new transactions and borrowings announced after the
date of this release, as follows:
| Provided November 5, 2025 | Previous | |
|---|---|---|
| Portfolio Receipts | $3,200 million to $3,250 million<br><br>(Growth of ~+14% to 16% year/year) | $3,050 million to $3,150 million<br><br>(Growth of ~+9% to 12% year/year) |
| Payments for operating and professional costs | ~9% to 9.5% of Portfolio Receipts | ~9% to 9.5% of Portfolio Receipts |
| Interest paid | $275 million | $275 million |
The above Portfolio Receipts guidance represents expected growth of 14% to 16% in 2025. Royalty Pharma’s full year 2025
guidance reflects a negligible estimated foreign exchange impact to Portfolio Receipts, assuming current foreign exchange
rates prevail for the rest of 2025.
Payments for operating and professional costs in the second half of 2025 are expected to decrease due to extinguishment
of the management fee following the completion of the internalization transaction on May 16, 2025. Payments for
operating and professional costs in 2025 include one-time payments amounting to approximately $70 million (>2% of 2025
Portfolio Receipts), comprised of transaction costs for the Internalization and other one-time items.
Total interest paid is based on the semi-annual interest payment schedule of Royalty Pharma’s existing notes and the
quarterly interest payment schedule for the term loan assumed as part of the internalization transaction. In 2025, total
interest paid is anticipated to be approximately $275 million, including $7 million in the fourth quarter of 2025. These
projections assume no additional debt financing in 2025. In the third quarter of 2025, Royalty Pharma collected interest of
$7 million on its cash and cash equivalents, which partially offset interest paid. In 2026, Royalty Pharma anticipates interest
paid to be approximately $350 - $360 million(7), including interest payments on the $2.0 billion of senior unsecured notes
issued in September 2025.
Royalty Pharma today provides this guidance based on its most up-to-date view of its prospects. This guidance assumes no
major unforeseen adverse events or changes in foreign exchange rates and excludes the contributions from transactions
announced subsequent to the date of this press release.
Deloitte Report on the Biopharma Royalty Market
In September 2025, Royalty Pharma announced the release of Deloitte's report on the biopharma royalty market. The
report, titled “Role of Royalties in Funding Biopharma Innovation,” is the first of its kind and offers a comprehensive
analysis of the current dynamics, growth drivers and outlook for biopharma royalties. As part of this study, Deloitte
engaged with more than 110 biopharma leaders, primarily CEOs and CFOs, through a digital survey and one-on-one
interviews to assess views on royalty funding. The report underscores the vital role royalties play in fueling the biopharma
ecosystem — supporting life sciences innovation and commercial success while offering flexible, non-dilutive capital at
scale. The full report is available for download at Deloitte’s website and Royalty Pharma’s website.
Financial Results Call
Royalty Pharma will host a conference call and simultaneous webcast to discuss its third quarter 2025 results today at 8:00
a.m., Eastern Time. Please visit the “Investors” page of the company’s website at https://www.royaltypharma.com/
investors/events to obtain conference call information and to view the live webcast. A replay of the conference call and
webcast will be archived on the company’s website for at least 30 days.
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About Royalty Pharma plc
Founded in 1996, Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation
across the biopharmaceutical industry, collaborating with innovators from academic institutions, research hospitals and
non-profits through small and mid-cap biotechnology companies to leading global pharmaceutical companies. Royalty
Pharma has assembled a portfolio of royalties which entitles it to payments based directly on the top-line sales of many of
the industry’s leading therapies. Royalty Pharma funds innovation in the biopharmaceutical industry both directly and
indirectly - directly when it partners with companies to co-fund late-stage clinical trials and new product launches in
exchange for future royalties, and indirectly when it acquires existing royalties from the original innovators. Royalty
Pharma’s current portfolio includes royalties on more than 35 commercial products, including Vertex’s Trikafta and
Alyftrek, Johnson & Johnson’s Tremfya, GSK’s Trelegy, Roche’s Evrysdi, Servier’s Voranigo, Biogen’s Tysabri and Spinraza,
AbbVie and Johnson & Johnson’s Imbruvica, Astellas and Pfizer’s Xtandi, Pfizer’s Nurtec ODT, and Gilead’s Trodelvy, among
others, and 17 development-stage product candidates.
Forward-Looking Statements
The information set forth herein does not purport to be complete or to contain all of the information you may desire.
Statements contained herein are made as of the date of this document unless stated otherwise, and neither the delivery of
this document at any time, nor any sale of securities, shall under any circumstances create an implication that the
information contained herein is correct as of any time after such date or that information will be updated or revised to
reflect information that subsequently becomes available or changes occurring after the date hereof.
This document contains statements that constitute “forward-looking statements” as that term is defined in the United
States Private Securities Litigation Reform Act of 1995, including statements that express the company’s opinions,
expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results, in contrast
with statements that reflect historical facts. Examples include discussion of Royalty Pharma’s strategies, financing plans,
growth opportunities, market growth and plans for capital deployment, plus the benefits of the internalization transaction,
including expected accretion, enhanced alignment with shareholders, increased investment returns, expectations regarding
management continuity, transparency and governance, and the benefits of simplification to its structure. In some cases,
you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,”
“plan,” “seek,” “project,” “expect,” “may,” “will,” “would,” “could” or “should,” the negative of these terms or similar
expressions. Forward-looking statements are based on management’s current beliefs and assumptions and on information
currently available to the company. However, these forward-looking statements are not a guarantee of Royalty Pharma’s
performance, and you should not place undue reliance on such statements. Forward-looking statements are subject to
many risks, uncertainties and other variable circumstances, and other factors. Such risks and uncertainties may cause the
statements to be inaccurate and readers are cautioned not to place undue reliance on such statements. Many of these
risks are outside of the company’s control and could cause its actual results to differ materially from those it thought would
occur. The forward-looking statements included in this document are made only as of the date hereof. The company does
not undertake, and specifically declines, any obligation to update any such statements or to publicly announce the results
of any revisions to any such statements to reflect future events or developments, except as required by law.
Certain information contained in this document relates to or is based on studies, publications, surveys and other data
obtained from third-party sources and the company’s own internal estimates and research. While the company believes
these third-party sources to be reliable as of the date of this document, it has not independently verified, and makes no
representation as to the adequacy, fairness, accuracy or completeness of, any information obtained from third-party
sources. In addition, all of the market data included in this document involves a number of assumptions and limitations,
and there can be no guarantee as to the accuracy or reliability of such assumptions. Finally, while the company believes its
own internal research is reliable, such research has not been verified by any independent source.
For further information, please reference Royalty Pharma’s reports and documents filed with the U.S. Securities and
Exchange Commission ("SEC") by visiting EDGAR on the SEC's website at www.sec.gov.
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Portfolio Receipts
Portfolio Receipts is a key performance metric that represents Royalty Pharma’s ability to generate cash from Royalty
Pharma’s portfolio investments, the primary source of capital that is deployed to make new portfolio investments. Portfolio
Receipts is defined as the sum of Royalty Receipts and Milestones and other contractual receipts. Royalty Receipts includes
variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are
attributed to Royalty Pharma.
Milestones and other contractual receipts include sales-based or regulatory milestone payments and other fixed
contractual receipts, net of contractual payments to legacy non-controlling interests, that are attributed to Royalty Pharma.
Portfolio Receipts does not include royalty receipts and milestones and other contractual receipts that were received on an
accelerated basis under the terms of the agreement governing the receipt or payment. Portfolio Receipts also does not
include proceeds from equity securities or proceeds from purchases and sales of marketable securities, both of which are
not central to Royalty Pharma’s fundamental business strategy.
Portfolio Receipts is calculated as the sum of the following line items from Royalty Pharma’s GAAP condensed consolidated
statements of cash flows: Cash collections from financial royalty assets, Cash collections from intangible royalty assets,
Other royalty cash collections, Proceeds from available for sale debt securities and Distributions from equity method
investees less Distributions to legacy non-controlling interests - Portfolio Receipts, which represent contractual distributions
of Royalty Receipts, milestones and other contractual receipts to the Legacy Investors Partnerships.
Use of Non-GAAP Measures
Adjusted EBITDA and Portfolio Cash Flow are non-GAAP liquidity measures that exclude the impact of certain items and
therefore have not been calculated in accordance with GAAP. Management believes that Adjusted EBITDA and Portfolio
Cash Flow are important non-GAAP measures used to analyze liquidity because they are key components of certain
material covenants contained within Royalty Pharma’s credit agreement. Royalty Pharma cautions readers that amounts
presented in accordance with the definitions of Adjusted EBITDA and Portfolio Cash Flow may not be the same as similar
measures used by other companies or analysts. These non-GAAP liquidity measures have limitations as analytical tools, and
you should not consider them in isolation or as a substitute for the analysis of Royalty Pharma’s results as reported under
GAAP.
The definitions of Adjusted EBITDA and Portfolio Cash Flow used by Royalty Pharma are the same as the definitions in the
credit agreement. Noncompliance with the interest coverage ratio, leverage ratio and Portfolio Cash Flow ratio covenants
under the credit agreement could result in lenders requiring the company to immediately repay all amounts borrowed. If
Royalty Pharma cannot satisfy these covenants, it would be prohibited under the credit agreement from engaging in
certain activities, such as incurring additional indebtedness, paying dividends, making certain payments, and acquiring and
disposing of assets. Consequently, Adjusted EBITDA and Portfolio Cash Flow are critical to the assessment of Royalty
Pharma’s liquidity.
Adjusted EBITDA and Portfolio Cash Flow are used by management as key liquidity measures in the evaluation of the
company’s ability to generate cash from operations. Management uses Adjusted EBITDA and Portfolio Cash Flow when
considering available cash, including for decision-making purposes related to funding of acquisitions, debt repayments,
dividends and other discretionary investments. Further, these non-GAAP liquidity measures help management, the audit
committee and investors evaluate the company’s ability to generate liquidity from operating activities.
The company has provided reconciliations of these non-GAAP liquidity measures to the most directly comparable GAAP
financial measure, being net cash provided by operating activities in Table 4.
Royalty Pharma Investor Relations and Communications
+1 (212) 883-6772
ir@royaltypharma.com
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Royalty Pharma plc
Condensed Consolidated Statements of Operations (unaudited)
Table 1
| Three Months Ended September 30, | ||
|---|---|---|
| ($ in millions) | 2025 | 2024 |
| Income and other revenues | ||
| Income from financial royalty assets | 579 | 533 |
| Other royalty income and revenues | 30 | 32 |
| Total income and other revenues | 609 | 565 |
| Operating expense/(income) | ||
| Provision for changes in expected cash flows from financial royalty assets | 12 | (228) |
| Provision for credit losses on unfunded commitments | 1 | — |
| Research and development funding expense | 51 | 1 |
| General and administrative expenses (includes 73 and 1 of share-based<br><br>compensation expense for the three months ended September 30, 2025 and<br><br>2024, respectively) | 119 | 57 |
| Total operating expense/(income), net | 182 | (170) |
| Operating income | 427 | 735 |
| Other (income)/expense | ||
| Equity in earnings of equity method investees | (16) | (10) |
| Interest expense | 80 | 67 |
| Other income, net | (81) | (127) |
| Total other income, net | (17) | (71) |
| Consolidated net income before tax | 444 | 806 |
| Income tax expense | — | — |
| Consolidated net income | 444 | 806 |
| Net income attributable to non-controlling interests | 156 | 262 |
| Net income attributable to Royalty Pharma plc | 288 | 544 |
Amounts may not add due to rounding.
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Royalty Pharma plc
Selected Balance Sheet Data (unaudited)
Table 2
| ($ in millions) | As of September 30, 2025 | As of December 31, 2024 |
|---|---|---|
| Cash and cash equivalents | 939 | 929 |
| Total current and non-current financial royalty assets, net | 16,624 | 15,911 |
| Total assets | 19,347 | 18,223 |
| Current portion of long-term debt | 380 | 998 |
| Long-term debt, net of current portion | 8,566 | 6,615 |
| Total liabilities | 9,726 | 7,880 |
| Total shareholders’ equity | 9,621 | 10,342 |
| 10 | ||
| --- |
Royalty Pharma plc
Condensed Consolidated Statements of Cash Flows (unaudited)
Table 3
| Three Months Ended<br><br>September 30, | Nine Months Ended<br><br>September 30, | |||
|---|---|---|---|---|
| ($ in millions) | 2025 | 2024 | 2025 | 2024 |
| Cash flows from operating activities: | ||||
| Cash collections from financial royalty assets | 882 | 792 | 2,439 | 2,206 |
| Cash collections from intangible royalty assets | 0 | 0 | 1 | 14 |
| Other royalty cash collections | 29 | 30 | 85 | 79 |
| Distributions from equity method investees | — | — | 13 | 13 |
| Interest received | 7 | 17 | 28 | 37 |
| Development-stage funding payments | (51) | (1) | (402) | (2) |
| Payments for operating and professional costs | (34) | (55) | (230) | (164) |
| Payments for Employee EPAs | (2) | — | (2) | — |
| Interest paid | (130) | (79) | (270) | (159) |
| Net cash provided by operating activities | 703 | 704 | 1,663 | 2,026 |
| Cash flows from investing activities: | ||||
| Acquisition of businesses, net of cash acquired | (0) | — | (74) | — |
| Distributions from equity method investees | 1 | 11 | 100 | 20 |
| Investments in equity method investees | — | — | — | (11) |
| Purchases of equity securities | — | (12) | (4) | (63) |
| Proceeds from equity securities | — | — | — | 99 |
| Purchases of available for sale debt securities | — | — | (75) | (150) |
| Proceeds from available for sale debt securities | 3 | 3 | 18 | 7 |
| Proceeds from sales of available for sale debt securities | — | — | 511 | — |
| Acquisitions of financial royalty assets | (962) | (1,195) | (964) | (2,009) |
| Acquisitions of other financial assets | — | — | — | (18) |
| Milestone payments | — | — | (269) | (50) |
| Other | — | 0 | (9) | 2 |
| Net cash used in investing activities | (958) | (1,193) | (766) | (2,173) |
| Cash flows from financing activities: | ||||
| Distributions to legacy non-controlling interests - Portfolio Receipts | (102) | (102) | (276) | (281) |
| Distributions to continuing non-controlling interests | (34) | (31) | (127) | (94) |
| Dividends to shareholders | (95) | (94) | (284) | (283) |
| Repurchases of Class A ordinary shares | (146) | (97) | (1,147) | (177) |
| Contributions from legacy non-controlling interests - R&D | (0) | 0 | 0 | 1 |
| Contributions from non-controlling interests - other | 0 | 1 | 6 | 3 |
| Proceeds from revolving credit facility | 1,275 | — | 1,275 | — |
| Repayment of revolving credit facility | (1,275) | — | (1,275) | — |
| Repayment of long-term debt | (1,000) | — | (1,000) | — |
| Proceeds from issuance of long-term debt, net of discount | 1,954 | — | 1,954 | 1,471 |
| Debt issuance costs and other | (14) | (3) | (14) | (12) |
| Other | — | 0 | — | (9) |
| Net cash provided by/(used in) financing activities | 563 | (326) | (886) | 619 |
| Net change in cash and cash equivalents | 307 | (815) | 10 | 473 |
| Cash and cash equivalents, beginning of period | 632 | 1,765 | 929 | 477 |
| Cash and cash equivalents, end of period | 939 | 950 | 939 | 950 |
EPAs: Equity Performance Awards. Amounts may not add due to rounding.
| 11 |
|---|
Royalty Pharma plc
GAAP to Non-GAAP Reconciliation (unaudited)
Table 4
| Three Months Ended September 30, | ||
|---|---|---|
| ($ in millions) | 2025 | 2024 |
| Net cash provided by operating activities (GAAP) | 703 | 704 |
| Adjustments: | ||
| Proceeds from available for sale debt securities(6) | 3 | 3 |
| Distributions from equity method investees(6) | 1 | 11 |
| Interest paid, net(6) | 123 | 62 |
| Development-stage funding payments | 51 | 1 |
| Distributions to legacy non-controlling interests - Portfolio Receipts(6) | (102) | (102) |
| Payments for Employee EPAs | 2 | — |
| Adjusted EBITDA (non-GAAP) | 779 | 679 |
| Interest paid, net(6) | (123) | (62) |
| Portfolio Cash Flow (non-GAAP) | 657 | 617 |
Amounts may not add due to rounding.
| 12 |
|---|
Royalty Pharma plc
Description of Approved Indications for Select Portfolio Therapies
Table 5
| Cystic fibrosis franchise | Cystic fibrosis |
|---|---|
| Trelegy | Chronic obstructive pulmonary disease and asthma |
| Tysabri | Relapsing forms of multiple sclerosis |
| Evrysdi | Spinal muscular atrophy |
| Xtandi | Prostate cancer |
| Tremfya | Plaque psoriasis, psoriatic arthritis, ulcerative colitis and Crohn’s disease |
| Imbruvica | Hematological malignancies and chronic graft versus host disease |
| Promacta | Chronic immune thrombocytopenia purpura and aplastic anemia |
| Voranigo | Low-grade glioma |
| Cabometyx/Cometriq | Kidney, liver and thyroid cancer |
| Spinraza | Spinal muscular atrophy |
| Erleada | Prostate cancer |
| Trodelvy | Breast and bladder cancer |
| 13 | |
| --- |
Notes
(1)Portfolio Receipts is defined above in the section entitled “Portfolio Receipts.”
(2)Adjusted EBITDA is defined under the credit agreement as Portfolio Receipts minus payments for operating and professional costs. Operating and
professional costs reflect Payments for operating and professional costs from the GAAP condensed consolidated statements of cash flows. See GAAP
to Non-GAAP reconciliation in Table 4.
(3)Portfolio Cash Flow is defined under the credit agreement as Adjusted EBITDA minus interest paid or received, net. See GAAP to Non-GAAP
reconciliation in Table 4. Portfolio Cash Flow reflects the cash generated by Royalty Pharma’s business that can be redeployed into value-enhancing
royalty acquisitions, used to repay debt, returned to shareholders through dividends or share purchases or utilized for other discretionary
investments.
(4)Capital Deployment is calculated as the summation of the following line items from Royalty Pharma’s GAAP condensed consolidated statements of
cash flows: Investments in equity method investees, Purchases of available for sale debt securities, Acquisitions of financial royalty assets,
Acquisitions of other financial assets, Milestone payments, Development-stage funding payments less Contributions from legacy non-controlling
interests - R&D.
(5)Other products primarily include Royalty Receipts on the following products: Crysvita, Entyvio, Farxiga/Onglyza, IDHIFA, Nesina, Nurtec ODT,
Orladeyo, Prevymis, Rytelo, Skytrofa and distributions from the Legacy SLP Interest, which is presented as Distributions from equity method investees
on the GAAP condensed consolidated statements of cash flows.
(6)The table below shows the line item for each adjustment and the direct location for such line item on the GAAP condensed consolidated statements
of cash flows.
| Reconciling Adjustment | Statements of Cash Flows Classification |
|---|---|
| Interest paid, net | Operating activities (Interest paid less Interest received) |
| Distributions from equity method investees | Investing activities |
| Proceeds from available for sale debt securities | Investing activities |
| Distributions to legacy non-controlling interests - Portfolio Receipts | Financing activities |
(7)The term loan that Royalty Pharma assumed as part of the Internalization has a Secured Overnight Financing Rate (SOFR) based variable interest
rate. Royalty Pharma estimated the related interest payment for 2025 based on the forward curve as of November 3, 2025.